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, 2007
  AngloGold Ashanti Limited
  Republic of South Africa
  76 Jeppe Street
 Newtown, Johannesburg, 2001
 (P.O. Box 62117, Marshalltown, 2107)
 South Africa
  Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
 Name of each exchange on which registered
 American Depositary Shares
 New York Stock Exchange
 Ordinary Shares
 New York Stock Exchange*
 *    
  Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the Securities
 and Exchange Commission
 Securities registered pursuant to Section 12(g) of the Act:
 None
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 None
 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
 277,457,471
 E Ordinary Shares of 25 ZAR cents each
 4,140,230
 A Redeemable Preference Shares of 50 ZAR cents each
 2,000,000
 B Redeemable Preference Shares of 1 ZAR cent each
 778,896
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 Yes
      No
 If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
 15(d) of the Securities Exchange Act of 1934.
 Yes
   No
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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.
 Yes
      No
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of
 “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
 
 (Check one):Large Accelerated Filer
               
  Accelerated Filer                 
  Non-Accelerated Filer
 Indicate by check mark which financial statement item the registrant has elected to follow.
 Item 17
   Item 18
 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
 Exchange Act).
 Yes
   No


Table of contents
  Presentation of information
 4
 Certain forward-looking statements
 5
 Glossary of selected terms Mining
  
      Part I:
 Item 1:
   Item 2:
   Item 3:
    
     
  Item 4:
 Information on the company 4A. History
  
  
     Item 4A:
   Item 5
   
        
        Item 6
      
  
  
  
  Item 7


Item 8
          Item 9
 The offer and listing 9A.
                Item 10:
                    Item 11:
 Quantitative and qualitative disclosures about market risk
  Item 12:
 Description of securities other than equity securities
 Part II:
 Item 13
   Item 14
   Item 15
  Item 16A:
 Audit committee financial expert
  Item 16B:
 Code of ethics
  Item 16C:
 Principal accountant fees and services
  Item 16D:
 Exemptions from the listing standards for audit committees
  Item 16E:
 Purchases of equity securities by the issuer and affiliated purchasers
 Part III:
 Item 17:
   Item 18
  Item 19


Presentation of information
 AngloGold Ashanti Limited
 In this annual report on Form 20-F, 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, 2007, 2006 and 2005 and as at December 31, 2007 and 2006 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 submitted to the US Securities and Exchange Commission (SEC) on Form 6-K.
 
 Currency
  In this annual report, references to rands, ZAR and R are to the lawful currency of the Republic of South Africa, references toUS 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$ 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 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 noon buying rate inthe City of New York for cable transfers in rands as certified for customs purposes by the Federal Reserve Bank of New York. On May 15, 2008 the noon buying rate was R7.5975/$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 statements
 Certain 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’s 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 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 expenditure, and the outcome and consequences of any pending litigation proceedings.
 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 aresult 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, 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 terms
 The 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 sulphuric 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 theCIP 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 tunnelling 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.
 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, as well as 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 Ore 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 Ore 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 underground 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 a slurry which is pumped back to the metallurgical plants for processing.
 Recovered gradeThe recovered mineral content per unit of ore treated.
 ReefA 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 Minerals and Energy, 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 waves (energy) which results from mining activities.
 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.
 Capital expenditureTotal capital expenditure on tangible assets. Discontinued operationsAn operation that, pursuant to single plan, has been disposed of or abandoned or is classified as held-for-sale until conditionsprecedent 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 South Africa, Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, Tanzania and United States of America.   Related partyParties are considered related if one party has the ability to control the other party or exercise significant influence over theother 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 decision 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 and amortization, rehabilitation, corporateadministration, 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 costsTotal 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 totalproduction 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


10
 Abbreviations
 ADS
 American Depositary Share
 ADR  American  Depositary  Receipt
 ASX
 Australian Stock Exchange
 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  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 Code of Corporate Practices and Conduct representing the principles of good governance as laid out in the King Report on Corporate Governance for South Africa 2002
 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 Mineral Resources and Mineral Reserves
 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
 Tonnes/tons per month
 tpa
 Tonnes/tons per annum
 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
  Item 3: Key information
 3A.
 Selected financial data
 The selected financial information set forth below for the years ended December 31, 2005, 2006 and 2007 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, 2003 and 2004 and as at December 31, 2003 and 2004 has been derived from the US GAAP financial statements not included in this annual report.


12
 Year  ended December 31,
 2003
 (1)(2)(3)
 2004
 (4)(5)
 2005
 2006  2007
 (6)
 $  $
 $
 $
 $
 (in millions, except share and per share amounts)
 Consolidated statement of income
 
 
 
 
 
        (7)
                   (8)
                                                            Income/(loss) from continuing operations before income tax   equity income, minority interests and cumulative effect of   accounting change
                                            Income/(loss) from continuing operations before cumulative   effect of accounting change
                                              (9)
                                          (9)


13
 As at December 31,
 2003
 (1)(2)(3)
 2004
 (4)(5)
 2005  2006
 2007
 (6)
 $
 $
 $
 $
 $
 (in millions, except share and per share amounts)
 Consolidated balance sheet data (as at period end)
 
 
 
 
 Cash and cash equivalents and restricted cash
      Other current assets
      Property, plants and equipment, deferred stripping, and
 acquired properties, net
      Goodwill and other intangibles, net
      Materials on the leach pad (long-term)
      Other long-term assets, derivatives, deferred taxation
 assets and other long-term inventory
           Total assets
           Current liabilities
      Provision for environmental rehabilitation
      Deferred taxation liabilities
      Other long-term liabilities, and derivatives
      Minority interest
      Stockholders’ equity
           Total liabilities and stockholders’ equity
           Capital stock (exclusive of long-term debt and
 redeemable preferred stock)
      Number of common shares as adjusted to reflect
 changes in capital stock
      Net assets
           (1)
 Excludes the financial condition of the Amapari Project sold with effect from May 19, 2003.  See “Item 4A.: History and development of the company”.
 (2)
 Excludes the Gawler Craton Joint Venture sold with effect from June 6, 2003. See “Item 4A.: History and development of the company”.
 (3)
 Excludes the results of operations and financial condition of the Jerritt Canyon Joint Venture sold with effect from June 30, 2003.  See “Item 4A.: History and development of the company”.
 (4)
 Includes the results of operations and financial condition of Ashanti as of April 26, 2004. See “Item 4A.: History and development of the company”.
  Excludes the results of operations and financial condition of the Freda-Rebecca mine sold with effect from September 1, 2004.  See “Item 4A.: History and development of the company”.
  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”.
 (7)
 Product sales represent revenue from the sale of gold.
 (8)
 Operating costs include production costs, exploration costs, related party transactions, general and administrative, market development costs, research and development, employment severance costs and other.
 (9)
 The calculations of basic and diluted earnings/(loss) per common share are described in note 9 to the consolidated financial statements “(loss)/earnings per common share”. Amounts reflected exclude E Ordinary shares.


Annual dividends
 The table below sets forth the amounts of interim, final and total dividends paid in respect of the past five years in cents perordinary share. In respect of 2007, AngloGold Ashanti’s board of directors declared an interim dividend of 90 South African cents per ordinary share on July 30, 2007, with a record date of August 24, 2007, and a payment date of September 10, 2007, and a final dividend of 53 South African cents per ordinary share on February 6, 2008, with a record date of February 29, 2008 and a payment date of March 17, 2008.
 
 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.
 Future dividends will be dependent on AngloGold Ashanti’s cash flow, earnings, planned capital expenditures, financial condition and other factors. Given that AngloGold Ashanti is in its highest-ever capital expenditure phase, it will continue tomanage 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, 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”.
 Exchange rate information
 The following table sets forth for the periods and dates indicated certain information concerning the noon buying rate in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York expressed in rands per $1.00. On May 15, 2008, the noon buying rate between South African rands and US dollars was R7.5975/$1.00.
 Year ended December 31
 High
 Low
 Year end
 Average
 (1)
             (2)
   –
  (1)
 The average of the noon buying rates on the last business day of each month during the year.
 (2)
 Through May 15, 2008.


Exchange rate information for the months of
 High
 Low
                (1)
  (1)
 Through May 15, 2008.
 3B.
 Capitalization and indebtedness
  3C.
 Reasons for the offer and use of proceeds
  3D.
 Risk factors
  •     
  risks related to the gold mining industry generally;  •
    Risks related to the gold mining industry generally
 The profitability of AngloGold Ashanti’s operations, and the cash flows generated by these operations, are significantly affected by changes in the market price for gold.
 The market price for gold can fluctuate widely. These fluctuations are caused by numerous factors beyond AngloGold Ashanti’s control, 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;
 
 •     changes in the supply of gold from production, disinvestment, scrap and hedging;
 
 •     financial market expectations regarding the rate of inflation;
 
 •     the strength of the dollar (the currency in which the gold price trades internationally) relative to other currencies;
 
 •     changes in interest rates;
 
 •     actual or expected gold sales by central banks and the International Monetary Fund;
 
 •     gold hedging and de-hedging by gold producers;
 
 •     global or regional political or economic events; and
 
 •     costs of gold production in major gold-producing nations in which the company has operations, such as South Africa, the United States and Australia.
 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.


16
 The following table presents the annual high, low and average afternoon fixing prices over the past 10 years, expressed in dollars, for gold per ounce on the London Bullion Market:
 Year  High
 Low
 Average
  
  
  
  
  
  
  
  
  
  
  (1)
 1,023
 840
 913
 Source of data: Metals Week, Reuters and London Bullion Market Association
 .
 (1)
 Through May 15, 2008.
  In addition to the spot price of gold, a portion of AngloGold Ashanti’s gold sales is determined at prices in accordance with thevarious hedging contracts that it has entered into, or may enter into, with various gold hedging counterparts.
 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 past 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.
 The profitability of AngloGold Ashanti’s operations, and the cash flows generated by these operations, are significantly affected by the fluctuations in the price of input production factors, many of which are linked to the price of oil and steel.
 Fuel, power and consumables, including diesel, heavy fuel oil, chemical reagents, explosives and tires, which are used in mining operations form a relatively large part of the operating costs of any mining company. The cost of these consumables is linked, to a greater or lesser extent, to the price of oil.
 AngloGold Ashanti has estimated that for each $1 per barrel rise in the oil price, the average cash costs of all its operationsincreases by approximately $0.61 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.
 Furthermore, the cost 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.
 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 miningprojects or render certain projects non-viable. AngloGold Ashanti has no influence over the price of fuel, chemical reagents, explosives, steel and other commodities used in its mining activities.
 AngloGold Ashanti’s operations and development projects could be adversely affected by shortages of, as well as the lead times to deliver, strategic spares, critical consumables, heavy mining equipment and metallurgical plant.
 Due to the significant increase in the world’s demand for commodities, the global mining industry is experiencing an increase inproduction capacity both in terms of expansions at existing, as well as the development of new, production facilities.
 This increase in expansion capacity has taken place, in certain instances, without a concomitant increase in the capacity for production of certain strategic spares, critical consumables and mining and processing equipment used to operate and construct mining operations, resulting in shortages of and an increase in the lead times to deliver these items.


17
 In particular, AngloGold Ashanti and other gold mining companies have experienced shortages in critical consumables like tires for mobile mining equipment, underground support, as well as certain critical spares for both mining equipment and processing plants including, for example, gears for the ball-mills. In addition, the company has experienced an increase in delivery timesfor these and other items. These shortages have also resulted in unanticipated increases in the price of certain of these and other items. Shortages of critical spares, consumables and equipment result in delays and production shortfalls. Increases in prices result in an increase in both operating costs and the capital expenditure to develop mining operations.
 While suppliers and equipment manufacturers may increase capacity to meet the increased demand and therefore alleviate both shortages of, and time to deliver, strategic spares, critical consumables and mining and processing equipment, individuallythe companies have limited influence over manufacturers and suppliers. Consequently, shortages and increased lead times in delivery of strategic spares, critical consumables, heavy mining and certain processing equipment could have an adverse impact upon AngloGold Ashanti’s results of operations and its financial condition.
 Gold companies face many risks related to their operations (including their exploration and development activities) that may adversely affect their cash flows and overall profitability.
  Exploration activities are speculative and are often unproductive. These activities also often require substantial expenditure toestablish the presence, and quantify the extent and grades (metal content) of mineralized material through exploration drilling;determine appropriate metallurgical recovery processes to extract gold from the ore; estimate Ore Reserves; undertake feasibility studies and estimate the technical and economic viability of the project; and construct, renovate or expand mining and processing facilities.
 Once gold mineralization is discovered it can take several years to determine whether 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.
 AngloGold Ashanti evaluates from time to time the acquisition of Ore Reserves, development properties and operating mines, either as stand-alone assets or as part of companies. Its decisions to acquire these properties have historically been based ona variety of factors including historical operating results, estimates of and assumptions regarding the extent of Ore Reserves,cash and other operating costs, gold prices and projected economic returns and evaluations of existing or potential liabilitiesassociated with the property and its operations and how these may change in the future. Other than historical operating results,all of these parameters are uncertain and have an impact upon revenue, cash and other operating issues, as well as the uncertainties related to the process used to estimate Ore Reserves. In addition, there is intense competition for the acquisitionof attractive mining properties.
 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 Reserves or operations. This could adversely affect its results of operations and its financial condition.
  AngloGold Ashanti’s profitability depends, in part, on the actual economic returns and the actual costs of developing mines, which may differ significantly from its current estimates. The development of its mining projects may be subject to unexpected problems and delays.
 AngloGold Ashanti’s decision to develop a mineral property is typically based, in the case of an extension or, in the case of anew development, on the results of a feasibility study. Feasibility studies estimate the expected or anticipated project economicreturns.
 These estimates are based on assumptions regarding: future gold, other metal and uranium prices; anticipated tonnage, grades and metallurgical characteristics of ore to be mined and processed; anticipated recovery rates of gold, and other metalsand uranium from the ore; anticipated capital expenditure and cash operating costs; and the required return on investment.
 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 determined particularly by the costs of the commodity inputs, including the cost of fuel, chemical reagents, explosives, tires and steel that are consumed in mining activities and credits from by-products. 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.


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 In addition to those discussed above these uncertainties include: the timing and cost, which can be considerable, of the construction of mining and processing facilities; the availability and cost of skilled labor, power, water and transportation facilities; the availability and cost of appropriate smelting and refining arrangements; the need to obtain necessary environmental and other governmental permits and the timing of those permits; and the availability of funds to finance construction and development activities.
 The costs, 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 fluctuations in the prices of commodities consumed inthe 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 of these new production sites or facilities may be less profitable than currently anticipated or may not be profitable at all.  The shortage of skilled labor may also impede exploration and development projects.
  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 parameters such as gold price and exchange rates. Ore Reserve estimates are not precise calculations and are dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available samplingresults. 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 and, as a result, have an adverse effect upon the market price of AngloGold Ashanti’s ordinary shares and ADSs.
 Production or mining industry risks
 Gold mining is susceptible to numerous events that may have an adverse impact on a gold mining business, its ability to produce gold and meet its production targets. These events include, but are not limited to:
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 Seismic activity is of particular concern to the gold mining industry in South Africa, in part because of the large percentage of deep-level gold mines. To understand and manage this risk, AngloGold Ashanti uses sophisticated seismic and rock mechanics technologies.
 Despite the implementation of this 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 deathof, or personal injury to, miners and other employees, as well as the loss of mining equipment, damage to or destruction of mineral properties or production facilities, production disruptions, monetary losses, environmental damage and potential legal liabilities, both within 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 operational results and its financial condition.  For example, in the fourth quarter of 2007, AngloGold Ashanti encountered unanticipated delays and a shortfall in production of approximately 55,000 ounces as a result of these events.


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 Gold 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.
 As a consequence of public concern about the perceived ill effects of economic globalization, business generally and in particular large multinational corporations such as AngloGold Ashanti, 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 these commercial activities, which are also expected to minimize or eliminate any damage to the interests of those stakeholders.
 These pressures tend to be applied most strongly against companies whose activities are perceived to have a high impact on their social and physical environment. The potential consequences of such pressures, especially if not effectively managed, include reputational damage, legal suits and social spending obligations. All of these factors could have a material adverse effect on AngloGold Ashanti’s results of operations and its financial condition.
 The South African Department of Minerals and Energy has embarked on an audit strategy with the objective of helping mines to develop programs to improve health and safety. Audits have been conducted and in a number of working places compliance stoppages have occurred. These instances have had a short-term adverse impact on gold production. Future stoppages could have a similar negative impact on production.
 Gold mining operations are 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 formulated to improve and to protect the safety and health of employees. If these laws and regulations were to change and, if as a result, material additional expenditure were required to comply with such new laws and regulations, it could adversely affect AngloGold Ashanti’s results of operations and its financial condition.
 Gold mining companies are subject to extensive environmental laws and regulations.
 Gold mining companies are subject to extensive environmental laws and regulations in the various jurisdictions in which they operate. These regulations establish limits and conditions on gold producers’ ability to conduct their operations. The cost of AngloGold Ashanti’s compliance with environmental laws and regulations has been significant and is expected to continue to be significant.
 Gold mining companies are required to close their operations and rehabilitate the lands that they mine in accordance with environmental laws and regulations. Estimates of the total ultimate closure and rehabilitation costs for gold mining operationsare significant and based principally on current legal and regulatory requirements that may change materially. Environmental liabilities are accrued when they are 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 adverseeffect on AngloGold Ashanti’s financial condition.
 Environmental laws and regulations are continually changing and are generally becoming more restrictive. If AngloGold Ashanti’s environmental compliance obligations were to change as a result of changes in the laws and regulations or in certain assumptions it makes to estimate liabilities, or if unanticipated conditions were to arise in its operations, its expenses and provisions would increase to reflect these changes. If material, these expenses and provisions could adversely affect AngloGold Ashanti’s results of operations and its financial condition.


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 Risks related to AngloGold Ashanti’s operations
  AngloGold Ashanti uses gold hedging instruments and has entered into long term sales contracts, which may prevent the company from realizing all potential gains resulting from subsequent commodity price increases in the future. AngloGold Ashanti’s reported financial condition could be adversely affected as a result of the need to fair value all of its hedge contracts.
 AngloGold Ashanti currently uses gold hedging instruments to fix the selling price of a portion of its anticipated gold productionand 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 ofproduction covered by the hedge and of any subsequent favorable exchange rate movements.
 A significant number of AngloGold Ashanti’s forward sales contracts are not treated as derivatives and fair valued on the financial statements as they fall under the normal purchase normal sales exemption (NPSE).  Should AngloGold Ashanti fail to settle these contracts by physical delivery, then it may be required to account for the fair value of a portion of, or potentially all of, the existing contracts in the financial statements. This could adversely affect AngloGold Ashanti’s reported financial condition.
 AngloGold Ashanti intends to significantly reduce its gold hedging position
 following a proposed
 rights offering,
 which will substantially reduce its protection against future declines in the market price of gold.
 AngloGold Ashanti has traditionally used gold hedging instruments to protect the selling price of some of its anticipated salesagainst declines in the market price of gold. The use of these instruments has prevented AngloGold Ashanti from fully participating in the significant increase in the market price of gold in recent years. Since 2001 AngloGold Ashanti has has beenreducing its hedge commitments through hedge buy-backs (limited to non-hedge derivatives), physical settlement of maturing contracts and other restructurings in order to provide greater participation in a rising gold price environment.
 Notwithstanding the steps AngloGold Ashanti has taken to date, its gold hedging position has continued to have a significantly adverse effect upon its financial performance.  In order to address this, AngloGold Ashanti intends to procure early settlementof certain contracts otherwise due to mature in 2009 and 2010 during the course of 2008.  This is to be funded by way of a proposed rights offering that is subject to shareholder approval at a general meeting to be held on May 22, 2008.  In addition tothe settlement of certain contracts during 2008, AngloGold Ashanti intends to restructure some of the remainder of its hedge book in order to achieve greater participation in the spot price of gold beyond 2009.  As a result of these measures, AngloGoldAshanti expects to have substantially less protection against declines in the market price of gold during 2008 and later years compared to 2007.  For a description of AngloGold Ashanti’s commodity instruments, see “Item 11.: Quantitative and qualitative disclosures about market risk”.
 AngloGold Ashanti faces certain risks and uncertainties in the execution of its planned gold hedge restructuring.
 Through the planned gold hedge restructuring, AngloGold Ashanti intends to significantly reduce its gold hedging position by procuring early settlement of certain contracts otherwise due to mature in 2009 and 2010 during the course of 2008.  In addition to the settlement of certain contracts during 2008, AngloGold Ashanti also intends to restructure some of the remainder of its hedge book in order to achieve greater participation in the spot price for gold beyond 2009.  The exact nature,extent and execution of these processes will depend upon prevailing and anticipated market conditions at the time of restructuring, particularly prevailing gold prices and exchange rates and other relevant economic factors.  Should these conditions become unfavorable at any stage during the restructuring, this may delay or frustrate the implementation of the restructuring.  In addition, should the outlook for gold prices, exchange rates and other economic factors materially change, it is possible that AngloGold Ashanti’s plans for the execution of the gold hedge restructuring may be modified so as to minimize the adverse impact from such changes or maximize the benefits from them.
 Furthermore, the execution of the gold hedge restructuring may depend on or be affected by AngloGold Ashanti’s ability to obtain consents from hedge counterparties and its lenders.  If AngloGold Ashanti is not able to successfully execute the planned gold hedge restructuring, then it will be prevented from fully participating in higher gold prices should such prices continue to prevail.


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 AngloGold Ashanti also continues to give consideration to the early settlement of contracts not currently recorded on balance sheet (Normal Purchase Normal Sale Exemption (NPSE)) by means of early physical delivery.  Such early physical settlement, if it were to occur, would result in a significant adverse impact on its 2008 recorded revenues in AngloGold Ashanti’s income statement, as sales that would have otherwise been executed at the spot price of gold will be replaced with sales based on the earlier contracted prices of such NPSE contracts that are settled during the year.  Furthermore should AngloGold Ashanti conclude that such early physical settlement of NPSE contracts represents a tainting event, it would be required to recognize on balance sheet the fair value of a portion of, or potentially all of, the existing NPSE contracts, which would result in a significant adverse impact on its financial statements.  No such conclusion has yet been made by AngloGold Ashanti and it is still considering the potential impact of any such transaction.
 Some of AngloGold Ashanti’s power suppliers have forced it to halt or curtail activities at its mines, due to severe power disruptions. Power stoppages, fluctuations and power cost increases may adversely affect AngloGold Ashanti’s results of operations and its financial condition.
 In South Africa, AngloGold Ashanti’s mining operations are dependent upon electrical power generated by the State utility, Eskom. As a result of an increase in demand exceeding available generating capacity, Eskom has warned that the country could face disruptions in electrical power supply. At the start of 2008, as a result of substantial unplanned maintenance at Eskom's power stations, as well as higher than usual seasonal rainfall adversely affecting Eskom's coal stockpiles, Eskom's generating capacity was constrained and reduced. As a result, the incidence of power outages in South Africa increased substantially to the point that, on Friday, January 25, 2008, Eskom warned that it could no longer guarantee the availability ofits supply of electrical power to the South African mining industry. Consequently, AngloGold Ashanti, along with other mining companies with South African operations, were forced temporarily to suspend mining operations at their South African mines. Following meetings between industry-wide representatives, including AngloGold Ashanti, and Eskom, agreement was reached whereby mines were able to resume their power consumption at 90 percent of average capacity in return for Eskom guaranteeing a more normal power supply, including undertakings to more reliably warn companies when power outages may occur. Mining operations resumed on Wednesday, January 30, 2008 at AngloGold Ashanti’s South African mines, although operations continue to be constrained by a power capacity limitation imposed by Eskom. By mid-first quarter of 2008, power supply had increased to approximately 96.5 percent and AngloGold Ashanti’s South African operations were once again able to operate at full capacity as a result of the various energy efficiency initiatives implemented at its South African operations. Ongoing and future production levels will depend on an ongoing stable power supply consistent with Eskom’s undertaking as well as whether AngloGold Ashanti is able to continue to implement, and increase, its various energy efficiency initiatives.  The extent to which the power capacity limitation will result in lost production will depend on a number of factors, including the success of the company’s energy efficiency initiatives; accordingly, AngloGold Ashanti is unable to estimate its lost productionas a result of the power capacity limitations. Eskom has also advised AngloGold Ashanti that it intends to increase power tariffssignificantly. Should the power outages continue or should AngloGold Ashanti be unable to achieve its production or cost targets due to the current constraints, any additional power outages or any power tariff increases, then its future profitability and financial condition may be adversely impacted.
 All of AngloGold Ashanti’s mining operations in Ghana are dependent for their electricity supply on hydro-electric power supplied by the Volta River Authority (VRA) an entity controlled by the government of Ghana. Most of this electrical power is hydro-generated electricity, although AngloGold Ashanti also has access to VRA electricity supply from a recently constructed smaller thermal plant. 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 the group’s equipment. The VRA also obtains power from neighbouring Cote d’Ivoire, which has intermittently experienced some political instability and civil unrest. These factors, including increased power demand from other users in Ghana, may cause interruptions in AngloGold Ashanti’s power supply to its operations in Ghana or result in increases in the cost of power even if they do not interrupt supply. Consequently, these factors may adversely affect AngloGold Ashanti’s results of operations and its financial condition. In order to address this problem and to supplement the power generated by the VRA, AngloGold Ashanti has, together with the other three principal gold producers in Ghana, acquired (and equally fund) an 85 megawatt, diesel-fired, power plant that could be converted to gas supply once the anticipated West African Gas Pipeline is developed. To further reduce the dependence on hydro-electric power, which may be impacted by low rainfall, the VRA is increasing its thermal power generation capacity by constructing a 126 mega watt thermal plant at Tema.
 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.


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 Contracts for sale of uranium at fixed prices could affect AngloGold Ashanti’s operating results and financial condition.
 AngloGold Ashanti has entered into contracts for the sale of uranium produced by some of its South African operations and may therefore be prevented from realizing all potential gains from an increase in uranium prices to the extent that the company’s future production is covered by such contracts, or should AngloGold Ashanti not produce sufficient quantities of uranium to cover such contracts, it may need to procure or borrow uranium in the market to meet any shortfall which could adversely affect AngloGold Ashanti's results of operations and its financial condition.
 Given the uncertainty relating to availability of power, and the impact power constraints may have on uranium production, the company is in negotiations to reschedule some of its uranium contracts and depending on the outcome of these negotiations, may have to buy uranium on the open market to fulfill its contractual obligations.  For example in 2007, AngloGold Ashanti purchased 400,000 pounds of uranium at a cost of approximately $31 million.
 Foreign exchange fluctuations could have a material adverse effect on AngloGold Ashanti’s operating 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 applicable local currency where the relevant operation is located. The weakening of the dollar, without a corresponding increase in the dollar price of gold against these local currencies, results inlower 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. If material, these exchange rate movements may have a material effect on AngloGold Ashanti’s operational results.
 Since June 2002, the weakening of the dollar against the South African rand (up until the second half of 2007 when the South African rand began to also weaken against the dollar), the Brazilian real, the Argentinean peso and the Australian dollar has had a negative impact upon AngloGold Ashanti’s profitability. Conversely, in certain prior years, the devaluation of these localcurrencies against the dollar has had a significant positive effect on the profitability of AngloGold Ashanti’s operations. In 2007, 2006, and 2005, AngloGold Ashanti derived approximately 71 percent, 73 percent and 67 percent, respectively, of its revenues from these countries and incurred approximately 62 percent, 61 percent and 63 percent, respectively, of production costs in these local currencies.
 In 2007, the weakening of the dollar against these local currencies in which the company operates continued to increase total cash costs.  A one percent strengthening of these local currencies against the dollar will result in an increase of total cash costs incurred of nearly $3 per ounce, or 1 percent. These impacts were partially offset by the increase in the dollar price of gold,which increase was to some extent a function of dollar weakness. In addition, production costs in South African rand, Brazilianreal, Argentinean peso and Australian dollar terms were only modestly offset by the effect of exchange rate movements on the price of imports denominated in dollars, as imported products comprise a small proportion of production costs in each of these countries.
 A small proportion of AngloGold Ashanti’s hedges are denominated in South African rands, Australian dollars and Brazilian real which may partially offset the effect of the US dollar’s strength or weakness on AngloGold Ashanti’s profitability.
 In addition, due to its global operations and local foreign exchange regulations, some of AngloGold Ashanti’s funds are held inlocal currencies, such as the South African rand and the Australian dollar.
 The dollar value of these currencies may be affected by exchange rate fluctuations. If material, exchange rate movements may adversely affect AngloGold Ashanti’s financial condition.
 AngloGold Ashanti’s level of indebtedness may adversely affect its business.
 As of December 31, 2007, AngloGold Ashanti had gross borrowings of approximately $1.9 billion (including bonds). This level of indebtedness could have adverse effects on AngloGold Ashanti’s flexibility to do business. Under the terms of AngloGold Ashanti’s borrowing facilities from its banks it is obliged to meet certain financial and other covenants. AngloGold Ashanti expects to meet these covenants and to be able to pay principal and interest on its debt by utilizing the cash flows from operations. Its ability to continue to do so 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. AngloGold Ashanti maybe 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.


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 AngloGold Ashanti’s level of indebtedness may make it vulnerable to economic cycle downturns, which are beyond its control, because during such downturns, it cannot be certain that its future cash flows will be sufficient to allow it to pay principal and interest on its debt and also to meet its other obligations. Should the cash flow from operations be insufficient, it 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.
 AngloGold Ashanti intends to redeem its R2 billion corporate bond (which matures in August 2008) and refinance its $1 billion convertible bond (which matures in February 2009) before these bonds mature.  AngloGold Ashanti cannot give assurance that it will be able to do so on commercially reasonable terms, if at all.
 Inflation may have a material adverse effect on AngloGold Ashanti’s results of operations.
 Most of AngloGold Ashanti’s operations are located in countries that have experienced high rates of inflation during certain periods.
 Because it is unable to control the market price at which it sells the gold it produces (except to the extent that it enters intoforward sales and other derivative contracts), 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 amaterial adverse effect upon AngloGold Ashanti’s results of operations and its financial condition.
 While none of AngloGold Ashanti’s specific operations is 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 discontinued or reduced or rationalized at higher cost mines.
 AngloGold Ashanti’s new order mining rights in South Africa could be suspended or cancelled should the company breach, and fail to remedy such breach of, its obligations in respect of the acquisition of these 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 South Africa.
 The Mineral and Petroleum Resources Development Act (MPRDA) vests custodianship of South Africa’s mineral rights in the State. The State issues prospecting rights or mining rights to applicants. Prospecting, mining and mineral rights formerly regulated under the Minerals Act 50 of 1991 and common law are now known as old order mining rights and the transitional arrangements provided in Schedule II to the MPRDA give holders of such old order mining rights the opportunity to convert their old order mining rights into new order mining rights within specified time frames.
 The Department of Minerals and Energy (DME) has published, pursuant to the MPRDA, the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the Charter). Compliance with the Charter, measured using a designated Scorecard, requires that every mining company achieve 15 percent ownership by Historically Disadvantaged South Africans (HDSAs) of its South African mining assets by May 1, 2009, and 26 percent ownership by May 1, 2014 and achieve participation by HDSAs in various other aspects of management referred to below. The company has submitted to the DME two Social and Labor Plans – one for each of its main mining regions – detailing its specific goals in these areas.
 The Scorecard allows for a portion of ‘offset’ against the HDSAs equity participation requirements insofar as companies have facilitated downstream, value-adding activities in respect of the products they mine. AngloGold Ashanti carries out such downstream activities and believes these will be recognized in terms of a framework currently being devised by the South African government.
 AngloGold Ashanti has completed a number of asset sales to companies owned by HDSAs in the past (estimated to have been equivalent to 20 percent of AngloGold Ashanti’s South African production as at August 1, 2005, when its applications for the conversion of its West Wits and Vaal River mineral rights from old order to new order mineral rights were approved). Furthermore, at the end of 2006 AngloGold Ashanti implemented an Employee Share Ownership Plan (ESOP) and Black Economic Empowerment (BEE) transaction, collectively with a value equivalent to approximately 6 percent of its South African assets. This is consistent with the company’s stated strategic intention to develop means of promoting broad based equity participation in the company by HDSAs and with an undertaking made to the DME as a condition for the granting to the company of its new order mining rights. AngloGold Ashanti believes that it has made significant progress towards meeting the requirements of the 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, including the


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 implementation of programs to help achieve the requirement of having 40 percent of management roles being held by HDSAs by 2010. AngloGold Ashanti will incur expenses in giving further effect to the Charter and the Scorecard and the implementation of the ESOP will affect the company’s results of operations.  See “Item 5.: Operating and financial review and prospects – Establishment of a Black Economic Empowerment (BEE) transaction in South Africa” for a detailed discussion on the implementation of an ESOP.
 AngloGold Ashanti was informed on August 1, 2005, by the Director General of Minerals and Energy that its applications to convert its old order mining rights to new order mining rights for its West Wits and Vaal River operations, as well as its applications for new mining rights to extend its mining areas at its TauTona and Kopanang mines, had been successful. These applications relate to all of its existing operations in South Africa. The notarial agreements for the converted West Wits mining right and Block 1C11 new mining rights have been executed and registered as well as the agreements for Jonkerskraal, Weltevreden, Moab Extension Area and the new right for Edom, all of which form part of the Vaal River operations. Two notarial agreements relating to the Vaal River operations are pending.
 Even where new order mining rights are obtained under the MPRDA, these rights may not be equivalent to the old order mining rights. The AngloGold Ashanti rights that have been converted and registered do not differ significantly from the relevant old order rights. The duration of the new rights will no longer be perpetual as was the case under old order mining rights but rather will be granted for a maximum period of 30 years, with renewals of up to 30 years each and, in the case of prospecting rights, amaximum period of five years with one renewal of up to three years. Furthermore, the MPRDA provides for a retention period after prospecting of up to three years with one renewal of up to two years, subject to certain conditions, such as non-concentration of resources, fair competition and non-exclusion of others. In addition, the new order rights will only be transferable subject to the approval of the Minister of Minerals and Energy.
 The new order mining rights can be suspended or cancelled by the Minister of Minerals and Energy if, upon notice of a breach from the Minister, the entity breaching its obligations to comply with the MPRDA or the conditions of the notarial agreement fails to remedy such breach. 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 liabilitiesassociated with the company’s South African operations in light of the new, as well as existing, environmental requirements.
 The proposed introduction of South African State royalties where a significant portion of AngloGold Ashanti’s mineral reserves and operations are located could have an adverse effect on its results of operations and its financial condition.
 The South African government has announced the details of the proposed new legislation whereby new order rights will be subject to a State royalty. The third draft of the Mineral and Petroleum Resources Royalty Bill was published on December 6, 2007 and provides for the payment of a royalty according to a formula based on earnings before interest, tax and depreciation. It is estimated that the formula could translate to a royalty rate of more than 4 percent of gross sales in terms of current pricing assumptions. The latest proposal results in a large increase from the 1.5 percent rate proposed in the second draft in 2006, and the company is making representations to the government through the South African Chamber of Mines to retain the proposed 1.5 percent rate. The payment of royalties is currently scheduled to begin on May 1, 2009, if the Bill is passed by Parliament in its current form.
 Certain factors may affect AngloGold Ashanti’s ability to support the carrying value of its property, plants and equipment, acquired properties, investments and goodwill on its balance sheet.
 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 and 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 results of operations and its financial condition.


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 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 andapplication of accounting literature to mining specific issues. For example, AngloGold Ashanti capitalizes the drilling and relatedcosts 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 (see “Item 5.: Operating and financial review and prospects – critical accounting policies”). 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.
 AngloGold Ashanti’s mineral reserves and 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 on 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.
 In 2007, the government of the Democratic Republic of Congo (DRC) announced an industry-wide review of all mining concessions and related agreements. The agreements related to the ownership and operation of AngloGold Ashanti’s concessions in the DRC are also subject to this review by a commission as appointed by the DRC government. The commission has indicated that it is seeking to increase the DRC government’s ownership in AngloGold Ashanti’s concession, and increase land usage charges.  The commission’s review process, the timing and the final outcome of which AngloGold Ashanti is unable to predict, could result in an adverse change to AngloGold Ashanti in terms of these agreements which could have adverse impact upon AngloGold Ashanti’s current exploration activities and potential future mining activities in the DRC.
 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, developmentand mining of mineral reserves, taxation and royalties, exchange controls, import and export duties and restrictions, investmentapprovals, 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 oragreements 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, which could result in changes to such laws and regimes, its results of operations and its financial condition could be adversely affected.
 In Mali and Tanzania, AngloGold Ashanti is due refunds of input tax 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 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.
 In Argentina, the government is looking to apply export taxes of 5 percent to mining companies that were exempt therefrom. AngloGold Ashanti has filed a claim with the courts to prevent payment of an export tax. If the outcome of the tax claim is unfavorable to AngloGold Ashanti, it could have an adverse effect upon its results and operations and financial condition.
 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 the company is present may pose a credible threat of terrorism, extortion and kidnapping, which could have an adverse effect on the company’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, which in turn, could have an adverse impact on its results of operations and its financial condition.


26
 Labor disruptions and/or increased labor costs could have an adverse effect on AngloGold Ashanti’s operating results and financial condition.
 As at December 31, 2007, approximately 77 percent (2006: 69 percent) of AngloGold Ashanti’s workforce excluding contractors or 63 percent of total workforce was located in South Africa. Approximately 98 percent of the workforce on its SouthAfrican operations is unionized, with the National Union of Mineworkers (NUM) representing the majority of unionized workers.
 AngloGold Ashanti’s employees in some South American countries and Ghana are also highly unionized. Trade unions have a significant impact on AngloGold Ashanti’s labor relations climate, as well as on social and political reforms, most notably 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 August 2007, following negotiations between NUM, United Associations of South Africa (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. A two-year deal was reached without resorting to any industrial action.
 Labor costs represent a substantial proportion of AngloGold Ashanti’s total operating costs and in many operations, including South African operations, is the company’s single largest operating cost category. The two-year wage agreement will be reviewed in June 2009 in negotiation with NUM, UASA, Solidarity and the Chamber of Mines and any increases in labor costs have to be off-set by greater productivity efforts by all operations and employees.
 There is a risk that strikes or other types of conflict with unions or employees may occur at any one of AngloGold Ashanti’s operations. It is uncertain whether labor disruptions will be used to advocate labor, political or social goals in the future. Should any labor disruptions occur, if material, they could have an adverse effect on AngloGold Ashanti’s results of operations and itsfinancial condition.
 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.
 Mining contractors are used at certain of AngloGold Ashanti’s mines, including Sadiola, Morila and Yatela in Mali, Siguiri in Guinea, Iduapriem in Ghana and Sunrise Dam in Australia, to mine and deliver ore to processing plants. Consequently, at these mines, AngloGold Ashanti does not own all of the mining equipment and may face disruption of operations and incur costs and liabilities in the event that any of the mining contractors at these mines has financial difficulties, or should there be a dispute in renegotiating a mining contract, or a delay in replacing an existing contractor. Furthermore, increases in contract mining rates, in the absence of associated productivity increases, will have an adverse impact on the company’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 the global industry wide shortages, 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. For further details see the risk factor “AngloGold Ashanti’s new order mineral rights in South Africa could be suspended or cancelled should the company breach, and fail to remedy such breach of, its obligations in respect of the acquisition of these rights”.
 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 its financial condition could be adversely affected.


27
 AngloGold Ashanti faces certain risks in dealing with HIV/AIDS which may adversely affect its results of operations and its financial condition.
 AIDS remains the major health care challenge faced by AngloGold Ashanti’s South African operations. 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. Accurate prevalence data for AIDS is not available owing to doctor-patient confidentiality.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 (ART) to HIV positive employees who met the current medical criteria for the initiation of ART.  From April 2003, AngloGold Ashanti has treated all eligible employees desiring it. Currently approximately 4,600 employees are on the wellness program and as at December 2007, approximately 2,100 employees were receiving treatment using anti-retroviral drugs.
 The cost of providing rigorous outcome-focused disease management of employees with AIDS, including the provision of an anti-retroviral therapy, is on average R1,300 ($185) per employee on treatment per month. It is not yet possible to develop an accurate cost estimate of the program in its entirety, given uncertainties such as drug prices and the ultimate rate of employeeparticipation.
 AngloGold Ashanti does not expect the cost that it will incur related to the prevention of HIV infection and the treatment of AIDSto 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.
 AngloGold Ashanti faces certain risks in dealing with malaria, particularly at its operations located in Africa, which may have an adverse effect on its results of operations.
 Malaria is a significant health risk at all of AngloGold Ashanti’s operations in Central, West and East Africa where the diseaseassumes epidemic proportions because of ineffective national control programs. The disease 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 treatment of occupational health diseases and the potential liabilities related to occupational health diseases 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 are noise-induced hearing loss (NIHL), occupational lung diseases (OLD) and tuberculosis (TB). AngloGold Ashanti provides occupational health services to its employees at its occupational health centers and it continues to improve preventative occupational hygiene initiatives. Ifthe costs associated with providing such occupational health services increase, such increase could have an adverse effect on AngloGold Ashanti’s results of operations and its financial condition.
 Furthermore, the South African government, by way of a cabinet resolution in 1999, proposed a possible combination and alignment of benefits of the Occupational Diseases in Mines and Works Act (ODMWA) that provides for compensation to miners who have OLD, TB and combinations thereof, and the Compensation for Occupational Injuries and Diseases Act (COIDA) that provides for compensation to non-miners who have OLD.
 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.


28
 Mr Thembekile Mankayi instituted a legal action against AngloGold Ashanti in October 2006 in the High Court, Witwatersrand Local Division. Mr Mankayi is claiming approximately R2.6 million for damages allegedly suffered by him as a result of silicosisallegedly contracted whilst working on mines now owned by AngloGold Ashanti. An exception has been filed by AngloGold Ashanti against the claim and was heard in the High Court early February 2008. AngloGold Ashanti filed the exception on the basis that mine employers are insured in terms ODMWA and COIDA against compensable diseases and this prevents any delictual claims by employees against employers. Judgment has been reserved. If AngloGold Ashanti is 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 National Union of Mineworkers (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 reliefto communities that have been affected.
 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.
 AngloGold Ashanti has embarked on legal action in South Africa after the owner of an adjacent mine put the company owning the adjacent mining operation into liquidation, raising questions about its and other companies’ willingness to meet their waterpumping obligations.
 The relevant mining companies have entered into a settlement agreement. As part of the settlement arrangement the mining companies have formed and registered a not-for-profit company, known as the Margaret Water Company, to conduct water pumping activities from the highest lying shaft which is currently owned by Stilfontein Gold Mining Company (in liquidation). The three mining companies will contribute equally to the cost of establishing and initially running the Margaret Water Company.
 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 are believed to be reasonable dependingupon 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 otherreasons, including an assessment that the risks are remote. Furthermore, AngloGold Ashanti may not be able to obtain insurance coverage at acceptable premiums. AngloGold Ashanti has a captive insurance company, namely AGRe Insurance Company Limited, which participates at various levels in certain of the insurances maintained by AngloGold Ashanti. The occurrence of events for which it is not insured may adversely affect AngloGold Ashanti’s cash flows, overall profitability and its financial condition.
 Risks related to AngloGold Ashanti’s ordinary shares and American Depositary Shares (ADSs)
 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, as could future offerings of AngloGold Ashanti’s ordinary shares, ADSs or securities exchangeable or exercisable for ordinary shares or ADSs..
 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 ADSs 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, including offerings of additional ADS rights, letters of allocation or similar securities at any time or from time to time in the future.


29
 AngloGold Ashanti has entered into a registration rights agreement with Anglo American plc (AA plc) that would facilitate US registration of additional offers and sales of AngloGold Ashanti shares that AA plc makes in the future, subject to certain conditions. Sales of AngloGold Ashanti ordinary shares or AngloGold Ashanti ADSs if substantial, or the perception that sales may occur and be substantial, could exert downward pressure on the prevailing market prices for AngloGold Ashanti ordinary shares or AngloGold Ashanti ADSs, causing their market prices to decline. In April 2006, AA plc sold 19,685,170 AngloGold Ashanti ordinary shares and, in October 2007, sold an additional 69,100,000 AngloGold Ashanti ordinary shares. These and other sales combined with the dilutive effect of AngloGold Ashanti’s issuance of 9,970,732 ordinary shares in April 2006, reduced AA plc’s shareholding in AngloGold Ashanti from approximately 51 percent of issued AngloGold Ashanti shares as at April 19, 2006 to approximately 16.6 percent as at October 9, 2007. AA plc has stated that it intends to reduce and ultimately exit its gold company holdings and that it will continue to explore all available options to exit AngloGold Ashanti in an orderly manner.  Sales or distributions of substantial amounts of AngloGold Ashanti ordinary shares or AngloGold Ashanti ADSs or the perception that sales or distributions may occur, could adversely affect the market price for AngloGold Ashanti ordinary sharesor AngloGold Ashanti ADSs.
 Fluctuations in the exchange rate of different 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 ofthese 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. The Memorandum and Articles of Association of the company allows for dividends and distributions to be declared in any currency at the discretion of AngloGold Ashanti’s board ofdirectors, 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 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 ratemovements 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.
 The recently announced proposal by the South African Government to replace the Secondary Tax on Companies with a withholding tax on dividends and other distributions may impact on the amount of dividends or other distributions received by the company’s shareholders.
 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 phases between 2007 and 2009. Although this may reduce the tax payable by the South African operations of the company thereby increasing distributable earnings, the withholding tax will generally reduce the amount of dividends or other distributions received by AngloGold Ashanti shareholders.


Item 4: Information on the company
 AngloGold Ashanti, 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) which was incorporated in Ghana on August 19, 1974.
 4A.
 History and development of the company
 AngloGold Ashanti, 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 20 operations are located in ten 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 proven and probable Ore Reserves of the group amounted to 72.2 million ounces as at December 31, 2007.
 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 Subregister System Depositary Interests (CDIs) and in Ghana, in the form of Ghanaian Depositary Shares (GhDSs).
 AngloGold Ashanti Limited (formerly AngloGold 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 principal executive office is located at 76 Jeppe Street, Newtown, Johannesburg, 2001 (P.O. Box 62117, Marshalltown, 2107) South Africa (Telephone +27 11 637 6000), AngloGold Ashanti's US offices are at the offices of AngloGold Ashanti North America Incorporated, 7400 East Orchard Road, Suite 350, Greenwood Village, CO 80111.
 AngloGold Limited was formed in June 1998 through the consolidation of the gold interests of Anglo American Corporation of South Africa Limited (AAC) and its associated companies, namely East Rand Gold and Uranium 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 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.
 AngloGold acquired minority shareholders interests in Driefontein Consolidated Limited (17 percent); Anmercosa Mining (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).
 In 1999, AngloGold purchased Minorco's gold interests in North and South America and acquired Acacia Resources in Australia.
 In 2000, AngloGold acquired a 40 percent interest in the Morila mine in Mali from Randgold Resources Limited, acquired a 50 percent interest in the Geita mine in Tanzania from Ashanti Goldfields Company Limited (Ashanti) (in 2004, following the business combination with Ashanti, AngloGold acquired the remaining 50 percent interest) and in support of its market development initiatives acquired a 25 percent interest in OroAfrica, South Africa's largest manufacturer of gold jewellery.
 In 2001, AngloGold sold the Elandsrand and Deelkraal mines to Harmony Gold Mining Company Limited (Harmony), disposed of AngloGold's interests in No. 2 Shaft Vaal River Operations to African Rainbow Minerals (ARM) and made an unsuccessful take-over bid for Normandy Mining Limited.
 In 2002, the sale of AngloGold’s Free State assets to ARM and Harmony became effective.  Also in 2002, AngloGold acquired an additional 46.25 percent of the equity, as well as the total loan assignment, of Cerro Vanguardia SA from Pérez Companc International SA, increasing its interest in Cerro Vanguardia to 92.5 percent and disposed of AngloGold's wholly owned subsidiary, Stone and Allied Industries (O.F.S.) Limited.


In 2003, AngloGold disposed of its wholly owned Amapari project to Mineração Pedra Branca do Amapari, finalized the sale of its 49 percent stake in the Gawler Craton Joint Venture, including the Tunkillia project located in South Australia to Helix Resources Limited, concluded the sale of its interest in the Jerritt Canyon Joint Venture to Queenstake Resources USA Inc, disposed of its entire investment in East African Gold Mines Limited and in Randgold Resources Limited and purchased a portion of the Driefontein mining area in South Africa from Gold Fields Limited.
 In 2004, AngloGold sold its Western Tanami project to Tanami Gold NL in Australia, the business combination between AngloGold and Ashanti Goldfields Company Limited was completed, resulting in the company changing its name to AngloGold Ashanti Limited, AngloGold Holdings plc, a subsidiary of AngloGold, completed an offering of $1 billion principal amount 2.375 percent convertible bonds, due 2009 and guaranteed by AngloGold Ashanti.  Also in 2004, AngloGold Ashanti acquired a 29.8 percent stake in Trans-Siberian Gold plc (TSG), sold its Union Reefs assets to the Burnside Joint Venture, comprising subsidiaries of Northern Gold NL (50 percent) and Harmony (50 percent), disposed of its entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Proprietary) Limited, subscribed for a 12.3 percent stake in the expanded issued capital of Philippines explorer Red 5 Limited and sold its 40 percent equity interest in Tameng Mining and Exploration (Pty) Limited of South Africa (Tameng) to Mahube Mining (Pty) Limited.
 In January 2005, AngloGold Ashanti completed a substantial restructuring of its hedge book.  Also in 2005, AngloGold Ashanti signed a three-year $700 million revolving credit facility, sold exploration assets in the Laverton area in Australia, disposed of its La Rescatada project to ARUNANI SAC, a local Peruvian corporation, with an option to repurchase 60 percent of the project should economically viable reserves in excess of 2 million ounces be identified within three years.  The Director-General of Minerals and Energy notified AngloGold Ashanti in August 2005 that application for the new order mining rights in terms of the South African Mineral Resources and Petroleum Development Act had been granted.
 In 2006, AngloGold Ashanti raised $500 million in an equity offering, signed a Heads of Agreement with Antofagasta plc to jointly explore a highly prospective belt in Southern Colombia for new gold and copper deposits which was mutually dissolved in 2007, disposed of its entire business undertaking, related to the Bibiani mine and Bibiani North prospecting permit to CentralAfrican Gold plc, entered into a 50:50 strategic alliance with Russian gold and silver producer, OAO Inter-Regional Research and 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 and implemented an empowerment transaction with two components: the development of an employee share ownership plan (ESOP) and the acquisition by Izingwe Holdings (Proprietary) Limited (an empowerment company) of an equity interest in AngloGold Ashanti and acquired an effective 8.7 percent stake in China explorer, Dynasty Gold Corporation.
 Also in 2006, AngloGold Ashanti and B2Gold (formerly Bema Gold) formed a new company to jointly explore a select group of AngloGold Ashanti’s mineral opportunities located in northern Colombia, South America and AngloGold Ashanti (U.S.A.) Exploration Inc, International Tower Hill Mines Ltd (ITH) and Talon Gold Alaska, Inc. (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 a 19.99 percent interest in ITH. AngloGold Ashanti has the option to increase or dilute its stake in these projects, subject to certain conditions.
 On February 5, 2007, AngloGold Ashanti informed the market that a partial slope failure had occurred in an intermediate footwall of the Nyankanga pit at Geita Gold Mine on Saturday February 3, 2007.  The pit had been monitored by slope stability radar and was safely evacuated in advance of the failure.  No injury to employees or contractors occurred and there was no damage to equipment.
 On February 13, 2007, the AngloGold Ashanti board approved a project to develop the Mponeng mine below the 120 level, adding some 2.5 million ounces of gold and 8 years to the mine's life, at a capital cost of $252 million.  Production is due tocommence in 2013.
 On May 4, 2007, AngloGold Ashanti announced that Messrs CB Brayshaw and AJ Trahar retired from the board effective May 5, 2007.  AngloGold Ashanti further announced that Mrs C Carroll had been appointed as a non-executive director with effect from May 5, 2007.
 On June 1, 2007, AngloGold Ashanti Australia Ltd announced the commencement of a pre-feasibility study at the Tropicana gold project in Western Australia.  Tropicana, located 400 kilometers north-east of Kalgoorlie, is a joint venture between AngloGold Ashanti Australia (70 percent) and Independence Group NL (30 percent free carried to completion of the pre-feasibility study).  The study is expected to be completed in mid-2008 and will focus on the Tropicana and Havana zones and will only consider open-cut resources.


On June 8, 2007, AngloGold Ashanti announced that it would sell, subject to certain conditions, to a consortium of Mintails South Africa (Pty) Limited/DRD South African Operations (Pty) Limited Joint Venture most of the remaining moveable and immovable assets of Ergo, the surface reclamation operation east of Johannesburg, discontinued in March 2005.  The site is currently being rehabilitated by AngloGold Ashanti.  The joint venture will operate, for its own account, under the AngloGold Ashanti authorizations until new order mining rights have been obtained and transferred to the joint venture.
  On July 31, 2007, the board of directors announced the retirement of Mr RM Godsell, (AngloGold Ashanti's Chief Executive Officer) and the resignation of Mr R Carvalho Silva (Chief Operating Officer – International) from the company effective September 30, 2007 and the appointments of Mr M Cutifani as Chief Executive Officer and Mr N Nicolau, (formerly Chief Operating Officer – Africa) as Chief Operating Officer for all operations as of October 1, 2007.  Subsequently, on November 12,2007, it was announced that due to further operational management restructure, Mr N Nicolau had resigned from the board to pursue other opportunities.
 In August 2007, AngloGold Ashanti through the South African Chamber of Mines signed a two-year wage agreement effective from July 2007, with the three recognized mining unions.  This agreement covers some 29,000 category 3-8 workers, miners, artisans and officials in the company's South African operations and was achieved through a mediated outcome.  In terms of the agreement: the first year increases from July 2007 range from 10 percent for the lower categories of worker to 8 percent forofficials and include a special dispensation for the benefit of artisans and some skilled occupations.  Some improvements to leave conditions and housing allowances were also agreed.  Second year increases from July 2008 will be determined at South African CPIX plus 1 percent with a minimum of an 8 percent increase.
 The company completed the acquisition of minority interests previously held by the Government of Ghana (5 percent) and the International Finance Corporation (10 percent) in the Iduapriem and Teberebie mine effective September 1, 2007 for a total cash consideration of $25 million.  Iduapriem and Teberebie is now wholly-owned by AngloGold Ashanti.  The company is in the process of finalizing the purchase price allocation of fixed assets.  The final purchase price allocation is not expected tovary significantly from the preliminary allocation.
 On September 18, 2007, AngloGold Ashanti announced that Mr M Cutifani was appointed to the board effective September 17, 2007, as Chief Executive Officer designate.  Mr Cutifani succeeded Mr RM Godsell as Chief Executive Officer, on his retirement with effect from October 1, 2007.
 On October 1, 2007, AngloGold Ashanti noted the announcement by Anglo American plc that it intended to offer for sale, 61 million ordinary shares of AngloGold Ashanti in the form of ordinary shares and American Depositary Shares pursuant to the registration of such securities under AngloGold Ashanti's automatic shelf registration statement.
 On October 2, 2007, AngloGold Ashanti noted the announcement by Anglo American plc that Anglo American had completed an offering of 67.1 million ordinary shares of AngloGold Ashanti in the form of ordinary shares and American Depositary Shares (ADS) priced at US$44.00 per ADS (US$44.11 inclusive of uncertificated securities tax payable by investors in ADSs) and R300.61 per ordinary share (exclusive of uncertificated securities tax).  The offering which was launched on October 1, 2007 was increased from the earlier announced 61 million ordinary shares.  The offering price represented discounts of 6.16 percent and 7.84 percent to the closing prices of the ADSs and ordinary shares in New York and Johannesburg, respectively, on Friday, September 28, 2007.  The offering settled on October 9, 2007.  On completion of the offering, Anglo American's holding in AngloGold Ashanti was 17.3 percent.  An additional 2 million shares were sold by Anglo American in a private placement, further reducing its shareholding to 16.6 percent.
 Following the settlement of the offering and the consequent reduction in shareholding, all the directors representing Anglo American plc on the AngloGold Ashanti board, namely Mrs C Carroll and Mr R Médori, together with his alternate Mr PG Whitcutt resigned from the AngloGold Ashanti board, effective October 9, 2007.
 On December 12, 2007, AngloGold Ashanti announced the successful closing of a $1.15 billion syndicated revolving loan facility.  The new three-year facility will be used to refinance an existing $700 million revolving credit facility (due January2008), an A$200 million facility and for general corporate purposes.
 On January 14, 2008, AngloGold Ashanti announced that it had agreed to acquire 100 percent of Golden Cycle Gold Corporation (GCGC) through a transaction in which GCGC's shareholders will receive 29 AngloGold Ashanti ADRs for every 100 shares of GCGC common stock held.  GCGC holds a 33 percent shareholding in Cripple Creek & Victor while AngloGold Ashanti holds the remaining 67 percent.  The transaction will result in Cripple Creek & Victor being wholly-owned by AngloGold Ashanti.  The transaction is subject to a number of regulatory and statutory approvals, including approval by GCGC shareholders.  The transaction, at the date of announcement was valued at approximately $149 million.


On January 18, 2008, AngloGold Ashanti provided operation guidance to its fourth quarter 2007 results, in which it was stated that the company's South African and Geita operations had experienced production difficulties resulting in the group's production for the quarter to be of the region of 1.4 million ounces.
 On January 25, 2008, AngloGold Ashanti announced that following notification from Eskom regarding interruptions to power supplies, it had halted mining and gold recovery operations on all of its South African operations.  Only underground emergency pumping work was being carried out.
 On January 27, 2008, AngloGold Ashanti announced it had agreed a process with Eskom, whereby the supplier would give its normal guarantees for sufficient power for the company to undertake shifts from that day for the purpose of re-establishing safeworkplaces at each of the deep level underground mines in South Africa.  The company was anticipating a ramp up in additional power later in the week that should enable a phased return to normal mining operations.  A protocol had also been agreed with the electricity supplier whereby Eskom will provide the company with four hours warning, prior to having to reduce power supply.
 On January 29, 2008, AngloGold Ashanti announced that following a meeting between Eskom and industrial electricity consumers, the company had commenced the process of bringing back into production all of its underground mines and their associated gold treatment plants.  On February 7, 2008, AngloGold Ashanti stated that following extensive discussions with Eskom and government, a power supply of 90 percent had been offered which has resulted in first quarter production from the South African operations being severely disrupted.  Equally important is Eskom's ability to maintain a continuous power supply at a 90 percent level in order to return to normal production levels and milling rates.
 On February 14, 2008, AngloGold Ashanti announced that it had entered into a binding memorandum of agreement (MOA) with B2Gold Corp. (B2Gold).  The MOA provides for the existing Colombian joint venture agreements between AngloGold Ashanti and B2Gold to be amended to provide that B2Gold acquire from AngloGold Ashanti additional interest 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.  Subsequently, the transaction was finalized, as announced by AngloGold Ashanti on May 16, 2008.
 On April 14, 2008 it was announced that, following the stabilization of power provided by Eskom (the South African electricity supply body) to the South African operations during the quarter, AngloGold Ashanti forecast the first quarter production to be approximately 1.19 million ounces.  The revised production outlook was approximately 8 percent above guidance provided in the fourth quarter of 2007.  AngloGold Ashanti had also fully delivered into maturing hedge contracts during the quarter. On January 25, 2008, the South African national power supplier, Eskom, had communicated that it could not guarantee power supply to AngloGold Ashanti’s South African operations. Precautionary steps were taken for the safety of employees, including ceasing the transportation of employees underground to carry-out mining activities and the cessation of milling activities. Following extensive discussions with Eskom and the South African government, Eskom agreed to guarantee a power supply equivalent to 90 percent of previous supply and undertook to more reliably warn companies when power outages may occur. Mining operations resumed on Wednesday, January 30, 2008 at AngloGold Ashanti’s South African mines and in late March 2008, Eskom increased power supply to 96.5 percent of previous levels. At these power levels and as a result of the company’s previously implemented and ongoing initiatives to improve its energy efficiencies, the company has been able to restore production back to 100 percent of previous capacity.  Since 2004, AngloGold Ashanti and Eskom have undertaken and committed funds and other resources to various initiatives to improve energy efficiencies and reduce power consumption at AngloGold Ashanti’s South African mines. These combined efforts have resulted in a decline in the use of electricity, fuel and coal and have to date achieved a 17 percent improvement in energy efficiencies at the company’s South African operations. AngloGold Ashanti views these initiatives as being important not only in the light of power shortages and related disruption toits mining operations but also in that it anticipates that these initiatives will assist in managing future operating cost increases in the light of anticipated increases in unit electrical power, fuel and other energy costs. AngloGold Ashanti anticipates that these ongoing initiatives will allow it to achieve electricity consumption at a level of 90 percent of previous consumption by 2009.
 On May 6, 2008, AngloGold Ashanti announced a significant greenfields discovery at its 100 percent owned La Colosa exploration site. A conceptual economic study completed during the quarter had defined, with upside potential, 12.9 million ounces of inferred Mineral Resource at that site.
 Also on May 6, 2008 AngloGold Ashanti announced that it intends to proceed, subject to certain conditions, with an approximate one-for-four renounceable rights offer, which would result in AngloGold Ashanti issuing approximately 69.4 million shares at a minimum share price of ZAR172 raising approximately ZAR11.9 billion ($1.6 billion based on an exchange rate of ZAR7.56/$1.00 on May 5, 2008).  The proposed rights offer is being fully underwritten subject to certain customary conditions.  The final rights offer price will be announced at the time of the announcement of the rights offer.  Theproposed rights offer will be subject to approval at a general meeting of AngloGold Ashanti shareholders to be held on May 22, 2008.


The principal purpose of the rights offer is to provide AngloGold Ashanti with additional financial resources to improve its financial flexibility.  In particular, the net proceeds from the rights offer will allow AngloGold Ashanti both to significantlyrestructure and reduce its existing gold hedging position, which has adversely affected its financial performance in recent years, while also being able to continue to fund its principal development projects and exploration growth initiatives. Pendingthis use of proceeds, the net proceeds of the rights offer may, in the interim, be used by AngloGold Ashanti to reduce its short-term borrowings and the borrowings outstanding on AngloGold Ashanti’s revolving credit facility or retained as cash and invested in accordance with AngloGold Ashanti’s cash management policies.
 AngloGold Ashanti has traditionally used gold hedging instruments to protect a portion of its anticipated gold sales against declines in the market price of gold.  The use of these instruments has prevented AngloGold Ashanti from fully participating inthe significant increase in the market price for gold in recent years.  As at December 31, 2007, the total net delta tonnage ofAngloGold Ashanti’s hedge positions was 10.39 million ounces and the total committed hedge position was 11.28 million ounces, an increase of 0.16 million ounces and a reduction of 0.34 million ounces against the December 31, 2006, hedge delta and hedge committed position, respectively. As at December 31, 2007, the marked-to-market value of all hedge transactions making up the hedge positions was negative $4.27 billion.
 Since the beginning of 2008, prevailing spot gold prices have been significantly higher than those prevailing during 2007. If these high prices continue to prevail, AngloGold Ashanti estimates that its gold hedging position will continue to have a significant adverse affect upon its financial performance.  AngloGold Ashanti believes that this has also negatively affected themarket price of its ordinary shares, further constraining its financial flexibility.
 In order to address this issue, AngloGold Ashanti intends to early settle certain contracts otherwise due to mature in 2009 and2010 during the course of 2008 in addition to settling contracts due to mature in 2008.  Given the low committed prices of thesecontracts, AngloGold Ashanti expects that if these measures were implemented it would result in a realization of previously recognized losses for contracts historically recognized on Balance Sheet on a marked–to–market basis. These losses would be measured by the difference between the committed price of the contracts and the prevailing gold price at the time that these contracts are settled. If the restructuring is implemented as anticipated the received price for the remainder of 2008 should beapproximately $475 per ounce assuming a gold price of $900 per ounce and gold production for the last nine months of 2008 of 3.8 million ounces.
 AngloGold Ashanti also continues to give consideration to the early settlement of contracts not currently recorded on balance sheet (Normal Purchase Normal Sale Exemption (NPSE)) by means of early physical delivery.  Such early physical settlement, if it were to occur, would result in a significant adverse impact on our 2008 recorded revenues in AngloGold Ashanti’s income statement, as sales that would have otherwise been executed at the spot price of gold will be replaced with sales based on the earlier contracted prices of such NPSE contracts that are settled during the year.  Furthermore should AngloGold Ashanti conclude that such early physical settlement of NPSE contracts represents a tainting event, it would be required to recognize on balance sheet the fair value of a portion of, or potentially all of, the existing NPSE contracts, which would result in a significant adverse impact on its financial statements.  No such conclusion has yet been made by AngloGold Ashanti and it is still considering the potential impact of any such transaction.
 In addition to the settlement of certain contracts during 2008 AngloGold Ashanti also intends to restructure some of the remainder of its hedge book in order to achieve greater participation in the spot price for gold beyond 2009.  The exact natureand extent of the restructuring will depend upon prevailing and anticipated market conditions at the time, particularly the prevailing gold price and exchange rates as well as other relevant economic factors.
 If the restructuring is executed as currently anticipated, the overall impact would be to reduce the hedge book to approximately6.25 million ounces, which would represent 8.6 percent of AngloGold Ashanti’s ore reserves as at December 31, 2007.  As a result of this reduction the discount to the spot gold price realized during 2009 is estimated to be approximately 6 percent andat a similar level thereafter assuming a gold price of $900 per ounce.
  On May 15, 2008 AngloGold Ashanti announced that it had terminated the process related to its proposed sale of its interests in the Morila Gold Mine in Mali, due to the fact that no proposals were received which met the company’s value criteria for sucha sale.  AngloGold Ashanti will therefore remain a joint venture partner together with Randgold Resources Limited and the Government of Mali in the Morila Gold Mine. Randgold Resources will continue as operators of the mine.


4B.    
  Business overview
 The market for gold
 Products
 AngloGold Ashanti’s main product is gold. Revenue is also derived from the sales of silver and uranium oxide. AngloGold Ashanti sells its products on world markets.
 Gold market
 The gold market is relatively liquid compared to many other commodity markets. Physical demand for gold is primarily for fabrication purposes, including jewellery (which accounts for just less than 80 percent of fabricated demand), electronics, dentistry, decorations, medals and official coins. In addition, central banks, financial institutions and private individuals buy, sell and hold gold bullion as an investment and as a store of value.
 The use of gold as a store of value (a consequence of the tendency of gold to retain its value in relative terms against basic goods, and particularly in times of inflation and monetary crisis) and the large quantities of gold held for this purpose in relation to annual mine production have meant that, historically, the potential total supply of gold is far greater than demand at any onetime. Thus, while current supply and demand play some part in determining the price of gold, this does not occur to the same extent as with other commodities. Instead, the gold price has from time to time been significantly affected by macro-economic factors such as expectations of inflation, interest rate changes, exchange rate changes, changes in reserve policy by central banks, and by global or regional political and economic events. In times of price inflation and currency devaluation, gold is oftenbought as a store of value, leading to increased purchases and support for the price of gold.
 The market in 2007
 Continued strong levels of investor and speculator interest, particularly in the fourth quarter of the year, pushed the gold priceto levels just short of record highs, records which were then surpassed soon after year end in an exceptionally buoyant market.The average gold spot price for the year, at $697 per ounce, was 15 percent higher than that in 2006.
 Although prices were relatively range-bound during the first half of the year, the end of the third quarter and the fourth quartersaw a strong surge in the dollar gold price and particularly high levels of investor interest. Fabrication demand followed an inverse pattern, with the more stable prices of the first half leading the market to record high levels of jewellery consumption in certain regions, which then fell away in the fourth quarter as price volatility took its toll, particularly in more price-sensitivemarkets. The exception to this pattern was the Chinese market, where jewellery demand remained relatively solid in the fourth quarter despite the high levels of price volatility.
 The main contributing factor to the price gains seen in the second half of the year was economic uncertainty relating to creditconcerns and the impact of the sub-prime mortgage crisis in the US. Inflationary concerns driven by higher food, oil and commodity prices also played a role, as did the escalation in geopolitical tension, particularly at year-end.
 Rand gold prices saw new record highs of R187,000 per kilogram during the year and an average spot price for the year of just over R157,000 per kilogram.
 Investment
 Overall, the investment market saw lower levels of demand than in 2006, however, this demand was heavily concentrated in the last half of 2007, for the aforementioned reasons.
 Particular strength was exhibited in trade on commodity exchanges and also in the gold Exchange-Traded Funds (ETFs). Total ETF holdings at year-end stood at close to 28 million ounces, with a total value of over $23 billion. This represents a significant level of growth over year-end holdings in 2006, even though this itself represented a doubling over levels of funds held the previous year. The majority of ETF investment occurred in the US-listed fund, StreetTracks.


Demand
 Over the first half of 2007, physical demand from jewellery fabrication recovered strongly from the low levels of 2006, reachingrecord highs in several major markets. In the second half of the year, however, this level of demand could not be sustained in the face of a more volatile price environment, which impacted heavily on traditional markets, and with the increasingly difficult consumer and retail environment in developed markets such as the US.
 Overall, fabrication demand for jewellery in 2007 increased by 6 percent in tonnage terms over 2006 levels, with the bulk of thatincrease contributed by the larger emerging markets of East Asia, India and the Middle East. European demand is expected to remain flat, whereas demand from the US market fell in tonnage terms by 14 percent over 2006.
 It was in the Indian market that the contrast in consumption levels between the two halves of the year was most marked. Demand reached record levels in rupee and tonnage terms for both jewellery and retail investment in the second quarter of the year. Together these totaled 317 tonnes, half of global mine output for the quarter and 90 percent higher than the relatively low level attained in the same quarter in 2006.
 Demand in the first half of the year increased by 72 percent over the corresponding period in the previous year. This strong level of consumption was fuelled in part by economic growth, particularly in the agricultural sector, as well as by a stable rupee gold price. In the second half of the year, however, the rupee/dollar exchange rate showed significant volatility, and this combined with a period of volatility in dollar gold prices created a set of circumstances unfavorable to gold consumption. Pricevolatility is a significant deterrent to demand in the Indian market, and in the second half of 2007 the periods of most extremeprice volatility coincided with some of the more auspicious gold buying occasions, such as Diwali. Demand in the fourth quarterwas particularly poor and fourth quarter offtake reached the lowest level since the early 1990s.  Over the year as a whole, an increase in jewellery offtake in tonnage terms of 6 percent was recorded.
 Demand in the Middle East, specifically in the six Gulf markets, was also dented considerably in the second half of the year, with a sharp shift in consumer sentiment away from gold jewellery consumption brought about by a combination of volatile price levels, inflationary concerns and significant escalations in rent charges.  As the currencies of these markets are pegged againstthe dollar, there is no cushioning for consumers against dollar gold price volatility. In the region, Turkey and Egypt experiencedhealthier demand, with good tourist seasons and increased economic stability helping to fuel consumption.
 The Chinese market proved most resilient to the more volatile prices as most retailers maintain a margin of approximately 10 percent over the gold price and therefore tend not to adjust prices on a daily basis according to each and every fluctuation in the dollar gold price.  The Chinese economy also continued to record strong growth.
 In the US, gold demand in 2007 reached the lowest level since 1992. Retailers continued to reduce their focus on the category in the light of rising prices and to seek out product with lower gold content so as to offer a lower-cost range of product to anincreasingly price-sensitive consumer. Only the high end of the market, which typically retails 18 carat product, remained strong. Margins in this segment are higher than in the mass market segment and consumers are less sensitive to price increases.
 Despite high gold prices, supplies of scrap into the market were weaker than in 2006. In part this seems to have been due to the fact that significant personal gold inventories were liquidated in 2006 and have not been replaced as yet. Another factor was the price surge which took place towards the end of the year. Consumers were deterred from selling old jewellery by the expectation that prices might rise further.
 Industrial demand increased marginally by 2 percent over 2006 levels. A slowdown in the demand for electronic goods over the second half of the year impacted growth in this sector.
 Official market
 Official sector sales for the calendar year were 485 tonnes, some 30 percent higher than in 2006. Gold sales by the Central Bank Gold Agreement (CBGA) signatories account for the bulk of this increase and in the third year of the second CBGA agreement (which came to an end on September 26, 2007) 475.8 tonnes of the available quota of 500 tonnes had been released onto the market.


Hedging
 Gold producers reduced their hedging positions considerably in 2007. Over 400 tonnes were bought in the market in this way, a figure only slightly below the record level of de-hedging measured in 2004. The majority of this activity took place in the first half of the year and was driven by the activities of a small number of major players.
 As at December 31, 2007, the net delta hedge position of AngloGold Ashanti was 10.39 million ounces or 323 tonnes, valued at the spot price of gold on that day of $836 per ounce.  The marked-to-market value of the hedge position at this date was negative $4.27 billion.
 Marketing channels
 Gold produced by AngloGold Ashanti’s mining operations is processed to a saleable form at various precious metals refineries. Once refined to a saleable product – either a large bar weighing approximately 12.5 kilograms and containing 99.5 percent gold, or smaller bars weighing 1.0 kilogram or less with a gold content of 99.5 percent and above – the metal is then sold eitherthrough the refineries’ channels or directly to bullion banks and the proceeds are paid to the company.
 Bullion banks are registered commercial banks that deal in gold. They participate in the gold market by buying and selling goldand distribute physical gold bullion bought from mining companies and refineries to physical offtake markets worldwide.  Bullionbanks hold consignment stocks in all major physical markets and finance such 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.
 Where forward sales contracts exist against which AngloGold Ashanti delivers physical product, the same channel of the refinery is 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 theappropriate amount of gold fulfills 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 development
 AngloGold Ashanti has since its inception been committed to growing the market for its product, particularly as gold jewellery sales in many developed markets have declined materially over the years in favor of other luxury goods. In response, the company’s marketing programs aim to increase the desirability of gold to sustain and grow demand and to support the deregulation of the market in key economies.
 AngloGold Ashanti’s market development activities centre on the following areas: Strategic projects undertaken in key and critical gold jewellery offtake markets (USA, India, China, Italy, Middle East), which aim to develop positive corporate identification and recognition while achieving, where sensible and possible, financial returns for AngloGold Ashanti; Host country projects of a downstream development nature; and AuDITIONS, the company’s gold jewellery design competition.
 AngloGold Ashanti remains a member of the World Gold Council (WGC) and undertakes its own strategic marketing projects in such a way as to co-operate with and support the WGC’s wider objectives.
 Strategic projects
 India
 India is the world’s largest consumer market in tonnage terms. Gold demand here is firmly embedded in cultural and religious traditions and is seen as a symbol of wealth and prosperity. It is considered to be an auspicious metal that is bought and givenas a gift during religious festivals.
 With the assistance of a pre-eminent Indian jewellery retailer, AngloGold Ashanti’s projects in India are intended to help bringabout the modernization of the country’s traditional gold jewellery sector. One concept centers on transforming the traditional,semi-urban jewellery retailing environment into a more modern and efficient one that presents rural consumers with a high-quality, professional and trusted ‘local’ jewellery store, which can better compete with stores selling such lifestyle items aselectronics and cell phones. Other concepts focus on the development and distribution of branded collections of jewellery into the market.


China
 China has been identified as a key strategic market by AngloGold Ashanti both because of its size – it is the third largest market worldwide for jewellery – and because of its potential for growth. In China, AngloGold Ashanti has partnered with a Hong Kong-based retailer to develop and roll-out a retail concept that targets independent, high-income earning women wishing to express their independence and individuality through accessories of gold.
 The roll out of this concept has included the co-sponsoring of AuDITIONS China so as to expand the reach of the company’s jewellery design competition to the China mainland. A collection of jewellery for commercial sale was developed on the basis ofthe competition designs. AngloGold Ashanti has also partnered with the retailer to establish concept stores for gold jewellery in major urban centers in China. The first of these stores will open in Beijing in April 2008.
 United States
 The American gold jewellery market is characterized primarily as an adornment market in which gold jewellery is purchased mainly as a fashion accessory. During the past ten years, there has been some slippage in gold jewellery consumption in volume terms in the US market relative to that of other luxury and lifestyle goods.
 Contributing in part to this decline has been the commoditization of gold jewellery through the mass-market retail channel, which has tended to sell jewellery on price rather than design style. Consumer research, however, suggests that the US customer shops in a fashion- and trend-conscious way and is therefore generally receptive to brands and branding. Furthermore, the US market is viewed by consumers in other important consumption categories as an opinion- and trend-forming market. Influencing the purchasing motives and buying patterns of the US consumer base can therefore influence other key consumption regions around the world.
 In response to these factors, AngloGold Ashanti, together with the WGC, partnered with a large US jewellery wholesaler and distributor to develop and promote at retail level selected collections of gold jewellery from the new product ranges of the Italian-based Gold Expressions (GE) manufacturers. This project is intended to promote the sale of fashionably-designed and progressively-styled gold jewellery in the US retail market and to lay the foundation for Italian manufacturers to build themselves or their products into consumer brands.
 Middle East
 As a region, the Middle East (comprising the United Arab Emirates, Turkey and Saudi Arabia) is the third largest consumer market for gold in volume terms. The increase in disposable income in this region as a result of both higher oil revenues and rising numbers of tourists has impacted positively on gold jewellery consumption.
 While the challenge from increasingly more prominent lifestyle, luxury and branded products is, as it is in other markets, clearly growing, the gold category in the Middle East has so far sustained its already high rate of gold consumption per capita compared to the rates of growth in population and per capita disposable income.
 AngloGold Ashanti has partnered with the WGC and a leading jewellery wholesaler in the region to develop a business concept to launch and promote at the local retail level selected collections of mid- to high-end gold jewellery from the product ranges of Italian-based manufacturers. The project is intended to improve the gold jewellery product and retailing proposition offered toboth the domestic and the tourist consumer segments in the Middle East.
 Host Country Jewellery Sector Development
 AngloGold Ashanti’s marketing efforts have historically been directed at the growth and development of the jewellery sector in countries that host AngloGold Ashanti operations. These projects are intended to bring benefit to the company on several levels: corporate image-building, supporting host governments’ beneficiation agendas; and providing a platform for strategic market development projects.
 These projects will continue to be important for jewellery sector development and will be focused primarily in South Africa, Brazil and Ghana.  AngloGold Ashanti continues to hold a 25 percent stake in the Oro Group, the largest gold jewellery manufacturer in South Africa, with projects in Ghana and Brazil currently under investigation.


AuDITIONS
 In 2004, following the business combination of AngloGold and Ashanti, the AngloGold Ashanti AuDITIONS brand was created to unite the company’s gold jewellery design competitions and to reinforce the company’s brand in look, feel and character. Theconcept of AuDITIONS is premised on the metaphor of the performing arts, with designers auditioning in gold through their pieces.
 The overall strategic objective of AuDITIONS is to stimulate innovative design in high-caratage gold around the world in order to raise the profile of and drive demand for this jewellery category among consumers. AuDITIONS competitions also seek, through their contacts with the jewellery manufacturing and retail trade, to promote the concept of innovative jewellery designand expose the trade to new and innovative design and techniques.
 It is intended to build AuDITIONS into an independent global competition brand and, with the help of the WGC, the competition has been extended to the key gold markets of India, China and the Middle East, from its original bases in South Africa and Brazil.
 Uranium
 AngloGold Ashanti remains South Africa’s largest producer of uranium. Several initiatives are under way to boost AngloGold Ashanti’s uranium production further. In 2007, a new tailings dam was commissioned in order to segregate untreated uranium-bearing material from material which had previously been treated. Work has begun on an upgrade of the uranium plant at Vaal River and this will be commissioned in 2009. Nuclear Fuels Corporation of South Africa (Pty) Limited (Nufcor) has also entered into contracts with several other uranium producers to treat their material. The first deliveries under these contracts started in late 2007.
 Following a run of price increases lasting more than four years, the spot price of U3O8 reached an all-time high of $136 per pound in mid-June 2007. The price weakened thereafter due to weak seasonal demand during the summer months. The spot price dropped to a low of $75 per pound at the start of October before recovering to end the year at $90 per pound.
 Recent spot price volatility has been predominantly demand-driven with utilities backing away from the market in light of the record prices for uranium. Conversely, term market prices have remained remarkably steady with published prices remaining at $95 per pound throughout the second half of 2007. Term activity remains the dominant contracting force in the uranium market with up to 90 percent of utility demand procured via direct multi-year supply agreements with producers.
 Forward uranium market fundamentals remain positive with robust demand augmented via an increasing number of new reactor build projects. Market prices are anticipated to remain robust for several years with the potential for price spikes in the event of further supply disruption.
 Gold production and mine-site rehabilitation processes
 The process of producing goldThe process of producing gold can be divided into six main phases:
            Finding the orebodyAngloGold Ashanti’s global exploration group identifies targets and undertakes exploration, on its own or in conjunction with joint venture partners.


Creating access to the orebody
   underground mining: a vertical or decline shaft (designed to transport people and/or materials) is sunk deep into the ground, after which horizontal development takes place at various levels of the main shaft or decline. This allows for further on-reef development of specific mining areas where the orebody has been identified; and
   Removing the ore by mining or breaking 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 out of the mine.
  In open-pit mining, drilling and blasting may also be necessary to release the gold- bearing rock; excavators then load the material onto the ore transport system.
 Transporting the broken material from the mining face to the plants for treatment
  Underground ore is transported by means of vertical and/or horizontal transport systems. Once on the surface, conveyor belts usually transport the ore to the treatment plants.
   ServicesMining activities require extensive services, both on the surface and underground, including:
    • ventilation; •
       Processing
  Comminution is the process of breaking up ore to make gold available for treatment. Conventionally, this process occurs in multi-stage crushing and milling circuits. Modern technology is to use large mills fed directly with run-of-mine material.
    refractory ores, where the gold is locked within a sulphide mineral and not readily available for recovery by the cyanidation process; or
    Refractory ore treatment: after fine grinding, the sulphide materials are separated from the barren gangue material using flotation to produce a high-grade sulphide concentrate. The sulphide concentrate is oxidized by either roasting as at Brasil Mineração or bacterial oxidation (BIOX) as at Obuasi. The oxidation process oxidizes the sulphide minerals, liberating the gold particles and making them amenable to recovery by the cyanidation process.
   alkaline cyanide leach solution. This is generally followed by adsorption of the gold cyanide complex onto activated carbon-in-pulp (CIP).
  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 the ore deposit tonnage cannot economically justify constructing a process plant. Run- of-mine ore is crushed and heaped on a 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 stripped solution is recycled to the top of the heaps.


Gold adsorbed onto activated carbon is recovered by a process of re-dissolving the gold from the activated carbon (elution), followed by precipitation in electro-winning cells and subsequent smelting of that precipitate into doré bars that are shipped to the gold refineries.
  Retreatment of tailing stockpile from previous decades’ operations is also practiced by AngloGold Ashanti. The old tailings are mined by water sluicing followed by agitator leaching in alkaline cyanide solution and recovery of dissolved gold onto activated carbon.
        uranium which is recovered in a process which involves initial acid leaching followed by recovery of the leached uranium onto resin and subsequent stripping with ammonium hydroxide and precipitation of crude yellow cake.
  The tailings from the process operations are stored in designated tailings storage facilities designed to enhance water recovery and prevent contaminant seepage into the environment.
 RefiningThe doré bars are transported to a refinery for further refining, to as close to pure gold as possible. This is known as good delivery status.  This gives the assurance that the bar contains the quantity and purity of gold as stamped on the bar.
 The process of mine-site rehabilitation
 In all the jurisdictions in which the company operates, it is required to conduct closure and rehabilitation activities to return the land to a productive state once mining has been completed. Additionally, the company is required to provide financial assurance, in a form prescribed by law, to cover some or all of the costs of the anticipated closure and rehabilitation costs forthe operation. Rehabilitation refers to the process of reclaiming mined land to the condition that existed prior to mining or to a pre-determined post-mining use.
 Closure plans are devised prior to the commencement of operation and are regularly reviewed to take into account life-of-mine projections. Although the final cost of closure cannot be fully determined ahead of closure, appropriate provision is made duringthe mine’s economic operation.
 Rights to mine and title to properties
 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. In a number of countries in which AngloGold Ashanti operates there are, in some cases, certain restrictions in terms of the group’s ability to independently move assets out of that country and/ortransfer the assets within the group, without the prior consent of the local government or minority shareholders involved.


Operating performance
 In 2007, gold production totaled 5.5 million ounces compared to 5.6 million ounces in 2006. This decline in production was largely a result of the reduced volumes mined at the South African operations owing to safety concerns, and at some of the operations in Mali which are nearing the end of their productive lives. Record production was reported at Sunrise Dam in Australia and at Siguiri in Guinea, while at Moab Khotsong in South Africa the ramp-up in production continued. Total cash costper ounce for the year was $367 compared to $321 in 2006.
 AngloGold Ashanti has 20 operations in 10 countries around the world. The 20 operations include Boddington, a joint venture expansion project with Newmont, which is currently underway in Australia. While these operations are managed on a regional basis, they are reported on country-by-country basis.


43
 OPERATIONS AT A GLANCE for the year ended December 31, 2007
 Attributable tonnes
 treated/milled (Mt)
 Average grade recovered (g/t)
 Attributable gold
 production (000oz)
 Total cash costs
 ($/oz)
 (1)
  
 SOUTH AFRICA
       2,328  2,554  2,676
 
 
 
 Vaal River
                                        (1)
                                       West Wits
                                        (2)
  
  
 ARGENTINA
       
 
 
 
 
 
              AUSTRALIA
       
 
 
 
 
 
  (3)
  
 
 BRAZIL
       408  339  346
     (2)
  
 
  (2)
             GHANA
       527  592  680
 
 
 
  (5)
    
  
  
    (3)(4)
  
 
  (2)
 
 
 GUINEA
       
 
 
 
 
 
  (3)
  
 
 MALI
       441  537  528
 
 
 
                            (6)
  
 
 NAMIBIA
       
 
 
 
 
 
              TANZANIA
       
 
 
 
 
 
              UNITED STATES OF AMERICA
       
 
 
 
 
 
  (6)
   
 
 (1)
 Attributable production at Moab Khotsong prior to commercial production in 2006 was capitalized against pre-production costs.
 (2)  The yield of TauTona, Brasil Mineraçáo, Serra Grande and Obuasi represents underground operations. (3)  The yield of Sunrise Dam, Iduapriem and Siguiri represents open-pit operations. (4)
 The minority 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.
 (5)
 The yield of Bibiani represents surface and dump reclamation in 2006 and open-pit operations in 2005.  Bibiani was sold effective December 28, 2006.
 (6)  The yield of Yatela and Cripple Creek & Victor Joint Venture reflects recoverable gold placed/tonnes placed.


SOUTH AFRICA
 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
  Rights:
 In October 2002, the President of South Africa assented to the Mineral and Petroleum Resources Development Act (MPRDA),
  which was passed by the Parliament of South Africa in June 2002 and came into effect on May 1, 2004. The objects of the Act
  are 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 concerning prospecting, exploration, mining and production operations. The state ensures that holders of
  mining and prospecting rights contribute to the socio-economic development of the areas in which they are operating. AngloGold Ashanti was informed on August 1, 2005, by the Director General of Minerals and Energy that its applications to
  convert its old order mining rights to new order mining rights for its West Wits and Vaal River operations, as well as its
  applications for new mining rights to extend its mining areas at its TauTona and Kopanang mines, had been successful. These
  applications relate to all of its existing operations in South Africa. The notarial agreements for the converted West Wits mining
  right and Block 1C11 new mining rights have been executed and registered as well as the agreements for Jonkerskraal,
  Weltevreden, Moab Extension Area and the new right for Edom, all of which form part of the Vaal River operations.  Two
  notarial agreements relating to the Vaal River operations are in the process of being executed and registered. the conversion process is April 2009. The South African government expects to finalize the Royalty Bill towards the end of
  2008.


Geology: The Witwatersrand Basin comprises a six-kilometer thick sequence of interbedded 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: At the South African operations, there were most regrettably 27 fatalities during the course of 2007, five fewer than in 2006. This resulted in a FIFR of 0.29 per million hours worked for the year as opposed to 0.35 in 2006. The LTIFR for the South African operations as a whole for 2007 was 12.72 per million hours worked (2006: 12.53), indicating a deterioration in safety levels, although there were improvements in the safety performance at Kopanang, Moab Khotsong and Tau Lekoa.
 The safety of AngloGold Ashanti’s workforce remains a priority and in November 2007, the ‘Safety is our first value’ campaign was launched at the South African operations. This behavior-based campaign will begin with developing a framework for managing safety, the template for which will be based on OSHAS 18001 and OSHAS 18002. The safety campaign was launched in collaboration with the trade unions and government representatives. Simultaneously, various safety interventions were implemented at the operations to re-emphasize the company’s principles and standards regarding safety. The focus is on leadership, behavior and on improving compliance with operating standards at all levels.
 •  
  West Wits operations
 Description: The Mponeng, Savuka and TauTona mines are situated on the West Wits Line, near the town of Carletonville, straddling the border of the province 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 collectively produced 33,258 kilograms (1,069,000 ounces) of gold, equivalent to 20 percent of group production.
 Mponeng
 Description: Mponeng is situated close to the town of Carletonville in North West Province, southwest of Johannesburg, straddling the border with the province of Gauteng. The mine currently mines the Ventersdorp Contact Reef (VCR) with stoping taking place at an average depth of 3,054 meters. The deepest operating stope is at a depth of 3,370 meters below surface. Given the high degree of variability in the grade of the VCR at Mponeng, a sequential grid mining method is used which allows for selective mining and increased flexibility in dealing with changes in grade ahead of the stope.
 Mponeng comprises a twin-shaft system housing two vertical shafts and two service shafts. Ore mined is treated and smelted at Mponeng’s gold plant. The ore is initially ground down by means of semi-autogenous milling after which a conventional gold leach process incorporating liquid oxygen injection is applied. The gold is then extracted by means of carbon-in-pulp technology. The Mponeng gold plant conducts electrowinning and smelting (induction furnaces) on products from Savuka and TauTona as well.  The Mponeng gold plant has a capacity of 160,000 tonnes per month.


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: Safety at Mponeng deteriorated during the year, with the LTIFR rising from 10.70 in 2006 to 13.08 in 2007. There were also, most regrettably, six fatalities during the year with the result that FIFR rose to 0.42 (2006: 0.30). Four of these fatalities were caused by seismic events, one a result of a fall of ground and an accident involving machinery.
 Operating review: Production declined by 2 percent to 18,260 kilograms (587,000 ounces) in 2007 compared with 18,549 kilograms (596,000 ounces) in 2006. The various planned and unplanned work stoppages and safety initiatives conducted towards the end of the year, combined with a decline in grade and reduced face advance, contributed to the decrease in production.
  Cost-saving initiatives were implemented at Mponeng and cost increases were kept to a minimum during the year. Total cash costs rose by 11 percent to $264 per ounce, largely a result of the fatal accidents and the resulting loss of production days. Also affecting costs were the strength in the rand and the increase in expenditure on seismic-related support.
 Capital expenditure (including the amounts spent on below 120 VCR project and purchase of equipment) for the year totaled R604 million ($86 million) (2006: R325 million ($48 million)). The SS2 shaft, which extends the mining depth to 6,700 meters, was commissioned in December 2007.
 Growth prospects:
 VCR below 120 project: this entails accessing the mineral reserves below 120 level. It is estimated that this project will add 2.5 million ounces to production at a cost of $252 million (R2.03 billion).  This project was approved by the board in February2007, following which construction began. On-reef development and thus the start of production are scheduled for 2013 with full production due in 2015.
 CLR below 120 project: Work is currently under way on this project aimed at accessing the Carbon Leader Reef which is located about 900 meters below the VCR. Initial estimates are that it has the potential to contribute up to 7.4 million ounces toproduction over the life of the project. Production from this project is estimated to commence in 2018.
 Savuka
 Description:Savuka is situated on the West Wits line in the province of Gauteng, approximately 70 kilometers south-west of Johannesburg. Savuka is close to the town of Carletonville in North West Province. The mine currently mines both the Carbon Leader Reef (CLR) and the Ventersdorp Contact Reef (VCR).
 This mining operation comprises sub and tertiary shaft systems with the latter reaching a depth of 3,777 meters, making Savuka the deepest mine in the world. Longwall mining was the preferred extraction method until recently but the operation is in the process of converting to sequential grid mining. There are 23 panels currently in operation.
 Ore mined at Savuka is processed firstly at TauTona’s processing plant. The plant uses conventional milling to crush the ore and a carbon-in-pulp circuit to treat the ore further, after which it is sent to the Mponeng gold plant where the gold is extracted by means of electrowinning and smelting.  The Savuka gold plant has a capacity of 280,000 tonnes per month.


Savuka was scheduled to close in April 2006. However, the strengthening gold price at that time, and a revised business plan for Savuka based on shared managerial and processing resources, have contributed to a turnaround at this operation which is now making a positive contribution to AngloGold Ashanti.
 Safety: There was a deterioration in safety during the year with an overall LTIFR for the year of 25.99 per million hours worked compared to 19.30 in 2006. There were two fatalities caused by seismic falls of ground to give a FIFR of 0.79 for the year (2006: 0.0). Steps were taken to address safety including dedicated ‘safety’ days, mass communication and employee workshops. These were in addition to the launch of the ‘safety is our first value’ campaign.
 Operating review: Production was down to 2,284 kilograms (73,000 ounces) in 2007, although output was greater than had been initially planned. Volumes mined were 9 percent down on 2006 with tonnes milled down by 5 percent.  Increased development for much of the year aimed at improving the stoping widths resulted in reduced grades. However, once this had been achieved, reduced face advances, work stoppages and safety interventions also had a negative effect on production.
 Total cash costs increased by 18 percent to $397 per ounce, largely as a result of the reduced production and lower grades which were affected by the decline in stoping activity and increase in development waste.
 Growth prospects: The restructuring program instituted at Savuka over the last two years has increased its expected life of mine. There is an extensive resource to the west of current mining activities. Exploration and drilling programs are being undertaken to determine extent and accessibility of this resource and to target potential mining prospects prior to the conduct of feasibility studies.
 TauTona
 Description:TauTona is situated close to Savuka near the town of Carletonville. TauTona exploits the Ventersdorp Contact Reef (VCR) and the Carbon Leader Reef (CLR). Mining operations are conducted at depths ranging from 1,800 meters to 3,500 meters at which the deepest stoping sections are found.
 The mine consists of a main shaft system supported by secondary and tertiary shafts. The mining method used here is primarily longwall mining. TauTona shares a processing plant with Savuka. The plant uses conventional milling to crush the ore and a carbon-in-pulp plant to treat the ore further. Once the carbon has been added to the ore, it is transported to the gold plant at Mponeng for electrowinning, smelting and the final recovery of the gold.
 Safety:There was deterioration in safety at TauTona during 2007. The LTIFR for the year was 18.14 (2006: 17.09) and there were five fatalities (2006: 16), the major cause of which was rockfalls and/or falls of ground. The FIFR for the year was 0.40 (2006: 1.23) .
 Operating review:Gold production declined by 14 percent to 12,714 kilograms (409,000 ounces) (2006: 14,736 kilograms (474,000 ounces)), owing to a greater-than-scheduled decline in the volume of ore mined. This was a result of increased seismic activity in the vicinity of the CLR shaft pillar which is being mined, and at several high-grade production panels, where production was halted for limited periods during the course of the year owing to the fatal accidents caused by seismic activity.Both face length and face advance were negatively affected by seismicity during the year. The increased geological risk from this seismic activity necessitated re-planning regarding mine layout and mining methods.
 The decline in production, together with an increase in input costs, annual wage increases, work stoppages and a stronger rand contributed to an 18 percent increase in total cash costs to $318 per ounce. The increase in cash costs occurred despite the implementation of various cost-saving initiatives, which were insufficient to offset the increase in costs associated with thereduction in production and costs related to the repair of seismic damage.  Capital expenditure was R500 million ($71 million),less than had been planned.
 Growth prospects:
 The CLR below 120  level project is accessed via a twin-decline system down to 128 level.  Production is planned to begin in 2009 and the project is scheduled to produce 2.5 million ounces of gold from 2009 to 2019.  The project has total budgeted capital expenditure of $172 million (R1.2 billion) of which $73 million (R512 million) has been spent to date.


The CLR shaft pillar extraction project enables stoping operations to be conducted up to a recently revised infrastructural zone of influence. Production from this project, which began in 2004 and will continue until 2010, is estimated to total more than 425,000 ounces at an average cash cost of $118 per ounce during this period.  Capital expenditure for this project is R272 million ($40 million) at current exchange rates, most of which has been committed.
 The VCR pillar project, which accesses the VCR pillar area located outside the zone of influence, began production in 2005. Development is scheduled to be completed by mid-2009. Total production over a nine-year period until 2013 is estimated at almost 226,000 ounces at a capital cost of R123 million ($18 million). Of this, R95 million ($14 million) has been spent to date.The average project cash cost is calculated to be $158 per ounce.
 Operating and production data for West Wits operations
 Mponeng                            
  TauTona                                 
  Savuka
 2007
                         (1)
     (1)
         (2)
     (2)
    2006
                         (1)
     (1)
         (2)
     (2)
    2005
                         (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.


·   
  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 AngloGold Ashanti Vaal River operations have among them four gold plants, one uranium plant and one sulphuric acid plant.
 Combined, the Vaal River operations (including surface operations) produced 39,171 kilograms (1,259,000 ounces) of gold, equivalent to 23 percent of group production.
 Great Noligwa
 Description: 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. Both the Vaal Reef, the primary reef, and the Crystalkop Reef, a secondary reef, are mined here. The mining operation here consists of a twin-shaft system and operates over eight main levels at an average depth of 2,400 meters.
 Owing to the geological complexity of the orebody, a scattered mining method is employed. Great Noligwa has its own dedicated milling and treatment plant which applies conventional crushing, screening semi-autogenous grinding and carbon-in-leach processes to treat the ore and extract the gold.
 Geology:
  ·  
  The Vaal Reef contains approximately 85 percent of the reserve tonnage with mining grades between 10 and 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.·   The VCR has a lower grade than the Vaal Reef, and contains approximately 15 percent of the estimated 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. ·    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.
 Vaal River – Summary of metallurgical operations
 West GP
 East Gold Acid
 and Float Plant
 Noligwa GP
 Mispah GP
 Kopanang GP
 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
 
 
 Sulphuric acid plants
 
 
 
 
 
 Production  (tonnes/month)
 –
 7,500
 –
 –
 –


Operating and production data for Vaal River operations
 
 Great Noligwa
 Kopanang
 Tau Lekoa
 Moab Khotsong
 (3)
 2007
 
 
 
 
 Pay limit (oz/t)
 0.34
 0.36
 0.16
 1.52
 Pay limit (g/t)
 11.69
 12.18
 5.39
 52.12
 Recovered grade (oz/t)
 0.220
 0.211
 0.106
 0.232
 Recovered grade (g/t)
 7.54
 7.24
 3.62
 7.94
 Gold production (000 oz)
 483
 418
 165
 67
 Total cash costs ($/oz)
 (1)
 
 404                             
  306                            
  473                             
  672
 Total production costs ($/oz)
 (1)
 
 513                             
  400                            
  752
 1,254
 Capital expenditure ($ million)
 37
 52
 16
 89
 Employees
 (2)
 
 5,908                          
  5,470                          
  2,506                         
  1,986
 Outside contractors
 (2)
 
 726                             
  465                            
  345
 1,548
 2006
 
 
 
 
 Pay limit (oz/t)
 0.28
 0.32
 0.14
 1.50
 Pay limit (g/t)
 9.57
 10.92
 4.85
 51.44
 Recovered grade (oz/t)
 0.236
 0.204
 0.110
 0.185
 Recovered grade (g/t)
 8.08
 7.01
 3.76
 6.35
 Gold production (000 oz)
 615
 446
 176
 44
 Total cash costs ($/oz)
 (1)
 
 260                             
  291                            
  438                             
  659
 Total production costs ($/oz)
 (1)
 
 374                             
  377                            
  693
 1,136
 Capital expenditure ($ million)
 49
 41
 11
 83
 Employees
 (2)
 
 5,883                          
  5,360                          
  2,514                          
  1,539
 Outside contractors
 (2)
 
 696                             
  455                            
  379
 1,365
 2005
 
 
 
 
 Pay limit (oz/t)
 0.39
 0.39
 0.19
 -
 Pay limit (g/t)
 13.24
 13.25
 6.23
 -
 Recovered grade (oz/t)
 0.271
 0.215
 0.116
 -
 Recovered grade (g/t)
 9.30
 7.38
 3.96
 -
 Gold production (000 oz)
 693
 482
 265
 -
 Total cash costs ($/oz)
 (1)
 
 264                             
  277                            
  410
 -
 Total production costs ($/oz)
 (1)
 
 354                             
  363                            
  555
 -
 Capital expenditure ($ million)
 43
 41
 15
 94
 Employees
 (2)
 
 5,704                          
  5,506                          
  3,021                         
  1,320
 Outside contractors
 (2)
 1,152
 524
 1,084
 1,201
 (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)
 Commercial production commenced on January 1, 2006.
 Safety: Safety at Great Noligwa as measured by the LTIFR deteriorated year-on-year. The LTIFR for the year was 14.46 (2006: 12.21). There were regrettably two fatalities (2006: seven) caused by falls of ground, to give a FIFR of 0.11, as compared to 0.36 in 2006.
 Operating review: Production declined by 21 percent to 15,036 kilograms (483,000 ounces) in 2007, compared to 19,119 kilograms (615,000 ounces) in 2006. This was a result of poor face advance combined with a lack of mining flexibility given the geological features encountered, and increased mining of pillars at the boundary limits of the mining lease area. Thedecline in production was also affected by safety-related work stoppages and the running of safety training initiatives towardsthe end of the year. The overall result was a 16 percent decline in tonnes mined.
 Overall, total cash cost for the year rose by 55 percent to $404 per ounce. Increases in costs were the result of lower volumes,higher input costs, annual wage increases and losses on uranium byproduct. The losses on uranium were caused by firstly, reduced production and secondly, uranium purchases which had to be made to meet contractual obligations. Capital expenditure totaled R261 million ($37 million).
 Growth prospects: As the operation ages, Great Noligwa is in the process of converting from conventional scattered mining to pillar or remnant mining for the remainder of its operational life. Up until now the Vaal Reef has been the most economically viable reef to mine. However, as this reef is being mined out, the less economical Crystalkop Reef is being increasingly exploited as are economically viable pillars within the mine boundaries.


Kopanang
 Description: 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 1,350 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.
 Safety: Safety as measured by the LTIFR improved year-on-year. The LTIFR for the year was 13.10 (2006: 15.22).  There were regrettably three fatalities (2006: two) caused by accidents involving machinery and explosives. FIFR for the year was 0.22 compared to 0.14 in 2006.
 Operating review: Gold production declined by 6 percent to 13,013 kilograms (418,000 ounces) (2006: 13,886 kilograms (446,000 ounces)) with volumes mined decreasing by 5 percent.  Although an initial drop in production was made up subsequently when increased volumes of higher grade material were mined, resulting in an improved yield for the year, this was insufficient to prevent an overall decline in production year-on-year. Seismic activity was a concern during the year as thislimited access to high-grade areas. In addition, mining face length was restricted by the unexpected geological structures encountered, the intersection of methane, a lack of mining flexibility and shifts lost owing to safety-related training and workstoppages.
 The decreased production, combined with increased input costs including the implementation of winter power tariffs and annual wage increases contributed to a 5 percent increase in total cash costs to $306 per ounce.
  Growth prospects: A new waste washing plant is planned at a cost of R11 million ($1.6 million). The plant will upgrade the quality of the fines to be added to the Kopanang stream as well as that of the tonnes to be sent to the plant at Great Noligwa for uranium extraction.
 The orebody to the west of Kopanang’s current mining area is being explored which, if it proves viable, will extend the life ofmine.
 Tau Lekoa
 Description: Tau Lekoa is one 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. Tau Lekoa has an expected life of mine of nine years.
 The Tau Lekoa operation comprises a twin-shaft system. Because of the geologically complex orebody occurring at Tau Lekoa, a scattered mining method is used with the orebody being accessed via footwall tunneling while stoping takes place on strike. There are currently seven shaft levels with an average of 70 panels in operation. Tau Lekoa employs hydro-electric power as its primary source of energy.
  Safety: Although safety as measured by the rate of lost-time injuries improved to 19.07 compared to 24.99 in 2006, in terms of fatalities, safety standards declined.  There were regrettably four fatalities at Tau Lekoa to give a FIFR for the year of 0.58 (2006: 0.15).


Operating review:Production declined by 6 percent to 5,137 kilograms (165,000 ounces) in 2007 from 5,473 kilograms (176,000 ounces) in 2006, despite a marginal improvement in face advance.  This was in line with a scheduled down-sizing of the operation in 2006/7, and a planned decline in yields and inventory depletion. Production was achieved despite work stoppages, both planned and unplanned, around safety-related matters and the implementation of safety training initiatives.
 While Tau Lekoa has proved that current levels of production are both sustainable and profitable, its primary challenge is to maintain high levels of output per employee without compromising safety.
 Total cash costs rose by 8 percent to $473 per ounce compared to $438 per ounce the previous year.  Capital expenditure for the year totalled R113 million ($16 million) (2006: R74 million ($11 million)).
 Growth prospects
 Moab Khotsong
 Description: Moab Khotsong, the newest of AngloGold Ashanti’s South African operations, began commercial production in January 2006. Located south and south-east of Great Noligwa and Kopanang in the Free State province, Moab Khotsong was developed so as to exploit the Vaal Reef. The first phase of this operation included the development of a main shaft system, a subsidiary ventilation shaft and three main production levels to a depth of between 2,600 meters and 3,054 meters below surface.
 Given the known geological complexity of the Vaal Reef, a scattered mining method has been employed with haulages, cross cuts and raises pre-developed in a grid system.
 Safety: There were most regrettably five fatalities at Moab Khotsong in 2007. The primary cause of the fatal accidents was seismic events. The FIFR for the year was 0.57 (2006: 0.27). There was, however, an improvement in the LTIFR to 13.48 (2006: 15.75).
 Operating review: Production continued to ramp-up with 2,081 kilograms (67,000 ounces) being produced in 2007 (2006: 1,371 kilograms (44,000 ounces)) – 726 kilograms (23,000 ounces) were produced in the fourth quarter of 2007 alone.  Annual production was, however, less than had been budgeted as a result of poor face advance which was 25 percent less than planned. Consequently, tonnes mined were 21 percent down on expectations.
 Full annual production of 14,000 kilograms (440,000 ounces) is scheduled for 2013. As at the end of December 2007, the total cost of developing Moab Khotsong was R4,193 million ($599 million) (at an exchange rate of R7/$).
 The values mined and volumes treated increased by 25 percent and 21 percent, respectively. This was despite an increase in dilution owing to an increase in off-reef mining and stoping widths in order to negotiate dip faults.
 Total cash cost rose by 2 percent to $672 per ounce compared to $659 per ounce the previous year. Costs were negatively affected by the lower-than-scheduled level of production, the purchase of uranium to meet delivery contracts, and the relative strength of the rand for the year. Capital expenditure for the year totaled R628 million ($89 million) (2006: R565 million ($83 million)).
 Growth prospects: A study for Phase 2 of the development at Moab Khotsong which will extend below the Phase 1 workings was approved by the board and completed during 2007.


ARGENTINA
 AngloGold Ashanti has one gold mine in Argentina, Cerro Vanguardia, which produced 204,000 attributable ounces of gold in 2007, equivalent to 4 percent of group production.  The company owns the right to exploit the deposit up to 2036 based on the Usufruct Agreement signed in December 1996.
 Description: AngloGold Ashanti has an interest of 92.5 percent in Cerro Vanguardia and the province of Santa Cruz, 7.5 percent. Located to the north-west of Puerto San Julian in the province of Santa Cruz, Cerro Vanguardia consists of multiple small open pits with high stripping ratios. The orebodies comprise a series of hydrothermal vein deposits containing vast quantities of silver which is produced as a by-product.
 Ore is processed at a metallurgical plant located at the mine and includes a cyanide recovery plant. Technology at the plant is based on carbon-in-leach processes with the tailings dam incorporated in a closed circuit with plant process so that there is no final discharge.  The Cerro Vanguardia gold plant has a capacity of 82,000 tonnes per month.
 Rights: 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, 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 rights over mining licenses are: to sell the license; to lease such license; or to assign the rights under such a license by a beneficial interest or Usufruct Agreement. In the case of Cerro Vanguardia, the mining title holder is its partner, Fomicruz, and due to 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.
 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 andesiteflows 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:There was a deterioration in safety during the year. The LTIFR for 2007 was 3.34 compared to 3.13 in 2006. As in 2006, there were no fatalities in 2007. Corrective action has been taken including safety awareness workshops for the managers responsible for operational safety, supervisors and contractors.
 Operating review:Attributable production decreased in line with expectations to 204,000 ounces for the year, mostly as a result of the lower grade mined in the first three quarters of the year.
 The highlights for the year were the higher stripping ratio achieved with the extraction of 1.5 million tonnes of additional wasteand an increase in silver production to 420,000 ounces.
 The recovered grade decreased year-on-year from 7.29g/t in 2006 to 6.88g/t in 2007 as a result of the lower grade material supplied to the plant.
 Total cash costs increased by 17 percent to $260 per ounce as compared to $223 per ounce in 2006. Increases in the cost of mining supplies, a function of the inflationary impact of higher commodity prices and higher maintenance costs (due to an extension on the useful life of some mine equipment), as well as an increase in workforce and contractor costs, were partially offset by greater silver by-product revenue.
  Growth prospects: The four-year brownfields exploration program entered its second year in 2007. The focus of the program is to determine the extent of and to delineate the shallow, high-grade mineral resources.
 Operating and production data for Cerro Vanguardia
 2007                         
  2006                          
  2005
 Pay limit (oz/t)
 0.18
 0.13
 0.12
 Pay limit (g/t)
 3.48
 4.56
 4.02
 Recovered grade (oz/t)
 0.201
 0.213
 0.225
 Recovered grade (g/t)
 6.88
 7.29
 7.70
 Gold production (000 oz) 100  percent
 220
 232
 228
 Gold production (000 oz) 92.50  percent
 204
 215
 211
 Total cash costs ($/oz)
 (1)
 260
 223
 171
 Total production costs ($/oz)
 (1)
 358
 372
 270
 Capital expenditure ($ million) 100  percent
 20
 19
 15
 Capital expenditure ($ million) 92.50  percent
 18
 18
 14
 Employees
 (2)
 708
 623
 487
 Outside contractors
 (2)
 309
 283
 459
 (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.


AUSTRALIA
 AngloGold Ashanti’s three assets in Australia are the Sunrise Dam gold mine, and the Boddington and Tropicana joint venture projects. In 2007, production from Sunrise Dam was a record 600,000 ounces, an increase of 29 percent and equivalent to 11 percent of group production for the year.
 Ownership of these assets, all in the state of Western Australia, is as follows:
 The Sunrise Dam gold mine is 100 percent owned by AngloGold Ashanti and is currently the only producing AngloGold Ashanti operation in Australia.  The Sunrise Dam gold plant has a capacity of 300,000 tonnes per month.
 The Boddington project is a joint venture between AngloGold Ashanti and Newmont Mining Corporation, in which each has interests of 33.33 percent and 66.67 percent, respectively.
 The Tropicana project is a joint venture between AngloGold Ashanti (70 percent) and Independence Group NL (30 percent), which will contribute in terms of its 30 percent stake on completion of the pre-feasibility study.
 Rights: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 the general mining legislation and controlled by the miningministry of each respective State or Territory.  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, and 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.
 Sunrise Dam
 Description: The Sunrise Dam gold mine is located in the northern goldfields of Western Australia, 220 kilometers north-east of Kalgoorlie and 55 kilometers south of Laverton. The mine consists of a large open-pit, which is now in its eleventh year of operation, and an underground mine, which began producing in 2003. Mining at both operations is conducted by contractors and the ore mined is treated in a conventional gravity and 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:While no fatalities were recorded there was a slight deterioration in the rate of lost-time injuries. The LTIFR for the year was 2.63 (2006: 1.81).
 Operating review:
 (2006: 465,000 ounces).  The GQ zone in the open pit provided the anticipated large volumes of high grade ore, which accounted for the increase in annual gold production. Approximately 79,000 ounces of gold production was sourced from the underground mine.  Progress was made in developing access to the Cosmo, Dolly, and Watu lodes and 2,000 meters of underground capital development and 6,100 meters of operational development were completed. A total of 67,400 meters of diamond drilling was also completed.


Processing plant throughput in 2007 was 3.8 million tonnes, slightly lower than the record throughput of 3.9 million tonnes in 2006.
 Total cash costs fell by 21 percent to $262 per ounce. Despite cost increases in areas such as open-pit mining contractor ratesper unit mined, the greater volume of ore mined, and the appreciation in value of the Australian dollar, the increase in production, due primarily to the higher grade of ore mined, resulted in the decrease in unit cash costs, year-on-year.
 The conversion of the mine’s diesel power station to liquefied natural gas (LNG) progressed well and the new LNG facility will begin operation in the second quarter of 2008. Capital expenditure for the year amounted to A$35 million ($30 million).
 Growth prospects:The main open pit (the Mega Pit) will be completed in the second quarter of 2008, at a final depth of 440 meters. A cutback of the north wall of the open pit began in October 2007, and is scheduled for completion in mid-2010.
 The underground life of mine study was completed in late 2007 and, following successful exploration, underground reserves have increased to 552,000 ounces (after depletion).
 Operating and production data for Sunrise Dam
 2007                         
  2006                         
  2005
 Pay limit (oz/t)
 0.06                            
  0.05                            
  0.07
 Pay limit (g/t)
 1.76                            
  1.64                            
  2.27
 Recovered grade (oz/t)
 (2)
 0.142
 0.099
 0.107
 Recovered grade (g/t)
 (2)
 4.86
 3.39
 3.68
 Gold production (000 oz)
 600
 465
 455
 Total cash costs ($/oz)
 (1)
 262
 333
 269
 Total production costs ($/oz)
 (1)
 345
 406
 367
 Capital expenditure ($ million)
 30
 24
 34
 Employees
 (3)
 102                               
  99                               
  95
 Outside contractors
 (3)
 255
 283
 280
 (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.
 Boddington (attributable 33.33 percent)
 Description:Boddington is located 130 kilometers south-east of Perth in Western Australia. The original, predominantly oxide open-pit operation was closed at the end of 2001.
 Geology:Boddington is located in the Saddleback Greenstone Belt, a northwest-trending fault-bounded silver of greenstones about 50 kilometers long and eight kilometers wide within the Archaean Yilgarn Craton. The Boddington resource is located within a six kilometer strike length and consists of felsic to intermediate volcanics and related intrusives. The resource is subdivided into Wandoo South and Wandoo North. Wandoo South is centered on a composite diorite stock with five recognizable intrusions. Wandoo North is dominated by diorites with lesser fragmental volcanic rocks.
 Operating review and growth prospects:The Boddington expansion project, which involves mining the basement reserves beneath the oxide pits, was approved in March 2006. The project has an attributable capital budget of between A$770 million and A$900 million ($700 million and $800 million). At year-end, overall project progress was approximately 65 percent complete, with engineering and procurement activities nearing completion. Construction of the treatment plant was approximately 32 percent complete.  Based on the current mine plan, mine life is estimated to be more than 20 years, with attributable life-of-mine gold production expected to be greater than 5.7 million ounces of gold.


Operating and production data for Boddington
 2007                       
  2006                       
  2005
 Pay limit (oz/t)
 – – –
 Pay limit (g/t)
 – – –
 Recovered grade (oz/t)
 –
 –
 –
 Recovered grade (g/t)
 – – –
 Gold production (000 oz) 100  percent
 –
 –
 –
 Gold production (000 oz) 33.33  percent
 –
 –
 –
 Total cash costs ($/oz)
 (1)
 –
 –
 –
 Total production costs ($/oz)
 (1)
 –
 –
 –
 Capital expenditure ($ million) 100  percent
 747
 180
 12
 Capital expenditure ($ million) 33.33  percent
 249
 60
 4
 Employees
 (2)
 37 12 18
 Outside contractors
 (2)
 387
 85
 48
 (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.
 Tropicana
 Description:Tropicana is a 12,500 square kilometers tenement package located 330 kilometers east north-east of Kalgoorlie in Western Australia. AngloGold Ashanti holds a 70 percent interest in the project and Independence Group NL holds a 30 percent interest (free carried to completion of the pre-feasibility study).  Independence has agreed to contribute to certainproject studies to ensure timely development of the project and to contribute to all regional exploration.
 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, whereasTropicana comprises one main mineralised lens.
 Operating review and growth prospects: The pre-feasibility study on this project began in June 2007.  The study, which is scheduled to be completed by mid-2008, focuses on the Tropicana and Havana zones.
 Metallurgical testwork has determined that the preferred plant configuration is a conventional carbon-in-leach circuit.  Tests are currently underway to assess the optimal crushing and grinding circuit as well as the possible inclusion of energy-efficient high-pressure grinding rolls.
 With the completion of the resource estimate, pit design and mine scheduling studies are underway to determine the optimal operating scale, grade and material scheduling strategy, infrastructural requirements, and capital and operating costs.  A potential large-scale water resource has been identified within 50 kilometers of the deposit.
 AngloGold Ashanti and Independence have agreed to jointly fund ongoing drilling to increase the resource classification to measured, indicated and inferred by mid-2008 to enable estimation of reserves and to streamline the progression of the project to feasibility level.


BRAZIL
 AngloGold Ashanti’s two assets in Brazil are Brasil Mineração and Serra Grande.  In 2007, these operations together produced an attributable 408,000 ounces of gold, equivalent to 7 percent of group production.
 Rights:In Brazil, there are two basic mining rights: a license for the exploration stage, valid up to three years, renewable once; and a Mining Concession or Mine Manifest, valid for the life of the deposit.
 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 depletion of reserves,provided that the mining title holder complies with current Brazilian mining and environmental legislation, as well as with thoserequirements set out by the National Department of Mineral Production (DNPM) who acts as inspecting entity for mining activities. Obligations of the titleholder include:
  ·
  ·
  ·
  ·
  ·
  ·
  ·
 The difference between a Mine Manifest and a Mining Concession lies in the legal nature of these two mining titles, since it ismuch 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.


59
 Brazil – Summary of metallurgical operations
 
 AngloGold Ashanti Mineração
 Serra Grande
 Cuiabá
 Raposos
 Gold plants
          AngloGold Ashanti Brasil Mineração
 Description: The wholly owned AngloGold Ashanti Brasil Mineração (Brasil Mineração) complex is located in south-eastern 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 underground mine, and then processed at the Cuiabá and Queiroz plants, and from the Córrego do Sítio 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 sulphides 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 sulphidation of the iron rich layers. Steeply plunging shearzones 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 ductileenvironment. The host rocks at Brasil Mineração are BIF, Lapa Seca and mafic volcanics (principally basaltic). Mineralization isdue to the interaction of low salinity carbon dioxide rich fluids with the high-iron BIF, basalts and carbonaceous graphitic schists. Sulphide mineralization consists of pyrrhotite and pyrite with subordinate pyrite and chalcopyrite; the latter tends tooccur as a late-stage fracture fill and is not associated with gold mineralization. Wallrock alteration is typically carbonate,potassic and silicic.
 Safety: Safety levels were maintained during the course of the year with little change in the LTIFR (2007: 2.30; 2006: 2.33).  No fatalities were recorded.
 Operating review: Production increased by 31 percent to 317,000 ounces in line with expectations (2006: 242,000 ounces), boosted by the commissioning and start-up of the Cuiabá Expansion Project. Although the rainy season at the start of the year hampered heap-leach activities and delayed the start up of the Cuiabá Expansion Project, by the end of the year, operating performance had improved. The Cuiabá Expansion Project includes the deepening of the underground mine, the construction of new treatment and tailings storage facilities, a roaster and an acid plant. The entire circuit has now been integrated and isoperational from the underground Cuiabá mine crushing area to the Queiroz processing plant. No significant problems were experienced in increasing mine throughput from 830,000 tonnes to an average of 1.3 million tonnes annually. This project will add six years to the life of mine of Brasil Mineração.
 From an operational perspective, actions such as the setting of new development rates, a new ramp, improvements to mine infrastructure and layout and improved geotechnical conditions are being implemented to consolidate a sustainable long-term rate of production.  A 7 percent increase in the volume of tonnages treated has been planned to offset a 5 percent decline in grades for 2008.
 Total cash costs rose by 19 percent to $246 per ounce compared to $207 per ounce in 2006. Higher costs were largely a result of the appreciation in the local Brazilian currency (the real) against the US dollar, lower grades, the reduction in by-productcredits received for sulphuric acid and an increase in the operational cycle of the mine in deeper levels in addition to a new plant at Cuiabá site.
 Capital expenditure for the year totaled $117 million, significantly down on that of 2006 ($168 million) as the Cuiabá ExpansionProject was completed.


Growth prospects: The Córrego do Sítio Underground Sulphide Project is investigating the viability of exploiting the potential sulphide ore resources of the Córrego do Sítio underground orebodies, namely Cachorro Bravo, Laranjeira and Carvoaria.  The results from the study for this project were released in 2007. This project, which is expected to produce 100,000 ounces of goldannually over 14 years from a total of 6.8 million tonnes of ore milled, is scheduled to begin in mid-2011.
 The development of a ramp and the exposure of the Cachorro Bravo orebody are continuing. The development of access drives to the Carvoaria orebody is ongoing and exposure of the Laranjeira orebody to increase the extent of the mineable resource has begun. Trial mining on the Cachorro Bravo orebody is in progress and generating data for the feasibility study.
 The Lamego Project explores the orebodies on the Lamego property. This project is expected to produce approximately 450,000 ounces over nine years. However, given the geological similarity of Lamego to that of the nearby Cuiabá mine, and the lack of information regarding the deeper levels of Lamego, a more aggressive exploration program was budgeted for in 2007 and 2008 so as to evaluate the potential of increasing current expected production at Lamego to levels similar to those of the Cuiabá operation. During 2007, development totaled 3,274 meters. A pre-feasibility study will be conducted in 2008.
 Operating and production data for Brasil Mineração
 2007  2006    2005
 Pay limit (oz/t)
 0.13
 0.09
 0.11
 Pay limit (g/t)
 3.50
 3.10
 3.86
 Recovered grade (oz/t)
 (1)
 0.218
 0.222
 0.212
 Recovered grade (g/t)
 (1)
 7.48
 7.60
 7.27
 Gold production (000 oz)
 317
 242
 250
 Total cash costs ($/oz)
 (2)
 246
 207
 169
 Total production costs ($/oz)
 (2)
 360
 301
 260
 Capital expenditure ($ million)
 117
 168
 71
 Employees
 (3)
 1,814
 1,546
 1,363
 Outside contractors
 (3)
 1,620
 2,065
 1,234
 (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, five kilometers from the city of Crixás. AngloGold Ashanti and the Kinross Gold Corporation are joint 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 comprises two underground mines, Mina III and Mina Nova, and an open pit at Mina III which began operation in 2007. The processing circuit, with grinding, leaching, filtration, precipitation and smelting facilities, has a capacity of about 800,000 tonnes of ore a year.
 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 sulphides 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 Ardhaean 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 withirregular thrust ramp geometry, in part controlled by concealed early basin faults. The main Crixás orebodies are adjacent to amajor 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 levels deteriorated during the course of the year and there was one fatality due to a rockfall in the second quarter of the year.  This was the first fatality ever involving an employee of Serra Grande.  Corrective action has been taken.The LTIFR for the year was 2.47 (2006: 1.76) while the FIFR was 0.49 (2006: nil).
 Operating review: Attributable production at 91,000 ounces (2006: 97,000 ounces) decreased by 6 percent mainly due to the lower grades mined.
 Total cash costs increased by 35 percent to $264 per ounce, largely due to the lower grade of the material available for treatment, an appreciating local currency (the real) and inflation which affected the costs of power, labor, material and services.
 Total capital expenditure amounted to $24 million or $12 million attributable. Capital expenditure was also negatively impactedby the appreciation in the local currency.
 Growth prospects: An aggressive brownfields exploration campaign at Serra Grande aims to increase reserves and resources in and around Mina III and Mina Nova.  In 2007, there was an increase in reserves at Mina Nova and Mina III (orebody 4) and a new orebody named Pequizão was discovered between Mina Nova and Mina III.  In 2008, the intention is to re-evaluate resources and reserves including Pequizão and start the main access to the Palmeiras mine.  The access ramp project was finished by the end of 2007 and the development should start in March 2008.
 Operating and production data for Serra Grande
 2007  2006  2005
 Pay limit (oz/t)
 0.14
 0.09
 0.09
 Pay limit (g/t)
 3.90
 3.24
 3.02
 Recovered grade (oz/t)
 0.210
 0.219
 0.231
 Recovered grade (g/t)
 7.21
 7.51
 7.93
 Gold production (000 oz) 100  percent
 182
 194
 192
 Gold production (000 oz) 50  percent
 91
 97
 96
 Total cash costs ($/oz)
 (1)
 264
 196
 158
 Total production costs ($/oz)
 (1)
 374
 278
 229
 Capital expenditure ($ million) 100  percent
 24
 17
 13
 Capital expenditure ($ million) 50  percent
 12
 8
 7
 Employees
 (2)
 654  609  566
 Outside contractors
 (2)
 264
 208
 209
 (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.


GHANA
 The two AngloGold Ashanti operations in Ghana are Obuasi and Iduapriem, which combined had total attributable production of 527,000 ounces, equivalent to approximately 10 percent of group production, for the year.
 Rights: Mining activities in Ghana are primarily regulated by the new Minerals and Mining Act, 2006 (the Mining Act.)  Under the Constitution and the Mining Act, 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.
 A license is required for the export or disposal of such minerals and the government has a right of pre-emption over all such minerals. The government of Ghana shall acquire, without payment, a 10 percent interest in the rights and obligations of the mineral operations in relation to a mineral right to reconnaissance, prospecting or mining, and shall have the option to acquire a further 20 percent interest where any mineral is discovered in commercial quantities, on terms agreed between the government and the holder of the mining lease subject to arbitration if the parties fail to agree.
 A license or lease granting a mineral right is required to prospect for or mine a mineral in Ghana and the Minister of Energy and Mines has the power to negotiate, grant, revoke, suspend or renew any mineral right, subject to a power of disallowance exercisable within 30 days of such grant, revocation, suspension or renewal by the Cabinet.
 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.  A mineral right or interest therein may not be transferred, assignedor otherwise dealt with in any other manner without prior written approval of the Minister of Mines.
 Payments and allowances
 The Mining Act provides that royalties are payable by the holder of a mining lease to the State at rates of between 3 percent and 6 percent of total minerals revenue, depending on a formula set out in mineral royalty regulations.
 AngloGold Ashanti and the Government of Ghana have entered into a Stability Agreement with respect to the payment of royalties and taxes.  Under the Stability Agreement, the government of Ghana agreed:
 ·  ·  Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold Ashanti from such mining operations; · to ensure that the income tax rate would be 30 percent for a period of fifteen years. The agreement was amended in December 2006 to a tax rate equal to the prevailing corporate rate for listed companies;· that a sale of AngloGold Ashanti’s or any of its subsidiaries' assets located in Ghana remain subject to the government's approval;· to permit AngloGold Ashanti and any or all of its subsidiaries in Ghana to retain up to 80 percent of their exportation proceeds in foreign currencies offshore, or if such foreign currency is held in Ghana, to guarantee the availability of such foreign currency; and· to retain its special rights (Golden Share) under the provisions of the mining Act pertaining to the control of a mining company, in respect of the assets and operations in Ghana.


The Government of Ghana also 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.
 Mining leases may be applied for either by a prospecting license holder who has established the existence of minerals in commercial quantities or by others who do not hold such licenses, who establish the same to the satisfaction of the Minister ofMines. Mining leases are normally granted for a period not exceeding 30 years and the holder may apply to the Minister of Mines for renewal, on such conditions as the Minister of Mines may determine, for up to another 30 years. This period has been extended in terms of the Stability Agreement. They are to have a maximum size (subject to derogation by the President where it is considered to be in the national interest) of 50 square kilometers for any grant and 150 square kilometers in aggregate.
 Reconnaissance and prospecting licenses are normally granted for up to 12 months and three years respectively, subject to renewal. A detailed program must be submitted for the recruitment and training of Ghanaians with a view to achieving ‘localization’, being 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.
 Prior notification to the Minister of Mines is required for ceasing, suspending or curtailing production. Approval to such actionsmay be given, subject to conditions determined on the advice of the Minerals Commission.
 There are also provisions relating to surrender, suspension and cancellation of mineral rights in certain circumstances. The Minister of Mines may suspend or cancel a mineral right if, among other things, the holder: fails to make payments under the Mining Act when due; is in breach of any provisions of the Mining Actor the conditions of the mineral right or the provisions ofany other enactment relating to mines and minerals; becomes insolvent or bankrupt; makes a statement to the Minister of Mines in relation to the mineral right which he knows, or ought to have known, to be false; or for any reason, becomes ineligibleto apply for a mineral right under the provision of the Mining Law.
 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. Subject to the proper conduct of the mining operations, the holder must affect as little as possible the interest of any lawful occupier, whose grazing rights are retained but who is precluded from erecting any building without the consent of the holder (or, if such consent is unreasonably withheld, without the consent of the Minister).
 An owner or occupier of any land subject to a mineral right may apply to the holder of the mineral right for compensation and the amount of the compensation shall, subject to the approval of the Land Valuation Board, be determined by agreement between the parties concerned (or, if they are unable to reach agreement, by the Minister of Mines in consultation with the Land Valuation Board). The Land Valuation Board has in the past increased amounts of compensation payable to owners and occupiers. The holder, in the exercise of his rights, is required to have due regard to the effect of the mineral operations on the environment and is to take such steps as may be necessary to prevent pollution of the environment as a result of such operations.
 A range of activities and breaches of the Mining Law, including obstructing the government from exercising its pre-emption rightand conducting mining, prospecting or related activities other than in accordance with the Mining Law, constitute offences punishable by fine or imprisonment. The maximum fine is 500,000 cedis (at the current exchange rate, equivalent to approximately $50) and the maximum term of imprisonment is two years.
 Mining properties
 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 Ashantiregion for a term of 30 years from the date of the agreement.  In addition, the application for a mining lease over the adjacent140 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 to the government of Ghana rent (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 kilometers and such royalties as are prescribed by legislation, including royalties on timber felled within the Lease Area.


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.  The terms and conditions of these leases are consistent with similar leases granted in respect of the Obuasi mining lease.
 Obuasi
 Description: Obuasi, which is wholly owned by AngloGold Ashanti, is located in the Ashanti region of southern Ghana, approximately 80 kilometers from Kumasi.  It is primarily an underground mine operating at depths of 1,500 meters, although some surface mining does occur.  Three treatment plants process the ore: a sulphide plant treats the ore from underground, a tailings plant for tailings reclamation operations and an oxide plant is used to batch treat remnant open-pit ore and stockpiles.  The mine was established in 1897 and has produced more than 30 million ounces of gold in all.
 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:
  ·   
  quartz veins which consist mainly of quartz with free gold in association with lesser amounts of various metal sulphides
       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·    sulphide ore which is characterized by the inclusion of gold in the crystal structure of a sulphide material.  The gold 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. Sulphide ore is generally refractory.
 Safety: Regrettably there were four fatalities during the year: two were caused by accidents involving machinery, one a fall of ground and one involved an employee falling down a rock pass.  The LTIFR for the year deteriorated to 2.72 per million hours worked, from 2.29 in 2006, while the FIFR rose from 0.08 in 2006 to 0.19 per million hours worked in 2007.
 Remedial action has been taken to improve safety at Obuasi, including the conducting of a training program to identify and address workplace hazards for all employees involved in hazardous tasks. Each work team on the mine will, before it begins, evaluate the task at hand to determine the risks and to assign and implement a control known as a ‘simplified risk assessment’.This procedure is to be conducted by every employee prior to the conducting of any hazardous task on the mine.
  Operating review: Gold production at Obuasi declined by 7 percent to 360,000 ounces in 2007 (2006: 387,000 ounces).  This decline in production was largely attributable to the decline in volumes mined although the recovered grade improved marginally. An 11-day plant shut down in the third quarter and power outages during the year also contributed to the reduced production.
 Total cash costs rose by 17 percent to $464 per ounce (2006: $397 per ounce), largely as a result of the reduced production and increases in prices of consumables and rates of service contracts.
 Growth prospects:
 Ghana – Summary of metallurgical operations
 Obuasi
 Bibiani
 Iduapriem
 Sulphide
 Treatment Plant
 Tailings
 Treatment Plant
 Oxide Treatment
 Plant
 Gold plants
 
 
 
 
 
 
 Capacity
 (000 tonnes/month)
 200  200  150  225  375


65
 Operating and production data for Obuasi
 2007  2006  2005
 Pay limit (oz/t)
 (1)
 0.28  0.229  0.177
 Pay limit (g/t)
 8.49  7.13  6.06
 Recovered grade (oz/t)
 (1)
 0.129
 0.128
 0.139
 Recovered grade (g/t)
 4.43
 4.39
 4.77
 Gold production (000 oz)
 360
 387
 391
 Total cash costs ($/oz)
  464
 397
 345
 Total production costs ($/oz)
  739
 638
 532
 Capital expenditure ($ million)
 94
 91
 78
 Employees
  4,672  5,629  5,852
 Outside contractors
  1,554
 2,210
 2,443
 (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.
 Bibiani
 Bibiani in Ghana was sold to Central African Gold plc effective December 28, 2006
 Operating and production data for Bibiani
 2007  2006
 (4)
 2005
 Pay limit (oz/t)
 -    0.030  0.020
 Pay limit (g/t)
 -  0.83  0.70
 Recovered grade (oz/t)
  -
 0.016
 0.042
 Recovered grade (g/t)
  -
 0.55
 1.55
 Gold production (000 oz)
 -
 37
 115
 Total cash costs ($/oz)
  -
 432
 305
 Total production costs ($/oz)
  -
 594
 522
 Capital expenditure ($ million)
 -
 -
 7
 Employees
  -  211  462
 Outside contractors
  -
 142
 140
 (1)
 Recovered grade represents open pit operations in 2005 and surface and dump reclamation in 2006.
 (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)
 For the eleven months from January 2006 to November 2006.
 Iduapriem
 Description:Iduapriem comprises two properties, Iduapriem and Teberebie, in which, prior to September 2007, AngloGold Ashanti had a combined effective stake of 85 percent. The International Finance Corporation held 10 percent and the government of Ghana, 5 percent. AngloGold Ashanti acquired these minority shareholdings and, with effect from September 1, 2007, its shareholding in the Iduapriem operation increased to 100 percent.
 The Iduapriem mine is situated in the western region of Ghana, some 70 kilometers north of the coastal city of Takoradi and 10 kilometers south-west 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:With the heightened focus on training and education, safety performance improved consistently throughout the year. As at year end, the mine achieved 3.57 million hours worked without a lost-time injury.  The LTIFR was 0.46 (2006: 1.15).  No fatalities were recorded.
 Operating review:  After the problems experienced in the first quarter of the year with a mill gearbox failure at the treatment plant which impacted adversely on production, there was a turnaround in the second and third quarters.  Unfortunately, at the start of the fourth quarter, the mine suffered another setback in production when a fire broke out at the main substation whichaffected one of two transformers that supply power to the mine.  The problem took about a month to resolve following which a series of crusher problems further impacted on the mine’s performance for the fourth quarter.  Total attributable production forthe year at 167,000 ounces remained unchanged from 2006.
 Total cash costs for the year was 20 percent higher at $497 per ounce owing to the combined impact of the mill shutdown and increases in contract mining costs.
 Attributable capital expenditure for the year amounted to $23 million which was significantly up on the $5 million spent in 2006.  The increased capital expenditure was spent primarily on the plant expansion and other items.
 The expansion project, which will increase current plant capacity by about 15 percent, was a highlight of the year with additional staff being located on site to progress with detailed design work and preparation for the mobilization of the main contractors. Construction of the expansion project advanced with the appointment of the civil contractor and completion of the tender for the structural mechanical and process piping component of the project. The electrical and instrumentation contracts are yet to be tendered. By year-end, good progress had been made with the earthworks and infrastructure for the new crushing plant, ball mill and thickener areas. Long lead items such as the gyratory crusher, ball mill shell and other relevant equipmentarrived on site before year-end. The project is expected to be commissioned during the fourth quarter of 2008.
 Growth prospects: The mine has limited growth prospects on surface. The scoping study to evaluate the viability of exploiting the considerable low-grade mineral resources of other properties lying in the Tarkwaian conglomerates that extend below the economic limits of the existing pits was not pursued during the year. However, the recent surge in the gold price has caused renewed interest in evaluating this prospect further. Additional drilling is planned to be carried out in 2008 to give more confidence to existing data and the scoping study will subsequently be progressed to pre-feasibility stage.
 Operating and production data for Iduapriem
 2007
 (4)
 2006                         
  2005
 Pay limit (oz/t)
 0.06 0.05 0.023
 Pay limit (g/t)
 1.66 1.60 0.72
 Recovered grade (oz/t)
 (1)
 0.054
 0.051
 0.050
 Recovered grade (g/t)
 (1)
 1.85
 1.74
 1.71
 Gold production (000 oz) 100 percent
 185
 196
 205
 Gold production (000 oz) 100 percent
 (4)
 167
 167
 174
 Total cash costs ($/oz)
 (2)
 497
 413
 348
 Total production costs ($/oz)
 (2)
 653
 544
 477
 Capital expenditure ($ million) 100 percent
 24
 6
 5
 Capital expenditure ($ million) 100 percent
 (4)
 23
 5
 4
 Employees
 (3)
 721 668
  698
 Outside contractors
 (3)
 602
 583
 585
 (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.


GUINEA
 AngloGold Ashanti has one gold mining operation, Siguiri, in the Republic of Guinea. Siguiri produced 280,000
 Rights: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 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 periods as may be required to exhaust economic Ore Reserves.
 The original area granted encompassed 8,384 square kilometers which the subsidiary was required to reduce to five or fewer single blocks of not less than 250 square kilometers per block totaling not more than 1,500 square kilometers by November 11, 1996. The retrocession reduced the Siguiri concession area to four blocks totaling 1,495 square kilometers.
 SAG has the exclusive right to explore and mine in the remaining Siguiri concession area for a further 22-year period from November 11, 1996 under conditions detailed in a Convention de Base predating the new Guinea Mining Code.
 Key elements of the Convention de Base are: 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, and 5 percent based on a spot gold price above $475, 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 the gross sales revenues; 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 disturbedor 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.
 In addition to the export tax payable to the government of Guinea, a royalty on production may be payable to the International Finance Corporation (IFC) and to Umicore SA, formerly Union Miniere (UM). Pursuant to the option agreement between UM and Golden Shamrock Mines Limited (GSM), a royalty on production may be payable to UM by Chevaning Mining Company Limited (CMC) or GSM, which payment obligation has been assigned to AngloGold Ashanti (Ghana) Limited, on a sliding scale of between 2.5 percent and 7.5 percent based on the spot gold price per ounce between $350 and $475, subject to indexing from January 1, 1995, to a cumulative maximum of $60 million. In addition, under the terms of the restructuring agreement with the IFC, a sliding scale royalty on production may be payable to the IFC calculated on the same basis but at half the rate payable to UM, to a maximum of $7.8 million.


Siguiri (attributable 85 percent)
 Description: AngloGold Ashanti has an interest of 85 percent in Siguiri and the government of Guinea, 15 percent. The Siguiri mine is a conventional open-pit operation situated in the Siguiri district in the north-east of the Republic of Guinea, West Africa,about 850 kilometers from the capital city of Conakry. The nearest major town is Siguiri (some 50,000 inhabitants), located on the banks of the Niger River. All ore and waste is mined by a mining contractor and the ore is processed using carbon-in-pulp (CIP) and heap-leach processes. Siguiri mines two types of gold deposits, laterite and in situ quartz-vein related mineralizations.  The Siguiri gold plant has a capacity of 800,000 tonnes per month.
 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.  The practice at Siguiri has been to blend the CAP and SAP ore types and to process these using the heap-leach method.  With the percentage of available CAP ore decreasing, however, a new carbon-in-pulp (CIP) plant was brought on stream during 2005 to treat predominantly SAP ore.
 Safety: Overall safety standards improved at Siguiri with an LTIFR for the year of 0.41 per million hours worked (2006: 0.77). No fatalities were recorded.
 Operating review:
 Total cash costs were again considerably higher at $471 per ounce (2006: $398 per ounce), due to higher royalty payments which are a function of the significantly higher gold price, and higher fuel costs.  Siguiri is currently in discussion with theGuinean government regarding the relationship between fuel prices and the exchange rate.  Compounding the problem of rising costs is that the increase in local labor costs, together with the appreciation of the Guinean franc against the dollar, has changed the cost profile and labor costs now account for a greater proportion of total costs.
 The CIP plant had a consistently good operation in 2007.  A total of 9.8 million tonnes of ore was processed for the year with plant availability of 91.6 percent and a recovery rate of 94.2 percent.
  Growth prospects: Regarding the CIP plant, the design of a second gravity concentrator and de-gritting facilities are being finalised and will be installed during 2008; these are expected to improve productivity.
 Operating and production data for Siguiri
 2007                        
  2006                         
  2005
 Pay limit (oz/t)
 0.03 0.03 0.017
 Pay limit (g/t)
 0.95 0.94 0.55
 Recovered grade (oz/t)
 (1)
 0.031
 0.032
 0.035
 Recovered grade (g/t)
 (1)
 1.05
 1.08
 1.21
 Gold production (000 oz) – 100 percent
 330
 301
 289
 Gold production (000 oz) – 85 percent
 280
 256
 246
 Total cash costs ($/oz)
 (2)
 471
 398
 301
 Total production costs ($/oz)
 (2)
 629
 593
 451
 Capital expenditure ($ million) – 100 percent
 21
 19
 36
 Capital expenditure ($ million) – 85 percent
 18
 14
 31
 Employees
 (3)
 1,537 1,541 1,170
 Outside contractors
 (3)
 1,380
 1,167
 808
 (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.


MALI
 AngloGold Ashanti has interests in three gold mining operations, all of which it manages in Mali. They are Sadiola, Yatela and Morila. The Malian operations together produced 441,000 attributable ounces of gold in 2007 equivalent to 8
   · 
  Sadiola: AngloGold Ashanti and IAMGOLD each
     have a stake of 38 percent while the government
     of Mali has a stake of 18 percent and the
     International Finance Corporation, 6 percent.
 ·    d’Exploration des Mines d’Or de Yatela SA, a  joint venture in which AngloGold Ashanti and  IAMGOLD each have an effective holding of  40
  ·  Morila: this is a joint venture between AngloGold  Ashanti and Randgold Resources in which each  has a 40
 Rights: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 (autorisation 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 (3) years renewable without a reduction in the area of the authorization.  Research activities may be carried out under research permits (permis de recherche).  The latter are granted to corporate entities only by order of the Minister in charge of Mines.  Researchpermits are granted for a period of three (3) 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 fora maximum period of thirty (30) years renewable three times for an additional 10 years). The exploitation permit is granted onlyto 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 NationalDirector of Mines.
 As soon as the exploitation permit is granted, the holder of the exploitation permit must incorporate a company under the law ofMali. 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 ofincreasing the capital.
 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 at Morila, Sadiola and Yatela, all of which are governed by establishment conventions (Convention d’Etablissement) 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).


Due to the fact that the establishment conventions contain stabilization clauses, the mining operations carried out by the AngloGold Ashanti subsidiaries 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 thirty (30) year permits which expire in 2029, 2024 and 2030, respectively.
 Sadiola (attributable 38 percent)
 Description:Sadiola is situated in the far south-west of the country, 77 kilometers to the south of the regional capital of Kayes. Mining takes place in five open pits and the ore mined is treated and processed in a 435,000 million tonnes per month (5.2 million tonnes per month) CIP gold plant.  The Sadiola gold pant has a capacity of 435,000 tonnes per month.
 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 sulphide zone. From 1996 until 2002, shallow saprolite oxide ore from the Sadiola Hill pit was the primary ore source. Since 2002, the deeper saprolitic sulphide ore has been mined and in future will progressively replace the depleting oxide reserves.
 Safety:Overall safety standards were maintained at Sadiola with an LTIFR for the year of 1.11 (2006: 1.02).  No fatalities were recorded.
 Operating review: (2006: 190,000 ounces). While there was a steady increase in production during the course of the year, this failed to make up
  for the sharp drop which had occurred during the first quarter of the year.  This decline in the throughput of tonnes was a result
  of plant optimization to improve recovery of sulphide ores.  The decline in the grade of feed to the plant was a result of a
  decision to withhold high-grade sulphide feed prior to the commissioning of the gravity circuit at the concentrator in
  December 2007.  Consequently, total cash costs rose sharply by 54 percent to $414 per ounce (2006: $268 per ounce).
 Total capital expenditure of $16 million or an attributable $6 million, was spent during the year.  A new gravity circuit was installed at the metallurgical plant to improve the recovery rates for the sulphide ores.
 Growth prospects:  Various options are to be reviewed in the coming year to improve current assumptions in the Deep Sulphide Project concerning mining method, scale, energy and metallurgical recovery.
 Operating and production data for Sadiola
 2007                        
  2006                        
  2005
 Pay limit (oz/t)
 0.08                           
  0.06                           
  0.05
 Pay limit (g/t)
 2.46                           
  1.98                           
  1.80
 Recovered grade (oz/t)
 0.081
 0.094
 0.080
 Recovered grade (g/t)
 2.76
 3.22
 2.73
 Gold production (000 oz) 100  percent
 369
 500
 442
 Gold production (000 oz) 38  percent
 140
 190
 168
 Total cash costs ($/oz)
 (1)
 414
 268
 265
 Total production costs ($/oz)
 (1)
 479
 363
 440
 Capital expenditure ($ million) 100  percent
 16
 11
 18
 Capital expenditure ($ million) 38  percent
 6
 4
 7
 Employees
 (2)
 618                            
  589                            
  584
 Outside contractors
 (2)
 911
 705
 661
 (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: Yatela is situated some 25 kilometers north of Sadiola and approximately 50 kilometers south-south-west of Kayes.  This is a single pit operation.  The ore mined is treated at a heap-leach pad together with carbon-loading.  The carbonis then eluted and the gold smelted at nearby Sadiola.  The Yatela gold plant has a capacity of 250,000 tonnes per month.
 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:  Overall safety standards improved at Yatela with an LTIFR for the year of 0.39 (2006: 0.43).  No fatalities were recorded.
 Operating review:  Attributable gold production at Yatela declined by 15 percent to 120,000 ounces (2006: 141,000 ounces). Mining from the bottom of the main pit was completed in July 2007, after which lower grade ore from the stockpiles was fed to the heap leach pad.
 Total cash costs increased dramatically, to $300 per ounce as a result of the decline in gold production, the appreciation of the euro and the FCFA against the dollar, and higher fuel prices.
 Capital expenditure of $5 million (attributable $2 million) increased in 2007 and was spent mostly on additional leach pads to accommodate the extension in the life of mine.
 Operating and production data for Yatela
 2007                        
  2006                        
  2005
 Pay limit (oz/t)
 0.04                           
  0.06                           
  0.05
 Pay limit (g/t)
 1.37                           
  1.79                           
  1.66
 Recovered grade (oz/t)
 0.101
 0.120
 0.087
 Recovered grade (g/t)
 3.46
 4.12
 2.99
 Gold production (000 oz) 100  percent
 301
 352
 246
 Gold production (000 oz) 40  percent
 120
 141
 98
 Total cash costs ($/oz)
 (1)
 300
 241
 263
 Total production costs ($/oz)
 (1)
 342
 326
 347
 Capital expenditure ($ million) 100  percent
 5
 3
 5
 Capital expenditure ($ million) 40  percent
 2
 1
 2
 Employees
 (2)
 265                            
  203                            
  210
 Outside contractors
 (2)
 638
 675
 700
 (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.


Morila (attributable 40 percent)
 Description:The Morila mine is situated some 180 kilometers by road south-east of Bamako, the capital of Mali. Open-pit mining takes place at five cuts within one pit.  The current focus is on cuts 4 and 5.  At its peak, the Morila pit will be approximately 1.4 kilometers by 1 kilometer and up to 240 meters deep.  The plant, which comprises a conventional carbon-in-leach (CIL) process with an upfront gravity section to extract the free gold, has throughput capacity of 350,000 tonnes per month and 4.2 million tonnes per annum.  It has a capacity of 350,000 tonnes per month.
 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 sulphide mineralization consists of arsenopyrite, pyrrhotite, pyrite and chalcopyrite.
 Safety:  Overall, the level of lost-time injuries was maintained at Morila with an LTIFR for the year of 0.57 per million hours worked (2006: 1.42). The OHSAS 18001 Safety Management certification was achieved by November 2007.  Sadly, the Morila team lost two fellow colleagues on February 9, 2007 during an explosion caused by the inadvertent mixing of two chemicals.  This resulted in a FIFR for the year of 0.57 per million hours worked (2006: 0).
 Operating review:  Attributable gold production at Morila decreased by 13 percent to 180,000 ounces (2006: 207,000 ounces), with the significant increase in production in the second half of the year not quite making up for the losses recorded in the first half of the year.  The initial fall in production levels was a result of a decline in the recovered grade which improved markedlylater in the year with the mining and processing of higher grade ore.
 Mining production efficiencies improved significantly in the second half of 2007 as highlighted by the achievement of 1,001,444 BCMs in September month.  The optimal use of in-pit backfill (leaving waste in the pit) resulted in significant savingsand an increase in mining production.
 Total cash costs increased by 25 percent to $333 per ounce largely owing to the decline in production and an increase in cash costs caused by higher fuel costs and a weakening in the dollar against the FCFA and the euro.  As a result, fuel, local salaries, mining contractor and certain reagent costs increased significantly.
 Operating and production data for Morila
 2007                       
  2006                        
  2005
 Pay limit (oz/t)
 0.08                           
  0.08                           
  0.07
 Pay limit (g/t)
 2.46                           
  2.41                           
  2.27
 Recovered grade (oz/t)
 0.098
 0.113
 0.158
 Recovered grade (g/t)
 3.36
 3.88
 5.41
 Gold production (000 oz) 100  percent
 450
 517
 655
 Gold production (000 oz) 40  percent
 180
 207
 262
 Total cash costs ($/oz)
 (1)
 333
 266
 191
 Total production costs ($/oz)
 (1)
 406
 367
 298
 Capital expenditure ($ million) 100  percent
 1.3
 3
 5
 Capital expenditure ($ million) 40  percent
 0.5
 1
 2
 Employees
 (2)
 498                            
  500                            
  478
 Outside contractors
 (2)
 1,188
 1,075
 705
 (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.


NAMIBIA
 AngloGold Ashanti has one gold mining operation in Namibia, namely Navachab, which is wholly owned. In 2007, Navachab produced 80,000 ounces of gold, equivalent to 1 percent of group production.
 Description: The Navachab mine is situated near Karibib and 170 kilometers north-west of Windhoek in Namibia, on the south western cost of Africa. Navachab is an open-pit mine and its processing plant, with a production capacity of 120,000 tonnes per month, includes mills, carbon-in-pulp (CIP) and electrowinning facilities.  The Navachab gold plant has a capacity of 110,000 tonnes per month.
 Rights: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 abilities of the company, including mining, financial and technical capabilities, rehabilitation programs and payment of royalties. The relevant license has been 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.
 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 degree 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.
 Safety: Overall safety standards were maintained at Navachab with an LTIFR for the year of 4.59 (2006: 4.09).  No fatalities were recorded.
 Operating review:
 Mining volumes declined mainly due to a lack of drill availability, from 7.8 million tonnes in 2006 to 7.3 million tonnes.  Plant-production went up from 1.5 million tonnes in 2006 to 1.6 million tonnes in 2007 in line with expectations.  Feed grade fell by15 percent between 2006 and 2007.
 Drill performance and drill capacity affected mining throughput as did the loss of skills to local and international competitors.Grades were relatively low as the operation continued to strip the east pushback while metallurgical recovery was lower than expected.
 Total cash costs rose by 36 percent to $475 per ounce. This increase was caused by an increase in the cost of labor, explosives and the grade-related decline in gold production.


Growth prospects: Work on the west pushback expansion is currently underway. Work on the dense media separation (DMS) plant is also at an advanced stage.  Exploration aimed at increasing geological confidence will continue. Brownfields exploration projects will also increase the reserve base.
 Operating and production data for Navachab
 2007                        
  2006                      
  2005
 Pay limit (oz/t)
 0.04                           
  0.04                          
  0.05
 Pay limit (g/t)
 1.22                           
  1.29                          
  1.65
 Recovered grade (oz/t)
 0.046
 0.053
 0.060
 Recovered grade (g/t)
 1.56
 1.81
 2.05
 Gold production (000 oz) 100  percent
 80
 86
 81
 Total cash costs ($/oz)
 (1)
 475
 349
 321
 Total production costs ($/oz)
 (1)
 525
 407
 333
 Capital expenditure ($ million) 100  percent
 6
 5
 5
 Employees
 (2)
 409                            
  313                            
  315
 Outside contractors
 (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, Geita, which produced 327,000 ounces of gold in 2007, equivalent to 6 percent of group production.
 Rights:Mineral rights in the United Republic of Tanzania are governed by the Mining Act of 1998 (the Act), 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: prospecting licenses; retention licenses; and mining licenses.
 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 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 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 theexclusive right to conduct mining operations in or on the area covered by the license.  A mining license is granted for a periodof 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 it cannot be developed immediately by reason 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 fora 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 anaffiliate company of the holder or to a financial institution or bank as security for any loan or guarantee in respect of miningoperations.
 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 have been issued for 25 years and expire in 2024.


Geita
 Description:The Geita gold mine is situated 80 kilometers south-west of the town of Mwanza in the north-west of Tanzania.  The Geita gold deposit is an Archaean mesothermal orebody, largely hosted in a banded ironstone formation.  It is a multiple open-pit operation with further underground potential which is currently serviced by a 6 million tonnes per annum carbon-in-leach (CIL) processing plant. Standard open-pit mining methods are employed; hard overburden is drilled and blasted hydraulic excavators are used to load waste material into a fleet of large dump trucks exposing the gold bearing ore material which is directed to the processing plant.  The processing plant has a capacity of 490,000 tonnes per month.
 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:Overall safety standards were maintained at Geita with an LTIFR for the year of 0.68 (2006: 0.63).  No fatalities were recorded.
 Operating review:Production at Geita is gradually improving year on year following the serious decline in production in 2006.  This was exacerbated by the collapse of part of the Nyankanga pit sidewall during the first quarter of 2007, which covered a portion of the higher grade orebody.  Gold production increased from 308,000 ounces in 2006 to 327,000 ounces in 2007, an increase of 6 percent.  The average grade of ore processed increased from 1.68g/t in 2006 to 2.01g/t in 2007.  The collapse of the Nyankanga pit in the first quarter delayed access to the higher grade exposed ore in this area and resulted in the mining plan for the year being revised.  Production and tonnage throughput in particular was further aggravated by wet ore, mill lubrication problems and a major shutdown of the primary crusher for planned maintenance as well as damage to the ball mill discharge which led to reduced processing plant availability.  There was a considerable improvement in the third quarter of 2007 as Nyankanga ore was accessed, however, grades were not sustainable, the material was harder and as a result plant throughput was reduced and fourth quarter gold production suffered as a result.
 Total cash costs at $627 per ounce remained effectively unchanged from 2006 ($630 per ounce).  Reduced expenditure on equipment re-builds and contractor services also contributed to the containment of costs.  Capital expenditure for 2007 was $27 million (2006: $67 million).
 Growth prospects:At the end of 2007 advanced grade control drilling had begun at the Star & Comet project in preparation to start mining in the second quarter of 2008.  The adjacent Roberts project will begin mining towards the end of 2008.  Exploration activities during 2007 focused on strike additions at Area 3 and the detection of regolith gold anomalies below laterite cover via air core drilling.  The regolith program identified a 2 kilometers gold in saprolite anomaly that requires follow-up drilling.
 Metallurgical testwork continued during 2007 to identify a processing route for refractory ores at Matandani Kukuluma which still contain significant potential. A scoping study into the underground potential at Nyankanga and Geita Hill began in 2007.
 Operating and production data for Geita
 2007                      
  2006                       
  2005
 Pay limit (oz/t)
 0.09                          
  0.13                          
  0.07
 Pay limit (g/t)
 3.04                          
  4.16                          
  2.27
 Recovered grade (oz/t)
 0.059
 0.049
 0.092
 Recovered grade (g/t)
 2.01
 1.68
 3.14
 Gold production (000 oz)
 327
 308
 613
 Total cash costs ($/oz)
 (1)
 627
 630
 298
 Total production costs ($/oz)
 (1)
 817
 766
 419
 Capital expenditure ($ million)
 27
 67
 78
 Employees
 (2)
 2,304                         
  2,043                        
  1,066
 Outside contractors
 (2)
 922
 1,177
 1,214
 (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.


UNITED STATES OF AMERICA
 Cripple Creek & Victor is AngloGold Ashanti’s sole operation in the United States. In 2007, Cripple Creek & Victor produced 282,000 ounces of gold, 5 percent of group production.
 Cripple Creek & Victor (CC&V) is a joint venture in which AngloGold Ashanti has a 67 percent interest and Golden Cycle Gold Corporation holds the balance of 33 percent.  AngloGold Ashanti is the manager of CC&V and has a 100 percent interest in the gold produced by CC&V until the loans extended to the joint venture are repaid. Subsequent to year-end, on January 14, 2008, AngloGold Ashanti announced the execution of an Agreement and Plan of Merger in order to acquire 100 percent of Golden Cycle Gold Corporation, thus owning 100 percent of CC&V.  The closing of that transaction is anticipated to be completed in the second quarter of 2008 subject to various matters including approval by Golden Cycle Gold Corporation’s shareholders, satisfaction of certain closing conditions, and receipt of all necessary regulatory approvals.
 Rights: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 are owned by the federal government and are 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 tosell, 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.
 The Cripple Creek & Victor Gold Mining Company joint venture 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-minereserves are within these property controls.  The mining and rehabilitation permits issued by the State of Colorado are life-of-mine permits.
 Cripple Creek & Victor (attributable 67 percent with 100 percent interest in production)
 Description: Located in the state of Colorado in the United States, CC&V’s Cresson mine is a low-cost, open-pit mining operation which treats the ore mined by means of a heap-leach pad, which is one of the largest in the world.  Production began here in 1994.
 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 intrusive 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 vein 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 beencapsulated by iron and manganese oxides, pyrite, K-feldspar alteration and quartz.
 Safety:  As at March 2007, CC&V had reported 43 months without a single lost-time injury.  This record was unfortunately interrupted in the second quarter of the year when there was one lost-time accident.  Consequently, the LTIFR for the year was 3.00 per million hours worked (2006: 0.0).  No fatalities were recorded this year.
 The DuPont Safety Training (STOP) program implemented in 2003 and the risk-based safety management system implemented in 2005 continue to have very positive safety results.  An extension of the STOP program, called Train the Trainers, was implemented in 2007 to continue to enhance safety at CC&V.  The program is designed to prepare supervisors for peer training prior to crew training.
 Operating review: In 2007, production at CC&V fell marginally to 282,000 ounces from 283,000 ounces in 2006.  A total of 23 million tonnes were placed on the heap-leach pad.  The decline in production was a result of the greater distance over which the gold-bearing-leach solution had to be transported from the higher stacked ore to the leach-pad liner.  This decline was compounded in the third quarter by delayed production from the leach-pad stacking levels.
 Overall, there was an increase in total cash costs of 8 percent to $269 per ounce from $248 per ounce in 2006, principally as aresult of rising commodity costs, and of diesel fuel in particular.  A decrease in costs due to lower contractor costs was morethan made up for by increases in fuel costs as oil prices hit record levels on global markets and creeping inflation in the general US economy.
  Growth prospects:  The proposed mine life extension project is to include the development of new sources of ore and an extension to the additional heap leach facility.
 Cripple Creek & Victor – Summary of metallurgical operations
 Gold plants
 Capacity (000 tonnes/month)
 
 -
 crushed ore production
 1,739
 
 -
 total ore production
 1,796
 -       
  solution processed
 2,371
 Operating and production data for Cripple Creek & Victor operations
 2007                     
  2006                     
  2005
 Pay limit (oz/t)
 0.01                        
  0.01                         
  0.01
 Pay limit (g/t)
 0.34                        
  0.34                         
  0.34
 Recovered grade (oz/t)
 0.016
 0.016
 0.018
 Recovered grade (g/t)
 0.53
 0.54
 0.62
 Gold production (000 oz)
 282
 283
 330
 Total cash costs ($/oz)
 (1)
 269
 248
 230
 Total production costs ($/oz)
 (1)
 521
 498
 418
 Capital expenditure ($ million)
 23
 13
 8
 Employees
 (2)
 338                          
  325                          
  313
 Outside contractors
 (2)
 67                            
  44                           
  44
 (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
 Total exploration expenditure in 2007 amounted to $167 million (including equity accounted joint ventures).  The main aim of both exploration programs is to identify new ounces of gold that are attributable to AngloGold Ashanti.
 The main focus of AngloGold Ashanti’s 2007 exploration program was on greenfields exploration, i.e. exploration in new terrains, notably in Australia, Colombia, and the Democratic Republic of Congo (DRC).  Brownfields exploration, which is aimed at identifying ounces for production at or around existing mines, was undertaken around most current operations, with the most successful programs being undertaken in Ghana, the United States of America, Australia, and Guinea.
 Greenfields exploration activities were undertaken in seven countries – Australia, China, Colombia, the DRC, Laos, the Philippines and Russia – during 2007.  A total of 378,014 meters of diamond, reverse circulation and aircore drilling was completed during the year, drill testing existing priority targets and delineating new targets in Australia, Colombia and the DRC.  Greenfields activities in Russia, China, Laos, and the Philippines were predominantly undertaken through joint ventures and strategic alliances, with exploration activities in Laos eventually being discontinued in late-2007.  While the discovery of newlong-life, low-cost mines remains the principle aim of the greenfields exploration program, AngloGold Ashanti is also committedto maximizing shareholder value by exiting from or selling those exploration assets that do not meet its internal growth criteriaand by opportunistically investing in prospective junior exploration companies.
 A significant drill program and conceptual study are concurrently being undertaken at AngloGold Ashanti’s 100 percent-owned Colosa project in Colombia.  In 2008, exploration expenditure is expected to be some $185 million to $215 million.
 Argentina
 At Cerro Vanguardia, reconnaissance drilling continued on veins identified by regional mapping and geophysics.  Drilling to extend some of the current ore shoots was successful.


Australia
 At Sunrise Dam, brownfields exploration continues to focus on increasing the underground Mineral Resource inventory and increasing the confidence category of Mineral Resources so that Ore Reserve conversion can occur.
 At Boddington Gold Mine, a maximum of seven diamond drill rigs were employed during the year to complete a total of 121,212 meters of drilling in 151 holes targeting in-pit Mineral Resource conversion and near-pit Resource extensions.
 The Tropicana Joint Venture covers approximately 12,000 kilometers and is located to the east and north-east of Kalgoorlie in Western Australia. The Joint Venture held by AngloGold Ashanti Australia Limited and Independence Group NL. AngloGold Ashanti holds a 70 percent managing interest in the joint venture with Independence Group NL free carried until completion of the pre-feasibility study.  However, Independence has agreed to co-fund certain activities prior to the completion of the pre-feasibility study to ensure timely development of the project.
 Drilling continued at the Tropicana prospect in 2007 with the mineralization identified in the Tropicana-Havana zones moving into prefeasibility study assessment in May.  The study is focused on assessing the viability and options for developing an openpit gold mining operation.
 Reconnaissance exploration continues in parallel throughout the Tropicana joint venture tenements with a number of prospects identified by auger sampling and aircore drilling over a 40 kilometers strike trend north and south of the Tropicana prospect. Significant results have been obtained from limited aircore and reverse circulation drilling at the Beachcomber prospect, located approximately 200 kilometers south of the Tropicana prospect.
 Brazil
 At Córrego do Sítio, drilling of underground deposits continued.  A total of 40,500 meters were drilled during 2007 and were aimed at defining new orebodies and upgrading the level of information of known orebodies.  Drilling concentrated on the Laranjeiras and the Paraiso orebodies.  At Lamego, a total of 24,400 meters were drilled.  The drilling consisted of a combination of deep drilling targeted at the depth extension of the Cabeca de Pedra and Arco da Velha orebodies, surface infilldrilling at Arco da Velha and underground infill drilling at Carruagem. Regional geophysics, mapping and sampling continued.
 At Serra Grande, in October 2007 a new deposit, Orebody Pequizáo, was identified between Mina Nova and Mina III.  Drilling continues and a significant high-grade deposit is being targeted.
 China
 AngloGold Ashanti has entered into three co-operative joint ventures (CJVs) with local partners at Yili-Yunlong (Xinjiang province), Jinchanngou (Gansu province), and Pingwu (Sichuan province).  Business licenses have now been issued by the respective local authorities for the Yili-Yunlong and Jinchanggou CJVs (with systematic ground exploration now under way), whereas the business license for the Pingwu CJV is expected to be issued in early 2008.
 A short (1,053 meters) diamond drill program was completed on the Yili-Yunlong CJV in late-2007. The primary objective of this drill program was to test the vertical continuity of outcropping gold-copper mineralization, however, drilling only succeeded inintersecting weakly anomalous mineralization at depth. At Red Valley (Qinghai), assay results from the 3,300 meters diamond-drill program were also reviewed and confirmed the presence of only low-grade gold mineralization within the principal targets.As a result, AngloGold Ashanti has elected to withdraw from earning into this CJV.
 Colombia
 Regional exploration and target generation activities continued in Colombia during 2007. A conceptual economic study was also completed on the bulk-tonnage Gramalote prospect (Antioquia Department). On February 14, 2008, AngloGold Ashanti announced the signing of a binding agreement with B2Gold Corp, in which B2Gold will have the option to earn into 51 percent of the Gramalote Project.  AngloGold Ashanti will be issued 25 million shares and 21.4 million warrants in B2Gold Corp in exchange for this additional interest in Gramalote and certain other mineral properties in Colombia.
 Resource delineation drilling was also undertaken at AngloGold Ashanti’s 100 percent-owned Colosa porphyry gold prospect (Tolima Department).  To the end of December 2007, approximately 12,000 meters of diamond drilling (42 drill holes) had been completed at Colosa.  Additional drilling and a conceptual study are currently being undertaken at Colosa.


Democratic Republic of Congo (DRC)
 Exploration activities undertaken in the 10,000 square kilometers Concession 40 tenement (Ituri Province, northeastern DRC) included the advancement of resource delineation drilling on the known mineralization at Mongbwalu; and the start of regional target generation and evaluation activities between AngloGold Ashanti (86 percent) and OKIMO (14 percent), in which AngloGold Ashanti manages all exploration activities and OKIMO retains a free carried interest to production.
  High-quality airborne geophysical data (airborne magnetics, radiometrics, and electromagnetics) were acquired over approximately 2,200 square kilometers (or nearly 25 percent) of Concession 40, using both fixed-wing and helicopter-based platforms. Interpretation of this geophysical data, in conjunction with compilations of the known geology and available geochemical data, form the basis of the regional target generation process.  Drill testing of the highest priority regional targets is expected to be undertaken during 2008.
 Ghana
  Guinea
 Drilling at Siguiri in 2007 focused on infill drilling at the following deposits: Sintroko (8 kilometers south of the plant), Kintinian (4 kilometers north), Foulata (45 kilometers north-west) and the spent heap leach.  Mineral Resource extension drilling continued for the same deposits.  Reconnaissance drilling was conducted to follow up on anomalies identified in Block 3 (35 kilometers north-east) and Block 4 (70 kilometers north-east).  Surface geochemical sampling began on four new exploration licenses situated to the north of the mine.  An airborne electromagnetic survey was flown in the second quarter andfollow up on the identified targets has started.
 Laos
 The strategic exploration alliance in Laos between AngloGold Ashanti and Oxiana Ltd expired in December 2007 and was not extended by mutual agreement.
 Mali
 At Morila, the regional drilling program of 92 holes was completed during the first quarter and an intensive data integration andinterpretation phase started.  Work supported by international researchers continues in order to optimize the exploration process.  During the year, two diamond holes were drilled to the west of the pit to examine the continuity of the orebody between the main deposit and Samacline.  A further four diamond holes were drilled in the fourth quarter to follow up on potential extensions to mineralization in areas identified as being prospective.  Minor geochemical and pitting programs were also conducted during the year.
 At Sadiola, Phase 8 drilling, aimed at upgrading the Inferred high-grade zones of the main body and the footwall mineralization,was completed in the second quarter.  A full review of the geological model for the lease was completed and as a result two fence lines of diamond holes were drilled between the FE3 and FE4 deposits and through the FE4 deposit in order to follow up on potential mineralization trends.  Results are still awaited for this drilling.
 At Yatela, a small satellite to the main deposit was discovered to the north-west of the main pit and the final infill drilling is currently being completed.  Definition drilling of the Dinguilou oxides was completed and modelling is on going.  A program to investigate the deep sulphide breccias developed below the main deposit was started during the year and will continue in 2008.
 Namibia
 At Navachab, drilling concentrated on areas around the main pit particularly to the north-west and the west and in the Gecko Area.  Promising results were obtained from the pit area and further drilling is planned in 2008.  At Gecko, the central depositwas drilled to grade control spacing in order to test the continuity of the mineralization and further drilling was conducted on the south, north and far north extension.  A stream sediment sampling program was conducted, both on and off lease, in order to follow up on previous work and to target new areas.


Philippines
 Work continued on finalizing the joint venture agreements with the two Red 5 prospects, Mapawa and Outer Siana.  The start of detailed exploration at Mapawa currently awaits granting of a Mineral Production Sharing Agreement (MPSA) by the Mines and Geosciences Bureau in Manila.
 Russia
 Significant efforts were focused on finalizing the formation of the Polymetal/AngloGold Ashanti strategic alliance.  In June 2007, AngloGold Ashanti concluded the purchase of Trans-Siberian Gold’s interests in the Veduga and Bogunay projects in Krasnoyarsk for a consideration of $40 million, with the objective of contributing these assets to the new strategic alliance.  In return, Polymetal has agreed to contribute two projects to the alliance – Imitzoloto and Eniseevskaya – with a value of $16 million and to make an initial payment of $12 million to AngloGold Ashanti.  The Russian management company for the strategic alliance, Zoloto Taigi, has now been registered.  By end-2007, the joint venture team had assumed management of exploration activities in the four initial project areas (Bogunay, Anenskoye and Veduga in the Krasnoyarsk region and Aprelskovkoye in the Chita region).  In addition, the joint venture had successfully acquired the 390 square kilometer Sovremenie Prospect in the Krasnoyarsk region at auction.
 AngloGold Ashanti continues to hold a 29.8 percent shareholding in Trans-Siberian Gold (TSG), whose primary asset is the Asacha gold-silver project in Kamchatka.
 South Africa
 At Moab Khotsong, five surface diamond holes were drilled during the year.  MZA9 completed its initial deflections on the Vaal Reef and a long deflection to the east is under way.  MGR7 completed its deflection program on the Vaal Reef in the third quarter.  MMB5 continues to drill. MCY4 was reopened in the third quarter and a long deflection to the east is currently being drilled.  MCY5 was also started in the third quarter and continues to drill.
  Tanzania
 At Geita, drilling at various levels continued at Kukuluma/ Matandani, Area 3 (south, central and west), the Lone Cone – the Nyankanga Gap and the Nyakabale-Prospect 30 area. An intensive phase of reconnaissance drilling was completed on various parts of the mining lease and will continue into 2008.
 United States
 At Cripple Creek & Victor in Colorado, drilling of the mine life extension project area continued during the year and was concentrated on the Altman, Globe Hill, Schist Island and Control Point areas.  Development drilling was focused around Cresson, South Cresson and Schist Island.  A total of 94,996 meters in 452 holes were drilled.


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 reserves are planned to be mined out under the life-of-mine plans within the period of AngloGold Ashanti’sexisting rights to mine, or within the renewal periods of AngloGold Ashanti’s rights to mine.  In addition, as of the date of reporting, all 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, shaft pillars) are then defined. Grade and tonnage curves specific for each ofthe deposits, in conjunction with the cost structure, yield, mine call factor, 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 gradeis 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 areasthat 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.
  2006
 ( 3 Year Average)
 2007
 (Business Plan)
 2007
 (3 Year Average)
 Units
                Given the sustained increase in the gold price since 2002 and the positive gold price outlook, AngloGold Ashanti prepared its life of mine business plans using a gold price of $600 per ounce.  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 reserves.  The resultant SEC compliant proven and probable 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 total AngloGold Ashanti Ore Reserves increased from 66.0 million ounces in 2006 to 72.2 million ounces in December 2007. The principal changes in AngloGold Ashanti’s ore reserves as at December 31, 2007 compared with those published as at December 31, 2006 are as follows:
 Moz
 December 2006 Ore Reserves
 66.0
 Principal Reductions
 (1)
 Geita, reconciliation factors (-0.8Moz), flattening of slopes (-0.5Moz), model revisions (-0.2 Moz) and costs  (-0.1Moz)
        Principal Additions
 (1)
 Iduapriem, purchase of an additional 15 percent of the operation from the Ghananian Government and the IFC, to bring the ownership to 100 percent
              Moab Khotsong, the inclusion of Project Zaaiplaats – a deepening of Moab Khotsong to access deeper Vaal Reef blocks to the South West of the current mine
    December 2007 Ore Reserves*
 72.2
 (1)
 Principal reductions and principal additions include a total of 6.8 million ounces of depletion for the year 2007.
 * rounding may result in computational differences
 AngloGold Ashanti will continue to pursue a strategy of increasing value-adding 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 and Ghanaian underground mines which are in production. These ore reserves have been determined based upon completed economic studies.
 Audit of 2006 and 2007 Ore Reserve statement
 During the course of the year, the AngloGold Ashanti 2006 Ore Reserve statements were submitted to independent consultants for review. The Ore Reserves from eight of AngloGold Ashanti’s global operations were selected and subjected to review. These operations were Mponeng, Geita, Obuasi, Morila, Sadiola, Yatela, Cuiaba and Cripple Creek and Victor.  The company has been informed that the audit identified no material shortcomings in the process by which AngloGold Ashanti’s Ore Reserves were evaluated.
 During 2007, it was decided by management to audit Ore Reserves prior to publication.  As a result the 2007 Ore Reserves for the following operations were audited; Sunrise Dam, Cerro Vanguardia, Great Noligwa, Kopanang and Project Zaaiplaats (Moab deepening project).  The company has been informed that these audits identified no material shortcomings in the process by which AngloGold Ashanti's Ore Reserves were evaluated. It is the company's intention to repeat this process so that all its operations will be audited over a three year period.
 AngloGold Ashanti’s ore reserve statements have been prepared by the competent persons who manage AngloGold Ashanti’s ore reserves. See “Item 6.: Directors, senior management and employees”.


85
 Ore Reserves: Imperial
 At December 31, 2007
 Proven
 Ore
 Reserves
 (1)
 Probable
 Ore
 Reserves
 (1)(2)
 Metallurgical
 
 
 Gold
 
 
 Gold
 Recovery
 Tons
 (5)
 Grade  Content
 (1)
 Tons
 (5)
 Grade  Content
 (1)
 Factor
 
 (mill)
 (oz/ton)
 (mill oz)
 (mill)
 (oz/ton)
 (mill oz)
 percent
 South Africa
        Vaal River
 (6)
 
 
 
 
 
 
 
                  (2)
 
 
 
 (4)
         West Wits
         (2)
        (4)
          (2)
        Surface
 
 
 
 
 
 
 
         (4)
 Argentina
         (3)(7)
 
 
    Australia
         (3)(8)
  
  
         Brazil
         (9)
 
 
   (4)
  (3)
        (4)
 Ghana
         (3)
        (4)
  (2)
 
 
   (4)
 Guinea
         (3)
        (4)
 Mali
         (3)
        (4)
  (3)
        (4)
  (3)
        Namibia
                (4)
 Tanzania
                (4)
 United States of America
                Total  355.7
 0.060
 21.2
 720.2
 0.071
 51.0
 
 (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 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)
 
 Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois.
 (6)
 
 The Vaal Reef Ore Reserves include 42.97 million pounds 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.
 (7)
 
 The Ore Reserve contains 31.0 million ounces of silver to be recovered as a by-product.
 (8)
 
 The Ore Reserve contains 511 million pounds of copper.
 (9)
 
 0.47 million tons of sulphur will be recovered from processing the Ore Reserve


86
 The 2007 probable ore reserves include reserves below infrastructure in the case of the following underground mines currently in production:
 Mine  Tons  (millions)
 Grade  (ounces/ton)
 Gold Content
 (million ounces)


87
 Ore Reserves: Imperial
 At December 31, 2006
 Proven Ore Reserves
 (1)
 
 Probable Ore Reserves
 (1)
 Metallurgical
 Gold
 
 
 Gold
 Recovery
 Tons
 (5)
 Grade  Content
 (1)
 Tons
 (5)
 Grade  Content
 (1)
 Factor
 (mill)
 (oz/ton)
 (mill oz)
 (mill)
 (oz/ton)
 (mill oz)
 percent
 South Africa
         Vaal River
 
 
 
 
 
 
 
 
                                    West Wits
          (2)
                   (2)
         Surface
 
 
 
 
 
 
 
 
         (4)
 Argentina
          (3)
  
  
  Australia
          (3)
                 (4)
 Brazil
                 (4)
  (3)
        (4)
 Ghana
          (6)
          (3)
                 (4)
 Guinea
          (3)
         Mali
          (3)
        (4)
  (3)
        (4)
  (3)
        (4)
 Namibia
                 (4)
 Tanzania
                 (4)
 United States of America
                  Total  287.7
 0.050
 14.479
 655.6
 0.079
 51.491
 
 
 (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 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)
 
 Tons refers to a short ton, which is equivalent to 2000lbs avoirdupois.
 (6)
 
 Bibiani was sold on December 28, 2006.
 (7)
 
 The Vaal Reef Ore Reserves include 26.10 million pounds of Uranium by-products; this can not be accounted for by mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.
 (8)
 
 The Ore Reserve contains 24.5 million ounces of silver to be recovered as a by-product.
 (9)
 
 The Ore Reserve contains 418 million pounds of copper.
 (10)
 
 0.55 million tons of sulphur will be recovered from processing the Ore Reserve.


88
 The 2006 probable ore reserves include reserves below infrastructure in the case of the following underground mines currently in production:
 Mine  Tons  (millions)
 Grade  (ounces/ton)
 Gold Content
 (million ounces)


89
 Ore Reserves: Metric
 At December 31, 2007
 Proven
 Ore
 Reserves
 (1)
 Probable
 Ore
 Reserves
 (1)(2)
 Metallurgical
 
 
 Gold
 
 
 Gold
 Recovery
 
 Tonnes
 (6)
 Grade  Content
 Tonnes
 Grade
 Content
 Factor
 (mill)
 (g/t)
 (tonnes)
 (mill)
 (g/t)
 (tonnes)
 
 percent
 
 South Africa
         Vaal River
 (5)
 
 
 
 
 
 
 
 
                    (2)
 
               West Wits
          (2)
                   (2)
         Surface
 
 
 
 
 
 
 
 
         (4)
 Argentina
          (3)(7)
  
   
  Australia
          (3)(8)
                 (4)
 Brazil
                 (4)
  (3)
        (4)
 Ghana
          (3)
          (2)
 
   
 (4)
 Guinea
          (3)
         Mali
          (3)
        (4)
  (3)
        (4)
  (3)
        (4)
 Namibia
                 (4)
 Tanzania
                 (4)
 United States of America
                  Total  322.7
 2.04
 658.3
 653.4
 2.43
 1,588.2
 
 
 (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 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 19.5 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 963 tonnes of silver to be recovered as a by-product.
 (8)
 
 The Ore Reserve contains 0.23 million tonnes of copper.
 (9)
 
 0.47 million tonnes of sulphur will be recovered from processing the Ore Reserve.


90
 The 2007 probable ore reserves include reserves below infrastructure in the case of the following underground mines currently in production:
 Mine
 Tonnes  (millions)
 Grade  (grams/tonne)
 Gold Content  (tonnes)


91
 Ore Reserves: Metric
 At December 31, 2006
 Proven
 Ore
 Reserves
 (1)
 Probable
 Ore
 Reserves
 (1)
 Metallurgical
 
 
 
 Gold
 
 
 Gold
 Recovery
 
 Tonnes
 Grade
 Content
 Tonnes
 Grade
 Content
 Factor
 
 (mill)
 (g/t)
 (tonnes)
 (mill)
 (g/t)
 (tonnes)
 
 percent
 
 South Africa
         Vaal River
 
 
 
 
 
 
 
 
                                     West Wits
          (2)
   
 
              (2)
         Surface
 
 
 
 
 
 
 
 
         (4)
 Argentina
          (3)
 
    Australia
          (3)
   
 
             Brazil
                 (4)
  (3)
        (4)
 Ghana
          (5)
          (3)
   
 
            (4)
 Guinea
          (3)
   
 
 
  Mali
          (3)
   
 
 (4)
  (3)
   
 
 
 (4)
  (3)
        (4)
 Namibia
                 (4)
 Tanzania
                 (4)
 United States of America
                  Total  260.9
 1.73
 450.2
 594.7
 2.69
 1,601.5
 
 
 (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 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)
 
 Bibiani Mine was sold on December 28, 2006.
 (6)
 
 The Vaal Reef Ore Reserves include 11.8 thousand tons of Uranium by-products; this can not be accounted for by mine as Great Noligwa, Kopanang and Moab Khotsong feed to a combination of plants.
 (8)
 
 The Ore Reserve contains 0.76 million tons of silver to be recovered as a by-product.
 (9)
 
 The Ore Reserve contains 0.19 million tons of copper.
 (10)
 
 0.50 million tons of sulphur will be recovered from processing the Ore Reserve.


92
 The 2006 probable ore reserves include reserves below infrastructure in the case of the following underground mines currently in production:
 Mine
 Tonnes  (millions)
 Grade  (grams/tonne)
 Gold Content  (tonnes)


93
 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, 2007
 
 Tons (million)
 Grade (ounces/ton)
 Gold content
 (million ounces)
 South AfricaVaal RiverGreat Noligwa
 -
 -
 -
  -
 -
 -
  -
 -
 -
  -
 -
 -
 West Wits     Mponeng
 -
 -
 -
  -
 -
 -
  -
 -
 -
 Surface      Vaal River Surface – SA MET
 (2)
 130.861
 0.015  1.924
  (2)
 -
 -
 -
 Argentina  Cerro Vanguardia (92.5 percent)
 (1)
 0.050
 0.126  0.006
 Australia  Boddington (33.33 percent)
 (1)
 0.161
 0.024  0.004
  10.726
 0.060  0.643
 Brazil  Brasil Mineraçáo
 -
 -
 -
  (1)
 -
 -
 -
 Ghana  Iduapriem (100 percent)
 (1)
 2.096
 0.038  0.079
  (3)
 9.901
 0.050  0.492
 Guinea  Siguiri (85 percent)
 (1)(4)
 58.724
 0.016  0.961
 Mali  Morila
 (3)
  (1)
 7.685
 0.051  0.391
  (1)(5)
 1.895
 0.078  0.148
  (1)
 1.844
 0.031  0.057
 Namibia  Navachab
  4.977
 0.020  0.102
 Tanzania  Geita
 6.196
 0.032  0.183
 United States of America  Cripple Creek & Victor
 -
 -
 -
 Note:  The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.
 (1)
 
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 (2)
 
 Centralized operations treating material on surface that was previously generated by several underground operations.
 (3)
 Pompora TSF removed due to economic changes.
 (4)
 Spent heap included in Ore Reserve.
 (5)
 Sulphide stockpiles removed.


94
 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
 (1)
 
 At December 31, 2006
 
 Tons (million)
 Grade (ounces/ton)
 Gold content
 (million ounces)
 South Africa  Vaal River  Great Noligwa
 –
 –   –
  –
 –   –
  –
 –   –
  –
 –   –
 West Wits  Mponeng
 –
 –   –
  –
 –   –
  –
 –   –
 Surface  Surface sources
 (2)
 115.481
 0.02  1.912
 Argentina  Cerro Vanguardia (92.5 percent)
 0.020
 0.58  0.012
 Australia  Boddington (33.33 percent)
 0.165
 0.02  0.004
  7.455
 0.05  0.399
 Brazil  Brasil Mineraçáo
 0.051
 0.23  0.012
  0.073
 0.23  0.017
 Ghana  Iduapriem (85 percent)
 1.373
 0.04  0.049
  (3)
 51.647
 0.04  2.133
 Guinea  Siguiri (85 percent)
 20.052
 0.02  0.348
 Mali  Morila (40 percent)
 (3)
 6.561
 0.05  0.347
  8.057
 0.04  0.327
  2.278
 0.03  0.062
 Namibia  Navachab
 4.600
 0.02  0.102
 Tanzania  Geita
 4.457
 0.03  0.126
 United States of America  Cripple Creek & Victor
 –
 –   –
 Note:  The rounding of figures and converting from metric to imperial units may result in minor computational discrepancies.
 (1)
 
 Attributable to AngloGold Ashanti.
 (2)
 
 Centralized operations treating material on surface that was previously generated by several underground operations.
 (3)
 Includes Tailing Storage Facilities.


95
 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, 2007
 
 Tonnes (million)
 Grade (grams/tonne)
 Gold content
 (tonnes)
 South AfricaVaal RiverGreat Noligwa
 -
 -
 -
  -
 -
 -
  -
 -
 -
  -
 -
 -
 West Wits     Mponeng
 -
 -
 -
  -
 -
 -
  -
 -
 -
 Surface     Vaal River Surface - SA MET
 (2)
 118.715
 0.50  59.858
  (2)
 0.000
 -  0.000
 Argentina     Cerro Vanguardia (92.5 percent)
 (1)
 0.046
 4.32  0.197
 Australia     Boddington (33.33 percent)
 (1)
 0.146
 0.81  0.118
  9.730
 2.05  19.996
 Brazil     Brasil Mineraçáo
 -
 -
 -
  (1)
 -
 -
 -
 Ghana     Iduapriem (100 percent)
 (1)
 1.902
 1.30  2.469
  (3)
 8.982
 1.70  15.290
 Guinea     Siguiri (85 percent)
 (4)(1)
 53.274
 0.56  29.878
 Mali    Morila (40 percent)
 (3) (1)
 6.971
 1.74  12.158
  (5) (1)
 1.719
 2.67  4.598
  (1)
 1.673
 1.05  1.762
 Namibia     Navachab
 4.515
 0.70  3.160
 Tanzania     Geita
 5.621
 1.01  5.701
 United States of America     Cripple Creek & Victor
 -
 -
 -
 (1)
 
 Ore Reserves attributable to AngloGold Ashanti’s percentage interest shown.
 (2)
 
 Centralized operations treating material on surface that was previously generated by several underground operations
 (3)
 Pompora TSF removed due to economic changes.
 (4)
 Spent heap included in Ore Reserve.
 (5)
 Sulphide stockpiles removed.


96
 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
 (1)
 
 At December 31, 2006
 
 Tonnes (million)
 Grade (grams/tonne)
 Gold content
 (tonnes)
 South Africa  Vaal River  Great Noligwa
 –
 –   –
  –
 –   –
  –
 –   –
  –
 –   –
 West Wits  Mponeng
 –
 –   –
  –
 –   –
  –
 –   –
 Surface  Surface sources
 (2)
 104.763
 0.57  59.475
 Argentina  Cerro Vanguardia (92.5 percent)
 0.018
 20.00  0.369
 Australia  Boddington (33.33 percent)
 0.150
 0.80  0.120
  6.763
 1.82  12.325
 Brazil  Brasil Mineraçáo
 0.046
 7.95  0.368
  0.066
 7.87  0.522
 Ghana  Iduapriem (85 percent)
 1.246
 1.23  1.531
  (3)
 46.853
 1.42  66.353
 Guinea  Siguiri (85 percent)
 18.191
 0.60  10.828
 Mali  Morila
 (3)
  5.951
 1.82  10.815
  7.309
 1.39  10.160
  2.066
 0.94  1.940
 Namibia  Navachab
 4.173
 0.76  3.181
 Tanzania  Geita
 4.044
 0.97  3.924
 United States of America  Cripple Creek & Victor
 –
 –    –
 (1)
 
 Attributable to AngloGold Ashanti.
 (2)
 
 Centralized operations treating material on surface that was previously generated by several underground operations.
 (3)
 Includes Tailing Storage Facilities.


Drill hole spacing: Imperial
  Drill Hole Spacings
 Proven Ore Reserves
 Probable Ore Reserves
 South Africa  Underground sources     
  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
 Argentina
 
    Australia
 
  The average weighted distance to samples must be less than 131 feet of block centroid and more than 25 samples must have been used in the estimation
 The average weighted distance to samples must be less than 197 feet of block centroid and more than 15 samples must have been used in the estimation
    Brazil
 
  66 x 66 feet, 82 x 82 feet. Drilling pattern of 197 x 66 feet for Cuiaba Expansion Project.
  
 
 
 Serra Grande    (50 percent)
   Ghana
 
       
  Guinea  Siguiri
   Mali  Morila
         Namibia  Navachab
   Tanzania  Geita
   USA  Cripple Creek & Victor     
  <98 x 98 feet


Drill hole spacing: Metric
  Drill Hole Spacings
 Proven Ore Reserves
 Probable Ore Reserves
 South Africa  Underground sources     
  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
 Argentina
    Australia  Boddington
 The average weighted distance to samples must be less than 40 meter of block centroid and more than 25 samples must have been used in the estimation
 The average weighted distance to samples must be less than 60 meter of block centroid and more than 15 samples must have been used in the estimation
    Brazil
  20 x 20 meter, 25 x 25 meter. Drilling pattern of 60 x 20 for Cuiaba Expansion Project.
  
 
 
 Serra Grande    (50 percent)
   Ghana
       
  Guinea
    Mali
          Namibia
    Tanzania  Geita
   USA  Cripple Creek & Victor     
  <30 x 30 meter


RESEARCH AND DEVELOPMENT
 AngloGold Ashanti’s research and development program includes a range of initiatives in geology, mining, processing, engineering, safety, environment, marketing and knowledge management.
 Research and development expenditure amounted to $10 million, $4 million and $8 million during 2007, 2006 and 2005, respectively.
 A combination of collaborative and in-house research is adopted. Collaborative partners include research organizations, universities, mining companies, mining service providers and contractors.
 In addition, AngloGold Ashanti’s wholly owned subsidiary, ISS International Ltd (ISSI), is a global company specializing in seismic monitoring of mines, engineering structures and earthquakes. The company initiates and undertakes both broad-based and focused research and development to enhance the safety of those working in mining by developing effective monitoring and warning technology systems. ISSI functions on the international stage and its involvement in seismic matters extends well beyond the mining environment.
 AngloGold Ashanti is a signatory of the International Cyanide Management Institute (ICMI) and is committed to reaching compliance with the International Cyanide Management Code. All processing operations group-wide have been audited in-house. Following external audits during 2007, seven operations were certified by the ICMI to fully comply with the provisions ofthe International Cyanide Management Code.
 Extensive cyanide speciation studies have been conducted in collaboration with Mintek in Johannesburg at the various plants in the South Africa region to determine, on both a macro and a micro-scale, the environmental impacts of cyanide in residue material. Continuing projects cover cyanide measurement and control, cyanide recovery and cyanide destruction.
 A project evaluating the impacts of hypersaline water and cyanide on wildlife and the environment is under way in Australia in collaboration with ACMER. The results of this project have enabled Sunrise Dam to meet the stringent requirements of the International Cyanide Management Code regarding the management of cyanide in tailings.
 The AuTEK project to develop new industrial uses for gold is based at Mintek. AngloGold Ashanti continues to support the catalysis initiative within the program. This involves gold catalyst development for carbon monoxide oxidation, for use in fuelcells and in photocatalysis. A pilot plant for the production of gold catalyst is under construction. Close working relationshipshave been established with potential end users. Promising applications include gas masks, catalytic converters for diesel engines and catalysis of a variety of industrial chemical reactions.
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 COMPETITION
 As gold mining is a mature and regulated industry, and very significant volumes of gold and gold derivatives trade in the worldmarkets 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 exploration opportunities and human resources.


INTELLECTUAL PROPERTY
  SUSTAINABLE DEVELOPMENT: SAFETY, HEALTH, ENVIRONMENTAL AND SOCIAL DEVELOPMENT
 AngloGold Ashanti published its Report to Society 2007 on March 31, 2008. A copy has been furnished to the SEC under Form 6-K. This report covers issues pertaining to social development in line with AngloGold Ashanti’s values and business principles and the Global Reporting Initiative Guidelines prepared on a country and operational basis. The information below isextracted from the Report to Society 2007.
 Occupational safety and health
 Core business principle
 Every manager and employee takes responsibility for health and safety; and together strive to create workplaces that are free from occupational injury and illness.
 Performance
 The group’s safety performance was disappointing in 2007.  While the fatal (FIFR) was 4.5 percent lower year-on-year at 0.21 per million hours worked, the frequency rate (LTIFR) rose by 7 percent in 2007, to 8.24 per million hours worked.
 An intensive review of the group’s safety strategy, particularly in South Africa, during the year and the ‘Safety is our first value’campaign was launched.  Details of individual operational performance are reported in Item 4B.: “Business overview”.
 On the occupational health front, noise-induced hearing loss (NIHL), occupational lung diseases (OLD) (including silicosis) andin South Africa, pulmonary tuberculosis (TB) remain the most critical.  Medical surveillance programs are in place at most of the group’s operations with plans afoot to intensify efforts at a number of the African operations.  No new occupational disease cases were reported in Brazil, Argentina, the US or Australia.
 NIHL occurs over a period of time following consistent exposure to high levels of noise.  Hearing conservation programs comprise three features: engineering control to reduce noise at source, the use of hearing protection devices and medial surveillance.  In South Africa, 78 employees were compensated for NIHL in 2007 (2006: 67 employees).
 Exposure to silica dust is the major contributing factor in the development of OLD and efforts to reduce dust levels, improved dust monitoring and medical surveillance remain important in the program to eliminate silicosis.  During 2007, 207 cases of OLD were compensated in South Africa.  Also in 2007, 462 new cases of silicosis were recorded in South Africa and submitted for compensation (2006: 367 new cases).
 Some success has been achieved in reducing and managing TB in South Africa, where rigorous World Health Organization-based TB control programs are in place.  For the third consecutive year, TB statistics in South Africa declined, with 927 employees diagnosed with the disease.  There is a strong relationship between TB and HIV/AIDS.
 Human capital
 Employees: core business principle
 The company provides its employees with opportunities to develop their skills while sharing risks and rewards in workplaces that promote innovation, teamwork and freedom with accountability and embraces cultural diversity.


101
  Certain human rights conventions, including those relating to freedom of association and collective bargaining, are entrenched within South African labor legislation and the South African constitution as well as in the laws and regulations of many of thecountries in which the company operates.  AngloGold Ashanti is committed to upholding the fundamental rights conventions of the International Labor Organization (ILO) and no breaches of these conventions were alleged or reported during the year.  As the company is a signatory to the Voluntary Principles on Security and Human Rights, human rights training, particularly for security personnel, is being undertaken.
 A new global organizational development strategy is being implemented within the group.  The strategy recognizes the role of the individual as being a member of a family and a community and as an employee, and acknowledges the role of the company in supporting that and assisting the employee to reach his or her full potential.  A key goal of this strategy is the promotion of diversity and localization at all levels and all operations, enabling employees to take advantage of the extensive opportunitiesthe group can offer.
 The group’s Employee Share Ownership Plan (ESOP) in South Africa has been fully implemented with more than 30,000 individuals now having an equity stake in the company.  Discussions with the Ghana Mineworkers’ Union in respect of implementing a similar program in that country are ongoing.
 For a number of reasons, including legislation and customs, mining has not been a career easily accessible to women, AngloGold Ashanti has put plans in place to ensure retention, development and promotion of women.  Key statistics related to women at the end of 2007 are as follows: women at board level – 8.0 percent, permanent employees* who are women – 8.6 percent
  Education and training initiatives to alleviate the skills shortage and develop employees to their full potential continued during the year and included Adult Basic Education and Training (ABET), bursary schemes and learnerships, support for tertiary education, management development programs and executive development programs.
 Community
  AngloGold Ashanti strives to form partnerships with host communities, sharing their environments, traditions and values and wants communities to be better off for AngloGold Ashanti having been there. The company is committed to working in an environmentally friendly way.
  The group’s relationships with communities are guided by operation- or region-specific community policies, and are complemented by a company-wide management system which is currently being fully implemented. Several modules in the community and social development systems, focusing largely on issues such as resettlement and compensation, human rights and security, and the preservation of cultural and sacred sites, were developed during the year, with further implementation planned for 2008.
 The phenomenon of artisanal and small-scale mining, encountered particularly at the group’s operations and explorations prospects at Geita (Tanzania), Obuasi (Ghana), Siguiri (Guinea) and in the DRC, has on occasion given rise to conflict. During the year we continued to participate in the global debate on the matter and on the ground, in consultation with communities andother parties, we continue to explore sustainable opportunities for alternative livelihoods for small-scale miners. The group isdeveloping a strategy that promotes cohabitation and mutual respect for each others’ rights, within the legal and regulatory framework within a country.
 In terms of corporate social investment, AngloGold Ashanti contributed $7.7 million to corporate social investment (using a strict definition of the term that excludes sponsorships or the infrastructural developments attached to mining operations).
 Group operations are required to play a meaningful role in the development of local economic activity in the interest of contributing towards the sustainability of host communities.


Regional health
  AngloGold Ashanti is committed to prompt and supportive action in response to any major health threats in the regions in which it operates.
   In 2007, AngloGold Ashanti was recognized by a number of independent entities, non-government organizations and conferences for its work in delivering sustainable healthcare solutions in the communities in which it operates.  In June 2007,the Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria (GBC) identified the AngloGold Ashanti Obuasi Malaria Control Program as a global example of excellence in the private sector’s response to these three pandemics.  AngloGold Ashanti also won three awards in the second annual ABSA Healthcare Initiative Awards held in August 2007, a part of the Pan African Health Congress, for its integrated HIV/AIDS and tuberculosis control programs in South Africa, and for the malaria control programs at its operations in east and west Africa, winning in the category of Listed Company/Multinational Organisation/Hospital Group, as well as the Most Sustainable Project award and the award for Project with the Biggest Impact.
 The estimated HIV/AIDS prevalence levels at the group’s African operations are in line with similar demographically segmented portions in the general population.  It is estimated that the HIV/AIDS prevalence levels among employees at the South African operations in 2007 remained stable at approximately 30 percent of the workforce.
 Key objectives of the group HIV/AIDS program are to minimize the risk of HIV/AIDS on the company and its employees by reducing and ultimately eliminating new infections, efficiently managing those infected and supporting those with advanced AIDS.  The program focuses on:
 ·       Assuming single testing, approximately 102 percent of the South African workforce were tested in 2007 (2006:   75 percent).
  ·    Treatment programs, which involve the clinical care of those infected by the virus, including the use of antiretroviral    therapy (ART). ART is available to all employees at all our operations in Africa, either directly from company facilities,    through company-sponsored or -funded facilities, or from state facilities.
 ·
 Total expenditure on the company’s HIV/AIDS program in South Africa amounted to approximately R25.2 million ($3.6 million) in 2007 (2006: R21.5 million; $3.2 million).
 Malaria remains an area of concern for AngloGold Ashanti’s operations in Ghana, Guinea, Mali and Tanzania. Not only does the disease result in death, illness and absenteeism among employees, but it is a major cause of death in young children and pregnant women, with an obvious effect on employees’ families and communities.
 An extensive malaria program is in place at Obuasi and the lessons learnt here are being applied elsewhere. A revised integrated malaria control program began at Geita in Tanzania in September 2007, with indoor residual spraying of the Mchaura staff village and all mine vehicles. Work began during the year on the development of an integrated campaign at Siguiri in Guinea, modeled on the program at Obuasi.
 The incidence of malaria has continued to decline at Obuasi following the third year of the integrated malaria control campaign,from 164 per 1,000 employees in 2006 to 61 in 2007.
 By virtue of its South African domicile, AngloGold Ashanti is subject to certain conventions signed by the South African government, including the human rights and social conventions of the ILO (ILO 29, 87, 98, 100, 105, 111, 128 and 138).  South Africa’s Constitution, together with its associated laws, guarantees non-discrimination on the basis of race and other unfair grounds, freedom of association and the rights of children, among other basic human rights.


Certain ILO conventions (such as ILO Convention 128, dealing with child labor, and ILO Convention No 29, dealing with forced and compulsory labor) are also governed by law in South Africa, Argentina, Brazil, Australia, Namibia, Tanzania and the United States, and by law and various codes such as the Labour Code and Collective Agreement in Mali.
 A wide range of agreements and policies are also in place at an operational level to ensure that human rights are protected. These include recognition and collective bargaining agreements, disciplinary, grievance and appeal procedures and non-discrimination agreements. No breaches of fundamental rights conventions of the ILO were alleged or charges brought against the company in connection with these during 2007.
 Employment equity
 Racial and sexual harassment and other forms of discrimination are prohibited by the company’s business principles as well as by legislation in most of the countries where the operations are situated.
 In South Africa the employment of historically disadvantaged South Africans (HDSAs) remains a particular priority. Employment targets and achievements are reported annually to the South African Department of Labor, and reporting will also be provided in terms of the South African Mining Charter from 2007.
  Training
 AngloGold Ashanti’s training philosophy encompasses a wide range of training initiatives. In 2007, the company spent $31.4  million on employee training and development, of which $24.8  million was spent in the South Africa operations. In 2006,the employee training and development costs for South African-based operations amounted to $21.2 million. It is the company’s policy to provide Adult Basic Education and Training (ABET) to ensure that all employees are able to become literate and numerate.
 Environment
 Core business principle
 AngloGold Ashanti strives to form partnerships with host communities, sharing their environments, traditions and values and want communities to be better off for AngloGold Ashanti having been there.
 Performance
 As a member of the International Council on Mining and Metals, AngloGold Ashanti subscribes to the sustainable development framework and its principles for sustainable development, and is committed to publicly reporting. During the year, the group produced a set of five environmental guidelines to be used in conjunction with the group’s environmental policy.  These guidelines cover the management of water, air quality, waste material, chemicals and land. A number of other guidelines are currently under consideration and will be produced as and when required.
 All AngloGold Ashanti operations have had their environmental management systems certified in conformance with the ISO 14001 standard, and all the requisite permits for their current operations are in place. AngloGold Ashanti Health (Pty) Ltd,a subsidiary of the company that provides healthcare services to employees in South Africa, was also recommended for certification.
 In line with increasingly stringent governance and risk management requirements at a company level, AngloGold Ashanti initiated a corporate environmental review program during the year.  The program reviewed whether all significant environmental aspects had been identified and whether appropriate monitoring systems had been established to manage these aspects, including suitable monitoring systems.
 Closure plans, which are reviewed and updated annually, are in place at all operations.  These take into account operational conditions, planning and legislative requirements, international protocols, technological developments and advances in good practice.  In addition, an assessment of closure liabilities is undertaken and reviewed on an annual basis and, increasingly reviewed and assured by independent third parties.


A key performance objective for 2007 was the implementation of the International Cyanide Management Code for the Manufacture, Transport and Use of Cyanide in the Production of Gold (the Cyanide Code).  The code is a voluntary industry initiative developed under the auspices of the United Nations Environment Program to promote responsible management of cyanide used in gold mining, to enhance the protection of human health, and reduce the potential for environmental impacts.  AngloGold Ashanti was one of the first signatories to the code in November 2005 and, in line with this, committed to having allof its operations audited by an independent third party to demonstrate its compliance with the code.
 In addition to participating in the global debate on climate change and its potential impacts, AngloGold Ashanti has consideredits position, evaluating both risks and opportunities in respect of climate change, and embarking on a process of establishing its carbon footprint and its greenhouse gas emissions. In 2007, AngloGold Ashanti participated in the global Carbon Disclosure Project’s, survey of the top 40 companies listed on the JSE. CDP is a global institutional investor collaboration intent on understanding and quantifying climate change implications for business. AngloGold Ashanti’s response may be found at www.cdproject.net.
 4C.    
  Organizational structure
 Head office structure and operations
 AngloGold Ashanti’s operations are organized on a country basis. Management of AngloGold Ashanti is entrusted to the executive committee, comprising the two executive directors, 8 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, plants and equipment
  Item 4A: Unresolved staff comments


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 and are based on the US GAAP financial statements.
 This discussion addresses matters we consider important for an understanding of our financial condition and results of operations as of and for the three years ended and as at December 31, 2007, 2006 and 2005. It consists of the following subsections:
      commitments and contingencies, financial instruments, recent accounting pronouncements and critical accounting policies;
       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.
 Overview
 For the year ended December 31, 2007, AngloGold Ashanti had an attributable production of approximately 5.5 million ounces (including joint ventures) of gold.  Headquartered in Johannesburg, South Africa, the Company has a global presence with 20 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, 2007, the Company had Proven and Probable Ore Reserves of approximately 72.2 million ounces (including joint ventures) on an attributable basis.
 AngloGold Ashanti’s main product is gold.  A portion of its revenue is derived from sales of silver, uranium oxide and sulphuricacid.  The Company sells its products on world markets.
 AngloGold Ashanti’s world-wide operations, divided into countries are: South Africa (which comprises seven operations), Argentina (which encompasses one operation), Australia (which encompasses one operation), Brazil (which encompasses two operations), Ghana (which encompasses two operations), Guinea (which encompasses one operation), Mali (which encompasses three operations), Namibia (which encompasses one operation), Tanzania (which encompasses one operation) and the United States of America (which encompasses one operation).  For more information on the Company’s business and operations, see “Item 4B.: Business overview — Products, operations and geographical locations”.


5A.     
  Operating results
 Introduction
 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.  Inaddition, 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 from mining and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrialorganizations 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. If revenuefrom gold sales falls for a substantial period below the Company’s cost of production at its operations, AngloGold Ashanti coulddetermine 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.
  AngloGold Ashanti’s costs and expenses consist primarily of production costs, royalties and depreciation, depletion and amortization. Production costs are incurred on labor, fuel, lubricants, power, consumable stores which include explosives, timber, other consumables and utilities incurred in the production of gold.  Labor is a significant component of production costsas the Company’s mining operations consist mainly 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.
 In conducting mining operations, the Company recognizes the inherent risks and uncertainties of the industry, and the wasting nature of assets.  Recoverability of capitalized amounts is reviewed on a regular basis.
 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 2007, the Company derived 71 percent (65 percent including joint venture arrangements) of its revenues
  from these countries and incurred 62 percent (59 percent including joint venture arrangements) of its production costs in these
  local currencies.  In 2007, the weakening of the dollar against these local currencies in which the company operates continued to increase total cash costs.  A one percent strengthening of these local currencies against the dollar will result in an increase
  of total cash costs incurred of nearly $3 per ounce, or 1 percent. 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.  Based upon average rates during the respective years,
  the rand weakened and the real strengthened by approximately 4 percent and 11 percent respectively, against the US dollar in
  2007 compared to 2006.  The Argentinean peso traded freely against the US dollar from January 1, 2002 and had devalued to
  3.15: 1 against the US dollar by December 31, 2007.  The Australian dollar, based on the average rates during the respective
  years, strengthened by 11 percent against the US dollar in 2007 compared to 2006.


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, 2007, approximately 66 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 of the rand 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 willoccur 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 lead 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 itsgold (except to the limited extent that it utilizes commodity instruments) and it is possible, therefore, that if there is to besignificant 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 andfinancial 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:
 Year ended December 31
 2007
 percent
 2006
 percent
 2005
 percent
         Net effect
 6.2                
  1.4
 (4.2)
 Effect of commodity instruments
 AngloGold Ashanti has utilized commodity 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.   Since 2001 the company has been reducing its hedge commitments through hedge buy-backs (limited to non-hedge derivatives), deliveries into contracts and restructurings 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.  For a discussion of the Company's commodity instruments see "Item 11:  Quantitative 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.
  In April 2005, AngloGold Ashanti agreed to the conditional sale of exploration assets in the Laverton area, comprising the Sickle royalty of $30 per ounce, the Child Harold prospect, various 100 percent AngloGold Ashanti Australia-owned interests including the Lord Byron and Fish projects as well as its interests in the Jubilee, Black Swan and Jasper Hills Joint Ventures toCrescent Gold Limited (Crescent).


On May 31, 2005 AngloGold Ashanti acquired an additional 12.4 percent interest (6,131,585 ordinary shares) in Trans-Siberian Gold plc (TSG) for an aggregate consideration of £8 million ($15 million) as a second subscription in a transaction involving two subscriptions for ordinary shares. The first tranche of ordinary shares of 17.5 percent was acquired during July 2004. The Company’s aggregate shareholding in TSG at December 31, 2007 was 12,263,170 ordinary shares (29.8 percent interest held, after the dilution of shareholding resulting from an increase in issued share capital).
 On July 19, 2005, Aflease Gold and Uranium Resources Limited (Aflease) announced that it had purchased from AngloGold Ashanti, its Weltevreden mine. On December 19, 2005, Aflease was acquired by sxr Uranium One Incorporated (formerly Southern Cross Incorporated) (sxr Uranium One). The conditions precedent to the agreement with sxr Uranium One were not fulfilled by the expiry date of December 31, 2007 and a new agreement is being negotiated with Aflease Gold Limited. The Company has separately classified assets and liabilities for Weltevreden presented in the consolidated balance sheet, as held for sale. Refer to Note 16 in Item 18 – Assets and liabilities held for sale.
 On August 26, 2005, AngloGold Ashanti subscribed for additional shares in Red 5 Limited, for a cash consideration of A$0.8 million ($0.6 million), thereby increasing its holding to 14.1 percent from a 12.3 percent stake originally acquired in the expanded issued capital of Red 5 Limited during 2004. On September 18, 2006, the Company elected to exercise a second Joint Venture option with Red 5 Limited – the Outer Siena Joint Venture, located to the south-east of Boyongan - in terms of which the Company will spend a minimum of A$1.5 million ($1.2 million) in the first year with no interest.  The Company may earn between 52 percent and 58.5 percent interest in two tenements through an additional expenditure of A$4 million ($3 million), with a right to increase its holding by 8 percent to 9 percent through an additional spend of A$5 million ($4 million). As at December 31, 2007, the Company held a 10.2 percent interest in Red 5 Limited.
 During the period October 10 through October 18, 2005, AngloGold Ashanti Australia reduced it shareholding in Tanami Gold to 5 percent, through the sale of 8 million fully paid ordinary shares for a cash consideration of A$1.3 million ($1.0 million) and in February 2006, disposed of the entire investment in Tanami Gold with the sale of 19 million shares for a cash consideration of A$3.9 million ($3.0 million).
 On February 27, 2006, AngloGold Ashanti announced that it had signed an agreement with Dynasty Gold Corporation, a company with exploration activities in China, to acquire an effective 8.7 percent stake in that company through a purchase of 5.75 million Dynasty units at a price of C$0.40 each.  Each unit consists of one common share and one-half common share purchase warrant exercisable at a price of C$0.60 per unit for two years.
 On June 1, 2006, AngloGold Ashanti and Bema Gold Corporation (Bema) announced that they would jointly explore a select group of AngloGold Ashanti’s mineral opportunities located in Northern Colombia, with initial work focused on the La Mina and El Pino targets.  In November 2006, certain members of Bema’s management formed a company, B2 Gold, which company would acquire certain rights held by Bema following the acquisition by Kinross Gold of Bema in December 2006.  On February 14, 2007, the Company consented to the ultimate assignment of Bema’s rights and responsibilities to B2 Gold in terms of the joint venture agreement entered into between the Company and Bema.
 On June 30, 2006, AngloGold Ashanti (U.S.A.) Exploration Inc. (AngloGold Ashanti), International Tower Hill Mines Ltd (ITH) and Talon Gold Alaska, Inc. (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 Alaska mineral exploration properties and associated databases in return for 5,997,295 common shares of ITH stock, representing an approximate 19.99 percent interest in ITH (December 31, 2007; 15.12 percent).  The sales transaction closed on August 4, 2006.  The Company also granted to ITH the exclusive option to acquire a 60 percent interest in each of its LMS and Terra projects by incurring $3 million of exploration expenditure on each project (total of $6 million) within four years of the grant date of theoptions.  As part of the two option agreements, the Company will have the option to increase or dilute its stake in these projects, subject to certain conditions.
 On July 14, 2006, AngloGold Ashanti announced the signing of a Heads of Agreement with Antofagasta plc to jointly explore in Southern Colombia for new gold and copper deposits.  The Company will include all of its mineral applications, contracts and third party contracts within the area of interest in the new joint venture, while Antofagasta will commit to fund a minimum of $1 million of exploration within 12 months of the signing of the agreement, with an option to invest an additional $7 million within four years in order to earn-in to 50 percent of the joint venture. Both AngloGold Ashanti and Antofagasta will have the right to increase their interests by 20 percent in copper-dominant and gold-dominant properties subject to certain conditions. This transaction terminated in November 2007 with Antofagasta plc making a minimal payment fulfilling their commitment to the joint venture.


On August 23, 2006, AngloGold Ashanti announced that it had entered into a conditional agreement with Central African Gold plc (CAG) to sell the assets, related to Bibiani and Bibiani North prospecting permit, including all of Bibiani’s employees, fixed mining and non-mining assets, inventory, trade receivables and intellectual property as well as the Bibiani mining lease and theBibiani North prospecting license, and procure the cessation and delegation of all contracts related to Bibiani to CAG for a totalconsideration of $40 million. The conditions precedent to the sale of Bibiani were satisfied effective December 28, 2006. The Bibiani North prospecting license was assigned to CAG on May 17, 2007 by the Ghanaian Land Commission and Registry.
 Arising from the sale of Bibiani assets, AngloGold Ashanti decided to apply $3 million of the partial proceeds to an investmentof 15,825,902 Central African Gold plc (CAG) shares.  Subsequent to this decision, local regulators required that the shares inCAG be sold within 90 days of December 28, 2006.  On February 14, 2007, the Company disposed of 7,000,000 CAG shares yielding total proceeds of £768,845 ($1.5 million) and during April 2007, disposed of the remaining 8,825,902 CAG shares yielding total proceeds of £894,833 ($1.8 million).
 On September 21, 2006, AngloGold Ashanti announced that it had entered into a 50:50 strategic alliance with Russian gold and silver producer, OAO Inter-Regional Research and Production Association Polymetal (Polymetal) in terms of which, Polymetal and AngloGold Ashanti would cooperate in exploration, acquisition and development of gold mining opportunities within the Russian Federation. At the same time, the Company announced that it had submitted an offer to the board of Trans-Siberian Gold plc (TSG) to acquire all of TSG’s interest in its Krasnoyarsk based subsidiaries, OOO GRK Amikan (Amikan) and OOO Artel Staratelei Angarskaya Proizvodstvennaya Kompania (AS APK) for a total consideration of $40 million. In June 2007, the Company concluded the purchase of TSG’s interests in Amikan (which holds the Veduga deposit, related exploration and mining licenses) and AS APK (which holds the Bogunay deposit, related exploration and mining licenses). These companies acquired from TSG by AngloGold Ashanti, together with two greenfields exploration companies held by Polymetal, hold the initial operating assets of the strategic alliance. Of the assets acquired from TSG, assets of $15 million were subsequently classified as held for sale during 2007. Refer to Note 16 in Item 18 – Assets and liabilities held for sale.
 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 Joint Venture. The site is currently being rehabilitated by AngloGold Ashanti. The assets and associated liabilities were sold for R42.8 million (approximately $6 million). The joint venture will operate, for its own account, under the AngloGold Ashanti authorizations untilnew order mining rights have been obtained and transferred to the joint venture.  Refer to Note 8 in Item 18 – Discontinued operations.
 During July 2007, AngloGold Ashanti disposed of its investment of 600,000 shares previously held in Mwana Africa plc for $0.8 million. The shares were acquired pursuant to the sale of the Company’s entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Proprietary) Limited during 2004.
 AngloGold Ashanti completed the acquisition of the minority 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 Iduapriem and Teberebie mine is now wholly-owned by the Company.
 Acquisitions have been accounted for as purchase business combinations under US GAAP.  The consolidated financial statements reflect the operations and financial condition of AngloGold Ashanti, assuming that acquisitions and dispositions took place on the effective date of these transactions.  Therefore, the consolidated financial statements are not necessarily indicative of the Company’s financial condition or results of operations for future periods.  For a more detailed discussion ofthese transactions, see “Item 4A.: History and development of the company”.


South African political, 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, monetary and political 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 financial 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”.
 On May 1, 2004, the Minerals and Petroleum Resources Development Act, Act 28 of 2002 (MPRDA) came into effect and operation.  The MPRDA vests custodianship of South Africa’s mineral rights in the State.  The State issues prospecting rights or mining rights to applicants.  The former common law prospecting, mining and mineral rights are now known as old order mining rights and the transitional arrangements provided in the MPRDA give holders of such old order mining rights the opportunity to convert their old order mining rights into new order mining rights.  Applicants have five years from May 1, 2004,in which to apply to convert old order mining rights into new order mining rights. In August 2005, the Director General of Minerals and Energy notified that the AngloGold Ashanti application for new order mineral rights had been granted.
 The South African government has announced the details of the proposed new legislation whereby new order rights will be subject to a State royalty. The third draft of the Mineral and Petroleum Resources Royalty Bill was published on December 6, 2007 and provides for the payment of a royalty according to a formula based on earnings before interest, tax and depreciation. It is estimated that the formula could translate to a royalty rate of more than 4 percent of gross sales in terms of current pricing assumptions. The latest proposal results in a large increase from the 1.5 percent rate proposed in the second draft in 2006, and the company is making representations to the government through the South African Chamber of Mines to retain the proposed 1.5 percent rate. The payment of royalties is currently scheduled to begin on May 1, 2009, if the Bill is passed by Parliament in its current form.
 Gold market in 2007
 Continued strong levels of investor and speculator interest, particularly in the fourth quarter of the year, pushed the gold price to levels just short of record highs, records which were then surpassed soon after year end in an exceptionally buoyant market.The average gold spot price for the year, at $697 per ounce, was 15 percent higher than that in 2006. Although prices were relatively range-bound during the first half of the year, the end of the third quarter and the fourth quarter saw a strong surge in the dollar gold price and particularly high levels of investor interest. Fabrication demand followed an inverse pattern, with themore stable prices of the first half leading the market to record high levels of jewellery consumption in certain regions, whichthen fell away in the fourth quarter as price volatility took its toll, particularly in more price-sensitive markets. The exception to this pattern was the Chinese market, where jewellery demand remained relatively solid in the fourth quarter despite the high levels of price volatility. The main contributing factor to the price gains seen in the second half of the year was economic uncertainty relating to credit concerns and the impact of the sub-prime mortgage crisis in the US. Inflationary concerns drivenby higher food, oil and commodity prices also played a role, as did the escalation in geopolitical tension, particularly at year-end. Rand gold prices saw new record highs of R187,000 per kilogram during the year and an average spot price for the year of just over R157,000 per kilogram.
 Overall, the investment market saw lower levels of demand than in 2006, however, this demand was heavily concentrated in the last half of 2007, for the aforementioned reasons. Particular strength was exhibited in trade on commodity exchanges and also in the gold Exchange-Traded Funds (ETFs). Total ETF holdings at year-end stood at close to 28 million ounces, with a total value of over $23 billion. This represents a significant level of growth over year-end holdings in 2006, even though thisrepresented a doubling over levels of funds held the previous year.
 Over the first half of 2007, physical demand from jewellery fabrication recovered strongly from the low levels of 2006, reachingrecord highs in several major markets. In the second half of the year, however, this level of demand could not be sustained in the face of a more volatile price environment, which impacted heavily on traditional markets, and with the increasingly difficultconsumer and retail environment in developed markets such as the US.


Overall, fabrication demand for jewellery in 2007 increased by 6 percent in tonnage terms over 2006 levels, with the bulk of thatincrease contributed by the larger emerging markets of East Asia, India and the Middle East, whereas demand from the US market fell in tonnage terms by 14 percent over 2006.
 It was in the Indian market that the contrast in consumption levels between the two halves of the year was most marked. Demand reached record levels in rupee and tonnage terms for both jewellery and retail investment in the second quarter of the year. Together these totalled 317 tonnes, half of global mine output for the quarter and 90 percent higher than the relatively low level attained in the same quarter in 2006. Demand in the first half of the year increased by 72 percent over the correspondingperiod in the previous year. This strong level of consumption was fuelled in part by economic growth, particularly in the agricultural sector, as well as by a stable rupee gold price. In the second half of the year, however, the rupee/dollar exchangerate showed significant volatility, and this combined with a period of volatility in dollar gold prices created a set of circumstances unfavorable to gold consumption. Price volatility is a significant deterrent to demand in the Indian market, and inthe second half of 2007 the periods of most extreme price volatility coincided with some of the more auspicious gold buying occasions, such as Diwali. Demand in the fourth quarter was particularly poor, and fourth quarter offtake reached the lowest level since the early 1990s.  Over the year as a whole an increase in jewellery offtake in tonnage terms of 6 percent was recorded.
 Demand in the Middle East, specifically in the six Gulf markets, was also dented considerably in the second half of the year, with a sharp shift in consumer sentiment away from gold jewellery consumption brought about by a combination of volatile price levels, inflationary concerns and significant escalations in rent charges. As the currencies of these markets are pegged against the dollar, there is no cushioning for consumers against dollar gold price volatility. In the region, Turkey and Egypt experienced healthier demand, with good tourist seasons and increased economic stability helping to fuel consumption.
 The Chinese market proved most resilient to the more volatile prices as most retailers maintain a margin of approximately 10 percent over the gold price and therefore tend not to adjust prices on a daily basis according to each and every fluctuationin the dollar gold price. The Chinese economy also continued to record strong growth.
 In the US, gold demand in 2007 reached the lowest level since 1992. Retailers continued to reduce their focus on the category in the light of rising prices and to seek out product with lower gold content so as to offer a lower-cost range of product to anincreasingly price-sensitive consumer. Only the high end of the market, which typically retails 18 carat product, remained strong. Margins in this segment are higher than in the mass market segment and consumers are less sensitive to price increases.
 Despite high gold prices, scrap supplies of gold into the market were weaker than in 2006. In part this seems to have been due to the fact that significant personal gold inventories were liquidated in 2006 and have not been replaced as yet. Another factorwas the price surge which took place towards the end of the year. Consumers were deterred from selling old jewellery by the expectation that prices might rise further.
 Industrial demand increased marginally by 2 percent over 2006 levels. A slowdown in the demand for electronic goods over the second half of the year impacted growth in this sector.
 Official sector sales for the calendar year were approximately 485 tonnes, some 30 percent higher than in 2006. Gold sales by the Central Bank Gold Agreement (CBGA) signatories account for the bulk of this increase and in the third year of the second CBGA agreement (which came to an end on September 26, 2007) 475.8 tonnes of the available quota of 500 tonnes had been released onto the market.
 Gold producers reduced their hedging positions considerably in 2007. Over 400 tonnes were bought in the market in this way, a figure only slightly below the record level of de-hedging measured in 2004. The majority of this activity took place in the first half of the year and was driven by the activities of a small number of major players.
 Comparison of operating performance in 2007, 2006 and 2005The joint venture operations situated in Mali (the Sadiola, Yatela and Morila Joint Ventures) did not meet the significance testrequirements for separate financial statements and disclosures in terms of Regulation S-X Rule 3.09 for the financial year ended December 31, 2007.  Accordingly, the financial statements for these joint ventures included in Item 18 are unaudited for this period.


The following table presents operating data for the AngloGold Ashanti group for the three year period ended December 31, 2007:
 Operating data for AngloGold Ashanti
 Year ended December 31
 2007                    
  2006
 2005
                                Attributable  gold  production
 For the year ended December 31, 2007, AngloGold Ashanti’s total attributable gold production from continuing operations decreased by 158,000 ounces, or 3 percent, to 5.5 million ounces from 5.6 million ounces produced in 2006. In South Africa, gold production decreased by 9 percent from 2,554,000 ounces produced in 2006, to 2,328,000 ounces produced in 2007 mainly due to a decline in the volume of ore mined at Great Noligwa as a result of lower face advance and lower volume mined at TauTona and Kopanang due to seismicity issues.  Gold production in Argentina, Ghana and Mali decreased from 215,000 ounces, 592,000 ounces and 537,000 ounces, respectively, produced in 2006, to 204,000 ounces, 527,000 ounces and 441,000 ounces, respectively, produced in 2007. This was mainly due to lower grades at Cerro Vanguardia (in Argentina); lower volumes mined due to an eleven day plant shutdown and power outages at Obuasi (in Ghana) and the impact on production following the sale of Bibiani (in Ghana) concluded in December 2006. In Mali gold production for 2007 was lower compared to 2006 due to lower recovered grades at Yatela, Morila and Sadiola.
 The decrease in gold produced over 2007 at most mines was partially offset by an increase in gold production in Australia, Brazil, Guinea and Tanzania from 465,000 ounces, 339,000 ounces, 256,000 ounces and 308,000 ounces, respectively, produced in 2006, to 600,000 ounces, 408,000 ounces, 280,000 ounces and 327,000 ounces produced, respectively, in 2007. This was mainly due to the mining of high grade areas at Sunrise Dam (in Australia); at AngloGold Ashanti Brasil Mineração (in Brazil) due to Cuiabá mine expansion completed in latter half of 2006; at Siguiri (in Guinea) due to higher volumes treated withthe Carbon-in-pulp (CIP) plant being in full production and at Geita (in Tanzania) due to the impact of adverse weather conditions, the delay in the Nyankanga pit push-back and lower recovered grade in 2006.
 For the year ended December 31, 2006, AngloGold Ashanti’s total attributable gold production from continuing operations decreased by 531,000 ounces, or 9 percent, to 5.6 million ounces from 6.2 million ounces produced in 2005. Gold production from the Geita mine in Tanzania decreased from 613,000 ounces in 2005 to 308,000 ounces in 2006 and mines in Ghana and Guinea reported decreases from 926,000 ounces to 848,000 ounces, mainly due to lower yields.  Marginal declines in gold production were recorded from operations located in Brazil where gold production fell from 346,000 ounces to 339,000 ounces. Gold production from operations situated in South Africa decreased by 5 percent from 2,676,000 ounces produced in 2005 to 2,554,000 ounces in 2006 mainly due to both lower mining volumes and grade. Gold production from operations situated in the USA declined from 330,000 ounces produced in 2005 to 283,000 ounces in 2006. The Australian operations produced 465,000 ounces of gold during 2006, compared with 455,000 ounces in 2005.
 Gold production in Mali increased by 2 percent from 528,000 ounces in 2005 to 537,000 ounces in 2006. Navachab, the Namibian operation, produced 86,000 ounces of gold in 2006 compared with 81,000 ounces in 2005, mainly as a result of increased milled tonnages offset by reductions in recovered grade. Operations in Argentina produced 215,000 ounces in 2006, a marginal increase over the 211,000 ounces produced in 2005.
 A more detailed review of gold production at each of AngloGold Ashanti’s operations is provided under “Item 4B.: Business overview”.


Total cash costs and total production costs
 Comparison of total cash costs and total production costs in 2007 with 2006
 Cash costs in all of the operations situated in South Africa increased in 2007 when compared to 2006. This was largely a resultof the reduced volumes mined, declining grades, safety-related stoppages and wage increases.
 Cerro Vanguardia, the Argentinean mine, recorded an increase in cash costs of 17 percent from $223 per ounce in 2006 to $260 per ounce in 2007, mainly as a result of higher local inflation, increases in contractor and maintenance costs as well as an increase in the size of the workforce partially offset by higher silver by-product revenue. The Australian mine, Sunrise Dam,reported cash costs of $262 per ounce for 2007 compared to $333 per ounce for 2006, a 21 percent decrease mainly due to record gold production in 2007.
 The Brazilian mines, Brasil Mineração and Serra Grande, reported cash costs of $246 per ounce in 2007 compared to $207 per ounce in 2006 and $264 per ounce in 2007 compared to $196 per ounce in 2006, respectively. This increase in cash costs at both mines is mainly attributable to higher local inflation and reduced grade recovered and the appreciation of the local currency against the US dollar.
 Obuasi in Ghana reported increased cash costs of $67 per ounce increasing to $464 per ounce in 2007 as a result of reduced production and increases in prices of consumables and rates of service contracts. Iduapriem reported an increase in cash costs from $413 per ounce in 2006 to $497 per ounce in 2007 mainly due to the combined impact of the mill shutdown and increases in contract mining costs. The operations at Siguiri, in Guinea, reported a $73 per ounce increase in cash costs to $471 per ounce, mainly as result of the appreciation of the Guinean franc against the US dollar, higher royalty payments linkedto the higher gold price and higher fuel and labor costs.
 The Malian operations reported increased cash costs. Yatela reported an increase in cash costs to $300 per ounce in 2007 compared to $241 per ounce in 2006 due to the decline in production, appreciation of the euro and FCFA against the dollar and higher fuel prices. At Morila, cash costs increased in 2007 to $333 per ounce compared to $266 per ounce in 2006 mainly due to the decline in production, appreciation of the euro and FCFA against the dollar and higher fuel prices. At Sadiola, production declined 26 percent to 140,000 ounces, consequently cash costs increased from $268 per ounce in 2006 to $414 per ounce in 2007.
 Navachab in Namibia reported an increase in cash costs of 36 percent to $475 per ounce as a result of an increase in the costs of labor and explosives whilst a grade-related decline in gold production also had a negative effect. Geita in Tanzania reporteda slight decrease in cash costs from $630 per ounce in 2006 to $627 per ounce in 2007. Reduced expenditure on equipment re-builds, contractor services and an increased level of production contributed to the containment of costs.  In North America,Cripple Creek reported a $21 per ounce increase to $269 per ounce in 2007 mainly due to higher commodity and diesel fuel prices.
 Overall, total cash costs for 2007 increased by $46 per ounce, or 14 percent, of which $21 per ounce was due to inflation, $20 per ounce to lower efficiencies, $8 per ounce to decreased by-product sales, $6 per ounce to lower volumes and $5 per ounce to exchange and royalty effects. These increases were partially offset by higher grades of $2 per ounce and other variances of $12 per ounce.
 Comparison of total cash costs and total production costs in 2006 with 2005
 Cerro Vanguardia, the Argentinean mine, recorded an increase in cash costs of 30 percent from $171 per ounce in 2005 to $223 per ounce in 2006, mainly as a result of higher local inflation and increases in commodity and maintenance costs and the effects of the adoption of EITF 04-6. The Australian mine, Sunrise Dam, reported cash costs of $333 per ounce for 2006 compared to $269 per ounce for 2005, a 24 percent increase mainly from commodity and contractor costs and the adoption of EITF 04-6, which increased cash costs by $37 per ounce.
 The Brazilian mines, Brasil Mineração and Serra Grande, reported cash costs of $207 per ounce in 2006 compared to $169 per ounce in 2005 and $196 per ounce in 2006 compared to $158 per ounce in 2005, respectively. This increase in cash costs at both mines is mainly attributable to higher local inflation and reduced grade recovered and the adoption of EITF 04-6.


Obuasi in Ghana reported increased cash costs of $52 per ounce increasing to $397 per ounce in 2006 as a result of processing increased tonnages with lower grade ore, whilst at Iduapriem cash costs increased to $413 per ounce mainly due to local inflation and the adoption of EITF 04-6 which increased cash costs by $42 per ounce. The operations at Siguiri, in Guinea, reported a $97 per ounce increase in cash costs to $398 per ounce, mainly as result of commodity price increases, higher royalties, which are linked to spot prices, maintenance shutdowns and plant modifications post commissioning.
 The Malian operations had a mixed year. Yatela reported a decrease in cash costs to $241 per ounce in 2006 compared to $263 per ounce in 2005 mainly due to process changes in the heap leach operations. At Morila, cash costs increased in 2006 to $266 per ounce compared to $191 per ounce in 2005 mainly due to reduced grade recovered and the major mill relining that took place in the second half of the year which affected tonnage. Sadiola reported a $3 per ounce increase in cash costs to $268 per ounce in 2006 mainly due to increased royalty payments linked to the higher gold price.  All the Malian operations were affected by the adoption of EITF 04-6.
 Navachab in Namibia reported an increase in cash costs of 9 percent to $349 per ounce as a result of increased gold production and the effects of the US dollar on costs in the second half of the year and the adoption of EITF 04-6, which affected cash costs by $84 per ounce. Geita in Tanzania was impacted by a combination of factors during the year including a drought early in the year, followed by floods impacting haulage rates. These impacted the cut back of the Nyankanga pit which resulted in a 46 percent drop in grade and ultimately impacting cash costs by 111 percent, increasing cash costs from $298 per ounce in 2005 to $630 per ounce in 2006. The adoption of EITF 04-6 increased cash costs at Geita by $140 per ounce.  In North America, Cripple Creek reported a $18 per ounce increase to $248 per ounce in 2006 mainly due to higher commodity prices.
 Overall, total cash costs for 2006 increased by $40 per ounce of which $14 per ounce related to inflation, and $36 per ounce tolower grades and $13 per ounce for the adoption of EITF 04-6. Cost savings initiatives helped to offset these increases by $10 per ounce, favorable exchange variances by $7 per ounce, higher-by-product effects by $3 per ounce and other variances by $3 per ounce.
 Total production costs per ounce increased from $452 per ounce in 2006 to $504 per ounce in 2007 and from $398 per ounce in 2005 to $452 per ounce in 2006.
 A more detailed review of total cash costs and total production costs at each of AngloGold Ashanti’s operations is provided under “Item 4B.: Business overview”.
 
 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 now been incorporated into the National Mining Association, was a non-profit international association of miners, refiners, bullion suppliers and manufacturersof 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 andexploration costs.  Total cash costs per ounce are calculated by dividing attributable total cash costs by attributable ounces ofgold produced.
 Total production costs, as defined in the Gold Institute industry guidelines, are total cash costs, as calculated using the GoldInstitute 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.
 Prior to January 1, 2006 stripping costs incurred in open-pit operations during the production phase to remove additional wastewere charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs pertonne and resulted in capitalization of such stripping costs (deferred stripping). EITF Issue 04-6 prohibits capitalization of postproduction stripping costs effective from January 1, 2006. Except for this impact on total cash costs and total production costs, total cash costs and total production costs have been calculated on a consistent basis for all periods presented.
 Total cash costs and total production costs should not be considered by investors in isolation or as alternatives to productioncosts, 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 totalproduction 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 totalproduction costs for each of the three years in the period ended December 31, 2007 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.


For the year ended December 31, 2007
 Operations in South Africa
 (7)
 (in $ millions, except as otherwise noted)
 Mponeng
 TauTona
 Savuka
 Great
 
 Nolig wa
 Kopanang
 Tau Lekoa
 Moab
 Khotsong
 Surface
 
 oper ati ons
 Corporate
 (6)
 Production
 costs
 
 159  132  30  201  133  80  51  39  49
 Plus:
           (1)
  
 Less:
                    Plus:
                        
  (2)
  
 Adjusted for:
 
 
 
 
 
 
 
 
 
  (3)
  
        
 Total
 cash
 costs
 155  130  29  195  128  78  45  38  11
 Plus:
                                        Adjusted for:
           (3)
  
        
 Total
 production
 costs
 209  194  34  248  167  124  84  41  45
 
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 
 587  409  73  483  418  165  67  125  -
 
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 
 264  318  397  404  306  473  672  304  -
 Total production costs per ounce
 (5)
 
 356  474  466  513  400  752  1,254  328  -
 
 
 
 
 
 
 
 
 
 
 116


For the year ended December 31, 2007
 Operations in Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, Tanzania and USA(in $ millions, except as otherwise noted)
 ARGENTINA  AUSTRALIA
 BRAZIL
 GHANA
 GUINEA
 MALI
 NAMIBIA  TANZANIA
 USA
 Cerro 
 Vanguardia
 Sunrise  Dam
 Boddin
  gton
 (9)
 AngloGold  Ashanti  Brasil 
 Minera ção
 Serra 
 Grande
 Obuasi
 Bibiani
 (10)
 Iduapriem
 (11)
 Siguiri
 Sadiola
 Yatela
 Morila
 Navachab
 Geita
 Cripple  Creek    &  Victor
 Production
 costs
 
 44  145
 1
 82
 52
 176  -  92  136  -  -  -  36
 206  73
 Plus:
 
 
 
 
 Production costs of equity accounted joint ventures
 (1)
 
 -
 -  -  -  -   -  - -
 -
 54  30  50
 -
 -
 -
 Less:
 
 
 
 
 Rehabilitation costs & other non-cash costs
 (4)
 3
 (1)
 (4)
 (2)
 (18)
 -
 (7)
 (6)
 (3)
 (1)
 -
 2
 (4)
 (4)
 Plus:
 
 
 
 
 Inventory movement
 6
 (2)
 -
 -
 (1)
 1
 -
 2
 (3)
 -
 -
 1
 (1)
 (4)
 42
 Royalties
 11  11  -  -  -  8  -  4  28  6  5  8  1
 7
 -
 Related party transactions
 (2)
 
 -
 -  -  -  -  -  -  -
 -  1  2  1  -
 -
 -
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 
 (4)  -  -  -
 (25)
 -  -  (8)  (23)  -  -  -  -
 -
 -
 Total cash costs
 53
 157
 -
 78
 24
 167
 -
 83
 132
 58
 36
 60
 38
 205
 111
 Plus:
 
 
 
 
 Depreciation, depletion and amortization
 17
 53
 -
 32
 18
 67
 -
 21
 45
 6
 4
 13
 6
 58
 32
 Employee
 severance
 costs
 -
 -  -  -  -  14  -  -
 -
 -  -  -
 -
 -
 -
 Rehabilitation and other non-cash costs
 4
 (3)
 1
 4
 2
 18
 -
 7
 6
 3
 1
 -
 (2)
 4
 4
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 
 (1)  -  -  -
 (10)
 -  -  ( 2 )  (7)  -  -  -  -
 -
 -
 Total
 production
 costs
 73
 207  1  114  34  266  -  109  176  67  41  73  42
 267
 147
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 
 204
 600  -  317  91  360  -  167  280  140  120  180
 80
 327
 282
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 
 260
 262  -  246  264  464  -  497  471  414  300  333  475
 627
 (8)
 269
 Total production costs per ounce
 (5)
 
 358
 345  -  360  374  739  -  653  629  479  342  406  525
 817
 521


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
 (1)
  Less:   Rehabilitation costs & other non-cash costs
  Plus/(less):   Inventory movement
     (2)
  Adjusted for:   Minority interests
 (3)
    Total cash costs
 2,011
 Plus:   Depreciation, depletion and amortization
      Adjusted for:   Minority interests
 (3)
    Total production costs
 2,763
 Gold produced (000’ ounces)
 (4)
 5,477
 Total cash costs per ounce
 (5)
 367
 Total production costs per ounce
 (5)
 504
 (1)
 
 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.
 (2)
 
 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.
 (3)
 
 Adjusting for minority interest of items included in calculation, to disclose the attributable portions only.
 (4)
 Attributable
  production only.
 (5)
 
 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.
 (6)
 
 Corporate includes non-gold producing subsidiaries.
 (7)
 
 Adjusted to exclude Ergo.
 (8)
 
 Total cash costs per ounce calculation includes heap leach inventory change.
 (9)
 
 There was no production attributable to AngloGold Ashanti in 2007.
 (10)
 
 Bibiani was sold effective December 28, 2006.
 (11)
 
 Remaining minority interests of 15 percent were acquired effective September 1, 2007.


For the year ended December 31, 2006
 Operations in South Africa
 (7)
 (in $ millions, except as otherwise noted)
 Mponeng
 TauTona
 Savuka
 Great
 
 Nolig wa
 Kopanang
 Tau Lekoa
 Moab
 Khotsong
 Surface
 
 oper ati ons
 Corporate
 (6)
 Production
 costs
 
 137  128  29  161  128  78  29  32  (39)
 Plus:
           (1)
  
  Less:
                    Plus:
                        
  (2)
  
 Adjusted for:
 
 
 
 
 
 
 
 
 
  (3)
  
        
 Total
 cash
 costs
 142  128  30  160  130  77  29  32  4
 Plus:
                                        Adjusted for:
           (3)
  
           Total
 production
 costs
 223  195  32  230  168  122  50  36  4
 
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 
 596  474  89  615  446  176  44  113  -
 
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 
 238  270  337  260  291  438  659  283  -
 Total production costs per ounce
 (5)
 
 374  411  359  374  377  693  1 ,136  318  -
 
 
 
 
 
 
 
 
 
 
 119


For the year ended December 31, 2006
 Operations in Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, Tanzania and USA(in $ millions, except as otherwise noted)
 ARGENTINA  AUSTRALIA
 BRAZIL
 GHANA
 GUINEA
 MALI
 NAMIBIA  TANZANIA
 USA
 Cerro 
 V anguar dia
 Sunrise  Dam
 Boddin gton
 
 (9)
 AngloGold  Ashanti    Brasil 
 Minera ção
 Serra 
 Grande
 Obuasi
 Bibiani
 (10)
 Iduapriem
 Siguiri
 Sadiola
 Yatela
 Morila
 Navachab
 Geita
 Cripple Creek    &  Victor
 Production costs
 37
 140
 1
 53
 36
 142
 11
 68
 91
 -
 -
 -
 25
 190
 60
 Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Production costs of equity accounted joint ventures
 (1)
 
 -
 -  -  -  -  -  -  -  -  41
 21
 46  -
 -
 -
 Less:
 
 
 
 
 Rehabilitation costs & other non-cash costs
 -
 4
 (1)
 (3)
 -
 1
 3
 4
 (3)
 2
 3
 (2)
 2
 7
 (2)
 Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Inventory movement
 3
 4
 -
 -
 2
 4
 1
 3
 11
 2
 3
 3
 3
 (8)
 40
 Royalties
 11  7  -  -  -  7  1  4  21  6  5  7  -
 5
 2
 Related party transactions
 (2)
 
 -
 -  -  -  -  -  -  -  -  -  2  1  -
 -
 -
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 (3)
 -
 -
 -
 (19)
 -
 -
 (10)
 (18)
 -
 -
 -
 -
 -
 -
 Total cash costs
 48
 155
 -
 50
 19
 154
 16
 69
 102
 51
 34
 55
 30
 194
 100
 Plus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Depreciation, depletion and amortization
 35
 38
 -
 20
 14
 79
 9
 27
 52
 19
 15
 17
 7
 49
 39
 Employee severance costs
 -
 -
 -
 -
 -
 15
 -
 -
 -
 -
 -
 -
 -
 -
 -
 Rehabilitation and other non-cash costs
 -
 (4)
 1
 3
 -
 (1)
 (3)
 (4)
 3
 (1)
 (3)
 4
 (2)
 (7)
 2
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 
 (3)
 -  -  -  ( 6)  -  -  (1)  (5)  -  -  -
 -
 -
 -
 Total production costs
 80
 189
 1
 73
 27
 247
 22
 91
 152
 69
 46
 76
 35
 236
 141
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 215
 465
 -
 242
 97
 387
 37
 167
 256
 190
 141
 207
 86
 308
 283
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 
 223
 333  -  207  196  397  432  413  398  268  241  266  349
 630
 (8)
 248
 Total production costs per ounce
 (5)
 
 372
 406  -  301  278  638  594  544  593  363  326  367  407
 766
 498


For the year ended December 31, 2006
 AngloGold Ashanti operations - Total(in $ millions, except as otherwise noted)
 Total
 Production costs per financial statements
 1,539
 Plus:   Production costs of equity accounted joint ventures
 (1)
  Plus:   Rehabilitation costs & other non-cash costs
  Plus/(less):   Inventory movement
     (2)
  Adjusted for:   Minority interests
 (3)
    Total cash costs
 1,810
 Plus/(less):   Depreciation, depletion and amortization
      Adjusted for:   Minority interests
 (3)
    Total production costs
 2,546
 Gold produced (000’ ounces)
 (4)
 5,635
 Total cash costs per ounce
 (5)
 321
 Total production costs per ounce
 (5)
 452
 (1)
 
 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.
 (2)
 
 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.
 (3)
 
 Adjusting for minority interest of items included in calculation, to disclose the attributable portions only.
 (4)
 Attributable
  production only.
 (5)
 
 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.
 (6)
 
 Corporate includes non-gold producing subsidiaries.
 (7)
 
 Adjusted to exclude Ergo.
 (8)
 
 Total cash costs per ounce calculation includes heap leach inventory change.
 (9)
 
 There was no production attributable to AngloGold Ashanti in 2006.
 (10)
 
 Bibiani was sold effective December 28, 2006.


For the year ended December 31, 2005
 Operations in South Africa
 (7)
 (in $ millions, except as otherwise noted)
 Mponeng
 TauTona
 Savuka
 Great
 
 Nolig wa
 Kopanang
 Tau Lekoa
 Surface
 
 oper ati ons
 Corporate
 (6)
 Production costs
 138
 124
 51
 179
 135
 105
 26
 58
 Plus:
          (1)
  
 Less:
                  Plus:
                            (2)
  
 Adjusted for:
 
 
 
 
 
 
 
 
  (3)
  
          Total
 cash
 costs
 143  129  54  183  134  109  27  9
 Plus:
                                    Adjusted for:
          (3)
  
          Total
 production
 costs
 196  195  66  245  175  147  31  20
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 
 512  502  126  693  482  265  95  -
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 
 279  256  430  264  277  410  287  -
 Total production costs per ounce
 (5)
 
 383  388  524  354  363  555  326  -
 
 
 
 
 
 
 
 
 
 122


For the year ended December 31, 2005
 Operations in Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, Tanzania and USA(in $ millions, except as otherwise noted)
 ARGENTINA  AUSTRALIA
 BRAZIL
 GHANA
 GUINEA
 MALI
 NAMIBIA  TANZANIA
 USA
 Cerro 
 V anguar dia
 Sunrise  Dam
 Boddin
  gton
 (9)
 AngloGold  Ashanti    Brasil 
 Minera ção
 Serra 
 Grande
 Obuasi
 Bibiani
 Iduapriem
 Siguiri
 Sadiola
 Yatela
 Morila
 Navachab
 Geita
 Cripple  Creek  &  Victor
 Production costs
 31
 127
 -
 40
 27
 127
 45
 77
 76
 -
 -
 -
 20
 189
 67
 Plus:
 
 
 
 
 Production costs of equity accounted joint ventures
 (1)
 -
 -
 -
 -
 -
 -
 -
 -
 -
 42
 25
 48
 -
 -
 -
 Less:
 
 
 
 
 Rehabilitation costs & other non-cash costs
 -
 (10)
 -
 (1)
 -
 (1)
 (7)
 (2)
 (1)
 (2)
 (1)
 (2)
 6
 (18)
 (3)
 Plus:
 
 
 
 
 Inventory movement
 (1)
 -
 -
 3
 2
 3
 (5)
 (4)
 6
 -
 (1)
 (1)
 -
 5
 27
 Royalties  8
 5
 -
 -
 -
 5
 2
 3
 5
 5
 3
 7
 -
 7
 4
 Related party transactions
 (2)
 -
 -
 -
 -
 -
 1
 -
 1
 -
 -
 -
 (2)
 -
 -
 -
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 
 (2)
 -  -  -  (14)  -  -  (14)  (12)  -  -  -  -
 -
 -
 Total cash costs
 36
 122
 -
 42
 15
 135
 35
 61
 74
 45
 26
 50
 26
 183
 95
 Plus:
 
 
 
 
 Depreciation, depletion and amortization
 22
 35
 -
 22
 11
 72
 18
 23
 39
 27
 7
 26
 7
 56
 40
 Employee
 severance
 costs
 -
 -  -  -  -  -  -  -  -  -  -  -  -
 -
 -
 Rehabilitation and other non-cash costs
 -
 10
 -
 1
 -
 1
 7
 2
 1
 2
 1
 2
 (6)
 18
 3
 Adjusted
 for:
 
 
 
 
 Minority interests
 (3)
 
 (1)
 -  -  -  (4)  -  -  (3)  (3)  -  -  -  -
 -
 -
 Total
 production
 costs
 57
 167  -  65  22  208  60  83  111  74  34  78  27
 257
 138
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Gold produced (000’ ounces)
 (4)
 211
 455
 -
 250
 96
 391
 115
 174
 246
 168
 98
 262
 81
 613
 330
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Total cash costs per ounce
 (5)
 171
 269
 -
 169
 158
 345
 305
 348
 301
 265
 263
 191
 321
 298
 (8)
 230
 Total production costs per ounce
 (5)
 270
 367
 -
 260
 229
 532
 522
 477
 451
 440
 347
 298
 333
 419
 418


For the year ended December 31, 2005
 AngloGold Ashanti operations - Total(in $ millions, except as otherwise noted)
 Total
 Production costs per financial statements
 1,642
 Plus:   Production costs of equity accounted joint ventures
 (1)
  Less:   Rehabilitation costs & other non-cash costs
  Plus:   Inventory movement
     (2)
  Adjusted for:   Minority interests
 (3)
    Total cash costs
 1,733
 Plus:   Depreciation, depletion and amortization
      Adjusted for:   Minority interests
 (3)
    Total production costs
 2,456
 Gold produced (000’ ounces)
 (4)
 6,166
 Total cash costs per ounce
 (5)
 281
 Total production costs per ounce
 (5)
 398
 (1)
 
 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.
 (2)
 
 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.
 (3)
 
 Adjusting for minority interest of items included in calculation, to disclose the attributable portions only.
 (4)
 Attributable
  production only.
 (5)
 
 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.
 (6)
 
 Corporate includes non-gold producing subsidiaries.
 (7)
 
 Adjusted to exclude Ergo.
 (8)
 
 Total cash costs per ounce calculation includes heap leach inventory change.
 (9)
 
 There was no production attributable to AngloGold Ashanti in 2005.


Capital expenditure
 Total capital expenditure of $1,059 million, which includes $35 million relating to the fifteen-year secured capital leases for the new corporate office (Turbine Square and Turbine Hall), was recorded in the year ended December 31, 2007 compared to $817 million in the same period in 2006.  This represents a $207 million, or 25 percent, increase from 2006. In South Africa, capital expenditure increased from $321 million in 2006 to $411 million in 2007, mainly due to expansion projects at Mponeng, TauTona and the ramping up at Moab Khotsong.  Expenditure in Brazil decreased to $141 million in 2007 from $186 million in 2006 as a result of the Cuiabá expansion project nearing completion. In Australia, capital expenditure increased from $86 million in 2006 to $281 million in 2007, mainly as a result of the expansion at Boddington mine. At year-end, overall project progress at Boddington mine was approximately 65 percent complete, with engineering and procurement activities nearing completion.
 Total capital expenditure during the year ended December 31, 2006 was $817 million compared to $722 million in 2005 being a 13 percent increase. In South Africa, capital expenditure decreased from $347 million in 2005 to $321 million in 2006, mainly due to reduced expenditure as Moab Khotsong began commercial production in 2006 and the weakening of the rand.  Capital expenditure in Ghana and Guinea amounted to $97 million and $16 million, respectively, in 2006, compared to $90 million and $36 million, respectively, in 2005, mainly due to capital projects at Obuasi in Ghana and the commissioning of the CIP plant inGuinea. Expenditure in Brazil increased from $85 million in 2005 to $186 million in 2006 as a result of the Cuiabá expansion project. In Australia, capital expenditure increased from $38 million in 2005 to $86 million in 2006 mainly as a result of the underground mining project at Sunrise Dam and the commencement of expansion at Boddington mine. Capital expenditure in the USA increased from $8 million in 2005 to $13 million in 2006.
 A more detailed review of capital expenditure at each of AngloGold Ashanti’s operations is provided under “Item 4B.: Business overview”.
 Establishment of a Black Economic Empowerment (BEE) transaction in South Africa
 On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso employee share ownership plan (Bokamoso ESOP) with the National Union of Mineworkers, Solidarity and United Association for employees of the South African operations.  The Bokamoso ESOP creates an opportunity for the Company 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.
 The Company also undertook an empowerment transaction with a BEE investment vehicle, Izingwe Holdings (Proprietary) Limited (Izingwe).
 The transaction gave effect to undertakings made to the Department of Minerals and Energy at the time that the Company gained its new order mining rights in August 2005. The Company undertook to establish an ESOP and a BEE transaction equivalent to at least 6 percent of the value of the Company’s South African operations.
 In order to facilitate this transaction 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 trustfor the benefit of employees.
    ·  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 formulae, respectively;
  ·
  ·
  ·  the E ordinary shares will each be entitled to receive a 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 strike price calculation.


The average fair value of the E ordinary shares granted to employees in 2007 was R79 (2006: R105) 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 toordinary shares for the benefit of the employees. All unexercised awards will be cancelled on May 1, 2014.
 The average fair value of the E ordinary shares granted to Izingwe on December 13, 2006 was R90 per share.  Dividends declared in respect of the E ordinary shares will accrue and be paid to Izingwe, 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 award, Izingwe has a six month period to instruct the Company to cancel the relevant number of E ordinary shares as stipulated by a cancellation formula.  AnyE ordinary shares remaining in the tranche will be converted to ordinary shares for the benefit of Izingwe.  If no instruction isreceived at the end of the six month period, the cancellation formula will be applied automatically.
 Comparison of financial performance on a segment basis for 2007, 2006 and 2005
 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. During 2007, the Company changed the method of allocating hedging to individual mines. In prior periods, forward contracts were allocated to each reporting segment, based on the then prevailing contractual relationship with the counterparty. Following the removal of certain counterparty restrictions and the granting of group level guarantees during 2006, the Company has applied an average received gold price across all reporting segments. The average received gold price for each mine is thus similar to the Company’s average received gold price which includes realized gains/losses on non-hedge derivatives. Where applicable, the corresponding items of segment information for all earlier periods presented have been restated to reflect this. This information is consistent with the information used by the Company’sChief Operating Decision Maker in evaluating operating performance of, and making resource allocation decisions among operations.
 Revenues
 Year ended December 31
 (in millions)
 2007
 $
 percent
 2006
 $
 percent
 2005
 $
 percent
                      Total
 revenues
 3,095
 2,715
 2,485
                                                                                         
 3,666
 3,419
 2,869
             Total
 revenues
 3,095 100
 2,715 100
 2,485 100


In 2007, 49 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in South Africa, compared to 56 percent in 2006, mainly as a result of the 9 percent decrease in production in the South African operations. South Africa produced 43 percent of the global production in 2007.
 In 2006, 56 percent of AngloGold Ashanti’s total consolidated revenues were derived from its operations in South Africa, compared to 49 percent in 2005, mainly as a result of the increase in the rand gold price over 2005.
 Assets
 As at December 31
 (in millions)
 2007
 $
 percent
 2006
 $
 percent
 2005
 $
 percent
                                                                             (1)
  (1)
  (1)
                             Other, including Corporate, Assets held for sale and Non-gold producing subsidiaries
      Total segment assets
 10,381
 
 100
 9,513
 
 100
 9,113
 
 100
 (1)
 Investment held.
 At December 31, 2007, 32 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 33 percent at the end of 2006. Operations outside of South Africa collectively accounted for approximately 68 percent of AngloGold Ashanti’s total assets at December 31, 2007 compared to 67 percent at the end of the same period in 2006.
 At December 31, 2006, 33 percent of AngloGold Ashanti’s total assets were located in South Africa compared with 33 percent at the end of 2005. Operations outside of South Africa collectively accounted for approximately 67 percent of AngloGold Ashanti’s total assets at December 31, 2006 compared to 67 percent at the end of the same period in 2005.
 Comparison of financial performance in 2007, 2006 and 2005
 Financial performance of AngloGold Ashanti
 Year ended December 31
 2007 2006
 2005


Comparison of financial performance in 2007 with 2006
 Revenues
 Revenues from product sales and other income increased by $380 million from $2,715 million in 2006 to $3,095 million in 2007, representing a 14 percent increase over the period. This increase was primarily due to the increase in the spot price of gold in 2007. The average spot price of gold was $697 per ounce during 2007, $93 per ounce, or 15 percent, higher than $604 per ounce, the average spot price of gold in 2006. The majority of product sales consisted of US dollar-denominated gold sales.
 Total revenues from the South African operations decreased by $41 million to $1,472 million from $1,513 million realized in 2006, mainly as a result of reduced gold production at the South African operations (2,328,000 ounces in 2007 compared to 2,554,000 ounces in 2006) which more than offset the increase in gold price.
 Total revenues generated by Cerro Vanguardia, the Argentinean operation increased from $118 million in 2006 to $129 million in 2007 mainly as a result of the higher gold price.  The increase in revenue was partly offset by reduced gold production (204,000 ounces in 2007 compared to 215,000 ounces in 2006) and a reduction in grade recovered from 7.29 grammes per tonne in 2006 to 6.88 grammes per tonne in 2007.
 The Australian operation at Sunrise Dam increased production to 600,000 ounces from 465,000 ounces in 2006.  Average recovered grade increased from 3.39 grammes per tonne in 2006 to 4.86 grammes per tonne in 2007. Total revenues increased from $307 million in 2006 to $378 million in 2007.
 The two operations in Brazil produced 408,000 attributable ounces compared to 339,000 ounces in 2006.  The increase in production and higher gold price resulted in total revenues of $323 million in 2007 compared to $258 million in 2006.
 Total revenues generated from operations situated in Ghana amounted to $364 million in 2007, compared to $330 million in 2006.  The increase was mainly as a result of the higher gold price.  The increase in revenue was partly offset by reduced goldproduction from 592,000 ounces in 2006 to 527,000 ounces in 2007.
 Total revenues generated in Guinea amounted to $223 million in 2007 compared to $167 million in 2006.  The increase was due to the higher gold price and an increase in gold production from 256,000 ounces in 2006 to 280,000 ounces in 2007.
 Tanzania recorded total revenues of $219 million in 2007 compared to $199 million in 2006.  The increase in revenue was a result of the higher gold price and an increase in gold production from 308,000 ounces in 2006 to 327,000 ounces in 2007.
 Production costs
 Production costs increased from $1,539 million in 2006 to $1,917 million in 2007, which represents a $378 million, or 25 percent increase. In South Africa, production costs increased by $191 million to $874 million in 2007 from $683 million in 2006 mainly as a result of annual wage increases and higher fuel and power costs.  About 46 percent of AngloGold Ashanti’s production costs were denominated in South African rands in 2007.
 Production costs recorded from operations situated in Ghana, Guinea and Brazil increased from $221 million, $91 million and $89 million, respectively, in 2006 to $268 million, $136 million and $134 million, respectively, in 2007 mainly as a result of an increase in operational costs including labor, fuel, consumables, power and water costs as well as the strengthening of local currencies relative to the US dollar.
 Exploration costs
 Exploration costs increased to $117 million in 2007 from $58 million in 2006.  This was mainly due to increased exploration activities at the Tropicana project in Western Australia, regional and target generation activities in Colombia, continued drilling in the Mongbwalu region of the Democratic Republic of the Congo as well as mine-based programs in South America, Ghana and Guinea. Joint ventures and partnerships with other companies facilitated additional exploration activities in Russia, China,Laos and the Philippines. For a discussion of AngloGold Ashanti’s exploration activities in 2007, see “Item 4B.: Business overview – Global exploration”.


Related party transactions
 Related party transactions in 2007 amounted to a credit (representing purchases by related parties) of $16 million compared with a credit of $6 million in 2006.  This was mainly due to lower contract work generated by development activities.  The Company, which holds an equity interest of 29.8 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 cash consideration of $40 million.  The companies acquired consist of Amikan (which holds the Veduga deposit, related exploration and mining licenses) and AS APK (which holds the Bogunay deposit, related exploration and mining licenses).  For a detailed discussion of related party transactions, see “Item 7B.: Related party transactions”.
 General and administrative
 General and administrative expenses decreased from $140 million in 2006 to $130 million in 2007, mainly due to a decrease of $28 million in share-based payment expense being offset by an increase in labor and corporate office costs.
 Royalties
 Royalties paid by AngloGold Ashanti increased from $59 million in 2006 to $70 million paid in 2007 primarily due to higher spotprices, with royalties in Australia, Argentina and Tanzania amounting to $11 million, $11 million and $7 million, respectively, in 2007 compared with $7 million, $11 million and $5 million, respectively, in 2006.  Royalties paid in Ghana and Guinea amounted to $40 million in 2007 compared to $33 million in 2006.  Australian royalties are payable to the government as specified in the relevant legislation in each State or Territory based on ounces produced. In Argentina, royalties are payable toFomicruz, a State owned company in the Santa Cruz Province, being the minority shareholder of the Cerro Vanguardia operation calculated as a percentage of revenues.  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.  In Tanzania, royalties for Geita, are payable to the Tanzanian government calculated as a percentage of revenues.
 Market development costs
 Market development costs remained unchanged at $16 million.  AngloGold Ashanti remains a member of the World Gold Council (WGC) and through its membership receives assistance in all its marketing endeavors. For a detailed discussion on market development see “Item 4B.: Business overview – Gold market development”.
 Depreciation, depletion and amortization
 Depreciation, depletion and amortization expense decreased by $44 million or 6 percent, to $655 million in 2007 when compared to $699 million recorded in 2006. This decrease was mainly due to decreases in depreciation, depletion and amortization expense in South Africa, Ghana and the USA from $324 million, $119 million and $39 million, respectively, incurred in the year ended December 31, 2006 to $301 million, $91 million and $32 million, respectively, in the same period of 2007 mainly as a result of a decrease in gold production and changes in estimated lives of assets. This was partially offset byan increase in depreciation, depletion and amortization expense in Australia which increased from $39 million incurred in the year ended December 31, 2006 to $54 million in the same period in 2007 as a result of the increase in gold production.
 Impairment of assets
 In 2007, AngloGold Ashanti recorded impairments amounting to $1 million compared to $6 million in 2006 which related to the impairment and write-off of various minor tangible assets and equipment.


Interest expense
 Interest expense decreased by $2 million from $77 million recorded in 2006 to $75 million in 2007 as a result of similar averageborrowing levels in a stable interest rate environment for variable overdrafts and bank loans during 2007.  A significant portionof AngloGold Ashanti’s debt was denominated in US dollars in 2007.
 Accretion expense
 Accretion expense of $20 million was recorded in 2007 compared with $13 million in 2006. 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 $19 million in 2007 from $22 million in 2006. The 2007 expense included retrenchment costs of $5 million in the South African region (at Great Noligwa, Kopanang, Tau Lekoa, TauTona and Mponeng) and $14 million in Ghana (at Obuasi) due to a planned reduction in workforce.
 Loss/profit on sale of assets, realization of loans, indirect taxes and other
 A loss of $10 million was recorded in 2007 compared to a profit of $36 million recorded in 2006 which consisted mainly of the reassessment of indirect taxes and royalties in Tanzania and Guinea and profit on disposal and abandonment of land, mineral rights and exploration properties in 2007.
 Non-hedge derivative loss
 A loss on non-hedge derivatives of $808 million, being derivatives not designated in formal hedge accounting relationships, was recorded in 2007 compared to a loss of $208 million in 2006 relating to the use of non-hedging instruments.  The loss in 2007 is primarily the result of the revaluation of non-hedge derivatives resulting from changes in the prevailing spot gold price, exchange rates, interest rates and greater volatilities compared to 2006.  Non-hedge derivatives recorded for the years ended December 31, 2007 and 2006 included:
 Year ended December 31,
 2007                     
  2006
 (in US Dollars, millions)
          Other operating items
 Other operating items, consisting of provision for loss on future deliveries of other commodities and unrealized gain/loss on other commodity physical borrowings amounted to a net credit of $16 million in 2007 compared to an expense of $16 million in 2006.


Equity income in affiliates
 Equity income in equity method investments decreased from $99 million in 2006 to $41 million in 2007, mainly as a result of a decrease in earnings at Yatela, Sadiola and Morila mines in Mali, which reported attributable earnings of $17 million, $10 million and $18 million, respectively, in 2007 compared to $26 million, $28 million and $37 million, respectively, in 2006.  In 2007, the Company recorded an impairment loss of $14 million on its investment held in TSG.
 Taxation expense/benefit
 A net taxation expense of $118 million was recorded in 2007 compared to a net tax expense of $122 million recorded in 2006. Charges for current tax in 2007 amounted to $191 million compared to $156 million in 2006. Charges for deferred tax in 2007 amounted to a net tax benefit of $73 million compared to a net tax benefit of $34 million in 2006.  The increase in the taxationcharge in 2007 partly relates to the higher gold price and a reduction in unredeemed capital expenditure.  The increase in the deferred tax benefit over 2006 is mainly higher unrealized non-hedge derivative losses as a result of the higher gold price.  Deferred tax in 2007 include a tax benefit of $28 million arising from an increase in tax losses in Ghana and a tax expense at $23 million as a result of a change to the estimated deferred tax rate in South Africa.
 Comparison of financial performance in 2006 with 2005
 Revenues
 Revenues from product sales and other income increased by $230 million from $2,485 million in 2005 to $2,715 million in 2006, representing a 9 percent increase over the period. This increase was primarily due to the increase in the spot price of gold in 2006. The average spot price of gold was $604 per ounce during 2006, $159 per ounce, or 36 percent, higher than $445 per ounce, the average spot price of gold in 2005. The majority of product sales consisted of US dollar-denominated gold sales.
 Total revenues from the South African operations increased by $298 million to $1,513 million from $1,215 million realized in 2005, a 25 percent increase, mainly as a result of the higher gold price.  The increase in revenues was partly offset by the reduced gold production at the South African operations as both volumes (2,554,000 ounces in 2006 compared to 2,676,000 ounces in 2005) and grade decreased.
 Total revenues generated by Cerro Vanguardia, the Argentinean operation increased marginally from $99 million in 2005 to $118 million in 2006 on flat volumes. Volumes of ore processed increased, but gold produced only increased marginally by 4,000 ounces due to grade yield declines from 7.7 grammes per tonne to 7.29 grammes per tonne.
 The Australian operation at Sunrise Dam increased production to 465,000 ounces from 455,000 ounces in 2005.  Average recovered grade declined by 8 percent which was offset by increased tonnage processed from the underground operation. Total revenues increased from $208 million in 2005 to $307 million in 2006.
 The two operations in Brazil produced 339,000 attributable ounces.  Year-on-year volumes of ore processed increased with an increase in average grades recovered resulting in total revenues of $258 million in 2006 compared to $184 million in 2005.
 Total revenues generated from operations situated in Ghana amounted to $330 million in 2006, compared to $337 million in 2005.
  Tanzania recorded total revenues of $199 million in 2006 compared to $258 million in 2005 due to the reduction in production of nearly 50 percent due to delays in the cutback at the Nyankanga pit and weather related issues.


Production costs
 Production costs decreased from $1,642 million in 2005 to $1,539 million in 2006, which represents a $103 million, or 6 percentdecrease. In South Africa, production costs decreased by $133 million to $683 million in 2006 from $816 million in 2005 primarily due to a continued focus on cost saving initiatives assisted by the weakening of the South African rand relative to theUS dollar.  About 44 percent of AngloGold Ashanti’s production costs were denominated in South African rands in 2006.
 Production costs recorded from operations situated in Brazil increased from $67 million in 2005 to $89 million in 2006 primarilydue to the strengthening of the Brazilian real relative to the US dollar.
 Exploration costs
 Exploration costs increased to $58 million in 2006 from $44 million in 2005.  During 2006, exploration activities in new areas were primarily focused on the Tropicana project in Western Australia, in Colombia and the Democratic Republic of Congo. Joint ventures and partnerships with other companies facilitated additional exploration activities in Russia, China, Laos and thePhilippines. For a discussion of AngloGold Ashanti’s exploration activities in 2006, see “Item 4B.: Business overview – Global exploration”.
 Related  party  transactions
 Related party transactions in 2006 amounted to a credit (representing purchases by related parties) of $6 million compared with an expense (representing purchases from related parties) of $37 million in 2005 mainly due to the change in shareholding by Anglo American plc, which divested of approximately 20 percent of its holding in April 2006, resulting in fewer entities fulfilling the related party definition due to the relationship changing from a subsidiary of Anglo American plc to an associate of Anglo American plc. The Company continued to transact with Anglo American entities when price, service and quality factors supported this. For a detailed discussion of related party transactions, see “Item 7B.: Related party transactions”.
 General and administrative
 General and administrative expenses increased from $71 million in 2005 to $140 million in 2006, mainly due to $61 million share-based payment expense included in 2006 compared to $2 million in 2005.
 Royalties
 Royalties paid by AngloGold Ashanti increased from $39 million in 2005 to $59 million paid in 2006 primarily due to higher spotprices, with royalties in Australia, Argentina, Tanzania and the USA amounting to $7 million, $11 million, $5 million and $2 million, respectively, in 2006 compared with $5 million, $8 million, $7 million and $4 million, respectively, in 2005.  Royalties paid in Ghana and Guinea amounted to $33 million in 2006 compared to $15 million in 2005. Australian royalties are payable to the government as specified in the relevant legislation in each State or Territory based on ounces produced. 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.  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.  In Tanzania, royalties for Geita, are payable to theTanzanian government calculated as a percentage of revenues. In the USA, royalties are payable to a small number of private claim holders based on ounces produced and percentage ownership of the specific claim being mined.
 Market development costs
 Market development costs increased from $13 million in 2005 to $16 million in 2006. AngloGold Ashanti remains a member of the World Gold Council (WGC) and through its membership receives assistance in all its marketing endeavors. For a detailed discussion on market development see “Item 4B.: Business overview – Gold market development”.


Depreciation, depletion and amortization
 Depreciation, depletion and amortization expense increased by $106 million or 18 percent, to $699 million in 2006 when compared to $593 million recorded in 2005.  In South Africa, depreciation, depletion and amortization expense increased from $248 million in 2005 to $324 million in 2006, mainly due to the impact of Moab Khotsong mine coming into commercial production from January 1, 2006.
 Impairment of assets
 In 2006, AngloGold Ashanti recorded impairments amounting to $6 million. These related to the impairment and write-off of various minor tangible assets and equipment.
 In 2005, AngloGold Ashanti recorded impairments amounting to $141 million. These related to Bibiani in Ghana of $41 million; in South Africa – mine development costs of $6 million were impaired as a review of certain properties and access development identified that they will not generate future cash flows. The tax rate concession which was granted by the
 government of Ghana at a rate of 30 percent in negotiations for the Ashanti business combination in 2004 amounting to $20 million was fully impaired during 2005 as the corporate tax rate in Ghana was revised down to 25 percent. Due to a change in intention to exploit certain properties in South Africa, acquired at the formation of AngloGold, AngloGold Ashanti recorded an impairment of $74 million in 2005.
 Interest expense
 Interest expense decreased by $3 million from $80 million recorded in 2005 to $77 million in 2006.  The decrease in interest expense from 2005 was mainly due to higher cash resources available as a result of the higher average gold price in the year and the effects of the equity raising completed in April 2006.  Mostly all of AngloGold Ashanti’s debt (exclusive of the rand denominated corporate bond and local South African borrowings) was denominated in US dollars in 2006.
 Accretion expense
 Accretion expense of $13 million was recorded in 2006 compared with $5 million in 2005. Accretion relates to the unwinding of discounted future reclamation obligations to present values and increases the reclamation obligations to its future estimated payout.
 Employment severance cost
 Employment severance costs decreased to $22 million in 2006 from $26 million in 2005. The 2006 expense included retrenchment costs of $7 million in the South African region (at Great Noligwa, Kopanang, Tau Lekoa, TauTona and Mponeng) and $15 million in Ghana (at Obuasi) due to a planned reduction in workforce.
 Profit on sale of assets, realization of loans, indirect taxes and other
 A profit on sale of assets of $36 million recorded in 2006 compared to a profit of $3 million recorded in 2005. This consists mainly of profit on the disposal of land, mineral rights and exploration properties, the recovery of loans previously written off and the reassessment of indirect taxes in Tanzania.


Non-hedge derivative loss
 A loss on non-hedge derivatives of $208 million, being derivatives not designated in formal hedge accounting relationships, was recorded in 2006 compared to a loss of $142 million in 2005 relating to the use of non-hedging instruments.  Non-hedge derivatives recorded for the years ended December 31, 2006 and 2005 included:
 Year ended December 31,
 2006                     
  2005
 (in US Dollars, millions)
             Other operating items
 Other operating items, consisting of provision for loss on future deliveries of other commodities and unrealized loss on other commodity physical borrowings increased from $9 million in 2005 to $16 million in 2006, mainly due to an increase in the price of other commodities.
 Equity income in affiliates
 Equity income in equity method investments increased from $39 million in 2005 to $99 million in 2006, mainly as a result of an increase in earnings at Yatela and Sadiola mines in Mali, which reported attributable earnings of $26 million and $28 million, respectively, in 2006 compared to $5 million and $(1) million, respectively, in 2005.  In 2006, the Company recorded an impairment loss of $7 million on its investment held in TSG.
 Taxation expense/benefit
 A net taxation expense of $122 million was recorded in 2006 compared to a net tax benefit of $121 million recorded in 2005. Charges for current tax in 2006 amounted to $156 million compared to $70 million in 2005. Charges for deferred tax in 2006 amounted to a net tax benefit of $34 million compared to a net tax benefit of $191 million in 2005.  The increase in the currenttaxation change over 2005 is mainly as a result of a reduced net loss, an increase in the effective taxation rates, the effect ofnon-allowable deductions mainly related to hedge losses in non-taxable jurisdictions, BEE transactions and the effect of certainforeign entities exiting their tax holidays.  Deferred tax in 2006 include a tax benefit of $21 million resulting from an extension of tax losses granted by the Ghanaian Taxation Authorities which would have been forfeited during the current year as well as a tax expense at $65 million as a result of a change to the estimated deferred tax rate in South Africa, reflecting the impact of the South African mining tax formula to the decrease in the earnings at the operations in that country.
 Cumulative effect of accounting change


Cut-off adjustments
 On September 13, 2006, the SEC staff published Staff Accounting Bulletin (SAB) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 (SAB Topic 1.N) addresses quantifying the financial statement effects of misstatements, specifically, how the effects of prior year uncorrected errors must be considered in quantifying misstatements in the current year financial statements.
 As part of the 2006 year end financial statement close process the Company quantified the balance sheet impact and determined that it would only have a material effect in the reporting of “Payroll and related benefits”, which is separately identified on the face of the balance sheet for all years presented. The other accounts that were affected are Tangible Assets – Mine development costs; Inventories – Gold in process; Deferred taxation; Cash and cash equivalents; Trade accounts payable and Payroll and related benefits.
 The Company previously considered the above errors to be immaterial under the rollover method and evaluated the misstatement against the current year financial statements under both the rollover and iron curtain methods.
 In accordance with the transition provisions provided in SAB 108 the cumulative effect of applying SAB 108 was recorded as an adjustment to opening retained earnings and is summarized below:
 (in millions)
 $
 Assets
             Liabilities
           Retained earnings
   5B.
 Liquidity and capital resources
 Operating activities
 2007
 Net cash provided by operating activities was $561 million in 2007, 27 percent lower than the 2006 amount of $770 million. The decrease in net cash provided by operations was mainly as a result of higher payments to suppliers, partly offset by a higher average gold price received for the year.
 Net cash outflow from operating working capital items amounted to $170 million in 2007, compared with an outflow of $32 million in 2006.
 A detailed discussion of the movement in net loss is included in the comparison of 2007 with 2006 under “Item 5A: Operating results”.
 2006
 Net cash provided by operating activities was $770 million in 2006, 122 percent higher than the 2005 amount of $347 million. The increase in net cash provided by operations over that achieved in 2005 is mainly due to the higher profitability achieved asa result of the increased average gold price in 2006, compared to that in 2005, partially offset by costs increases.


Net cash outflow from operating working capital items amounted to $32 million in 2006, compared with an outflow of $13 million in 2005.
 A detailed discussion of the movement in net loss is included in the comparison of 2006 with 2005 under “Item 5A: Operating results”.
 Investing activities
 2007
 Investing activities in 2007 resulted in a net cash outflow of $1,031 million compared with a net cash outflow of $611 million in 2006. The major component of cash outflows was in additions to property, plants and equipment which included capital expenditure of $1,015 million, compared to $811 million in 2006, with the major capital projects at Mponeng, TauTona, Moab Khotsong in South Africa, at Boddington mine in Australia and the Cuiabá expansion in Brazil.  Cash paid for the two companies acquired from TSG amounted to $40 million in 2007.
 2006
 Investing activities in 2006 resulted in a net cash outflow of $611 million compared with a net cash outflow of $624 million in2005. The major component of cash outflows was in additions to property, plants and equipment which included capital expenditure of $811 million, compared to $710 million in 2005, with the major capital projects at the Cuiabá mine in Brazil, theSunrise Dam and Boddington mines in Australia.
 Financing activities
 2007
 Net cash generated by financing activities increased by $343 million from an inflow of $119 million in 2006 to an inflow of $462 million in 2007.  In 2007, drawdown’s on existing and the new $1,150 million Syndicated loan facility raised $843 million and debt repayments, which included $375 million on the $700 million Syndicated loan facility,  totaled $520 million.
 Dividends paid increased from $132 million (39 US cents or 272 South African cents per share) in 2006 to $144 million (44 US cents or 330 South African cents per share) in 2007.  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.
 2006
 Net cash generated by financing activities decreased by $81 million from an inflow of $200 million in 2005 to an inflow of $119 million in 2006.  During the year equity issues resulted in an inflow of $512 million, drawdown’s on existing facilities raised $158 million and during the year debt repayments totaled $552 million.
 Dividends paid decreased from $169 million (56 US cents or 350 South African cents per share) in 2005 to $132 million (39 US cents or 272 South African cents per share) in 2006.  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.  As the market price of gold can fluctuate widely,this may negatively impact on the profitability of the Company’s operations and the cash flows generated by these operations.  The Company uses 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 on the profitability of the Company’s operations and generated cash flows.


AngloGold Ashanti’s cash and cash equivalents increased to $477 million at December 31, 2007 compared with $471 million at December 31, 2006.  In accordance with South African Reserve Bank regulations, cash generated by South African operations is held in rands.  At December 31, 2007, approximately 34 percent of the Company’s cash and cash equivalents were held in US dollars, 44 percent were held in South African rands, 6 percent were held in Australian dollars and 16 percent were held in other currencies.
 AngloGold Ashanti’s short-term debt increased to $319 million at December 31, 2007 from $33 million at December 31, 2006.  Included in the short-term debt at December 31, 2007, was:
 ·
  ·
  AngloGold Ashanti’s long-term debt increased to $1,564 million at December 31, 2007 compared with $1,472 million at December 31, 2006.  As at December 31, 2007, the Company had the following attributable borrowings outstanding:
 Unsecured loans:
 ·
 $1,008 million is outstanding on the convertible bond (fixed semi-annual coupon of 2.375 percent per annum; the convertible bond is convertible into ADSs up to its maturity in February 2009 and is US dollar-based);
 ·
 $526 million is outstanding under the $1,150 million syndicated loan facility (interest charged at LIBOR plus 0.4 percent per annum; the loan is repayable in December 2010 and is US dollar-based); and
 ·
 $304 million is outstanding on the corporate bond (fixed semi-annual coupon of 10.5 percent per annum; the corporate bond is repayable on August 28, 2008 and is rand-based).
 Secured capital leases:
 ·
 $37 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);
 ·
 $5 million is repayable under the Senstar Capital Corporation loans (interest charged at an average rate of 6.9 percent per annum, the loans are repayable in monthly installments terminating in November 2009, are US dollar-based and the equipment financed is used as security for these loans); and
 ·
 $2 million is repayable to Terex Africa (Proprietary) Limited for equipment financed (interest charged at an average rate of 9.0 percent per annum, the loan is repayable in January 2008, is US dollar-based and the equipment financed is used as security for this loan).
 Unsecured capital leases:
 ·
 $1 million is repayable to Csilatina Arrendamento Mercantil S.A. (interest charged at an average rate of 5.0 percent per annum, loans are repayable in monthly installments terminating in October 2010 and are Brazilian real-based).
 As at December 31, 2007, AngloGold Ashanti’s total long-term debt, including the short-term portion maturing within 2008, was made up as follows:
 $ (million
         Long-term debt
 1,564


$ (million)
             Total
 1,883
 AngloGold Ashanti currently expects to repay debt maturing in 2008 from existing cash resources, cash generated by operations and existing credit facilities.
  $ (million)
         Total
 1,883
   $ (million)
  (1)
                      Total undrawn
 813
 (1)
 
 Expires December 2010.
  Capital expenditure is expected to be approximately $1,262 million in 2008.  AngloGold Ashanti intends to finance these capitalexpenditures and scheduled debt repayments in 2008 from cash on hand, cash flow from operations, existing credit facilities and, potentially, additional credit facilities or debt instruments.  AngloGold Ashanti intends to refinance its convertible bond due February 2009 with the proceeds of an equity-linked instrument, the principal amount of which may exeed the existing convertible bond.  The structure, size and timing of such an issue will depend upon prevailing market conditions.
 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.


Capital commitments and contingencies
  ·
 Capital commitments and contingent liabilities of AngloGold Ashanti include total contracted capital expenditure of approximately $436 million and total authorized capital expenditure not yet contracted of approximately $809 million.  The expenditure is expected to be financed from existing cash resources, cash generated by operations and debt facilities.
 ·
 The Company has identified a number of groundwater pollution sites at its current operations in South Africa and has investigated a number of different technologies and methodologies that could possibly be used to remediate the pollution plumes.  The geology of the area is typified by a dolomite rock formation that is prone to solution cavities.  Polluted process water from the operations has percolated from pollution sources to this rock formation and has been transported three dimensionally, creating pollution plumes in the dolomite aquifer.  Numerous scientific, technical and legal reports have been produced and the remedying of the polluted soil and groundwater is the subject of a continued research program between the University of the Witwatersrand and the Company.  Subject to the technology being developed as a proven remediation technique, no reliable estimate can be made for the obligation.
 ·
 Mineração Serra Grande S.A. (MSG), the operator of the Crixas mine in Brazil, has received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export namely, one assessment for the period between February 2004 and June 2005 and the other for the period between July 2005 and May 2006. The tax authorities maintain that whenever a taxpayer exports gold mined in the State of Goiás through a branch located in a different Brazilian state, it must obtain an authorization from the Goiás State Treasury by means of a Special Regime Agreement (Termo de Acordo re Regime Especial – TARE). The MSG operation is co-owned with Kinross Gold Corporation. The Company’s attributable share of the first assessment is approximately $39 million.  Although MSG requested the TARE in early 2004, the TARE, which authorized the remittance of gold to the Company’s branch in Minas Gerais specifically for export purposes, was only granted and executed in May 2006.  In November 2006 the administrative council’s second chamber ruled in favor of MSG and fully canceled 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 $24 million. The Company believes both assessments are in violation of federal legislation on sales taxes.
 ·
 Morro Velho and AngloGold Ashanti Brasil Mineração are involved in disputes with tax authorities.  These disputes involve eleven federal tax assessments including income tax, social contributions and annual property tax based on ownership of properties outside of urban perimeters (ITR). Tax authorities are claiming that the amount owing is $8 million.
 ·
 MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes of $8 million, on gold allegedly returned from the branch in Minas Gerais to the company head office in the State of Goiás. The tax administrators rejected the Company’s appeal against the assessment.  The Company is now appealing the dismissal of the case at the judicial sphere.
 ·
 AngloGold Offshore Investments Limited, a wholly owned subsidiary of the Company, has guaranteed 50 percent ($40 million) of the Nufcor International Limited loan facility with FirstRand (Ireland) plc (formerly RMB International (Dublin) Limited). Nufcor International Limited is accounted for under the equity method.
 ·
 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 ($15 million). The suretyship agreements have a termination notice period of 90 days. The probability of the non-performance under the suretyships is considered minimal, based on factors of no prior defaults, being well-established companies and recourse via general notarial bonds over the gold stocks of the subsidiaries of the Oro Group. These bonds should enable the Company to recover the majority of the guaranteed amount. The Company receives a fee from the associate for providing the surety and has assessed the possibility of a claim for non-performance.
 ·
 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 $48 million. 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, 2007 the carrying value of these obligations relating to AngloGold Ashanti USA amounted to $31 million and is included in the Provision for 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. There are no recourse provisions that would enable the Company to recover from third parties any of the amounts paid under the guarantee.


·
 The Company has guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $1,000,000,000 2.375 percent convertible bonds due 2009. The Company’s obligations regarding the guarantee are direct, unconditional and unsubordinated.
 ·
 A guarantee of $526 million is provided for the $1.15 billion Syndicated loan facility. AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited each have guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited regarding the $1.15 billion Syndicated loan facility dated December 13, 2007. This Syndicated loan facility replaced in its entirety the $700 million revolving credit facility dated January 26, 2005, which was repayable in January 2008.
 ·
 The Company has issued gold delivery guarantees of $683 million to several counterpart banks in 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.
 ·
 The Company together with its 100 percent owned subsidiary AngloGold Ashanti Holdings plc has provided guarantees to several counterpart banks for the hedging commitments of its wholly-owned subsidiary Ashanti Treasury Services Limited (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, 2007 the marked-to-market valuation of the ATS hedge book was negative $1,494 million.
 ·
 The Company and its 100 percent owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterpart banks in which they have guaranteed the due performance by Geita Management Company Limited (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 guarantee shall remain in force until no sum remains to be paid under the hedging agreements and the Bank has irrevocably recovered or received all sums payable to it under the Hedging Agreements. 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, 2007 the marked-to-market valuation of the GMC hedge book was negative $520 million.
 ·
 With operations in several countries on several continents, many of which are emerging markets, AngloGold Ashanti is subject to, and pays annual taxes under the various tax regimes where it operates. Some of these tax regimes are defined by contractual agreements with the local government, but others are defined by the general corporate tax laws of the country. The Company has historically filed, and continues to file, all required tax returns and to pay the taxes reasonably determined to be due.  In some jurisdictions, tax authorities are yet to complete their assessments for the previous years. The tax rules and regulations in many countries are complex and subject to interpretation. From time to time the Company is subject to a review of its historic tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved. Management believes based on information currently to hand, that such tax contingencies have been adequately provided for, and as assessments are completed, the Company will make appropriate adjustments to those estimates used in determining amounts due.
 In addition to the above, the Company has contingent liabilities in respect of certain tax assessments, claims, disputes and guarantees which are not considered to be material.
  (1)
   Expiration per Period
 Commitment
 (in millions)
 Total
 amount
 $
 
 Less than 1
 year
 $
 
 1 - 3
 years
 $
 
 4  - 5
 years
 $
 Over
 5
 years
 $
 Capital expenditure (contracted and not yet contracted)
                      Total
      (1)
 
 Including 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 credit risks.  In order to manage these risks, the Company may enter into transactions that make use of both on- and off-balance sheet derivatives. 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 gold price 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.  These estimates involve uncertainties and cannot be determined with precision.  The following table represents the change in fair value of all derivative financial instruments:
 $ (million)
        (1)
  Fair value of derivatives at December 31, 2007
  (1)
 Net losses on revaluation of derivatives.
  $ (million)
         Derivatives – net liabilities
  The difference between the fair value of all derivatives and the fair value of on-balance sheet derivatives represents the fairvalue of off-balance sheet derivatives totaling negative $1,779 million.
  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.


Sensitivity analysis
 The following table shows the approximate sensitivities of the $ marked-to-market value of the hedge book at December 31, 2007 (actual changes in the timing and amount of the following variables may differ from the assumed changes below):
 Sensitivity analysis Variables
 Change in
 Rate(+)
 Change in
 Fair value
 (1)
 Change in Rate
 (-)
 Change in
 Fair value
 (1)
                                         (1)
 In $ million.
 Recent developments
 On May 6, 2008 AngloGold Ashanti announced that it intends to proceed, subject to certain conditions, with an approximate one-for-four renounceable rights offer, which would result in AngloGold Ashanti issuing approximately 69.4 million shares at a minimum share price of ZAR172 raising approximately ZAR11.9 billion ($1.6 billion based on an exchange rate of ZAR7.56/$1.00 on May 5, 2008).  The proposed rights offer is being fully underwritten subject to certain customary conditions.  The final rights offer price will be announced at the time of the announcement of the rights offer.  The proposed rights offer will be subject to approval at a general meeting of AngloGold Ashanti shareholders to be held on May 22, 2008.
 The principal purpose of the rights offer is to provide AngloGold Ashanti with additional financial resources to improve its financial flexibility.  In particular, the net proceeds from the rights offer will allow AngloGold Ashanti both to significantlyrestructure and reduce its existing gold hedging position, which has adversely affected its financial performance in recent years, while also being able to continue to fund its principal development projects and exploration growth initiatives. Pendingthis use of proceeds, the net proceeds of the rights offer may, in the interim, be used by AngloGold Ashanti to reduce its short-term borrowings and the borrowings outstanding on AngloGold Ashanti’s revolving credit facility or retained as cash and invested in accordance with AngloGold Ashanti’s cash management policies.
 AngloGold Ashanti has traditionally used gold hedging instruments to protect a portion of its anticipated gold sales against declines in the market price of gold.  The use of these instruments has prevented AngloGold Ashanti from fully participating inthe significant increase in the market price for gold in recent years.  As at December 31, 2007, the total net delta tonnage ofAngloGold Ashanti’s hedge positions was 10.39 million ounces and the total committed hedge position was 11.28 million ounces, an increase of 0.16 million ounces and a reduction of 0.34 million ounces against the December 31, 2006, hedge delta and hedge committed position, respectively. As at December 31, 2007, the marked-to-market value of all hedge transactions making up the hedge positions was negative $4.27 billion.
 Since the beginning of 2008, prevailing spot gold prices have been significantly higher than those prevailing during 2007. If these high prices continue to prevail, AngloGold Ashanti estimates that its gold hedging position will continue to have a significant adverse affect upon its financial performance.  AngloGold Ashanti believes that this has also negatively affected the market price of its ordinary shares, further constraining its financial flexibility.
 In order to address this issue, AngloGold Ashanti intends to early settle certain contracts otherwise due to mature in 2009 and2010 during the course of 2008 in addition to settling contracts due to mature in 2008.  Given the low committed prices of thesecontracts, AngloGold Ashanti expects that if these measures were implemented it would result in a realization of previously recognized losses for contracts historically recognized on Balance Sheet on a marked–to–market basis. These losses would be measured by the difference between the committed price of the contracts and the prevailing gold price at the time that thesecontracts are settled. If the restructuring is implemented as anticipated the received price for the remainder of 2008 should beapproximately $475 per ounce assuming a gold price of $900 per ounce and gold production for the last nine months of 2008 of 3.8 million ounces.
 AngloGold Ashanti also continues to give consideration to the early settlement of contracts not currently recorded on balance sheet (Normal Purchase Normal Sale Exemption (NPSE)) by means of early physical delivery.  Such early physical settlement, if it were to occur, would result in a significant adverse impact on our 2008 recorded revenues in AngloGold Ashanti’s income statement, as sales that would have otherwise been executed at the spot price of gold will be replaced with sales based on the earlier contracted prices of such NPSE contracts that are settled during the year.  Furthermore should AngloGold Ashanti


conclude that such early physical settlement of NPSE contracts represents a tainting event, it would be required to recognize on balance sheet the fair value of a portion of, or potentially all of, the existing NPSE contracts, which would result in a significant adverse impact on its financial statements.  No such conclusion has yet been made by AngloGold Ashanti and it is still considering the potential impact of any such transaction.
 In addition to the settlement of certain contracts during 2008 AngloGold Ashanti also intends to restructure some of the remainder of its hedge book in order to achieve greater participation in the spot price for gold beyond 2009.  The exact natureand extent of the restructuring will depend upon prevailing and anticipated market conditions at the time, particularly the prevailing gold price and exchange rates as well as other relevant economic factors.
 If the restructuring is executed as currently anticipated, the overall impact would be to reduce the hedge book to approximately6.25 million ounces, which would represent 8.6 percent of AngloGold Ashanti’s ore reserves as at December 31, 2007.  As a result of this reduction the discount to the spot gold price realized during 2009 is estimated to be approximately 6 percent andat a similar level thereafter assuming a gold price of $900 per ounce.
 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”.  New accounting policies and recent pronouncements are described in note 4.27 to the consolidated financial statements “Recent pronouncements”.
 
 Recent pronouncements
  On September 15, 2006 the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS157”).
  SFAS157 provides enhanced guidance for using fair value to measure assets and liabilities. Under SFAS157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS157 also requires that fair value measurements be separately disclosed by level within the fair value hierarchy.  On February 12, 2008, the FASB issued FASB Staff Position No. FAS157-2, “Effective date of FASB Statement No. 157” (“the FSP”).  The FSP provides a one year deferral until January 1, 2009 for the implementation of SFAS157 for certain non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  The Company does not expect the adoption of SFAS157 to have a material impact on the Company’s financial statements.
  On September 29, 2006 the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post-retirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (“SFAS158”).


·
 SFAS158 represents the completion of the first phase in the FASB's post-retirement benefits accounting project and requires an entity to:
      date of adoption due to delayed recognition of actuarial gains and losses, prior service costs and credits, and transition assets and obligations; and
  financial statements about certain effects on net periodic benefit cost in the next fiscal year that arise from delayed recognition of actuarial gains or losses, prior service costs or credits and unrecognized transition asset and obligations.
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 The Company adopted the provisions of SFAS158 in 2006, as required, except for the requirement to measure the plan assets and benefit obligations at the fiscal year end, which is effective in fiscal years ending after December 15, 2008.  The Company is currently considering processes to meet these measurement requirements of SFAS158.
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 On February 15, 2007 the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement No. 115” (“SFAS159”).
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 SFAS159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.
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 The fair value option permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.
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    is irrevocable (unless a new election date occurs); and   is applied only to entire instruments and not to portions of instruments.
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 SFAS159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.  The Company will apply the provisions of SFAS159 from January 1, 2008.  The Company does not expect the adoption of SFAS159 to have a material impact on the Company’s financial statements.
    SFAS141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. SFAS141(R) applies to all transactions or other events in which an entity (the acquirer) obtains control of one or more businesses (the acquiree), including combinations achieved without the transfer of consideration. The Company is currently evaluating the potential impact of adopting SFAS141(R) on the Company’s financial statements.
  In December 2007, the FASB issued FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS160”).


SFAS160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. It shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially adopted, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. The Company is currently evaluating the potential impact of adopting SFAS160 on the Company’s financial statements.
  In March 2008, the FASB issued FASB statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB statement No. 133” (“SFAS161”).
  SFAS161 applies to all derivative instruments and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS133 and related hedged items accounted for under SFAS133.  SFAS161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting.  Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. SFAS161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. Comparative disclosures for earlier periods at initial adoption are encouraged but not required. The Company does not expect the adoption of SFAS161 to have a material impact on the Company’s financial statements.
 In May 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS162”).SFAS162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS162 is effective 60 days following the United States Securities and Exchange Commission (SEC's) approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”. The Company does not expect the adoption of SFAS162 to have a material impact on the Company’s financial statements.
 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 accounting principles generallyaccepted in the United States of America 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 andthe 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 therefrom, 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.  Commodity prices significantly affect theCompany’s profitability and cash flow.  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. Ore reserve estimates 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 factorscould materially and adversely affect Ore Reserves. The Company uses its ore reserve


for mine depreciation and closure rates, as well as in evaluating mine asset impairments. Changes in ore reserve estimates 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 operating results.
 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 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 andprobable 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 programmes.  Therefore prior to capitalizing such costs, management determines that the following conditions have been met:
       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:
 2007                  
  2006                  
  2005
      (1)
                (1)
 Impact per basic and diluted earnings per common share.
 
 Accounting for derivatives
 The Company accounts for derivative contracts in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS133") as amended.
 SFAS133 requires all contracts, which 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 each periodare to be accounted for either in the income statement or in 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 cashflows 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 the sale of AngloGold Ashanti’s production into the spot market, and are classified as cash flow hedges under SFAS133.  Where a derivative qualifies as the hedging instrument in a cash flow hedge under SFAS133, gains and losses on the derivative, to the extent effective, are deferred in other comprehensive income and reclassified to earnings as product sales when the hedged transaction occurs.  The ineffective portion of changes in fair value is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.


for mine depreciation and closure rates, as well as in evaluating mine asset impairments. Changes in ore reserve estimates 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 operating results.
 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 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 andprobable 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 programmes.  Therefore prior to capitalizing such costs, management determines that the following conditions have been met:
       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:
 2007                  
  2006                  
  2005
      (1)
                (1)
 Impact per basic and diluted earnings per common share. 
 Accounting for derivatives
 The Company accounts for derivative contracts in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS133") as amended.
 SFAS133 requires all contracts, which 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 each periodare to be accounted for either in the income statement or in 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 cashflows 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 the sale of AngloGold Ashanti’s production into the spot market, and are classified as cash flow hedges under SFAS133.  Where a derivative qualifies as the hedging instrument in a cash flow hedge under SFAS133, gains and losses on the derivative, to the extent effective, are deferred in other comprehensive income and reclassified to earnings as product sales when the hedged transaction occurs.  The ineffective portion of changes in fair value is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.
 background image147
All other contracts not meeting the criteria for the normal purchases and sales or hedge accounting, as defined in SFAS133, are recorded at their fair market value, with changes in value at each reporting period recorded in earnings as gains and losseson non-hedge derivatives.
The estimated fair values of derivatives are determined at discrete points in time based on the relevant market information.  These estimates are calculated with reference to the ruling market prices, interest rates and volatilities using the Black - Scholes option formula.
AngloGold Ashanti does not acquire, hold or issue derivative instruments for trading purposes.  A number of products, including derivatives, are used to manage gold price 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 price and currency fluctuations.
See “Item 5E.: Off-balance sheet arrangements” for a description of the normal purchase and normal sale exempt contracts accounting treatment.

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 SFAS No. 5, “Accounting for Contingencies”.  SFAS 5 requires the recording of an estimated loss for a loss contingency when information available indicates that it is probable thatan 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 assess 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 valueof the long-lived asset as recorded in the consolidated financial statements exceeds the undiscounted cash flows, an impairment charge is recognized in the consolidated financial statements based on the fair value of the asset.

Impairment of goodwill
Beginning January 1, 2002, SFAS142 requires goodwill to be reviewed for impairment rather than amortized and that intangible assets with finite useful lives other than goodwill be amortized over their useful lives.  In accordance with the provisions ofSFAS142 AngloGold Ashanti performed a transitional impairment test for each reporting unit and performed its annual impairment review during the fourth quarter of 2002.  The Company performs impairment tests at least annually during the fourth quarter and whenever certain indicators of impairment exist.  The Company’s reporting units are generally consistent with the operating mines underlying the segments identified in note 29 to the consolidated financial statements “Segment and Geographical Information”. background image148
Taxation
AngloGold Ashanti follows the liability method of accounting for 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 averageanticipated 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 valuationallowance 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.
Provisionfor 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. Such 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 28 to the consolidated financial statements “Employee benefit plans” 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 2007 relating to the most significant defined benefit plan were the discount rate, the expected returnon 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 were 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 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. background image149
Effects on results of operations
Company and plan participants’ contributions to the defined benefit funds are disclosed in note 28 to the consolidated financialstatements “Employee benefit plans”. The total Company contributions to defined contribution plans for the years ended December 31, 2007, 2006 and 2005 amounted to $51 million, $40 million and $31 million, respectively.
Change in pension trends
The trend of the expected return on the plan assets is higher (6.10 percent) for the year ended December 31, 2007 when compared to 2006.  Based on the 2006 estimated return of 10.50 percent on the defined benefit plan assets, the return for 2007 would amount to $28 million compared to the actual 2007 return of $27 million. The long-term compensation and pension inflation increases estimated in 2006 at 5.5 percent and 4.28 percent respectively have increased for compensation increases to 6.0 percent and increased for pension increases to 4.73 percent respectively, which is in line with current economic indicators.
Sensitivity analysis



Ore on Leach Pads

It is not the policy of AngloGold Ashanti to consider the sensitivity of the accounting figures to different assumptions. The actualshort-term salary inflation rate used for the 2007 valuation was a rate of 8 percent and the long-term salary inflation rate was6 percent, which is in line with the actual average increases granted and the target Consumer Price Index indicated by the South African Reserve Bank.  For each 1 percent point variance in the actual return on the plan assets, the value in growth willvary by $3 million.
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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, the majority (greater than 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. Based on current mine plans, the Company expects that current leaching operations will terminate at dates ranging from 2011 to 2020.  Feasibility studies in North America indicate that in terms of the mine life extension project at Cripple Creek leaching activitiescould extend to 2030.


Effects on results of operations
 Company and plan participants’ contributions to the defined benefit funds are disclosed in note 28 to the consolidated financialstatements “Employee benefit plans”. The total Company contributions to defined contribution plans for the years ended December 31, 2007, 2006 and 2005 amounted to $51 million, $40 million and $31 million, respectively.
 Change in pension trends
 The trend of the expected return on the plan assets is higher (6.10 percent) for the year ended December 31, 2007 when compared to 2006.  Based on the 2006 estimated return of 10.50 percent on the defined benefit plan assets, the return for 2007 would amount to $28 million compared to the actual 2007 return of $27 million. The long-term compensation and pension inflation increases estimated in 2006 at 5.5 percent and 4.28 percent respectively have increased for compensation increases to 6.0 percent and increased for pension increases to 4.73 percent respectively, which is in line with current economic indicators.
 Sensitivity analysis
 Ore on Leach Pads
 It is not the policy of AngloGold Ashanti to consider the sensitivity of the accounting figures to different assumptions. The actualshort-term salary inflation rate used for the 2007 valuation was a rate of 8 percent and the long-term salary inflation rate was6 percent, which is in line with the actual average increases granted and the target Consumer Price Index indicated by the South African Reserve Bank.  For each 1 percent point variance in the actual return on the plan assets, the value in growth willvary by $3 million.
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      .


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, the majority (greater than 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. Based on current mine plans, the Company expects that current leaching operations will terminate at dates ranging from 2011 to 2020.  Feasibility studies in North America indicate that in terms of the mine life extension project at Cripple Creek leaching activitiescould extend to 2030.


The costs of materials currently contained on the leach pad are reported as a separate line item apart from inventory.  As at December 31, 2007, $49 million was classified as short term compared with $46 million as at December 31, 2006 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.  Based on data gathered and analyzed from heap leach pad drilling results, and other studies and analysis completed, short-term 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 wasused in determining the short term portion of materials on the leach pad as at December 31, 2007.  As at December 31, 2007, $190 million was classified as long term compared with $149 million as at December 31, 2006.
 5C.
 Research and development, patents and licenses, etc.
  5D.
 Trend information
 Outlook.  Gold production for 2008 is forecast to be between 4.9 million and 5.1 million ounces subject to stability and availability of power in South Africa and other factors.
 Capital expenditure is expected to be approximately $1,262 million in 2008 (2007: $1,059 million), of which 34 percent relates to the Australia region, primarily for the development of Boddington, 26 percent to South Africa, 14 percent to Ghana and 10 percent to Brazil.
 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
 A number of derivatives are used to manage gold price risks that arise out of the group’s core business activities.  Gold pricing contracts that meet the SFAS138 exemption for Normal Purchase and Normal Sale do not appear on the balance sheet.  These agreements are accounted for as sales contracts with the proceeds under the contract being recorded in earnings at the date of settlement by physical delivery.  These off-balance sheet contracts are managed as part of AngloGold Ashanti’s gold price risk management activities and at December 31, 2007 had a marked-to-market value of negative $1,779 million.  All other derivatives are recognized on the balance sheet at fair value.  See “Item 11.: Quantitative and qualitative disclosures about market risk” and note 26 to the consolidated financial statements “Financial risk management activities”.
 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”.


5F.
 Tabular disclosure of contractual obligations
  Contractual Obligations
 (7)
 (in millions)
 Total
 $
 Less
 than
 1 year
 $
 1-3 years
 $
 3-5 years
 $
 More than
 5 years
 $
  (1)
                                        (2)
       (3)
       (4)
       (5)
          Pensions and other post retirement medical obligations
 (6)
      Total                                                                               
  9,109
 
 4,029
 
 2,909
 
 719
 
 1,452
 (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 include 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 4D.: Property, plants and equipment – Sustainable development : Safety, Health, environment and social development”.  Amounts stated include a total estimated liability of $29 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.
 (6)
 Represents payments for unfunded plans or plans with insufficient funding.
 (7)
 The Company is unable to determine the years, if any, that the resolution of its uncertain tax liabilities will result in a cash flow.


152
 Item 6: Directors, senior management and employees
 6A.
 Directors and senior management
 Directors
 AngloGold Ashanti has a unitary board structure which, at the date of this report, comprises two executive directors and ten non-executive directors. Certain information with respect to AngloGold Ashanti’s directors as at December 31, 2007 is set forthbelow:
 
 
 
 Year first
 Name Age
 Position
 appointed
 (1)
          (2)(3)
      (4)
      (2)
          (2)
      (2)
      (2)
          (5)(6)
      (6)
     (1)
 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 board of directors 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)
 Appointed to board in January 2000, resigned from board and appointed as alternate in October 2000.  Re-appointed to the board in May 2001.
 (6)
 Following their departure from Anglo American plc, Messrs Nairn and Thompson were requested to remain on the AngloGold Ashanti board, which request they duly accepted.  Due to their historical relationship with Anglo American plc, they are not considered independent and their independence will be determined after a three-year cooling-off period as required by both King II and the Sarbanes Oxley Act.
 The following movements to the board of directors have taken place during the period January 1, 2007 to December 31, 2007:
 Executive directors:Mr RM Godsell (CEO) retired from the board effective September 30, 2007. Mr M Cutifani was appointed to the board on September 17, 2007 and as CEO effective October 1, 2007. Mr R Carvalho Silva resigned from the board effective September 30, 2007. Mr NF Nicolau resigned from the board effective November 12, 2007 and company on January 31, 2008.
 Non-executive directors:Mr SM Pityana was appointed to the board effective February 13, 2007 and was re-elected by shareholders at the annual general meeting held on May 4, 2007. Dr SE Jonah resigned from the board effective February 12, 2007. Mr CB Brayshaw retired from the board effective May 5, 2007. Mr AJ Trahar retired from the board effective May 5, 2007. Mrs C Carroll was appointed to the board effective May 5, 2007 and resigned from the board effective October 9, 2007. Mr R Médori resigned from the board effective October 9, 2007.
 Alternate directors:Mr AH Calver (alternate to Mr WA Nairn) resigned as alternate effective January 1, 2007. Mr PG Whitcutt (alternate to Mr R Médori) resigned as alternate effective October 9, 2007 following Mr Médori’s resignation.


The following directors who retired by rotation at the annual general meeting held on May 6, 2008 in terms of the articles of association were all re-appointed:
 ·
 Dr TJ Motlatsi, Mr WA Nairn and Mr SM Pityana.
 Mrs E Bradley who retired by rotation did not make herself available for re-election and subsequently retired from the board following the annual general meeting on May 6, 2008.
 In addition to the abovementioned directors, Mr M Cutifani, who was appointed as a director during the year, was appointed at theannual general meeting.
 There has been no change in the offices of the vice president – compliance and corporate administration and the company secretary.
 The board of directors
 Mr M Cutifani(49)—BE (Min. Eng)Chief Executive OfficerMark Cutifani was appointed to the board of AngloGold Ashanti on September 17, 2007. He was appointed Chief Executive Officer, effective October 1, 2007, following the retirement of Bobby Godsell. Prior to joining AngloGold Ashanti, Mark held theposition of Chief Operating Officer at CVRD Inco where he was responsible for Inco’s global nickel business. He has been involved in the mining industry since 1976, and has considerable experience in gold mining.
 Mr S Venkatakrishnan (Venkat)
  Chief Financial OfficerVenkat was the finance director of Ashanti Goldfields Company Limited from 2000 until that company’s merger with AngloGold in 2004. Prior to joining Ashanti, Venkat was a director in the Reorganisation Services Division of Deloitte & Touche in London.He was appointed to the board in August 2005.
 Mr RP Edey
  Chairman and independent non-executive directorRussell Edey was appointed to the board in April 1998, as deputy chairman in December 2000 and as chairman in May 2002. Based in the United Kingdom, he is a non-executive director of Old Mutual plc, a member of the Conseil de Surveillance of Paris Orleans SA and a non-executive director of a number of companies within the N M Rothschild group.
 Dr TJ Motlatsi (56)   Hon DSoc Sc (Lesotho)Deputy Chairman and independent non-executive directorJames Motlatsi was appointed to the AngloGold board in April 1998 and as deputy chairman in May 2002. He has been associated with the South African mining industry since 1970 and is a past president of the National Union of Mineworkers. He is executive chairman of TEBA Limited.
 Mr FB Arisman
  Independent non-executive directorFrank Arisman was appointed to the board in April 1998. He resides in New York and retired, after 32 years of service, from JP Morgan Chase, where he held the position of managing director.
 Mr RE Bannerman
  Independent non-executive directorReginald Bannerman has been in law practice since 1958 and is currently the principal partner at Messrs Bruce-Lyle, Bannerman & Thompson Attorneys in Ghana. He is a member of the General Legal Council of Ghana and a member of the board of the Valco Trust Fund, the largest privately run trust in Ghana. A former lecturer in law at the Ahmadu Bello Universityin Nigeria, he was also formerly the mayor of Accra, the capital city of Ghana. Mr Bannerman was appointed to the board in February 2006.
 Mrs E Le R Bradley
  Independent non-executive directorElisabeth Bradley was appointed to the board in April 1998. She is non-executive chairman of Wesco Investments Limited and Toyota South Africa (Proprietary) Limited, and a director of a number of other companies. She is deputy chairman of the South African Institute of International Affairs. Mrs Bradley retires from the board at the annual general meeting to be held on May 6,2008.  Mrs Bradley retired from the board on May 6, 2008.


Mr JH Mensah
  Independent non-executive directorJoseph Mensah, who holds an MSc in Economics from London University, has extensive experience in international and local economic management. Formerly Minister of Finance and Economic Planning and then Senior Minister in the government of Ghana, he is now the chairman of the National Development Planning Commission and a member of the Ghana Parliament representing the Sunyani East constituency. He joined the board with effect from August 4, 2006.
 Mr WA Nairn(63)   BSc (Mining Engineering)Non-independent non-executive directorBill Nairn has been a member of the board since January 2000. He was re-appointed to the board in May 2001, having previously been alternate director to Tony Trahar. He was group technical director of Anglo American plc, prior to his retirement in 2004.
 Prof WL Nkuhlu
  Independent non-executive directorWiseman Nkuhlu, who holds a BCom degree from the University of Fort Hare, is a Chartered Accountant with the South African Institute of Chartered Accountants and is a past national president of that institute. He also holds an MBA from the University of New York and is a respected South African academic, professional and business leader. Professor Nkuhlu was appointed to the board and deputy chairman of the Audit and Corporate Governance Committee with effect from August 4, 2006, and assumed chairmanship of the committee with effect from May 5, 2007 following the retirement of Mr CB Brayshaw.
 Mr SM Pityana
  Independent non-executive directorSipho Pityana was appointed to the board with effect from February 13, 2007. He is the executive chairman of Izingwe Holdings (Proprietary) Limited and has occupied strategic roles in both the public and private sectors, including the positions of director general of the national departments of Labour and Foreign Affairs. He was formerly a senior executive of Nedbank and is currently a non-executive director of several companies.
 Mr SR Thompson
  Non-independent non-executive directorSimon Thompson was appointed to the board in 2004. He is a non-executive director of UC Rusal and was previously a director of Anglo American plc, where he was chairman of the Base Metals Division, the Exploration Division and the Tarmac Group.
  Executive committee
 This committee, chaired by Mr Cutifani, the new chief executive officer, since his appointment in October 2007, 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, 2007 are as follows.
 Executive directors:
 Mr M Cutifani(49)—BE (Min. Eng)Chief Executive OfficerMark Cutifani was appointed to the board of AngloGold Ashanti on September 17, 2007. He was appointed Chief Executive Officer, effective October 1, 2007, following the retirement of Bobby Godsell. Prior to joining AngloGold Ashanti, Mark held theposition of Chief Operating Officer at CVRD Inco where he was responsible for Inco’s global nickel business. He has been involved in the mining industry since 1976, and has considerable experience in gold mining.
 Mr S Venkatakrishnan (Venkat)
  Chief Financial OfficerVenkat was the finance director of Ashanti Goldfields Company Limited from 2000 until that company’s merger with AngloGold in 2004. Prior to joining Ashanti, Venkat was a director in the Reorganisation Services Division of Deloitte & Touche in London.He was appointed to the board in August 2005.


Executive management team
 Dr CE Carter(45)— BA (Hons), DPhil, EDPExecutive Vice President – Business StrategyCharles Carter joined Anglo American in 1991 and moved to the Gold and Uranium Division in 1996, and was part of the team responsible for the formation of AngloGold. In May 2005, he was appointed an executive officer, with responsibility for overseeing the company’s global investor relations program. He was appointed as executive vice president – business strategy in December 2007.
 Mr RN Duffy
  Executive Vice President – Business DevelopmentRichard Duffy joined Anglo American in 1987 and in 1998 was appointed executive officer and managing secretary of 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 – business development in December 2007.
 Mr G Ehm
  Executive Vice President – AustralasiaGraham Ehm has 30 years of 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 took up his current role as executive vice president – Australasia in December 2007.
 Mr RW Largent
  Executive Vice President – AmericasRon Largent has been with the company since 1994. He is a board member of the Colorado Mining Association in Denver and has served on the Board of Directors for the California Mining Association and the Nevada Mining Association. In 2001 he was appointed as 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
  Executive Vice President – AfricaRobbie 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. He was appointed executive officer – Africa underground region in July 2005 and took up his current role as executive vice president – Africa in December 2007.
 Mr MP Lynam
  Vice President – TreasurerMark Lynam joined the Anglo American group in 1983 and has been involved in the hedging and treasury area since 1990. In 1998 he joined AngloGold as treasurer and was appointed an executive officer in May 2004. He was appointed as Vice president – treasurer in December 2007.
 Mr PW Rowe
  Executive Vice President – Business EffectivenessPeter Rowe joined AngloGold Ashanti in June 2004 as head of AngloGold Ashanti Australia. Following 20 years with Anglo American and De Beers, he moved to Australia in the early 1990s where he held a number of senior managerial positions including that of project director of the Fimiston expansion, general manager of the Boddington Gold Mine and managing director and CEO of Bulong Nickel. He was appointed executive officer with responsibility for the corporate technical group in January 2006 and took up his current role as executive vice president – business effectiveness in December 2007.
 Mr TML Setiloane
  Executive Vice President – SustainabilityThero 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 – sustainability in December 2007.
 Ms YZ Simelane
  Vice President – Compliance and Corporate AdministrationYedwa 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 took up her current role as vice president – compliance and corporate administration in December 2007.


Mr NW Unwin (55) – BA Executive Vice President – Organizational DevelopmentNigel Unwin has many years experience in the field of human resources.  He was appointed an executive officer in 1999 and executive vice president – organisational development in December 2007.  Nigel Unwin joined Anglo American as a trainee in human resources in 1974 and spent 18 years in operations and corporate roles.  He then worked in the CFTA retail sector 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 and managed the integration of the two companies in Australia before taking over the HR and IT portfolios in 2001.  He was appointed to his current role of executive vice president – organizational development in December 2007.
 Prior to the re-organisation of the executive management team, the following represented the ‘executive officers’ team until November 30, 2007:
 Dr CE Carter
 
 Mr
  SJ Lenahan
 Mr  DH  Diering
 
 Mr
  MP Lynam
 Mr  RN  Duffy
 
 Mr
  FRL Neethling
 
 Mrs D Earp (resigned effective March 1, 2007)
 
 
 Mr PW Rowe
 
 Mr DC Ewigleben
 
 
 
 
 Mr TML Setiloane
 Mr  BW  Guenther
 Ms
  YZ Simelane
 Mrs  HH  Hickey
 Mr
  NW Unwin
 Office of company secretary
 Ms L Eatwell(53) – FCISLynda Eatwell joined AngloGold in August 2000 as an assistant company secretary. She was appointed company secretary of AngloGold Ashanti 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 are listed.
 Competent persons
 The schedule below presents the details of those persons who manage AngloGold Ashanti’s Ore Reserves and Mineral Resources:
 Name
 Age
 Position
 Year first appointed
 Carl E Brechtel
 57
 Manager - underground mining – Australia Region
 2001
 Vaughan A. Chamberlain
 45
 Manager - mineral resources and mine geology
 1998
 Michael (Mike) F. O’Brien
 50
 Manager – evaluation
 1999
 Eric Roth
 41
 Head of exploration - greenfields
 2005
 Jurgens van Zyl Visser
 53
 Manager - survey and planning – Africa Underground region
 2001
 David (Dave) L. Worrall
 57
 Manager - surface mining
 1999
 The information in this report that relates to exploration results, Mineral Resources or Ore Reserves is based on information compiled by the competent persons listed below. They are either members of the Australian Institute of Mining and Metallurgy (AusIMM) or recognized overseas professional organizations. They are all full-time employees of the company.
 The competent person for AngloGold Ashanti Exploration is
 E Roth — PhD (Economic Geology), BSc (Hons) (Geology), MAusIMM Eric has 17 years experience in mineral exploration and project evaluation, and holds a Bachelor of Science (Honors) degree in Geology and Ph.D in Economic Geology from the University of Western Australia.  Eric joined AngloGold in 2002 as Project Manager – Peru, subsequently holding the positions of Senior Evaluations Geologist – South America (2003 to November 2005) and Head of Exploration – Greenfields from December 2005.


The following competent persons take responsibility for the reporting of AngloGold Ashanti’s Mineral Resources, as defined under JORC 2004:
 VA Chamberlain — MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM Vaughan has 22 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.
 MF O’Brien — MSc (Mining Economics), BSc (Hons) (Geology), Dip Data, Pr.Sci.Nat., MAusIMM Mike has 28 years experience and holds a Bachelor of Science (Honors) degree in Geology from the University of Natal, a Masters degree in engineering from the University of Witwatersrand and a Diploma in Datametrics from UNISA. He joined Anglo American Corporation in 1981 as a geologist at Vaal Reefs Mine and AngloGold in 1999 as manager: evaluation in the Corporate Technical Group, the position he currently holds.
 The following competent persons take responsibility for the reporting of AngloGold Ashanti’s Ore Reserves
 CE Brechtel — MSc (Mining Engineering), BSc (Geological Engineering), MAusIMM, MSAIMCarl has 32 years experience and holds a Bachelor of Science degree in Geological Engineering and a Master of Science degree in Mining Engineering from the University of Utah, USA. After spending 6 years at AngloGold Ashanti’s Jerritt Canyon operations, he was appointed Manager of Underground Mining of the Corporate Technical Group (CTG) providing technical support and corporate governance to international mining operations outside of the South Africa Region. He is currently Manager Underground Mining for AngloGold Ashanti Australia. He is a registered Professional Mining Engineer in the states of Colorado and Nevada, USA.
 DL Worrall — ACSM, MAusIMM Dave has vast experience and has been involved, at various levels, in the planning and operation of surface mines since 1975.  He is an Associate of the Camborne School of Mines in Cornwall, England and joined Anglo American Corporation in 1981 as a senior mine planning engineer in the technical director’s office and AngloGold in 1999 as manager, surface mining in the corporate office, the position he currently holds.
 J van Zyl Visser — MSc (Mining Engineering), BSc (Mineral Resource Management), PLATO Jurgens has 21 years experience and holds a Bachelor of Science degree in Mineral Resource Management and a Master of Science degree in Mining Engineering from the University of the Witwatersrand. He started his career with Anglo American Corporation in 1975 as a surveyor at President Steyn Mine. He joined AngloGold in 1998 as a divisional valuator and in 1999 was appointed as manager survey and planning – Africa underground region.
 The competent persons consent to the inclusion of the exploration and Ore Reserves information in this report, in the form and context in which it appears.
 6B.    
  Compensation
 Remuneration report
 Policy
 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: attract, reward and retain executives of the highest caliber; align thebehavior and performance of executives with the company’s strategic goals, in the overall interests of shareholders; ensure theappropriate 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.


This policy and its application are reviewed at least annually by the Remuneration Committee. See “Item 6C.: Board practices – Remuneration Committee”.
 Compensation of executive directors
     The performances of the executive directors are considered relative to the prevailing business climate and market conditions as well as annual evaluations to assess the level of 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. Executive directors have elected to receive no remuneration as directors of the company.
    2. Salary is set at the median for the relevant competitive markets.  3. All incentive plans should align performance targets with shareholder interests.
 Bonus Share Plan (BSP) and Long-Term Incentive Plan (LTIP)
  Shareholders approved the introduction of two new schemes to replace the old share incentive scheme at the annual general meeting held on April 29, 2005. The purpose of both schemes is to align the interests of shareholders and the efforts of executives and managers.
 To the extent that structured company performance targets are achieved, the BSP allows for the payment of an annual bonus, paid in part in cash and part in rights to acquire shares.
 Changes to the BSP as approved by shareholders at the annual general meeting held on May 6, 2008:
 The global scramble for skills in the resources sector has had the effect of greatly increasing levels of remuneration for skilled professionals and managers. Whilst AngloGold Ashanti has been relatively successful in retaining many of its skilled professionals and managers, its competitive position in respect of remuneration has been significantly eroded. This is especially true of the awarding of shares and the magnitude of bonuses paid, which compare unfavorably both within South Africa and globally.
 At the annual general meeting, the company proposed raising the levels of maximum performance bonus payable and the maximum levels of bonus share awards, reducing the vesting period of bonus shares from three years to two years, and altering the split between company and individual performance in determining the bonus, which proposals were approved by shareholders.
  The LTIP allows for the granting of rights to acquire shares, based on the achievements of stretched company performance targets over a three-year period.
 These targets are based on the performance of earnings per share (EPS) and relative total shareholder return (TSR), whereby the company will need to consistently outperform its gold company peers. Additionally, certain strategic business objectives, which the Remuneration Committee will determine from time to time, will also need to be met.


Basic salary, which is subject to annual review by the Remuneration Committee and is set in line with the median of salaries in similar companies in the relevant markets both in South Africa and globally. The individual salaries of executive directors are reviewed annually in accordance with their own performance, experience, responsibility and company performance.
  Annual bonus, which is determined by the achievement of a set of stretching company and individual performance targets. The company targets include safety, earnings per share, cost control and global production. The weighting of the respective contribution of company and individual targets is 70 percent for company and 30 percent for individual. Failure to achieve safety improvement targets results in the reduction of bonuses for executive directors and executive management. Fifty percent of the bonus is paid in cash and 50 percent in awarding of rights to acquire shares. The awards have a three-year vesting period.
  LTIP:  The chief executive officer and executive director are granted the right to acquire share of value equivalent to 120 percent and 100 percent of their annual salaries, respectively, subject to the achievement of stretched company performance targets over a three-year period. These targets are based on the performance of EPS and TSR, whereby the company will need to consistently outperform its gold company peers. Additionally, strategic business objectives will also need to be met. The first tranche of LTIP awards was made to executive directors in 2005. The performance period in respect of the 2005 LTIP award ended at the end of 2007.  Only one of the performance targets, TSR, was met, which means that only 40 percent of the award of shares will vest, while the balance will lapse.  See “Item 6E.: Share Ownership” for more information on the Long-Term Incentive Plan.
  Pensions: All executive directors who are South African citizens, are members of the AngloGold Ashanti Pension Fund, a defined benefit fund which guarantees a pension on retirement equivalent to 2 percent of final salary per year of service. All executive directors who are not South African citizens have other retirement benefit plans, to which the company contributes to the level required by local practice. Death and disability cover reflects best practice among comparable employers in South Africa.
  Other benefits: Executive directors are members of an external medical aid scheme, which covers the director and his immediate family.
 Directors’ service contracts
 Service contracts of executive directors are reviewed annually. Mark Cutifani, as chief executive officer, has an initial contract of 24 months, but with a 12-month notice period. The notice period for the chief financial officer and executive director, 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 for these particular circumstances is calculated at twice the notice period earnings.
 Compensation of executive directors, executive officers and executive management
 Following the appointment of Mark Cutifani as chief executive officer, AngloGold Ashanti re-organised its executive management teams with effect from December 1, 2007, in line with the renewed strategic focus of the company. A decentralised regional operating structure was established with three executive vice presidents for Africa, the Americas and Australasia reporting directly to the chief executive officer. In addition, the heads of business strategy, business development, business effectiveness, sustainability and organizational development were made executive vice presidents. These operations and functional executive vice presidents, together with the vice president – treasurer, the vice president – compliance and corporate administration, the chief executive officer and the chief financial officer, constitute the company’s 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.


160
 The following table presents the compensation paid by AngloGold Ashanti to executive management during 2007 and 2006. Executive directors have elected not to receive payment of directors’ fees, committee fees and travel allowances.
 All figures in $000
 (1)
 Appointed with effect
 from
 (2)
 2007
 Resigned
 or Retired
 with
 effect
 from
 (2)
 2007
 Salary
 Compen-
 sation
 and
 recruit-
 ment
 (3)
 Performa
 nce
 related
 pay-
 ments
 (4)
 Pension
 scheme
 contribu-
 tions
 Other
 benefits
 (5)
 Encashed
 Leave
 (6)
 Sub-total
 Pre-tax
 gain on
 share
 options
 exercised
 Total
 Executive Directors’ remuneration 2007
     M Cutifani  Sept
        2,627
  2,627
  (7)
          4,400
  5,051
          2,495
  7,569
    (1)
       3,459
  3,795
         1,038
  1,038
 
 
 2,929
 8,811
 659
 632
 458
 530
 14,019
 6,063
 20,080
 Executive officers’ remuneration 2007 – up to November 30, 2007
 
 
 
 
 Representing 15 Executive Officers
 4,041
 -
 885
 511
 37
 95  5,569  1,634
 7,203
 Executive Managements’ remuneration 2007 – from December 1, 2007
 
 
 
 
 Representing 10 Executive Management
 
 345
 -
 73
 43
 6
 51
 518
 -
 518
 Total executive directors’, executive officers’  and executive management remuneration – 2007
 
 7,315
 8,811
 1,617
 1,186
 501
 676
 20,106
 7,697
 27,801
 Executive Directors’ remuneration 2006
     R M Godsell  (chief executive officer)
       1,437
  1,762
         1,314
  1,314
         825
  1,335
        829
  829
         214
  214
 
 
 2,979
 870
 650
 33
 85
 4,619
 834
 5,454
 Executive officers’ remuneration 2006
 
 
 
 
 Representing 16 executive officers
 
 4,344
 983
 474
 210
 39
 6,050
 1,102
 7,152
 Total executive directors’ and executive officers’ remuneration– 2006
 7,323  1,853
 1,124
 243
 124
 10,669
 1,936
 12,606
 (1)
 When directors’ compensation is paid in South African rands, for the purpose of this annual report, the rand values have been converted to US dollars using the following yearly average rate of exchange:  2007 ̈$1 = R7.0276 and 2006: $1 = R6.7706.
 (2)
 Salaries are disclosed only for the period from or to which, office is held except in respect of Messrs Godsell, Carvalho Silva and Nicolau, which amounts reflect total payments made to the date of this report. Mr Nicolau resigned from the board effective November 12, 2007 and left the company effective January 31, 2008.
 (3)
 Compensation and recruitment expenses relate to the once-off payments made to Messrs Godsell, Carvalho Silva and Nicolau on their retirement/resignation from the board and company, and to Mark Cutifani on his appointment as chief executive officer.
 (4)
 In order to move accurately disclose remuneration received/receivable by executive directors, exective officers and executive management, the tables include the performance related payments calculated on the year’s financial results paid in 2008.
 (5)
 Includes health care, personal travel and relocation expenses, and in the case of Mr Carvalho Silva, a compulsory payment to an unemployment insurance fund and a medical promise payout paid to Mr Nicolau.
 (6)
 In 2005, AngloGold Ashanti altered its policy regarding the number of leave days that may be accrued.  As a result, surplus leave days accrued are compulsorily encashed.
 (7)
 Mr Carvalho Silva’s earnings were paid in Brazilian real and US dollars.  For the purposes of this annual report on Form 20-F, values have been converted using the monthly average rates of exchange.
 NB: Rounding may result in computational differences


161
 Compensation of non-executive directors
 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 an allowance for traveling internationally to attend board meetings, non-executive directors receive no further payments from the company.
 There are no contracts of service between the non-executive directors and the company or any of its subsidiaries. All directorsare subject to retirement by rotation and re-election by shareholders at least once every three years.
 The following table presents the compensation paid by AngloGold Ashanti to each non-executive director during 2007 and 2006.
 All figures stated to the nearest $000
 (1)
 Appointed with effect
 from
 (2)
 Resigned/
 Retired
 with effect
 from
 (2)
 Directors
 fees
 (3)
 Commit-
 tee fees  Travel
 (4)
 Total
 Directors
 fees
 (3)
 Commit-
 tee fees  Travel
 (4)
 Total
           T J Motlatsi (deputy chairman)
     
                                 (5)
                      (6)
                                                                                            Total – non-executive directors
 389
 234
 87
 710
 349  176  44
 569
 AlternatesD D Barber
                      (7)
          Total alternate directors
 
 –
 –
 –
 –
 –
 5
 –
 5
 Grand total
 
 389
 239
 87
 715
 349
 181
 44
 574
 NB: Rounding may result in computational differences
 (1)
 Where directors' compensation is paid in South African rands, for the purpose of this annual report, the rand values have been converted to US dollars using the following year-to-date average rate of exchange: 2007: $1=R7.0276 and 2006: $1 = R6.7706.
 (2)
 Salaries are disclosed only for the period from or to which, office is held.
 (3)
 At the annual general meeting of shareholders held on May 4, 2007, shareholders approved an increase in directors’ fees with effect from May 1, 2007 as follows:
 
 
 
 Chairman
 -$150,000 per annum
 
 Deputy chairman and president
 -R360,000 per annum
 
 South African resident directors
 -R135,000 per annum
 
 Non-resident directors
 -$25,000 per annum
 
 (4)
 A payment of a travel allowance of $5,000 per meeting is made to non-executive directors who travel internationally to attend board meetings In addition, AngloGold Ashanti is liable for the payment of all travel costs.
 (5)
 In addition, Mr Brayshaw received fees from AGRe Insurance Company Limited, a wholly-owned subsidiary, for his role as both director and as member of its audit committee.
 (6)
 Dr Jonah resigned as an executive director with effect July 31, 2005, but remained a non-executive director and subsequently resigned from the board with effect from February 12, 2007.
 (7)
 Member of the investment committee.


6C. Board
 practices
 The board of directors
 The board has a unitary board structure and 12 members who assume complete responsibility for the activities of the company, including the entire risk management framework and corporate governance of the company. The board has a written charter that governs its powers, functions and responsibilities and covers the following pertinent areas:
 ·
 ·
 ·
 ·
 ·
 Authority of the board
 Directors’  appointments
 ·
 Role and responsibility of the board
 ·
 Procedures of the board
 Board  committees
 ·
 Matters reserved for board decision
 ·
 Management of risks
 Corporate  governance
 Remuneration  issues
 ·
 Evaluation of board issues and induction of new directors
 ·
 Declaration of interests
 Directors’ retirement follows a staggered process with one-third of directors retiring at least every three years at the annual general meeting. A curriculum vitae of each director standing for re-election is placed before shareholders at the annual general meeting to help inform the process of re-election. The board is authorized by the company’s articles of association to appoint new directors,provided such appointees retire at the next annual general meeting and stand for election by shareholders. A Nominations Committeehas been established as a subcommittee of the board to help identify suitable candidates for appointment to the board.
 Executive directors are appointed by the board to oversee the day-to-day running of the company by the effective supervision ofmanagement. Executive directors are held accountable by regular reporting to the board, and their performance is measured againstpre-determined criteria as well as the performance of their respective business units. Only executive directors have contracts ofemployment with the company. There are no contracts of service between the directors and the company, or any of its subsidiariesthat are terminable at periods of notice exceeding one year or that require payment of compensation on termination.
 Non-executive directors do not hold service contracts with the company.  Non-executive directors provide the board with invaluableand balanced advice and experience that is independent of management and the executive. The presence of independent directors onthe board, and the critical role they play as board representatives on key committees such as the Audit and Corporate Governance,Nominations, Political Donations and Remuneration committees, together with their calibre, experience and standing within the community, ensures that the company’s interests are served by impartial views that are separate from those of management and shareholders.
 In terms of board policy, a director will qualify as being independent provided AngloGold Ashanti has not, over the preceding year,done business in excess of $10 million or 5 percent of the company’s treasury business with the employer of that director. Furthermore, in compliance with JSE Listings Requirements, an independent director must not be a representative of a shareholderwho has the ability to control or materially influence management and/or the board; must not have been employed by the company or be the spouse of a person employed by the company in an executive role in the past three years; must not have been an adviser tothe company other than in the capacity as a director of the company; must not be a material supplier, customer or have a materialcontractual relationship with the company; and must be free of any relationship that could be seen to materially interfere with the independence of that person. The board has affirmatively determined that all eight independent non-executive directors comply with these requirements of independence.
 The board, its sub-committees, and the directors all completed an annual evaluation process to review their effectiveness. The chairman of each committee and the chairman of the board led the processes to evaluate the committees and the board respectively. Each non-executive director completed a self-assessment which was then reviewed by the chairman of the board, and where necessary a meeting was held between that director and chairman. There was a separate review of the chairman’s performance led by the deputy chairman of the board whereby each director evaluated his performance during the year. The vice-president – compliance and corporate administration, company secretary and compliance manager played a critical role in this process. The performance evaluation of executive directors is conducted by the Remuneration Committee.  As an example of the content of an appraisal form,the board effectiveness evaluation covered the following topics:
 ·
 Setting of performance objectives
 ·
 Board contribution to development of strategy
 ·
 Board response to crisis
 ·
 Board awareness of developments in regulatory environment and market
 ·
 Effectiveness of board committees
 ·
 Evaluation of the relationship between the board and management, shareholders and among members of the board itself
 ·
 Succession plans for senior executive management
 ·
 Definition of independent directors
 ·
 Corporate governance and legal issues facing the board/company


163
 The vice-president – compliance and corporate administration and the company secretary have been appointed to assist the board inits deliberations, informing members of their legal duties and ensuring, together with the executive directors and senior management that its resolutions are carried out.  Together with the investor relations department, the company secretarial function also provides a direct communications link with investors and liaises with the company’s share registrars on all issues affecting shareholders and in consultation with other departments, provides mandatory information required by various regulatory bodies and stock exchanges onwhich the company is listed. The vice president – compliance and corporate administration and the company secretary are responsible for compliance with all the statutory requirements related to the administration of the Share Incentive Scheme.  They also ensure that minutes of all shareholders, board and board committee meetings are properly recorded in accordance with the South African Companies Act 61 of 1973 as amended. The company secretarial and compliance functions also play a crucial role in the induction of new directors.
 A compliance office has been established to assist the board and management to determine their statutory duties, ensure legal compliance and advise on issues of corporate governance.
 All members of the board have access to management and the records of the company, as well as to external professional advisersshould the need arise.
 Six board meetings took place during the course of 2007. All directors, or their designated alternates, attended the board meetings during their tenure except for Mrs Carroll and Mr Médori who did not attend three meetings each, Dr Motlatsi and Mr Mensah who did not attend two meetings each, and Messrs Bannerman, Godsell, Nairn, Pityana, Thompson, Trahar, Prof Nkuhlu, Dr Jonah and Mrs Bradley who were each unable to attend one meeting.
 Directors and employees of AngloGold Ashanti with access to price sensitive information are not permitted to trade in the company’s shares during closed periods. In addition, they are prohibited from dealing in warrants and derivatives of the company at any time. Directors and key employees are required to follow a formal process before trading in the company’s shares. Closed periods are ineffect from the end of the reporting period to and including the date of publication of the quarterly, half-yearly and year-end results. Where appropriate, a closed period is also effective during periods when major transactions are being negotiated and a public announcement is imminent.
 Significant corporate governance issues faced by the board in 2007
 The company looks back proudly at its history as part of Anglo American and looks forward to a future that is rich with promise and prospect. The company views the reduction of Anglo American’s shareholding in it as a positive move that enables it to make itsstrategic choices more freely in a dynamic business environment.
 The increase in the free float of its shares up to 83 percent reflects the company’s ability to be independent in determining its strategy and developmental focus, enhancing its own competitiveness and in empowering shareholders by negating the effect of having a majority shareholder and increasing the company’s liquidity.
 The board’s previous composition, which at one stage numbered 19 directors, was clearly too large. There is now a smaller, morefocused group, with the right credentials in terms of skills, experience, knowledge and demographics which will hold the company in good stead as it charts its new strategy.
 The retirement of the chief executive officer, Mr Bobby Godsell, and the resignation of the two chief operating officers (COOs),Mr Roberto Carvalho Silva and Mr Neville Nicolau, required considerable deliberation by the board in order to ensure a smooth transition to their respective successors. Succession plans in the case of the two COOs ensured that the operational requirements of the company continued. In 1998, AngloGold was formed through the consolidation of the gold assets of Anglo American Corporation of South Africa into an independent, single focused gold company. Mr Bobby Godsell played a pivotal role in establishing AngloGold and overseeing its evolution as a world-class multinational gold company with mining and exploration activities on five continents and in more than 10 countries, and the first South African company to list on the New York Stock Exchange.  He also oversaw the mergerwith Ghanaian gold mining company Ashanti Goldfields Company Limited to form AngloGold Ashanti in 2004.  His decision to retirebased on a desire to contribute to the broader South African community in a more direct and meaningful manner was respected by the board and his significant contribution in nurturing the company through its formative years is appreciated by both staff and the board of the company.
 The process for selecting a successor to Mr Godsell was led by the board chairman in consultation with the board as a whole and in particular with the Nominations and Remuneration committees of the board. The search for an experienced and qualified mining andbusiness leader considered candidates both internally and externally. The decision to appoint an external candidate, Mr Mark Cutifani, a mining engineer by training, as the new CEO was based on the need to bring in new and fresh ideas to guide the company’s strategic future. In particular, Mr Cutifani’s impressive career and experience in both the operational and financial aspects of the mining industry were regarded by the board as key features in its decision to appoint him as chief executive officer.


164
 Highlights of Mr Cutifani’s career include:  Chief operating officer – CVRD INCO (Toronto, Canada); Chief operating officer – INCO Ltd (Toronto, Canada); Managing director – Sons of Gwalia Ltd (West Perth, Australia); Group executive, mining and development – Normandy Mining Ltd (Adelaide, Australia); Group manager, project management – Western Mining Corporation Ltd; and Manager, coal – Rio Tinto Ltd.
 Mr Cutifani is leading a strategic review of the company’s safety performance, its vision, mission and values, and the make-up of its operation and exploration profiles. This review will be implemented and completed during 2008.
 The Public Investment Corporation (PIC), which is the company’s third largest shareholder and invests South African public workers’ pension funds, released its policy on corporate governance. The board welcomes such initiatives and applauds the transparency andengagement provided by the PIC.  Many of the standards adopted in the policy already form part of the company’s practices but somestandards will require review and deliberation by the board.
 Board Committees
 To facilitate its activities and deliberations, the board has established a number of sub-committees, comprising members of theboard, with written terms of reference governing the powers, functions and activities of these sub-committees. At the October 2007 meeting of the board, a decision was taken to dissolve the Market Development Committee as its mandate can be met at management level. There are now eight committees of the board including the Executive Committee.
 Members of board committees have access to management and the records of the company, as well as to external professional advisers should the need arise.  A description of each subcommittee is provided below.
 Audit and Corporate Governance Committee
 The Audit and Corporate Governance Committee, including its chairman, comprises only independent non-executive directors, in compliance with the Sarbanes-Oxley Act. The members of the Audit and Corporate Governance Committee are Prof. WL Nkuhlu, Mr FB Arisman, Mr JH Mensah, Mrs E Bradley and Mr RP Edey.  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 five 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. In relation to independent directors’ membership of the committee, AngloGold Ashanti deviates from the guidelines of the King Code but complies with the requirements of the Sarbanes-Oxley Act as the chief executive officer is not a member of the committee but, if required, may attend by invitation from the chairman of the committee. In addition, AngloGold Ashanti deviates from the guidelines of the King Code in that the board chairman is a member of the committee. The board considers that the board chairman possesses invaluable experience and knowledge warranting his membership of the committee.  AngloGold Ashanti is otherwise compliant with the good governance requirements of the King Code.
 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, together with his calibre, experience and integrity, enable himto discharge his duties as required by law and in fulfillment of his obligations to the company. The function, duties and powersof internal audit, for which the group internal audit manager is responsible, are governed by a formal internal audit charter thathas been approved by the committee. In addition, the group internal audit manager meets with committee members in the absence of management.
 The committee is tasked to assist the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control processes and the preparation of accurate financial reporting and statements in compliance with all applicable legal requirements, stock exchange rules and accounting standards.  The committee does not perform any management functions or assume any managerial responsibilities.  The committee provides a forum for discussing business risk and control issues for development of relevant recommendations for consideration by the Board.  The committee is constituted in terms of the requirements of sound corporate governance practices and operates within that framework.  The committee meets regularly with the external audit partner, the group’s internal audit manager and the chief financial officer toreview the audit plans of the internal and external auditors and ascertain the scope of the audits, and to review the quarterlyfinancial 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.


The committee is furthermore responsible for:
 ·
 the appointment and dismissal of the external auditors; determining and approving external auditors’ fees; overseeing the work of the external auditors; determining all non-audit work of the external auditors including consulting work, and pre-approving non-audit fees to be paid to the external auditors; and ensuring that the external auditors report regularly to the committee. The non-audit activities performed by the external auditors during the year were in respect of: –   tax services; –   training services; and –   communications and advisory services regarding annual comment letters received from the US SEC.
 ·
 total fees expensed to the external auditors for such activities were less than $1 million while total fees expensed for 2007 were approximately $7 million. The percentage of non-audit fees as a portion of total fees paid to the external auditors for 2007 was about 14 percent;
 overseeing the internal audit function; receiving regular report back from the group internal audit manager; and the
 appointment and dismissal of the group internal audit manager;
 ·
 ·
 assessing and reviewing the company’s risk management framework; and
 ·
 monitoring the group’s corporate governance practices in relation to regulatory requirements and guidelines.
 The external auditors also meet with committee members in the absence of management. The Audit and Corporate Governance Committee, after due consideration, is satisfied 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 committee met on five occasions during 2007.  All members of the committee, except Mrs Bradley who could not attend two meetings, were present at each of the committee meetings for which they were eligible to attend. In addition, three meetings of the Audit and Corporate Governance sub-committee were held to approve the annual report on Form 20-F and other US GAAP filings with the United States’ Securities and Exchange Commission (SEC).
 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. Prof Nkuhlu, the chairman of the committee, is a member of two (2006: two) other public companies’ audit committees but is the chairman of none of these committees (2006: nil). Mrs Bradley is a member of three (2006: three) other public companies’ audit committees and is the chairman of one (2006: one).
 Prof Nkuhlu is a qualified chartered accountant with considerable experience in both accounting and auditing and is a past president of the South African Institute of Chartered Accountants.  Mrs Bradley has considerable financial and accounting experience.  The board is confident that the experience, calibre and integrity of both directors and active contribution at meetings of the committee and the board, demonstrate their commitment to the company. The simultaneous service on other audit committees by Prof Nkuhlu and Mrs Bradley has not impaired their ability to diligently execute their responsibilities to thecommittee 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 and to hold office for the next financial year.
 Employment Equity and 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. The committee is also responsible for employee skills development in a manner that seeks to retain and develop talent, and to provide employees with the opportunity to enhance their skills and knowledge. The committee met on four occasions during 2007.  Details of the company’s employment equity practices and performance during the year are provided later in this report under “Employment Equity and Development”.  All members of the committee attended each meeting for which they were eligible, except Mr Nairn who was unable to attend one meeting.
 Executive Committee
 This committee, chaired by Mr Cutifani, the new chief executive officer, since his appointment in October 2007, 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 Finance Committee, which is responsible for overseeing the financial and administrative affairs of the company, is a sub-committee of the Executive Committee.


166
 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 committee met on three occasions during 2007.  All members who were eligible to attend meetings of the committee were present except Mrs Bradley and Messrs Pityana, Nairn and Whitcutt who were unable to attend one meeting each.  Dr Jonah who was eligible to attend one meeting of the committee, prior to his resignation from the board, was unavailable for this meeting.
 Market Development Committee
 This committee was established to extend the influence of AngloGold Ashanti as a major global gold mining company in the development of a broader gold business, both nationally and internationally. The committee met on one occasion during 2007 and each member, except Dr Jonah, was present.  In October 2007, the board resolved to dissolve this committee as its objectives are best met at management level.
 Nominations Committee
 The appointment of directors is a matter for the board as a whole but the Nominations Committee is responsible for determining and recommending suitable candidates 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, chaired by the board chairman, was actively involved in the selection and recruitment of the company’s new CEO and for recommending him for approval to the board. The committee met on three occasions during 2007. All members of the committee who were eligible to be present attended the meetings.
 Political Donations Committee
 The membership of the Political Donations Committee comprises the South African resident independent non-executive directors, and is chaired by the deputy chairman of the board. The committee determines the funding of political parties in South Africa in accordance with a formal policy adopted by the board on April 29, 2003 that sets the guiding principles for funding. No meetings of the committee took place in 2007. Prof Nkuhlu and Mr Pityana were appointed by the board as additional members to this committee during the year.
 Remuneration Committee
 The Remuneration Committee, whose members consist only of independent non-executive directors, namely Mr RP Edey (chairman),  Mr RE Bannerman,  Prof WL Nkuhlu,  Mr FB Arisman,  Dr TJ Motlatsi  and  Mr SM Pityana,  is  responsible  for evaluating the performance of executive directors and executive management, and for setting appropriate remuneration for such officers of the company. Full details of the company’s remuneration philosophy, the committee’s deliberations during 2007, remuneration payments for all directors and information on the Share Incentive Scheme have been disclosed in “Item 6B.: Compensation” above.
 The performances of the executive directors are considered 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. The committee, chaired by the board chairman, actively engaged and debated the issues of the retirement package of Mr Godsell and the resignation packages of Messrs Carvalho Silva and Nicolau, as well as the remuneration package of the new CEO, Mr Cutifani. Executive directors have elected to receive no remuneration as directors of the company. 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 an allowance for travelling internationally to attend board meetings, non-executive directors receive no further payments from the company. The committee met on four occasions during 2007. All members of the committee attended meetings of the committee for which they were eligible to be present except Dr Motlatsi who was unable to attend one meeting. The chairman of the Remuneration Committee attends the annual general meeting to answer any questions from shareholders.


Safety, Health and Sustainable Development Committee
 This committee is tasked with overseeing the company’s performance regarding safety, health and sustainable development, and for establishing targets in relation to each of these areas. The committee, which comprises non-executive directors and executive management (including the chief executive officer) deliberated on the safety concerns faced by the company’s South African mines in particular, and on the strategies and methodologies that will enhance the safety and security of all company employees. The committee also called on management to engage external consultants to review the effectiveness of the company’s strategy and program to improve safety and health. This review influenced AngloGold Ashanti’s recently implemented “Safety is our first value” campaign.
 The committee met on five occasions during 2007. All members of the committee attended each committee meeting that they were eligible to attend except for Dr Motlatsi and Mr Pityana, who were each unable to attend one meeting, and Mr Mensah, who did not attend two meetings. Dr Jonah was unable to attend the one meeting which he was entitled to attend.
 Other committees
 In addition to the committees of the board mentioned above, the Executive Committee has established a number of standing committees to oversee the day-to-day management of the company’s affairs. The Finance Committee, which meets on an ad hoc basis, is chaired by the chief financial officer and comprises members of senior management in the administrative, financial and legal fields. It is tasked with monitoring all financial, legal and administrative aspects of the company’s affairs. The Treasury Committee is chaired by an independent director, Prof Nkuhlu and comprises one other independent director, Mr Arisman, and senior management in the financial discipline. It is responsible for reviewing and evaluating market conditions,treasury operations and future hedging strategies.
 6D.    
  Employees
  2007                            
  2006  2005
 South Africa
 36,976 35,968 40,426
 Argentina
 1,017 906 950
 Australia
 781 479 441
 Brazil
 4,352 4,428
  3,489
 Ghana
 7,549 9,443 10,304
 Guinea
 2,917
  2,708 1,978
 Mali
 1,615 1,473 1,309
 Namibia
 409
  313 315
 Tanzania
 3,226 3,220
  2,280
 USA
 405 369
  391
 Other*
 2,275 2,146 2,110
 Total
 61,522
  61,453 63,993
 *including corporate and other non-gold producing subsidiaries
 The change in employee numbers from 2006 to 2007 was largely a result of increases in employee complement in Australia and Namibia owing to staffing up at the Boddington joint venture and the full impact of the revised shift arrangements at Sunrise Dam, and the full transition to owner-mining at Navachab.  In contrast, employee numbers declined in Ghana where restructuring continued at the Obuasi operation.
 The change in employees numbers from 2005 to 2006 was largely a result of the go-ahead for Boddington project in Australia and change in shaft arrangements at Sunrise Dam, the expansion at Cuiabá in Brazil; the sale of Bibiani in Ghana, retrenchments at Obuasi and natural attrition; and the full impact of transition to owner-mining in Tanzania.


Employees and other stakeholder engagement
 The group has in place a set of core business principles which governs its relationships with employees, employee associations and trade unions, neighbouring communities, regulatory authorities, suppliers and customers, and supports the company’s vision, mission and values. AngloGold Ashanti recognizes these groups as stakeholders and business partners in its activities and seeks to reduce any potentially adverse effects of its operations and business. As a company with extensive mining and metallurgical processing operations, key areas of focus are the management of occupational health and safety, regional health, social and environmental impacts. More detailed disclosure on these may be found in the Report to Society 2007, available at www.aga-reports.com.
 Unions and collective bargaining
 Freedom of association, in particular, is recognized as a fundamental right within the group, and collective bargaining is encouraged in those countries where the relevant structures exist.  Management/union relationships are governed by collective bargaining, recognition and company-negotiated agreements in respect of all of the group’s operations, with 93 percent (2006: 85.6 percent) of the global workforce represented by recognized trade unions or provided for by way of collective bargaining processes.  AngloGold Ashanti is a strong supporter of collective bargaining.
 Although only 87 percent of all South African employees are members of unions, 97.5 percent fall under collective bargaining agreements, including the agency-shop agreement.  The agency shop agreement exists across the lower bargaining unit at the South African operations. This agreement provides for the contribution by non-union members of 0.75 percent of basic monthly pay to a fund which is used to address work and social needs of that bargaining group. This has been negotiated because union members pay 1 percent of their basic pay as union dues.  The outcome of wage negotiations with the unions applies to all employees within that bargaining unit, whether they are union members or not.
 The only exceptions to the collective bargaining arrangements are operations in the United States and Australia, where employees (as is common practice in these countries) are not members of unions, but where a high degree of employee participation is encouraged.
 There were no significant disputes or strikes at any of the group’s operations during the year. The most significant agreementsreached between the company and unions during the year were the review of wages and other conditions of service in both South Africa and Ghana.
 In South Africa, a two-year agreement, effective July 2007, was entered into between AngloGold Ashanti, through the Chamber of Mines, NUM and Solidarity. The agreement provides for:
 ·
 wage increases of between 8 percent and 10 percent, with the highest increase for the lowest job category and for key skills;
 ·
  ·
  ·
  ·
  In Ghana, the 3-year agreement which was negotiated in 2006 between AngloGold Ashanti and the Ghana Mine Workers’ Union is still current.
 Generally, conditions of service, including minimum notice periods and negotiation practices with employees and employee representatives, are guided by country legislation, collective bargaining agreements and individual contracts of employment and therefore vary from region to region.


169
 6E.   Share ownership
 
 Share ownership of directors
 Directors held the following number of ordinary shares of the company at December 31, 2007 and 2006, which did not individually or in the aggregate exceed 1 percent of the company's issued ordinary share capital:
 
 December 31, 2007
 December 31, 2006
 Beneficial
 Beneficial
 Beneficial
 Beneficial
 Direct
 Indirect
 Non-
 beneficial
 (1)
 Direct          
  Indirect
 Non-
 beneficial
 (1)
 Executive directorsM Cutifani
                                          Total  652
   16,662
   Non-executive directorsF B Arisman
                     C Carroll (appointed May 5, 2007, resigned October 9, 2007)
                                                                             Total
  26,423
 3,027
 44,892
 3,027
 Alternate directorsDD Barber (resigned August 4, 2006)
                     Total –
 –
 –
 –
 –
 –
 Grand Total
 652
 26,423
 3,027
 16,662
 44,892
 3,027
 (1)
 The director derives no personal benefit from the ordinary shares declared, for example by holding the ordinary shares in trust for another.
 Except for Mr Arisman and Prof Nkuhlu, who, after receiving permission to do so from the chairman of the company, acquired
 2,000 AngloGold Ashanti shares (in the form of ADSs) on February 22, 2008 and 800 AngloGold Ashanti shares on May 13,
 2008, respectively, there have been no other changes in the above interests since December 31, 2007. A register detailing
 directors’ and officers’ interests in contracts is available for inspection at the company’s registered and corporate office.
 Share ownership of executive officers/executive management
 Under 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 employees
 At a general meeting of shareholders held on December 11, 2006, members approved the creation of 4,280,000 new 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.
 All the authorised E-ordinary shares have been issued, of which, 2,880,000 E ordinary shares were issued to the Bokamoso ESOP Trust which holds these shares on behalf of approximately 31,000 employees.
 AngloGold Share Incentive Scheme
 AngloGold Ashanti operates a share incentive scheme for the purpose of providing an incentive to executive directors, executive officers/executive management and other managers to identify more closely with the fortunes of the group and its continued growth, and to promote the retention of such employees by giving them an opportunity to acquire ordinary shares in the company. Non-executive directors are not eligible for participation in the share incentive scheme.
 The incentives offered by AngloGold Ashanti are reviewed periodically to ensure that these incentives are globally competitive,so as to attract, reward and retain management of the highest caliber. As a result, several types of incentives, each with theirown issue and vesting criteria have been granted to employees – collectively known as the AngloGold share incentive scheme or share incentive scheme.
 Under the terms of the AngloGold share incentive scheme, which was approved by the shareholders at the general meeting held on June 4, 1998, and with the introduction of the Bonus share plan and Long-term incentive plan approved by the shareholders at the annual general meeting held on April 29, 2005, the maximum number of ordinary shares that may be allocated for the purposes of the share incentive scheme is equivalent to 2.75 percent of the total number of AngloGold Ashantiordinary shares in issue at any time. As of December 31, 2007 and 2006, this equated to 7,630,080 and 7,641,766 ordinary shares, respectively were available for purposes of the scheme.  As of May 15, 2008, 7,641,099 ordinary shares may be allocated for the purposes of the share incentive scheme.
 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 from 300,000 to 5 percent of the 2.75 percent attributable to the share incentive scheme (or 0.1375 percent of the total number of ordinary shares in issue at any one time).As of December 31, 2007 and 2006, this equated to 381,504 and 379,824 ordinary shares, respectively.  As of May 15, 2008, 382,055 ordinary shares, in aggregate, may be granted to any one participant.
 Employees participate in the scheme to the extent that they are granted options, shares or rights 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, unless otherwise stated.
 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, 2003, at which time it was agreed that no further time-relatedoptions would be granted. All options granted hereunder will terminate on February 1, 2012, being the date on which the last options granted under these criteria may be exercised or will expire. Each time-related option entitles the holder to acquire one ordinary share at a price equal to the closing price of ordinary shares on the JSE on the last business day prior to the date ofgrant.
 Time-related options vest over a five-year period from date of grant, and may be exercised in tranches of 20 percent each in years 2, 3 and 4 and 40 percent in year 5.  As of December 31, 2007, all options granted and outstanding have vested in full.


Performance-relatedPerformance-related options were 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 at which time it was agreed that no further performance-relatedoptions would be granted. 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. Each performance-related option entitles the holder to acquire one ordinary share at a price equal to the closing price of ordinary shares on the JSE on the last business day prior tothe date of grant.
 Performance-related options may be exercised in full, three years after date of grant, provided that the conditions on which theoptions were granted, namely the performance of the company as determined by the directors at date of grant, 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. Executive directors, executive officers/executive management 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. Awards granted vest in full, three years from date of grant, provided that the participant is still in the employ of the company at the date of vesting, unless an event occurs which may result in an earlier vesting, such as death.
 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. Options granted vest three years after date of grant, to the extent that the performance conditions under which the options were granted, are met, and provided that the participant is still in the employ of the company, or unless an event occurs which may result in an earlier vesting, such as death.
 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 period January 1, 2007 to December 31, 2007 was as follows:
 Time-
 related
 Performance-
 related
 Bonus
 share
 plan
 Long-term
 incentive
 plan
 Total
 Average
 exercise
 price per
 ordinary
 share – R
 Ordinary
 shares
 issued
 At January 1, 2007
 473,260
 2,585,800
 480,585
 660,175
 4,199,820
 166.64          
  3,114,077
 Movement during the year
 
 
 
 
 - Granted
 -
 *12,600
 296,495
 321,664
 630,759
 -
 - Exercised
 266,300
 874,874
 40,708
 -
 1,181,882
 210.31  1,181,882
 - Lapsed (terminations)
 -
 85,326
 50,704
 198,414
 334,444
 62.78
 At December 31, 2007
 206,960
 1,638,200
 685,668
 783,425
 3,314,253
 130.74          
  4,295,959
 Average exercise/issue price 
 per share  -  R
 124.68               
  248.76
 -
 -
 130.74
 * Correction of prior year lapsings in error.
 During the period January 1, 2008 to and including May 15, 2008, 367,691 BSP awards and 480,584 LTIP awards were granted at a market price of R267.05 per award and 135,299 options or rights were exercised.


172
 Option ownership of directors, executive officers/executive management and other management
 Under the Listings Requirements of the JSE, AngloGold Ashanti is required to disclose the option or rights ownership of individual directors. Under those requirements, AngloGold Ashanti is not required to, and it does not otherwise, disclose optionor rights ownership of individual executive officers/executive management and other management.
 The table below shows the movement in respect of options or rights held by executive directors on an individual basis, and by executive officers and managers, each as a group, to December 31, 2007.
 M. Cutifani
 R M Godsell
 R Carvalho
 Silva
 N F Nicolau
 S Venkat-
 akrishnan
 Total
 directors
 Total
 Executive
 officers
 Total other
 Total scheme
 Balance at January 1, 2007Number  –
            Granted during yearNumber  –
         Exercised during yearNumber  –
         Pre-tax gain, after expenses at date of exercise – R value (R000)
  
    
  Lapsed during the yearNumber  –
         Held as at December 31, 2007Number  –
         Latest expiry date
        Of the 3,314,253 options or rights granted and outstanding at December 31, 2007, 1,845,160 options are fully vested and 208,551 options vested on May 4, 2008 in terms of the BSP, while 105,640 options vested on May 4, 2008 with 158,460 options lapsing in terms of the LTIP.
 Non-executive directors are not eligible to participate in the scheme and therefore own no options.


Item 7: Major shareholders and related party transactions
 Overview
 Description of AngloGold Ashanti’s share capital
           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, A redeemable preference shares and B redeemable preference shares, see “Item 10B.: Memorandum and Articles of Association”.
  2007
 2006
 2005
 Issued
 Number of
 ordinary
 shares
 Rand
 Number of
 ordinary
 shares
 Rand
 Number of
 ordinary
 shares
 Rand
 At January 1,
 276,236,153
 69,059,038    
  264,938,432
 66,234,608    
  264,462,894
 66,115,724
 Issues during year-  
  $500 million Equity Raising
 –
 –
 9,970,732
 2,492,683
 –
 –
 -  Bokamoso ESOP and BEE transaction (approved
 by shareholders on December 11, 2006)
 31,410
 7,852
 –
 –  –
 –
 -  Bokamoso ESOP on conversion of E-ordinary
 shares  8,026
 2,007
 928,590
 232,147
 –
 –
 -  Exercise of options by participants in the
 AngloGold Share Incentive Scheme
 1,181,882
 295,471
 398,399
 99,600
 475,538
 118,884
 At December 31,
 277,457,471
 69,364,368  276,236,153
 69,059,038  264,938,432
 66,234,608
 During the period January 1, 2008 to and including May 15, 2008, 400,679 ordinary shares were issued at an average issue price of R257.84 per share, resulting in 277,858,150 ordinary shares being in issue at May 15, 2008


174
 7A.  Major  shareholders
 According to information available to the directors, the following are the only shareholders holding, directly or indirectly, more than 5 percent of the ordinary share capital of the company at December 31:
 Ordinary shares held at
 December 31, 2007
 December 31, 2006
 December 31, 2005
 Shareholder *
 Number
 % voting
 rights
 Number  %
 voting
 rights
 Number  %
 voting
 ·
 rights
                                   ·
 May not necessarily reflect the beneficial shareholder.
 At December 31, 2007, The Bank of New York Mellon held 82,550,854 ordinary shares through various custodians in respect of American Depositary Shares issued by them pursuant to the AngloGold Ashanti sponsored ADR program.  The number of persons who were registered holders of ADSs was reported at 3,914.  AngloGold Ashanti is aware that many ADSs are held off 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.
 The company’s major shareholders have the same voting rights as other holders of AngloGold Ashanti ordinary shares and do not have any different or special voting rights.
 As at December 31, 2007, there were 19,250 holders of record of AngloGold Ashanti ordinary shares. Of these holders 388 had registered addresses in the United States and held a total of 74,019 ordinary shares, approximately 2.7 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, hold AngloGold Ashanti ordinary shares, in whole or in part, beneficially for United States persons.
 All the issued A and B preference shares are held by Eastvaal Gold Holdings Limited, AngloGold Ashanti’s wholly-owned subsidiary. The articles of association of AngloGold Ashanti provide that the A redeemable preference shares and the B redeemable preference shares are not transferable.
 The E Ordinary shares are held by Izingwe Holdings (Proprietary) Limited, an empowerment company and the Bokamoso ESOP Trust, which holds the shares on behalf of employees who qualify in terms of the BEE transaction as approved by the AngloGold Ashanti shareholders on December 11, 2006.  Neither the Bokamoso ESOP Trust nor Izingwe Holdings (Proprietary) Limited may sell their shares or any portion of their shares without the written consent of AngloGold Ashanti.
 Insofar as is known to AngloGold Ashanti as of December 31, 2007, 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.


175
 7B.
 Related party transactions
 On October 26, 2005 Anglo American plc (AA plc) announced that it intended to reduce its shareholding in the Company, while still intending to remain a significant shareholder in the medium term.  During April 2006, AA plc reduced its shareholding in theCompany to less than 50 percent interest held, as the result of the sale in a public offering, of some of its shares held in theCompany and during October 2007, further to 16.61 percent interest held.  As at December 31, 2007, AA plc and its subsidiaries held an effective 16.58 percent (2006: 41.67 percent) interest in AngloGold Ashanti.  The Company had the following transactions with related parties during the years ended December 31, 2007, 2006 and 2005:
 December 31, 2007
 December 31, 2006
 December 31,
 2005
 (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 with significant shareholder AA plc
      Related party transactions with subsidiaries of AA plc
 (1)
  (2)
            Scaw Metals – A division of Anglo Operations Limited – steel and engineering
       (3)
            Related party transactions of equity accounted joint ventures and associatesOro Group (Proprietary) Limited
                              
 
 
 (1)
 Transactions to April 2006.
 (2)
 AA plc sold their interest in Boart Longyear Limited with effect from July 29, 2005.
 (3)
 Previously included in Scaw Metals – A division of Anglo Operations Limited.
 Amounts owed to/due by joint venture related parties and the loan balance due to Goldmed Medical Scheme of $1 million (2006: $nil), are unsecured, non-interest bearing and under terms that are no less favorable than those with third parties.
 The Trans-Siberian Gold plc loan bears interest at LIBOR plus 4 percent and is convertible into equity under certain circumstances at the option of the borrower.
 The Oro Group (Proprietary) Limited loan bears interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion.


The Company, which holds an equity interest of 29.8 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 cash consideration of $40 million. The companies acquired consist of Amikan (which holds the Veduga deposit, related exploration and mining licenses) and AS APK (which holds the Bogunay deposit, related exploration and mining licenses).
 In connection with the relocation of Roberto Carvalho Silva, an executive director of the Company since 2005, 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.  As at December 31, 2006, BRL728,580 ($340,458) of the purchase price remained to be paid to the Company’s subsidiary, with BRL657,717 ($341,352) remaining to be paid as at June 20, 2007. The remaining balance was 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 the years were: 2007: BRL634,023 ($329,055), in 2006: BRL903,465 ($414,433) and in 2005: BRL311,923 ($127,837). The Company terminated the agreement with the Brazilian marketing, communications and corporate affairs services company with effect July 2007.
 Registration rights agreement
 On March 23, 2006 the company entered into a Registration Rights Agreement with Anglo South Africa Capital (Proprietary) Limited (Anglo South Africa) under which the company has agreed to file U.S. registration statements for Anglo South Africa’s offer and sale of shares it holds in the company (each a Demand Registration) if Anglo South Africa requests the company to do so. The company is required to use all reasonable efforts to file a Demand Registration within 30 days after such a request and to keep it effective for 90 days unless the shares offered pursuant to it are sold earlier. Further, the company may not offer,sell, allot or issue any shares or other securities that are convertible into or exchangeable for, or that represent the right toreceive, shares, whether pursuant to U.S. registration or otherwise, for a 90-day period immediately following the first closing of an offering pursuant to a Demand Registration or a shorter period as may be imposed by underwriters in the Demand Registration; except: (i) in consideration for shares or assets of a company as part of a merger, acquisition, corporate reorganization or similar transaction, (ii) as required pursuant to the terms governing the 2.375 percent guaranteed convertiblebonds due 2009, issued by AngloGold Holdings plc and guaranteed by the company, and (iii) in connection with any option, employee bonus, profit sharing, pension, retirement, incentive, savings or similar plan, agreement or award. The Registration Rights Agreement may be terminated at any time by written consent by each of the parties thereto. The Registration Rights Agreement shall terminate automatically on the first date on which Anglo South Africa is no longer an “affiliate” within the meaning of Rule 144 under the United States Securities Act of 1933, as amended.
 7C.
 Interests of experts and counsel


Item 8: Financial information
 8A.
 Consolidated financial statements and other financial 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.
  ·
 In South Africa, action has been instituted by 19 plaintiffs, against Anglo American Corporation of South Africa Limited (AACSA) for damages resulting from lung diseases which the plaintiffs allegedly contracted while employed by mining companies managed by AACSA. There is a possibility that AACSA may seek to recover a portion of damages which may be awarded against it from AngloGold Ashanti by either AACSA or the plaintiffs. Exceptions filed by Anglo American against 10 actions were upheld.  At present, nine actions remain.  There is no indication at present of the merit of any such claim. A separate action was instituted against AngloGold Ashanti in 2006 by one of the plaintiffs out of the High Court, Witwatersrand Local Division, for damages allegedly suffered by him as a result of alleged silicosis allegedly contracted while working on mines now owned by AngloGold Ashanti. An exception was filed by AngloGold Ashanti against the claim which was heard on February 12 and 13, 2008 and AngloGold Ashanti is awaiting the judgement of the High Court.
 ·
 In South Africa 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 has excepted to the summons on the basis of it being vague and embarrassing. The exception was heard on February 18, 2008 and the exception was dismissed.  AngloGold Ashanti is considering taking another exception on other aspects of the plaintiffs’ particulars of claim.
 ·
 In Ghana, Westchester / Africore Limited instituted action against Ashanti Goldfields Company Limited 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. The plaintiffs have applied to pursue the matter through arbitration in Ghana.
 ·
 In Ghana, 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 favour of the company.  The plaintiffs took further action, claiming that they are dissatisfied with the findings and award of the arbitrator.
 ·
 ·
 In the Democratic Republic of Congo, twenty eight former expatriate employees of AngloGold Ashanti Kilo (AngloGold Ashanti’s subsidiary in the Democratic Republic of Congo) have made claims for salary arrears, severance pay, damages and interest jointly and severally against AngloGold Ashanti Kilo and AngloGold Ashanti Ghana, the immediate holding company.  Some of these former expatriates have instituted proceedings in the Brussels Labor Court claiming varying amounts but these have remained pending for some time now.
  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).  The case has been set down for mention on May 15, 2008.
 ·
 In Tanzania Senior Staff members have instituted a claim against Geita Gold Mining Company for overtime hours to the value of Tshs 3.6 billion (approximately US$2.8 million).  Mediation has failed and it is likely that the staff members will file a case in the Labor Court.


·
  assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export: one for the period between February 2004 and June 2005 and the other for the period between July 2005 and May 2006. The tax authorities maintain that whenever a taxpayer exports gold mined in the State of Goiás through a branch located in a different Brazilian State, it must obtain an authorization from the Goiás State Treasury by means of a Special Regime Agreement (Termo de Acordo re Regime Especial – TARE). The MSG operation is co-owned with Kinross Gold Corporation.  The company’s attributable share of the first assessment is approximately $39 million.  Although MSG requested the TARE in early 2004, the TARE, which authorized the remittance of gold to the Company’s branch in Minas Gerais specifically for export purposes, was only granted and executed in May 2006.  In November 2006 the administrative council’s second chamber ruled in favor of MSG and fully canceled 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 $24 million. The Company believes both assessments are in violation of federal legislation on sales taxes.
 ·
 Morro Velho and AngloGold Ashanti Brasil Mineração are involved in disputes with tax authorities.  These disputes involve eleven federal tax assessments including income tax, social contributions and annual property tax based on ownership of properties outside of urban perimeters (ITR).
 ·
 In Brazil, Mineração Serra Grande S.A. (MSG) received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold allegedly returned from the branch in Minas Gerais to the company head office in the State of Goais. The company lost the case at the administrative level but is now discussing it at the judicial sphere. The company believes there is a remote chance of success for the State of Minas Gerais. The company’s attributable share of the assessment is approximately $8 million.
 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.
 A potential restriction on dividends arises from the terms applicable to AngloGold Ashanti’s convertible bond. Legal opinion isthat the size of the dividends declared should be tested against condition 6(b)(iii) of the convertible bond and if triggered theconversion price should be adjusted, however the condition is not prohibitive.
  ·
  ·
 5 percent of the volume weighted average share price over 180 days trading immediately preceding the record date of the dividend.
 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 theBoard’s ongoing assessment of AngloGold Ashanti’s earnings, after providing for capital expenditure and long-term growth
 ,
  and
   8B. Significant  changes


Item 9: The offer and listing
 9A.
 Offer and listing details
 The following table sets out, for the periods indicated, 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)
 High
 Low
 High
 Low
 Year ended December 31
 (South African cents per ordinary share)
 
 (US dollars per ADS)
 Annual information
 
 
 
 
 2003
    2004
    2005
    2006
    2007
    Quarterly information
 2006First quarter
                    2007First quarter
                    Monthly informationSeptember 2007
                                         (2)
     (1)
 Each ADS represents one ordinary share.
 (2)
 Through May 15, 2008.
  9B.
 Plan of distribution


9C. Markets
 Nature of trading market
 Prior to June 29, 1998, the date on which Anglo American Corporation of South Africa Limited’s gold mining interests were consolidated into a single, focused, independent, global gold mining company, ordinary shares of AngloGold (formerly Vaal Reefs) were listed on the Johannesburg Stock Exchange (JSE), the London Stock Exchange (LSE) and the Paris bourse, were quoted in Brussels in the form of International Depositary Receipts and were listed under grandfathered unsponsored American Depositary Receipts (ADR) programs on the Nasdaq SmallCap Market. Shares of Freegold, Western Deep Levels and Southvaal were also listed under grandfathered unsponsored ADR programs on the Nasdaq SmallCap Market. Historically, the principal trading markets for such shares (as well as for shares of Freegold, Western Deep Levels and Southvaal) had been the JSE and Nasdaq. As part of the consolidation, shares of AngloGold, Freegold, Western Deep Levels and Southvaal were delisted from Nasdaq and shares of all participating companies were delisted from the JSE.
 With effect from the implementation of the consolidation, the ordinary shares were listed on the JSE, the LSE and the Paris bourse and were quoted in Brussels in the form of International Depositary Receipts. In addition, American Depositary Shares (ADSs) each representing half of one ordinary share and evidenced by ADRs issued by The Bank of New York under a program sponsored by AngloGold were listed on the New York Stock Exchange (NYSE) on August 5, 1998.
 The company was admitted to the official list of the Australian Stock Exchange (ASX) on November 15, 1999. The ordinary shares of the company issued in connection with the acquisition of the entire issued share capital of Acacia Resources Limited trade on the ASX. On November 28, 2001, AngloGold implemented a 10-for-1 split of the AngloGold CHESS Depositary Interests (CDIs), which trade on the Australian Stock Exchange.
 Effective at the close of business on December 24, 2002, AngloGold undertook a 2-for-1 stock split and a corresponding change in the ratio of ordinary shares to ADSs from 0.5 ordinary shares per one ADS to one ordinary share per one ADS.  At the same time, the ratio of ordinary shares to CDIs changed from one ordinary share equivalent to ten CDIs to one ordinary share equivalent to five CDIs.
 On April 26, 2004, the business combination with Ashanti became effective, at which time, AngloGold changed its name to AngloGold Ashanti. Following the business combination, the company’s ordinary shares were listed on the Ghana Stock Exchange (GhSE). In addition, Ghanaian Depositary Shares (GhDSs) were listed on the GhSE each representing one-hundredth of an ordinary share and evidenced by GhDSs issued by NTHC Limited (as Depositary) under a program sponsored by AngloGold Ashanti.
 9D.    
  Selling shareholders
  9E.     
  Dilution
  9F.
 Expenses of the issue


Item 10: Additional information
 10A. Share
 capital
 AngloGold Ashanti's Ordinary Shares and Preference Shares
 AngloGold Ashanti’s authorized and issued share capital as of December 31, 2007 and May 15, 2008 (being the latest practicable date prior to the publication of this document) is set out below:
 Issued
 Title of Class
 Authorized
 May 15, 2008
 December 31, 2007
                   All of the issued ordinary shares, E ordinary, 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.
  Period to
 Description
 Number of Shares
                             Employee Share ownership program – on conversion of E ordinary shares
              Period to
 Description
 Number of Shares
                      Cancelled and exchanged for ordinary shares to May 15, 2008


Guaranteed Convertible Bonds: On February 27, 2004, AngloGold Holdings plc, a wholly-owned subsidiary of AngloGold Ashanti, issued $1,000,000,000, 2.375 percent guaranteed Convertible Bonds due 2009, convertible into AngloGold Ashanti ADSs and guaranteed by AngloGold Ashanti. Subject to certain restrictions, holders of Convertible Bonds are entitled to convert each Convertible Bond into an AngloGold Ashanti ADS at the then applicable conversion price at any time from April 8, 2004 to February 20, 2009, or, if the Convertible Bonds are called for redemption earlier than February 27, 2009, the seventh business day prior to the date of early redemption. If the bonds have not been converted by February 20, 2009, they will be redeemed at par on February 27, 2009. AngloGold Holdings plc has the option of calling an early redemption of all the bonds 3 years after their issuance, if the price of the ADSs exceeds 130 percent of the conversion price for more than 20 days duringany period of 30 consecutive trading days.
 The initial conversion price for the Convertible Bonds is $65.00 per AngloGold Ashanti ADS. The conversion premium to the reference volume weighted average price of the ADSs on the New York Stock Exchange of $40.625 on February 19, 2004, when the issue of the Convertible Bonds was announced, was 60 percent. If all holders of Convertible Bonds exercise their option to convert their Convertible Bonds into ADSs and assuming no adjustments are made to the initial conversion price, up to 15,384,615 new ADSs will be issued. The conversion ratio is subject to adjustment in case of various corporate events including share splits and capital distributions.
 At the annual general meeting of shareholders to be held on May 6, 2008, the directors are seeking authority from shareholders to undertake a new issue of convertible bonds in order to enable the company to primarily refinance the existing bonds on the basis that such convertible bonds, when issued, will be convertible into not more than 15,384,615 ordinary shares, i.e. the same maximum number of ordinary shares into which the existing bonds are convertible. Once the terms and conditions of the proposed issue of convertible bonds have been finalized, shareholders will be requested to consider granting a specific authority and approval to the directors authorising them to issue a maximum of 15,384,615 ordinary shares pursuant to the conversion rights which will attach to such convertible bonds.  The resolution is proposed because the price at which theexisting bonds will be convertible into the company’s ordinary shares, currently $65 per share, currently exceeds the market price of the company’s shares on the New York Stock Exchange and it is accordingly likely that the existing bonds will not be converted into shares but instead be cash settled.  In such circumstances, the specific authority granted to the directors of thecompany in 2004 to allot and issue up to 15,384,615 ordinary shares of 25 cents each in the capital of the company will no longer be required and the authority will therefore lapse.
 10B.  Memorandum and Articles of Association
 Registration
 AngloGold 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, the South African Securities Regulation Code on Take-Overs and Mergers and the JSE Listing Requirements. In addition, rights of holders of AngloGold Ashanti ADSs are governed by the deposit agreement between AngloGold Ashanti and the Bank of New York.
 Directors
 The 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 Directors
 The board of directors may appoint any person to be a director and any director so appointed shall hold office only until the following annual general meeting and shall then be eligible for re-election. The directors who retire at the annual general meeting in this manner shall not be taken into account in determining the directors who are to retire by rotation at such meeting.
 At every annual general meeting at least one-third of the directors must retire from office, but are eligible for re-election. The directors so to retire at such annual general meeting shall be those who have been the longest in office since their last election. Where more than one director has served for an equal length of time, unless they agree between themselves, the director to resign will 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 foundto 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.
 AngloGold Ashanti is currently seeking amendments to its Articles of Association relating to the retirement of directors to remove ambiguities in the provisions relating to the determination of those directors who are to retire by rotation.
 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.
 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 shall 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.
 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 shall not vote nor be counted in the quorum and if he shall do so his vote shall not be counted on any resolution forhis 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 shall not apply to:
     (iii) any contract by a director to subscribe for or underwrite securities, or  (iv) 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 shall 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 thedirector 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.
 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 ofthe directors who may allot, grant options over or otherwise deal with or dispose of the ordinary shares to such persons at suchtimes 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 aclass 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, shall contain particulars of thediscount 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 ofsuch prospectus.
 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 shall be declared by shareholders in general meeting than isrecommended 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, as depositary, in accordance with 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.
 The holder of B preference shares is entitled to an annual dividend amounting to the lesser of five percent of the issue price ofthe 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 isnot 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.
 Voting rights
 Each ordinary share confers upon the member the right to vote at all general meetings. Each member 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, members 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 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, speakand 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 specify that if new classes of ordinary or preference shares are issued, the rights relating to anyclass of shares may be modified or abrogated either with the consent in writing of the holders of at least three-fourths of theissued shares of that class, or with the sanction of a resolution passed as if it were a special resolution of the company at aseparate general meeting of the holders of the shares of that class.
 Transfer of Ordinary Shares
 Dematerialized 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 member may transfer all or part of his certificatedsecurities, 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, islodged with AngloGold Ashanti accompanied by the share certificate, the transfer is in respect of only one class of securities orthe transfer is permitted within any of AngloGold Ashanti’s incentive schemes.
 Conversion of Ordinary Shares into Stock
 AngloGold 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 Capital
 AngloGold 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;
 ·
 increase the number of any issued no par value shares without increasing its stated capital; cancel any shares which have not been subscribed for;
 ·
  ·
 vary, modify or amend any rights attached to any shares whether issued or not, including the conversion of any shares into preference shares; and
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  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.


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.
 Rights upon liquidation
  ·
 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.
 ·
 the A redeemable preference shares confer the right, in priority to any payment in respect of the ordinary shares 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 issues AngloGold Ashanti’s American Depositary Shares, or ADSs. One ADS represents the ownership interest of one ordinary share of AngloGold Ashanti.
 The Unrestricted ADS Deposit Agreement and Restricted ADS Deposit Agreement
  AngloGold Ashanti has entered the following Deposit Agreements with The Bank of New York as depositary and the owners and beneficial owners of American Depositary Receipts (the “Deposit Agreements”)
 
 Ashanti’s registration statement on Form F-6 (Registration Statement No. 333-14066) (the “Unrestricted ADS Deposit Agreement”); and


·
 ·
 ·
 ·
 As this section is a summary, it may not contain all the information that may be important to a holder of ADSs.  For more complete information, see “Item 10.H.: Documents On Display”.  Copies of the Deposit Agreements for each Facility are also available for inspection at the Corporate Trust Office of The Bank of New York currently located at 101 Barclay Street, New York, New York, 10286.
 Under the Unrestricted ADS Deposit Agreement The Bank of New York as depositary issues ADSs which are not subject to transfer restrictions under the Securities Act and are listed and trade on the New York Stock Exchange (the Unrestricted ADSs).
 Under the Restricted ADS Deposit Agreement The Bank of New York as depositary issues ADSs which are considered “restricted securities” within the meaning of Rule 144 of the Securities Act (the Restricted ADSs). AngloGold Ashanti has entered a Registration Rights Agreement pursuant to which it has undertaken to file a registration statement with the SEC covering resales of Restricted ADSs.
 Any holder of Convertible Bonds which were offered and sold in the United States to Qualified Institutional Buyers (QIBs) in reliance on Rule 144A under the Securities Act exercising its right to convert its Convertible Bonds into ADSs prior to the later of February 27, 2006 and the date that is two years after the last date on which AngloGold Ashanti or any affiliate of AngloGoldAshanti was the owner of such Convertible Bonds, will receive Restricted ADSs issued under the Restricted ADS Facility. Any holder of Convertible Bonds which were offered and sold outside the United States in accordance with Regulation S under the Securities Act exercising its right to convert its Convertible Bonds into ADSs will receive Unrestricted ADSs issued under the Unrestricted ADS Facility.
 The description below generally applies to the ADSs issued under both the Restricted and the Unrestricted ADS Facility.  The material differences between the two Facilities are:
  affiliate of AngloGold Ashanti was the owner of such Convertible Bonds, only Restricted ADSs will be issued upon conversion of Convertible Bonds offered and sold in the United States to QIBs in reliance on Rule 144A under the Securities Act;
  withdrawal of the ordinary shares underlying their Restricted ADSs as described generally in “ Description of the ADSs Deposit, Withdrawal and Cancellation” below;
 Restricted ADSs will carry a transfer restrictions legend; and   Restricted ADSs generally may be held in book–entry form.
 Description of the ADSs
 AngloGold Ashanti ordinary shares (or the right to receive AngloGold Ashanti ordinary shares) are deposited with The Bank of New York’s custodians in South Africa: The Standard Bank of South Africa Limited, Société Générale South Africa Limited, FirstRand Bank Limited, National Australia Bank Limited and Australia and New Zealand Banking Group Limited (each, a “custodian”). Each ADS also represents securities, cash or other property deposited with The Bank of New York but not distributed to AngloGold Ashanti’s ADS holders. The Bank of New York’s Corporate Trust Office is located at 101 Barclay Street, New York, NY 10286. The principal executive office of The Bank of New York is located at One Wall Street, New York, NY 10286. The Bank of New York, as the depositary in respect of the ADSs, issued new ADSs following the completion of the Business Combination with Ashanti.
 ADSs may be held either directly or indirectly through a broker or other financial institution. If ADSs are held indirectly, suchholders must rely on the procedures of their broker or other financial institution to assert the rights of ADS holders described in this section and should consult with their broker or financial institution in this regard.
 The Bank of New York is the actual holder of the AngloGold Ashanti ordinary shares, and therefore holders of ADSs may, in certain circumstances, not be treated by AngloGold Ashanti as shareholders of AngloGold Ashanti. The rights of ADS holders and the rights of and obligations of The Bank of New York as depositary are set out in the Deposit Agreements among The Bank of New York, the registered holders and beneficial owners of ADSs, and AngloGold Ashanti. The Deposit Agreements and the ADSs are generally governed by the laws of the State of New York.


Dividends and Other Distributions
 The Bank of New York 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 ordinaryshares that their ADSs represent.
 Cash
 The Bank of New York 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 basisand 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.
 In accordance with the Deposit Agreements, The Bank of New York, via its appointed South African bank, will convert the South African rand it receives from AngloGold Ashanti to US dollars and distribute dividends in US dollars to registered holdersof 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 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 may hold the non-US currency it cannot convert for the account of holders of ADSs who have not been paid, unless a holder of ADSs requests in writing to receive the non-US currency distribution. 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 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 cannot convert the non-US currency, holders of ADSs may lose some or all of the value of the distribution.
 Ordinary shares
 The Bank of New York 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 does not distribute additional ADSs, the outstanding ADSs will also represent the newly distributed AngloGold Ashanti ordinary shares. The Bank of New York 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 asit distributes cash.
 Rights to subscribe for additional ordinary shares
 If 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, 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 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 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 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 may deliver ADSs which are "restricted securities" within the meaning of Rule 144 (including Restricted ADSs, as defined herein) 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 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 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.
 The Bank of New York is not responsible if it decides that it is unlawful or impractical to make a distribution available to anyADS 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 thedistribution of ADSs, AngloGold Ashanti ordinary shares, rights or anything else to ADS holders. This means that the holders ofADSs 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 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 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’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 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 ofNew York will deliver the deposited securities at its Corporate Trust Office.
 Any deposit of ordinary shares into the Restricted ADS Facility, including a deposit upon conversion of the Convertible Bonds, must be accompanied by a written certificate and agreement by or on behalf of the person who will be the beneficial owner of the Restricted ADSs to be issued upon deposit of such ordinary shares to the effect that each such beneficial owner: (i) understands that the ordinary shares and the Restricted ADSs have not been and will not be registered under the Securities Act, (ii) is not an affiliate of AngloGold Ashanti or a person acting on behalf of such an affiliate, (iii) is a QIB and will be the beneficial owner of such Restricted ADSs upon the issuance thereof and (iv) agrees not to offer, sell, pledge or otherwise transfer such ordinary shares, such Restricted ADSs or the Restricted ADRs evidencing such Restricted ADSs except: (a)(1) to a person who the beneficial owner reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (2) in an offshore transaction meeting the requirements of Regulation S, (3) pursuant to the exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (4) pursuant to an effective registration statement under the Securities Act and (b) in accordance with all applicable securities laws of the United States.
 Holders of Restricted ADSs are subject to further requirements as to certification of their status upon surrender of RestrictedADSs for the purpose of withdrawing the underlying ordinary shares. Those holders must deliver a written certificate and agreement by or on behalf of the person surrendering such Restricted ADSs who, after withdrawal, will be the beneficial owner of the ordinary shares to be withdrawn, acknowledging that the ordinary shares underlying the Restricted ADSs have not been registered under the Securities Act, certifying as to whether or not those ordinary shares will remain restricted upon withdrawal and, in the case of ordinary shares that will remain restricted, agreeing: (a) not to offer, sell, pledge or otherwise transfer such ordinary shares except in a transaction that complies with the applicable transfer restrictions and (b) not to deposit or cause to be deposited such ordinary shares into any unrestricted depositary receipt facility established or maintained by a depositary bank (including another facility maintained by The Bank of New York) unless the ordinary shares are no longer deemed to be restricted securities within the meaning of Rule 44(a)(3) under the Securities Act.
 Voting Rights
 Holders of ADSs may instruct The Bank of New York to vote the ordinary shares underlying their ADSs, but only if AngloGold Ashanti asks, in writing, The Bank of New York to request their instruction. Otherwise, holders of ADSs will not be able to exercise their right to vote unless they withdraw the AngloGold Ashanti ordinary shares.  However, the holders of ADSs may not know about the meeting enough in advance to withdraw the ordinary shares.


If AngloGold Ashanti asks for the instructions of holders of ADSs, The Bank of New York will notify them of the upcoming vote and arrange to deliver AngloGold Ashanti voting materials to them.  The materials will (1) describe the matters to be voted on and (2) explain how holders of ADSs, on or before a certain date, may instruct The Bank of New York to vote the ordinary shares or other deposited securities underlying their ADSs as they direct. For instructions to be valid, The Bank of New York must receive them on or before the date specified.
 The Bank of New York 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 will only vote or attempt to vote as such holders of ADSs instruct.
 However, if and to the extent that The Bank of New York does not receive their voting instructions, it will give a proxy to votethe relevant ordinary shares to a person designated by AngloGold Ashanti, unless AngloGold Ashanti does not wish the proxy to be given, or substantial opposition exists, or the issue at hand materially and adversely affects the rights of holders of ordinary shares.
 AngloGold Ashanti cannot assure the holders of ADSs that they will receive the voting materials in time for them to instruct TheBank of New York to vote their ordinary shares.  In addition, The Bank of New York 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 ADSsmay 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
 AngloGold Ashanti 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
    Transfer and registration of AngloGold Ashanti ordinary shares on the AngloGold Ashanti share register to or from the name of The Bank of New York or its agent when AngloGold Ashanti ordinary shares are deposited or withdrawn
 AngloGold Ashanti ADS holders must pay:
 For
    Taxes and other governmental charges The Bank of New York 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 to ADS holders
  * With respect only to the initial issuance of Unrestricted and Restricted ADSs issued upon conversion of the Convertible
 Bonds, AngloGold Ashanti will pay the applicable issuance fee of $5.00 (or less) per 100 ADSs.


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 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 toholders 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, mergers, 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 will become deposited securities.  Each ADS will automatically represent its equal share of the new deposited securities.
 The Bank of New York may, and will if AngloGold 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 Termination
 AngloGold Ashanti may agree with The Bank of New York 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 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 may terminate the Deposit Agreements 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 may also terminate the Deposit Agreement if The Bank of New York 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 must notify holders of AngloGold Ashanti ADSs at least 30 days before termination.
 After termination, The Bank of New York 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 ordinaryshares and other deposited securities.  One year after the date of termination or later, The Bank of New York 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 isholding 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’s only obligations will be to account for theproceeds 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.


Limitations on Obligations and Liability to ADS Holders
 The Deposit Agreements expressly limit AngloGold Ashanti’s obligations and the obligations of The Bank of New York, and they limit AngloGold Ashanti’s liability and the liability of The Bank of New York.  AngloGold Ashanti and The Bank of New York:
 ·
 are only obligated to take the actions specifically set forth in the applicable Deposit Agreement without negligence or bad faith;
 ·
 are not liable if either of AngloGold Ashanti or The Bank of New York is prevented or delayed by law or circumstances beyond AngloGold Ashanti’s control from performing AngloGold Ashanti’s obligations under the applicable Deposit Agreement;
 ·
 are not liable if either of AngloGold Ashanti or The Bank of New York exercises discretion permitted under the applicable Deposit Agreement;
 ·
 have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the agreement on behalf of the holders of ADS holders 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 Agreements, AngloGold Ashanti and The Bank of New York agree to indemnify each other under certain circumstances.
 Requirements for Depositary Action
 Before The Bank of New York 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 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 agreement, including presentation of transfer documents.
 The Bank of New York may refuse to deliver, transfer or register transfers of ADSs generally when the books of The Bank of New York or AngloGold Ashanti’s books are closed, or at any time if either AngloGold Ashanti or The Bank of New York thinks it advisable to do so.
 Holders of Unrestricted ADSs have the right to cancel their ADSs and withdraw the underlying ordinary shares at any time except:
 ·
 when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York 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 may deliver ADSs before deposit of the underlying ordinary shares.  This is called a pre-release of the ADS.


The Bank of New York 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. The Bank of New York 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 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 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, 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 considers appropriate; and
 ·
 The Bank of New York 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 deems appropriate. The Bank of New York 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 may disregard this limit from time to time, if it thinks it is appropriate to do so.
 Shareholders’ meetings
 The 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 meetingof 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 members’ meeting (other than a meeting at which a special resolution will be passed) consists of three members present personally, or if the member is 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 members’ meeting convened for the purpose of passing a special resolution consists of members holding at least 25 percent of the total member votes and present in person or by proxy. If the meeting is not quorate, it will be adjourned to a date between seven and 21 days after the adjourned meeting, and the members present at the second meeting shall 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 members 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 members are entitled.
  Disclosure of Interest in Shares
 Under 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 onwhose 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 Shareholders
 Majority 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.
 Golden Share
 Under 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.
    (ii) the voluntary winding-up or voluntary liquidation of AngloGold Ashanti (Ghana) Limited; (iii) the redemption of or purchase by AngloGold Ashanti of the Golden Share; (iv) the disposal of any mining lease held by AngloGold Ashanti (Ghana) Limited or any subsidiary of AngloGold Ashanti
   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 toany 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
 AngloGold and the Government of Ghana agreed the terms of a Stability Agreement, approved by the parliament of Ghana on February 18, 2004, (as amended) to govern certain aspects of the fiscal and regulatory framework under which AngloGold Ashanti will operate in Ghana following the implementation of the Business Combination with Ashanti.
 On March 23, 2006 the company entered into a Registration Rights Agreement with Anglo South Africa Capital (Proprietary) Limited (Anglo South Africa) under which the company has agreed to file U.S. registration statements for Anglo South Africa’s offer and sale of shares it holds in the company (each a Demand Registration) if Anglo South Africa requests the company to do so. The company is required to use all reasonable efforts to file a Demand Registration within 30 days after such a request and to keep it effective for 90 days unless the shares offered pursuant to it are sold earlier. Further, the company may not offer,sell, allot or issue any shares or other securities that are convertible into or exchangeable for, or that represent the right toreceive, shares, whether pursuant to U.S. registration or otherwise, for a 90-day period immediately following the first closing of an offering pursuant to a Demand Registration or a shorter period as may be imposed by underwriters in the Demand Registration; except: (i) in consideration for shares or assets of a company as part of a merger, acquisition, corporate reorganization or similar transaction, (ii) as required pursuant to the terms governing the 2.375 percent guaranteed convertiblebonds due 2009, issued by AngloGold Holdings plc and guaranteed by the company, and (iii) in connection with any option, employee bonus, profit sharing, pension, retirement, incentive, savings or similar plan, agreement or award. The Registration Rights Agreement may be terminated at any time by written consent by each of the parties thereto. The Registration Rights Agreement shall terminate automatically on the first date on which Anglo South Africa is no longer an “affiliate” within the meaning of Rule 144 under the United States Securities Act of 1933, as amended.
 AngloGold Ashanti is not party to any further material contracts other than contracts entered into in the ordinary course of business.
 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, 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 exchangecontrol 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.
  Investments in South African companies
 A foreign investor may invest freely in ordinary shares in a South African company. Any foreign investor may also sell shares ina 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 anon-South African company or when the acquisition is financed by a loan from a South African lender.


Dividends
 Dividends declared to foreign stockholders are not subject to the approval by the South African Reserve Bank (SARB). Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by publicly listed companies.
 Interest
  Voting rights
 There 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 Securities Exchange 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 taxation
 The 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 taxto 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 shall 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 inSouth Africa, and the dividends are attributable to such permanent establishment or fixed base.
 On February 21, 2007, the South African Minister of Finance, Mr Trevor Manuel, delivered his 2007 Budget Speech in which he stated that the STC currently levied at 12.5 percent will be replaced by a withholding tax on shareholders in respect of dividends distributed at a rate of 10 percent. This change is being implemented in two phases. On October 1, 2007 the STC rate reduced from 12.5 percent to 10 percent and in 2009 STC will be phased out and replaced by the 10 percent withholding tax.
 The draft legislation giving effect to the first phase has been published, and AngloGold Ashanti’s marginal tax rate for its South African mining operations is being reduced from 45 percent to 43 percent and the tax rate on its non-mining income from 38 percent to 37 percent.  These changes will be effective from 2008 tax year which begins on January 1, 2008.
 In the second phase, (expected to take place in 2009), 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 2009.  As stated above, the effect of this change will not materially affect the after tax dividend received by non-resident shareholdersand 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. Incontrast, 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 througha permanent establishment situated therein.


United States taxation
 The 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 ormore 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 ofthe United States for US federal income tax purposes; (b) a corporation (or other entity taxable as a corporation for US federalincome tax purposes) created or organized in or under the laws of the United States or any state thereof (including the Districtof 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 phased in during 2008 and 2009. See ‘Taxation – South African Taxation – Taxation of dividends’. Once the dividend withholding tax becomes effective, US holders who are eligible for benefits under thecurrent 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, regardless of whether the foreign currency is converted intoUS 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 currencyreceived 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 convertedinto US dollars by the depositary upon its receipt. Accordingly, a US holder of ADSs generally will not be required to recognizeforeign 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 rateof 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 morethan one country.
 In general, upon a sale, exchange or other disposition of shares, a US holder will recognize capital gain or loss for US federalincome 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 issubject to significant limitations.


Passive foreign investment company considerations
 A 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 orroyalties 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 thetaxable year ended December 31, 2007 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 saleor 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 withholding
 Dividend 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 notapply 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 refundof 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 agents
  10G.  Statement by experts
  10H.  Documents on display
 The documents referred to in this report can be read at the US Securities and Exchange Commission’s public reference facilities at Room 1580, 100 F Street, N.E., Washington, D.C. 20549.
 10I. Subsidiary
 information


Item 11: Quantitative and qualitative disclosures about market risk
 Treasury Policy
 The 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 hedging instruments, treatment of the instruments in the treasury system, reporting on the instruments and the accounting treatment for such instruments.
  ·
 Safeguarding the group core earnings stream from its major assets through the effective control and management of gold price risk, foreign exchange risk and interest rate risk;
 ·
 Effective and efficient usage of credit facilities in both the short and long term through the adoption of reliable liquidity planning and procedures;
 ·
  ·
 Ensuring that all contracts and agreements related to risk management activities are coordinated, 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.
    
     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 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 andrisk 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 company’s treasury system.
 Gold price and currency risk management activities
 The group enters into derivatives to ensure a degree of price certainty and to guarantee a 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 risks that arise out of the group’s core business activities. Forward purchase and sale contracts andpurchased or sold call and put options are used by the group to manage its exposure to gold price and currency fluctuations. Gold and currency hedging instruments are denominated in South African rands, US dollars, Brazilian real and Australian dollars.
 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 would benefit by the same quantity as the option loss by selling production in the open market.


The mix of hedging 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 of up to ten years with counterparts.
 Forward sale contracts establish the price of future gold sales at a specified price. A number of these contracts are intended byAngloGold Ashanti for delivery against production in a future period. The volume of net outstanding forward sales contracts at the end of 2007 was 108,403 kg compared with 122,133 kg at the end of 2006.
 SFAS133 requires that derivative instruments be accounted for as follows: •   
  Commodity based (“normal purchase or normal sale exempt”) contracts that meet the requirements of SFAS138, 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.
 
 value as either a derivative asset or derivative liability. For cash flow hedges the effective portion of changes in fair value of the hedging instrument are recognized in equity (other comprehensive income) until the underlying transaction occurs, then the gains or losses are recognized in product sales. The ineffective portion of changes in fair value is reported in earnings as gains or losses on derivatives in the period in which they occur.  The ineffective portion of matured and existing cash flow hedges recognized in losses on non-hedge derivatives in the income statement during the year was $10 million (2006: $nil). Of the contracts accounted for as cash flow hedges, contracts with a carrying value of $194 million, a liability at December 31, 2007, are expected to be reclassified from other comprehensive income and recognized as a reduction in product sales during 2008.
 
  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 for all periods presented.  Contracts that contain ‘off-market’ terms thatresult 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 within the financing activities section of theconsolidated cash flow statement.  Contracts that contain ‘off-market’ terms that result in the outflow of cash at inception areanalogous to lending activities and, as such, are treated as investing activities. All current and future cash flows associatedwith such instruments are classified within the investing activities of the consolidated cash flow statement.
 The table below indicates AngloGold Ashanti’s total gold hedge position at a weighted average settlement price as at December 31, 2007. The total net delta tonnage of the hedge on this date was 10.39 million ounces (323 tonnes) (December 31, 2006: 10.16 million ounces, 316 tonnes).
 The marked-to-market value of all hedge transactions making up the hedge positions was a liability of $4,273 billion as at December 31, 2007 (as at December 31, 2006: a liability of $2.903 billion). These values were based on a gold price of $836.30 per ounce, exchange rates of R/$6.8104 and A$/$0.8798 and the prevailing market interest rates and volatilities at the time.  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.


204
 
 Year  2008  2009  2010  2011  2012
 2013-2015  Total
 DOLLAR GOLD
                                                                                                RAND GOLD
                                             AUD DOLLAR GOLD
                                                                                           
  Hedge delta as a percentage of current production levels (%)  ***
 
 *
 Indicates a long position from forward purchase contracts.  The Company enters into forward purchase contacts as part of its strategy to manage and reduce the size of the hedge book.
 **
 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, 2007.
 ***  Percentage based on 2007 full year production of 5,477,000 ounces.
 At December 31, 2007 the company had 11.3 million committed ounces or 351t (2006: 11.6Moz or 361t).
 Gold lease rate swaps
 Year
 2008  2009  2010  2011
 2012
 -
 2015
 Amount (‘000oz)
 
   Gold borrowing cost associated with forward contracts
 (1)
 Interest rate %
 
   Amount (‘000oz)
 
   (2)
 Interest rate %
 
  (1)  Gold borrowing costs relating to Australian dollar gold forwards:
 The Australian dollar denominated gold forward contract prices are shown 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 shown 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 at the financial statement date.  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 statement.
 (2)  The gold lease rate swaps are contracts where the company receives a fixed percentage of the outstanding amount in gold and pays a floating market
 determined percentage in gold, quarterly in arrears.  The amount shown in the table above is the number of ounces outstanding at the beginning of each period.  The interest rate shown is the weighted average fixed rate that the company will receive for that period.


205
 Year
 2008
 2009
 2010
 2011
 2012
 2013-2015
 Total
 DOLLAR SILVERPut options purchased
                                 As at December 31, 2007 certain of the hedging positions reported in the above tables were governed by early termination options in favor of certain counterparts.  No termination clauses were exercised early.
 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.
 The following table indicates the group’s currency hedge position at December 31, 2007.
 Year
 2008
 2009
 2010
 2011
 2012
 2013-2015
 Total
 RAND DOLLAR (000)Forward contracts
                                        AUD DOLLAR (000)Forward contracts
                                        BRAZILIAN REAL DOLLAR (000)Forward contracts
                              For a more detailed presentation of the investment maturity profile, borrowings maturity profile and interest rate risk profile of these agreements, see note 26 to the consolidated financial statements “Financial risk management activities”.


Credit risk
 Realization of all these contracts is dependent upon the counterparts performing in accordance with the terms of the contracts.AngloGold Ashanti generally does not obtain collateral or other security to support financial instruments subject to credit risk,but monitors the credit standing of counterparts. AngloGold Ashanti spreads its business over a number of predominantly international, credit worthy counterparts and believes that no concentration of credit risk exists. Limits for each counterpart are based on the assessed credit quality of each counterpart. The Treasury Committee makes recommendations for board approval of all counterparts and the limits to be applied against each counterpart. Where possible, management tries to ensure that netting agreements are in place.
  The combined maximum credit exposure at the balance sheet date amounts to $516 million on a contract by contract basis. Credit risk exposure netted by counterpart amounts to $123 million. No set-off is applied to the balance sheet due to the different maturity profiles of assets and liabilities.
 Interest rate and liquidity risk
 Fluctuations in interest rates impact interest paid and interest 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.
  Number of Counterparts
 Type
 Credit Rating (Fitch)


207
 Fair value
 The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. In certain cases, these estimates involve uncertainties and cannot be determined with precision. The estimated fairvalues of AngloGold Ashanti’s financial instruments at December 31, 2007 and 2006, are as follows (assets (liabilities)):
 
 December 31, 2007
 
 December 31, 2006
 
 Carrying amount
 
 Fair value
 
 Carrying amount
 
 Fair value
 (in millions)
 $
 
 $
 
 $
 
 $
  (1)
        (1)
         (2)
      (2)
      (3) (5)
                    (4)
   (4)
                             (1)
 The carrying amounts approximate fair value because of the short-term duration of these instruments.
 (2)
 Fair value reflects the net present value of the future cash flows, discounted at the prevailing market rate.  The fair value of listed fixed rate debt and the Convertible Bonds are shown at their market value. The remainder of debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
 (3)
 The fair value of the above instruments is calculated based on market prices, volatilities and interest rates, as at December 31, 2007 and 2006.  Fair value includes off balance sheet normal purchase and sale exempted contracts.
 (4)
 Includes deliverable call options sold.  A deliverable option is an option in terms of which the delivery quantity is fixed regardless of the market price on the exercise date.  In the event that the market price is lower than the strike price, gold is sold to the counterpart at the ruling spot price.
 (5)
 Carrying amount represents derivatives on the balance sheet at each respective date.
 Sensitivity analysis
 The following table shows the approximate sensitivities of the $ marked-to-market value of the hedge book at December 31, 2007 (actual changes in the timing and amount of the following variables may differ from the assumed changes below):
 Sensitivity analysis
 Change in
 Rate(+)
 Change in Fair
 value
 (1)
 Change in Rate
 (-)
 Change in Fair
 value
 (1)
 Currency (R/$)
 1
 (34.43)
 1
 28.91
 
 Currency (A$/$)
 0.05
 35.22
 
 0.05
 (40.83)
 Currency (BRL/$)
 0.10  (3.76)  0.10  3.74
 
 Gold price ($/oz)
 10
 (102.71)
 10
 102.04
 
 US Interest Rate (%)
 0.1
 (10.27)
 0.10
 10.29
 
 ZAR Interest Rate (%)
 0.1
 (0.31)
 0.10
 0.31
 
 Aus Interest Rate (%)
 0.1
 (0.23)
 0.10
 0.23
 
 Gold Interest Rate (%)
 0.1
 21.76
 0.10
 (21.88)
 (1)
 In $ million.


Hedge levels
  A summary of the hedge position as at December 31, 2005, 2006 and 2007 is as follows. The “years of production hedged” is calculated as the hedge net delta position at year-end divided by the annual production for that year.
 As at December 31,
 Hedge Net Delta
 kg’s
 (1)
 Annual Production for
 Year
 kg’s
 (1)
 Years of Production
 Hedged
          (1)
 Includes equity accounted joint ventures.
 On May 6, 2008, AngloGold Ashanti announced its intention to reduce its hedge position.  See “Item 5.: Recent Developments”.


Item 12: Description of securities other than equity securities


PART II
 Item 13: Defaults, dividend arrearages and delinquencies


211
 Item 14: Material modifications to the rights of security holders and use of proceeds
 None.


Item 15: Controls and procedures
 Management certification
 (a) Disclosure Controls and Procedures:
 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 December 31, 2007, 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:
 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 U.S. generally accepted accounting principles. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
  ·
 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 December 31, 2007. 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, and hereby reports that the company’s internal control over financial reporting was effective as of December 31, 2007.
 (c)  Changes in Internal Control over Financial Reporting:
 financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a – 15 during the year ended December 31, 2007 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:
 Young, has issued an audit report on the effectiveness of our internal control over financial reporting.  This report appears below.
       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, 2007, 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 reportingincluded 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 designand 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 reportingas of December 31, 2007, based on the COSO criteria.
 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2007 consolidated financial statements of AngloGold Ashanti Limited and our report dated May 16, 2008 expressed an unqualified opinion thereon.
 Ernst & Young Inc. Johannesburg Republic of South Africa  May 16, 2008


ITEM 16A: Audit committee financial expert
 Prof Wiseman Nkuhlu, Chairman of the audit committee, has been determined by our board to be an audit committee financial expert within the meaning of the Sarbanes-Oxley Act, in accordance with the Rules of the NYSE and the SEC.   Prof
   (being Mr FB Arisman, Mrs Bradley, Mr RP Edey and Mr JH Mensah) are independent directors. All 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.
 ITEM 16B: Code of ethics
 In order to comply with the company’s obligations in terms of the Sarbanes-Oxley Act and the King Code, 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 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 assessing the integrity of new appointees in the selection and promotion process, adherence to the policy on the delegation of authority, induction of directors and employees on the company’s values, policies and procedures and compliance with a strict disciplinary code of conduct.  All reports made in terms of the whistle-blowing policy are fielded by a third party, Tip-Offs Anonymous, which ensures all reports are treated confidentially or anonymously depending on the preference of the caller. The information is relayed to management and to internal audit for investigation. All reports and theprogress of the investigations are conveyed to the audit and corporate governance committee by the group internal audit manager on a quarterly basis.
 In addition, the company has adopted a Disclosures Policy, the object 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.
  www.AngloGoldAshanti.com
 under About > Corporate Governance > Guidelines. 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 has served as AngloGold Ashanti’s independent public accountants for each of the financial years in the three-year period ended December 31, 2007 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 to AngloGold Ashanti in 2007 and 2006.
 (in millions)
 2007
 $
 2006
 $
 Audit Fees
 (1)
 7.73                                    
  9.29
 Audit-related Fees
 (2)
 0.80                                    
  0.88
 Tax Fees
 (3)
 0.05                                    
  0.06
 All Other Fees
 -                                         
  -
 Total
 8.58                                  
  10.23
 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 2007 and 2006, are fees paid to the external auditors in respect of SOX compliance.
 (2)  Audit-related Fees consist of fees billed for assurance and related services and include consultations concerning financial accounting and reporting standards;
 and comfort letters; and consents.
 (3)  Tax Fees include fees billed for tax advice and tax compliance services.


Audit 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 granting work to the Company’s external auditor. Non-audit services may not be acquired 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 committee has delegated the approval authority to the chairman of the Audit and Corporate Governance Committee, Prof Wiseman Nkuhlu or his designated official. The approval may take the form of a written or verbal response, and in the case of a verbal instruction these would be ratified at the next audit committee meeting. On a quarterly basis a summary of allapprovals and work to date is tabled at the audit committee.
 During 2007, no services were provided to AngloGold Ashanti by Ernst & Young in respect of Audit-related Fees (in the form of tax fees) paid pursuant to the de minimis exception to the pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
 No work was performed by persons other than the principal accountant’s employees on the principal accountant’s engagement to audit AngloGold Ashanti’s financial statements for 2007.
 ITEM 16D: Exemptions from the listing standards for audit committees
  ITEM 16E: Purchases of equity securities by the issuer and affiliated purchasers


PART III
 Item 17: Financial statements


Item 18: Financial statements


Report of the 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, 2007 and 2006 and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2007. 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 38 percent interest, have been audited by other auditors for the years ended December 31, 2006 and 2005 and for the periods 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 theconsolidated financial statements, the Company’s investment in Sadiola is stated at $66 million and $67 million, respectively, at December 31, 2006 and 2005, and the Company’s equity in net income is stated at $33 million and $8 million for each of the two years in the period ended December 31, 2006.
 The financial statements of Société d'Exploitation des Mines d'Or de Yatela S.A. (“Yatela”), a corporation in which the Company has a 40 percent interest, have been audited by other auditors for the year ended December 31, 2006 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 Yatela, is based solely on the report of the other auditors. In the consolidated financial statements, the Company’s investment in Yatela is stated at $26 million at December 31, 2006, and the Company’s equity in net income is stated at $34 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, 2005 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, prior to restatement, is based solely on the report of the other auditors. In the consolidated financial statements, the Company’s investment in Morila is stated at $89 million at December 31, 2005 and the Company’s equity in net income is stated at $53 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, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007 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, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 16, 2008 expressed an unqualified opinion thereon.
 As discussed in note 2 to the consolidated financial statements, in 2007 the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, and accordingly has evaluated all tax positions and has made sufficient provision and disclosure.


As discussed in Note 2 to the consolidated financial statements, in 2006, the Company changed its method of accounting for stock-based compensation in accordance with SFAS123(R)Share-Based Payment, its method of accounting for deferred stripping costs in accordance with EITF Issue 04-6 Accounting for Stripping Costs Incurred during Production in the Mining Industry, and  its method of considering the effects of prior year misstatements in accordance with SAB 108 Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.
 As discussed in note 2 to the consolidated financial statements, in 2005 the Company changed its method of accounting for employee benefit plans in accordance with SFAS87 Employers' Accounting for Pensions and SFAS106 Employers' Accounting for Postretirement Benefits Other Than Pensions, and in 2006 in accordance with SFAS158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R).
 Ernst & Young Inc. Registered Auditor
 Johannesburg, Republic of South Africa May 16, 2008


F-1
 ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of income
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 and 2005
 (In millions, except share and per share information)
 Notes
 2007
 $
 2006
 $
 2005
 $
 Sales and other income
       
 
 
 
 
 
               
 
 
 
 
 
 Costs and expenses
       
 
 
 
 
 
                                                                                                          
 
 
 
 
 
 Loss from continuing operations before income tax, equity income, minority interests and cumulative effect of accounting change
    
 
 
 
 
 
        
 
 
 
 
 
     
 
 
 
 
 
        
 
 
 
 
 
 Loss from continuing operations before cumulative effect of accounting change
    
 
 
 
 
 
        
 
 
 
 
 
 Loss before cumulative effect of accounting change
    
 
 
 
 
 
        
 
 
 
 
 
 Net loss – applicable to common stakeholders
    
 
 
 
 
 
 (Loss)/earnings per share : (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.


F-2
 ANGLOGOLD ASHANTI LIMITED
 Consolidated balance sheets
 AT DECEMBER 31, 2007 and 2006
 (In millions, except share information)
 Notes
 2007
 $
 2006
 $
 ASSETSCurrent 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 STOCKHOLDERS’ EQUITY Current liabilities
                                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
    Minority interest
   Commitments and contingencies
    Stockholders’ equity
    Common stock400,000,000 (2006 – 400,000,000) authorized common stock of 25 ZAR cents each
                 Total liabilities and stockholders’ equity
   The accompanying notes are an integral part of these Consolidated Financial Statements.


F-3
 ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of cash flows
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 and 2005
 (In millions, except share information)
 Notes
 2007
 $
 2006
 $
 2005
 $
 Net cash provided by operating activities
       
 
 
 
 
 
 
                      Loss/(profit) on sale of assets, realization of loans, indirect taxes and other
                              
                                    Net increase/(decrease) in provision for environmental rehabilitation and pension and other post-retirement medical benefits
      
 
 
 
 
 
 
                                          
 
 
 
 
 
 
 Net cash used in investing activities
     
 
 
 
 
 
 
                                                                              
 
 
 
 
 
 
 Net cash generated by financing activities
       
 
 
 
 
 
 
                                                    
 
 
 
 
 
 
 Net (decrease)/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.


ANGLOGOLD ASHANTI LIMITED
 Consolidated statements of stockholders’ equity
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 and 2005
 (In millions, except share information)
 Common stock
 Common
 stock
 $
 Additional paid
 in capital
 $
 Accumulated other
 comprehensive income*
 $
 Accumulated
 deficit
 $
 Total
 $
 Balance – January 1, 2005
                                        Balance – December 31, 2005
        
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
                      
  
 
 
 
 
      
 
 
 
 
         Balance – December 31, 2006
       F-4
 
 
 
                           
 
 
 
 
 
 
 
 
 
 
 
                         Balance – December 31, 2007
       *  The cumulative translation loss included in accumulated other comprehensive income amounted to $488 million (2006: $581 million).  The translation loss has no tax effect.  The cumulative charge, net of deferred taxation of
 $96 million (2006: $96 million), included in accumulated other comprehensive income in respect of cash flow hedges amounted to $216 million (2006: $260 million).  The cumulative gain, net of deferred taxation of $2 million (2006: $1 million), included in accumulated other comprehensive income in respect of available for sale financial assets amounted to $15 million (2006: $12 million).   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 (2006: $64 million).  This gain is offset by $64 million (2006: $64 million) arising from translation of a net investment in foreign entities.
 As at December 31, 2007 and 2006, $402 million and $286 million, respectively, of retained earnings arising from the Company’s equity accounted joint ventures and certain subsidiaries may not be remitted without third-party shareholder consent.
 The accompanying notes are an integral part of these Consolidated Financial Statements.


ANGLOGOLD ASHANTI LIMITED
 Notes to the consolidated financial statements
 FOR THE YEARS ENDED DECEMBER 31, 2007, 2006 and 2005
   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 Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania and the United States of America (USA).  The Company also produces uranium oxide and sulphuric acid.
  ACCOUNTING CHANGES
 Uncertain taxes
 The Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) on January 1, 2007.
 As at January 1, 2007, the Company had $84 million of total gross unrecognized tax benefits and the Company recorded an opening adjustment of $25 million against opening retained income as a result of adopting FIN 48 on January 1, 2007.
 The Company operates in numerous countries around the world and accordingly is subject to, and pays annual income taxes in terms of the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with local government and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic income tax filings.  In connection with such reviews disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company's business conducted within the country involved.  Refer to Note 7.
 Stock Based Compensation
 At December 31, 2007, the Company has five stock-based employee compensation plans consisting of time-based awards, performance related awards and equity settled compensation plans, which are described in Note 30 the “AngloGold Limited Share Incentive Scheme and Plans”. Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees, and Related Interpretations”, as permitted by SFAS123, “Accounting for Stock-Based Compensation”.
 Deferred Stripping Costs
 On January 1, 2006, the Company adopted Emerging Issues Task Force (“EITF”) Issue 04-6, “Accounting for Stripping Costs in the Mining Industry”. Issue No. 04-6 addresses the accounting for stripping costs incurred during the production phase of a mine and that post production stripping costs should be 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 would be appropriate only to the extent inventory exists at the end of a reporting period.
 Prior to January 1, 2006, stripping costs incurred in open-pit operations during the production phase to remove additional waste were charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne and resulted in capitalization of such stripping costs (deferred stripping) as part of mining assets.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)2.
 ACCOUNTING CHANGES (continued)
 As at December 31,
 (in millions)
 2006
 $
 2005
 $
 
 
 
 Movements in the deferred stripping costs balance were as follows:
 
 
 
 
 
 
 Opening balance
 105
 
 69
 Cumulative effect adjustment
 (105)
 -
 Net amount deferred
 -
 
 28
 Translation
 -
 
 8
 Closing balance
 -
 
 105
 Production costs for the year ended December 31, 2005 as disclosed in the consolidated statements of income, would have increased by $28 million if stripping costs were expensed rather than capitalized in this period.
 Total stripping costs (net of amortization) included in production costs in the consolidated statements of income for the period ended December 31, 2005  amounted to $203 million.
 Total stripping costs included in production costs in the consolidated statements of income for the year ended December 31, 2007 and 2006 amounts to $284 million and $227 million, respectively.
 Cut-off adjustments
 In prior years certain subsidiaries within the Company have consistently determined the year end close process in respect of certain operating costs at dates immediately preceding the Christmas vacation period. Historically, management concluded that any resulting adjustment was immaterial to operating results as all entities had twelve reporting periods and used the same cut-off dates from year to year.
 The above errors arose as a combination of the cut-off process being linked to the mine production cycle as well as utilizing a date not aligned to December 31 each year, although the same dates were utilized from year to year.
 On September 13, 2006, the SEC staff published Staff Accounting Bulletin (SAB) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 (SAB Topic 1.N) addresses quantifying the financial statement effects of misstatements, specifically, how the effects of prior year uncorrected errors must be considered in quantifying misstatements in the current year financial statements.
 As part of the 2006 year end financial statement close process the Company quantified the balance sheet impact and determined that it would only have a material effect in the reporting of “Payroll and related benefits”, which is separately identified on the face of the balance sheet for all years presented. The other accounts that were affected are Tangible Assets – Mine development costs; Inventories – Gold in process; Deferred taxation; Cash and cash equivalents; Trade accounts payable and Payroll and related benefits.
 The Company previously considered the above errors to be immaterial under the rollover method and evaluated the misstatement against the current year financial statements under both the rollover and iron curtain methods.
 In accordance with the transition provisions provided in SAB 108 the cumulative effect of applying SAB 108 as an adjustment to opening retained earnings is summarized below:
 (in millions)
 $
 AssetsTangible Assets – Mine development costs
 
 
 3  (increase)
 Inventories – Gold in process
 1
  (increase)
 Deferred taxation
 5
  (increase)
 Trade receivables
 5
  (decrease)
 LiabilitiesTrade accounts payable
 3
  (increase)
 Payroll and related benefits
 10
  (increase)
 Other creditors
 2
  (increase)
 Retained earnings
 11
  (decrease)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)2.
 ACCOUNTING CHANGES (continued)
 Employee Benefit Plans
 On September 29, 2006 the FASB issued SFAS158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)”. SFAS158 requires an entity to:
  •  recognize in its statement of financial position an asset for a defined benefit post-retirement plan's overfunded
      status or a liability for a plan's underfunded status;•  measure a defined benefit post-retirement plan's assets and obligations that determine its funded status as of
      the same day of the employer's fiscal year-end statement of financial position;•  recognize as a component of accumulated other comprehensive income, net of tax, amounts accumulated at
      the date of adoption due to delayed recognition of actuarial gains and losses, prior service costs and credits,
      and transition assets and obligations; and•  expand the disclosure requirements of SFAS132(R) to include disclosure of additional information in the notes
      to financial statements about certain effects on net periodic benefit cost in the next fiscal year that arise from
      delayed recognition of actuarial gains or losses, prior service costs or credits and unrecognized transition
      assets and obligations.
 The adoption of the recognition and disclosure requirements of SFAS158 which are effective for fiscal years ending after December 15, 2006, did not have a material impact on the Company’s earnings and financial position as the Company changed its accounting policy during the second quarter of 2005, retroactive to January 1, 2005, with respect to accounting for employee benefit plans to recognize the effects of actuarial gains and losses in income, rather than amortizing over the expected average remaining service period of employees participating in the plan.
 This change was made as the Company believes that elimination of the permitted pension and post-retirement benefit corridor, as allowed by SFAS87 and SFAS106 will result in more accurate financial information.
 The cumulative effect of this change in accounting treatment with respect to actuarial gains and losses recorded in 2005 decreased net income and stockholders’ equity by $22 million (net of taxation of $11 million).
   ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS
 2007 acquisitionsThe Company made the following acquisitions during the year:
 In June 2007, the Company acquired certain assets from Trans-Siberian Gold plc (TSG) as further discussed in this note under 2006 acquisitions “Strategic alliance in Russia with Polymetal and assets acquired from Trans-Siberian Gold plc”.
 •
 Acquisition of minority interests in GhanaAngloGold Ashanti completed the acquisition of the minority 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 Iduapriem and Teberebie mine is now wholly-owned by the Company. The Company is in the process of finalizing the purchase price allocation of fixed assets. The final purchase price allocation is not expected to vary significantly from the preliminary allocation.
 2007 disposalsThe Company’s disposals during the year included:
 •
 Sale of Ergo surface reclamation operationOn 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 Joint Venture. The site is currently being rehabilitated by AngloGold Ashanti. The assets and associated liabilities were sold for R42.8 million (approximately $6 million). The joint venture will operate, for its own account, under the AngloGold Ashanti authorizations until new order mining rights have been obtained and transferred to the joint venture. Refer to Note 8 – Discontinued operations.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)3.
 ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS (continued
 •
 Sale of Mwana Africa plc sharesDuring July 2007, AngloGold Ashanti disposed of its investment of 600,000 shares previously held in Mwana Africa plc for $0.8 million. The shares were acquired pursuant to the sale of AngloGold Ashanti’s entire interest in Ashanti Goldfields Zimbabwe Limited to Mwana Africa Holdings (Proprietary) Limited during 2004.
 2006 acquisitionsThe Company made the following acquisitions during the year:
 •
 Agreement signed with China explorer Dynasty Gold CorporationOn February 27, 2006, AngloGold Ashanti announced that it had signed an agreement with Dynasty Gold Corporation, a Vancouver-based company, with exploration activities in China, to acquire an effective 8.7 percent stake in that company through a purchase of 5.75 million Dynasty units at a price of C$0.40 each.  Each unit consists of one common share and one-half common share purchase warrant exercisable at a price of C$0.60 per unit for two years.
 •
 Agreement with International Tower Hill Mines LimitedOn June 30, 2006, AngloGold Ashanti (U.S.A.) Exploration Inc. (AngloGold Ashanti), International Tower Hill Mines Ltd (ITH) and Talon Gold Alaska, Inc. (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 Alaska mineral exploration properties and associated databases in return for 5,997,295 common shares of ITH stock, representing an approximate 19.99 percent interest in ITH (December 31, 2007: 15.12 percent).  The sales transaction closed on August 4, 2006.  AngloGold Ashanti also granted to ITH the exclusive option to acquire a 60 percent interest in each of its LMS and Terra projects by incurring $3 million of exploration expenditure on each project (total of $6 million) within four years of the grant date of the options.  As part of the two option agreements, AngloGold Ashanti will have the option to increase or dilute its stake in these projects, subject to certain conditions.
 •
 Strategic alliance in Russia with Polymetal and assets acquired from Trans-Siberian Gold plcOn September 21, 2006, AngloGold Ashanti announced that it had entered into a 50:50 strategic alliance with Russian gold and silver producer, OAO Inter-Regional Research and Production Association Polymetal (Polymetal) in terms of which, Polymetal and AngloGold Ashanti would cooperate in exploration, acquisition and development of gold mining opportunities within the Russian Federation. At the same time, AngloGold Ashanti announced that it had submitted an offer to the board of Trans-Siberian Gold plc (TSG) to acquire all of TSG’s interest in its Krasnoyarsk based subsidiaries, OOO GRK Amikan (Amikan) and OOO Artel Staratelei Angarskaya Proizvodstvennaya Kompania (AS APK) for a total consideration of $40 million. In June 2007, the Company concluded the purchase of TSG’s interests in Amikan (which holds the Veduga deposit, related exploration and mining licenses) and AS APK (which holds the Bogunay deposit, related exploration and mining licenses). These companies acquired from TSG by AngloGold Ashanti, together with two greenfields exploration companies held by Polymetal, hold the initial operating assets of the strategic alliance. Of the assets acquired from TSG, assets of $15 million were subsequently classified as held for sale during 2007. Refer to Note 16 – Assets and liabilities held for sale.
 •
 Purchase of Central African Gold Plc (CAG) sharesArising from the sale of Bibiani assets, AngloGold Ashanti decided to apply $3 million of the partial proceeds to an investment of 15,825,902 Central African Gold plc (CAG) shares.  Subsequent to this decision, local regulators required that the shares in CAG be sold within 90 days of December 28, 2006.  On February 14, 2007, the Company disposed of 7,000,000 CAG shares yielding total proceeds of £768,845 ($1.5 million) and during April 2007, disposed of the remaining 8,825,902 CAG shares yielding total proceeds of £894,833 ($1.8 million).
 2006 disposalsThe Company’s disposals during the year included:
 •
 Sale of Western Tanami projectDuring the period October 10 through October 18, 2005, AngloGold Ashanti Australia reduced it shareholding in Tanami Gold to 5 percent, through the sale of 8 million fully paid ordinary shares for a cash consideration of A$1.3 million ($1.0 million) and in February 2006, disposed of the entire investment in Tanami Gold with the sale of 19 million shares for a cash consideration of A$3.9 million ($3.0 million).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)3.
 ACQUISITIONS AND DISPOSALS OF BUSINESSES AND ASSETS (continued
 •
 Sale of BibianiOn August 23, 2006, AngloGold Ashanti announced that it had entered into a conditional agreement with Central African Gold plc (CAG) to sell the assets, related to Bibiani and Bibiani North prospecting permit, including all of Bibiani’s employees, fixed mining and non-mining assets, inventory, trade receivables and intellectual property as well as the Bibiani mining lease and the Bibiani North prospecting license, and procure the cessation and delegation of all contracts related to Bibiani to CAG for a total consideration of $40 million. The conditions precedent to the sale of Bibiani were satisfied effective December 28, 2006. The Bibiani North prospecting license was assigned to CAG on May 17, 2007 by the Ghanaian Land Commission and Registry.
 2005 acquisitionsThe company’s acquisitions during the year included:
 •
 AngloGold Ashanti acquires stake in Trans-Siberian Gold plcOn May 31, 2005 AngloGold Ashanti acquired an additional 12.4 percent interest (6,131,585 ordinary shares) in Trans-Siberian Gold plc (TSG) for an aggregate consideration of £8 million ($15 million) as a second subscription in a transaction involving two subscriptions for ordinary shares. The first tranche of ordinary shares of 17.5 percent was acquired during July 2004. The Company’s aggregate shareholding in TSG at December 31, 2007 was 12,263,170 ordinary shares (29.8 percent interest held, after the dilution of shareholding resulting from an increase in issued share capital).
 •
 Agreement with Red 5 LimitedOn August 26, 2005, AngloGold Ashanti subscribed for additional shares in Red 5 Limited, for a cash consideration of A$0.8 million ($0.6 million), thereby increasing its holding to 14.1 percent from a 12.3 percent stake originally acquired in the expanded issued capital of Red 5 Limited during 2004. On September 18, 2006, AngloGold Ashanti elected to exercise a second Joint Venture option with Red 5 Limited – the Outer Siena Joint Venture, located to the south-east of Boyongan - in terms of which the Company will spend a minimum of A$1.5 million ($1.2 million) in the first year with no interest.  The Company may earn between 52 percent and 58.5 percent interest in two tenements through an additional expenditure of A$4 million ($3 million), with a right to increase its holding by 8 percent to 9 percent through an additional spend of A$5 million ($4 million). As at December 31, 2007, AngloGold Ashanti held a 10.2 percent interest in Red 5 Limited.
 2005 disposalsThe Company’s disposals during the year included:
 •
 Conditional sale of Weltevreden mine in exchange for Aflease sharesOn July 19, 2005, Aflease Gold and Uranium Resources Limited (Aflease) announced that it had purchased from AngloGold Ashanti, its Weltevreden mine. On December 19, 2005, Aflease was acquired by sxr Uranium One Incorporated (formerly Southern Cross Incorporated) (sxr Uranium One). The conditions precedent to the agreement with sxr Uranium One were not fulfilled by the expiry date of December 31, 2007 and a new agreement is being negotiated with Aflease Gold Limited. The Company has separately classified assets and liabilities for Weltevreden presented in the consolidated balance sheet, as held for sale. Refer to Note 16 – Assets and liabilities held for sale.
  SIGNIFICANT ACCOUNTING POLICIES
 Basis of presentation: The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.  The Company presents its consolidated financial statements in United States dollars.  The functional currency of a significant portion of the group’s operations is the South African rand.  Other main subsidiaries have functional currencies of US dollars and Australian dollars.  The translation of amounts into US dollars was in accordance with the provisions of SFAS52, “Foreign Currency Translation”.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Use of estimates:The preparation of the financial statements requires the Company’s management to make estimates and 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 the reporting period. The determination of estimates requires the exercise of judgment based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. The Company regularly reviews estimates and assumptions that affect the annual financial statements, however, actual results could differ from those estimates.
 The more significant areas requiring the use of management estimates and assumptions include mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortization calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments (including impairments of goodwill, long-lived assets, and investments); write-downs of inventory 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 accounting treatment of financial instruments.
 Comparatives:Comparatives have been reclassified, where necessary to comply with the current year’s presentation.
 The following are the accounting policies used by the Company which have been consistently applied except for the adoption of FIN 48, “Accounting for Uncertainty in Income Taxes” on January 1, 2007, the adoption of SFAS123(R), “Share-Based Payment” on January 1, 2006 and the adoption of EITF Issue 04-6, “Accounting for Stripping Costs in the Mining Industry” on January 1, 2006.
 Consolidation
 
  The consolidated financial information includes the financial statements of the Company and its subsidiaries. Where the Company has a direct or indirect controlling interest in an entity through a subsidiary, the entity is classified as a subsidiary.  Interests in incorporated mining joint ventures in which the Company has joint control are accounted for by the equity method and are included in other long-term assets.
  The financial statements of subsidiaries and the Environmental Trust Fund (a rehabilitation trust under the Company’s control) are prepared for the same reporting period as the Company, using the same accounting policies, except for Rand Refinery Limited (a subsidiary of the Company) which reports on a three-month time lag.  Adjustments are made to subsidiary financial results for material transactions and events in the intervening period.
  Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date on which control ceases.
   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 of the parties sharing control.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Investments in equity investees (associates and incorporated joint ventures) (continued
  Investments in associates and incorporated joint ventures are accounted for using the equity method. The initial investment in these entities is recorded at cost.  Post acquisition, the Company’s share of profits or losses of associates and incorporated joint ventures is recognized in the income statement as equity accounted earnings.  The carrying amount of investments in associates and incorporated joint ventures is adjusted to recognize all cumulative post-acquisition movements in the equity of the investment.
  Goodwill relating to associates and incorporated joint ventures is included in the carrying value of the Company’s investment in those entities. 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 share 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 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.
   The results and financial position of all group entities (none of which has the functional currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • equity items other than profit attributable to equity shareholders are translated at the closing rate on each
     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
    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 ruling closing rate at each balance sheet date.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Segment reporting
  A business 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 business segments and are reported on a reporting segment basis using a 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 one product, namely Gold. A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.
 Cash and cash equivalents and restricted cash
 Cash and cash equivalents consist of all 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 for all periods presented.
 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 of the assets 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 other comprehensive income in the period in which they arise.  These amounts are removed from 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 provisions of SFAS115, “Accounting for Certain Investments in Debt and Equity Securities”.
   Inventories
  Inventories, including gold in process, gold on hand (doré/bullion), uranium oxide, sulphuric 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 sulphuric 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 for the stage of completed production. 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES(continued)4.8   
  Inventories(continued)
  The costs of materials currently contained on the leach pad are reported as a separate line item apart from inventory.  As at December 31, 2007, $49 million was classified as short term compared with $46 million as at December 31, 2006 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.  Based on data gathered and analyzed from heap leach pad drilling results, and other studies and analysis completed, short-term 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
 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.
  Prior to January 1, 2006, stripping costs incurred in open-pit operations during the production phase to remove additional waste were charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne.  The average stripping ratio was calculated as the number of tonnes of waste material expected to be removed during the life of mine per tonne of ore mined.  The average life of mine cost per tonne was calculated as the total expected costs to be incurred to mine the orebody divided by the number of tonnes expected to be mined.  The average life of mine stripping ratio and the average life of mine cost per tonne were recalculated annually in the light of additional knowledge and changes in estimates.  The cost of the “excess stripping” was capitalized as mine development costs when the actual mining costs exceed the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonne.  When the actual mining costs were below the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonne, previously capitalized costs were expensed to increase the cost up to the average.  Thus, the cost of stripping in any period was reflective of the average stripping rates for the orebody as a whole.
  Prior to January 1, 2006, capitalized stripping costs were included in the calculations of the impairment tests performed in accordance with the provisions of SFAS144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  The practice of deferring stripping costs, had the effect of amortizing the cost of waste ore removal over the expected life of mine rather than reflecting actual waste ore removal cost incurred in each period presented.  Deferred stripping costs deferred and amortized were included in production costs in the consolidated statements of income for the year ended December 31, 2005.
  On January 1, 2006, the Company adopted EITF Issue 04-6, “Accounting for Stripping Costs in the Mining Industry”. In accordance with the guidance of Issue No. 04-6, 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 are appropriate only to the extent inventory exists at the end of a reporting period.
  The guidance requires application through recognition of a cumulative effect adjustment to opening retained earnings in the period of adoption, with no charge to current earnings for prior periods. The results for prior periods have not been restated. Upon adoption, the cumulative effect of accounting change reduced opening retained earnings by $73 million (net of Taxation), increased the value of inventory by $5 million, eliminated the capitalized deferred stripping balance of $105 million, decreased Deferred taxation by $29 million, reduced Other long-term assets by $3 million and decreased Minority interest by $1 million.  Adoption of the new guidance had no impact on the Company’s cash position or net cash from operations.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Depreciation, depletion and amortization
 Mine development costs, mine plant facilities and other fixed assets
  Mine 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. Cost also includes finance charges capitalized during the construction period where such expenditure is financed by borrowings.
  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 in that area 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 properties
  Acquired properties are carried at amortized cost.  Purchased undeveloped mineral interests are acquired mineral rights and, in accordance with FSP141/142-1, 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.
  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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 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 in respect of subsidiaries is disclosed as goodwill. 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.
  An individual operating mine is not a typical "going-concern" business because of the finite life of its reserves. 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. In accordance with the provisions of SFAS142, 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. Changes in significant assumptions underlying future cash flow estimates may have a material effect on the Company’s financial position and results of operations. 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 reflects the risk-free rate of interest for a term consistent with the period of expected cash flows, adjusted for asset specific and country risks. A low gold price market, if sustained for an extended period of time, may result in asset impairments. In addition, an asset impairment is considered to exist where the net selling price of an asset held for sale is below its carrying amount. Once recognized an impairment loss is never reversed.
 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.
 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 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 in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The Company recognizes potential liabilities and records 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, related to unrecognized tax benefits in income tax expense.
 Asset retirement obligations and rehabilitation costs
  The Company accounts for asset retirement obligations in accordance with Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations (AROs)” (“SFAS143”).
  AROs arise from the acquisition, development, construction and normal 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 asset is amortized over its estimated useful life.  In accordance with the provisions of SFAS143 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 of 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)4.
 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 group becomes a party to the contractual arrangements.  The subsequent measurement of derivative instruments is dealt with below.
 Derivatives
  The Company accounts for derivative contracts in accordance with Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS133") as amended.
  SFAS133 requires all contracts which 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 each period are to be accounted for either in the income statement or in 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 the sale of AngloGold Ashanti’s production into the spot market, and are classified as cash flow hedges under SFAS133.  Where a derivative qualifies as the hedging instrument in a cash flow hedge under SFAS133, changes in fair value of the hedging instruments, to the extent effective, are deferred in other comprehensive income and reclassified to earnings as product sales when the hedged transaction occurs.  The ineffective portion of changes in fair value 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 SFAS133, 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 are included in net cash provided by operating activities in the statements of consolidated cash flows for all periods presented. 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 within the financing activities section 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 statement of cash flows.
  The estimated fair values of derivatives are determined at discrete points in time based on the 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 that are being hedged.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Employee benefits
 Pension obligations
  Group 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. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.
  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.  See Note 2.
  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.
  A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as employee benefit expense when they are 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 obligations
  Some group companies provide post-retirement healthcare benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. 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.  See Note 2.
 Termination benefits
  Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; 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 12 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Dividends paid
  Dividends paid 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.
 Earnings per share
  Earnings and diluted earnings per share have been calculated, for each class of common stock outstanding, in accordance with SFAS128, “Earnings per Share”, using the two class method.  Under the provisions of SFAS128, 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, and in accordance with EITF 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128”, 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 proved 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 proved 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 exploration expenditures and are expensed as incurred.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES(continued)4.25 
  Exploration and evaluation costs(continued)
  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:
        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:
 2007  2006  2005
      (1)
               (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. All other stock-based payments fair values are determined by reference to the goods or services received.
  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 to ensure they reflect current expectations.
  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 (nominal value) and Additional paid in capital when the options are exercised.
  Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees, and related Interpretations”, as permitted by SFAS123.
  On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS123(R), “Share-Based Payment”, using the modified prospective transition method.  See Note 2.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES (continued
 Recent pronouncements
  On September 15, 2006 the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS157”).
  SFAS157 provides enhanced guidance for using fair value to measure assets and liabilities. Under SFAS157, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. SFAS157 also requires that fair value measurements be separately disclosed by level within the fair value hierarchy.  On February 12, 2008, the FASB issued FASB Staff Position No. FAS157-2, “Effective date of FASB Statement No. 157” (“the FSP”).  The FSP provides a one year deferral until January 1, 2009 for the implementation of SFAS157 for certain non-financial assets and non-financial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  The Company does not expect the adoption of SFAS157 to have a material impact on the Company’s financial statements.
  On September 29, 2006 the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post-retirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (“SFAS158”).
  SFAS158 represents the completion of the first phase in the FASB's post-retirement benefits accounting project and requires an entity to:
 ·
  ·
  ·
 the date of adoption due to delayed recognition of actuarial gains and losses, prior service costs and credits, and transition assets and obligations; and
 ·
 to financial statements about certain effects on net periodic benefit cost in the next fiscal year that arise from delayed recognition of actuarial gains or losses, prior service costs or credits and unrecognized transition asset and obligations.
  The Company adopted the provisions of SFAS158 in 2006, as required, except for the requirement to measure the plan assets and benefit obligations at the fiscal year end, which is effective in fiscal years ending after December 15, 2008.  The Company is currently considering processes to meet these measurement requirements of SFAS158.
  On February 15, 2007 the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement No. 115” (“SFAS159”).
  SFAS159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.
  The fair value option permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES(continued)4.27  Recent pronouncements(continued)
   ·
  ·   is irrevocable (unless a new election date occurs); and ·   is applied only to entire instruments and not to portions of instruments.
  SFAS159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.  The Company will apply the provisions of SFAS159 from January 1, 2008.  The Company does not expect the adoption of SFAS159 to have a material impact on the Company’s financial statements.
    SFAS141(R) requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. SFAS141(R) applies to all transactions or other events in which an entity (the acquirer) obtains control of one or more businesses (the acquiree), including combinations achieved without the transfer of consideration. The Company is currently evaluating the potential impact of adopting SFAS141(R) on the Company’s financial statements.
  In December 2007, the FASB issued FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS160”).
  SFAS160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. It shall be applied prospectively as of the beginning of the fiscal year in which this Statement is initially adopted, except for the presentation and disclosure requirements. The presentation and disclosure requirements shall be applied retrospectively for all periods presented. The Company is currently evaluating the potential impact of adopting SFAS160 on the Company’s financial statements.
  In March 2008, the FASB issued FASB statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB statement No. 133” (“SFAS161”).
  SFAS161 applies to all derivative instruments and nonderivative instruments that are designated and qualify as hedging instruments pursuant to paragraphs 37 and 42 of SFAS133 and related hedged items accounted for under SFAS133.  SFAS161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting.  Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. SFAS161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. Comparative disclosures for earlier periods at initial adoption are encouraged but not required. The Company does not expect the adoption of SFAS161 to have a material impact on the Company’s financial statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)4.
 SIGNIFICANT ACCOUNTING POLICIES(continued)4.27 
  Recent pronouncements(continued)
  In May 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS162”).
  SFAS162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. SFAS162 is effective 60 days following the United States Securities and Exchange Commission (SEC's) approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”. The Company does not expect the adoption of SFAS162 to have a material impact on the Company’s financial statements.
  COSTS AND EXPENSES
 Employment Severance Costs
 Total employee severance costs amounted to $19 million for 2007 (2006: $22 million, 2005: $26 million) and were due to retrenchments reflecting mainly downsizing and rationalization of operations in the South Africa and Ghana regions. Employee severance costs recorded in 2007, 2006 and 2005 included retrenchment costs of $5 million, $7 million and $26 million, respectively, in the South African region (at Great Noligwa, Kopanang, Tau Lekoa, Mponeng, TauTona and Savuka) and $14 million, $15 million and $nil million, respectively, in Ghana (at Obuasi) due to a planned reduction in workforce.
 Interest Expense
 2007
 $
 2006
 $
 
 2005
 $
 Finance costs on bank loans and overdrafts
 18
 20
 
 21
 Finance costs on corporate bond
 (1)
 31
 32
 
 34
 Finance costs on convertible bond
 (2)
 26
 26
 
 27
 Capital lease charges
 3
 2
 
 2
 Discounting of non-current trade and other debtors
 6
 4
 
 -
 Other
 1
 3
 
 12
 85
 87
 
 96
 Less : Amounts capitalized
 (3)
 (10)
 (10)
 (16)
 75
 77
 
 80
 (1)
 On August 21, 2003 AngloGold issued an unsecured bond in the aggregate principal amount of R2 billion ($300 million).  Refer to
 Note 20.
 (2)
 On February 27, 2004, AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the Company, issued $1,000,000,000
 2.375 percent guaranteed convertible bonds due 2009, convertible into ADSs and guaranteed by AngloGold Ashanti.  Refer to Note 20.
 (3)
 Interest capitalized on qualifying assets.  Refer to Note 12.
 Impairment of Assets
 The impairment loss in respect of reporting units arose from the declining values of the remaining ore reserves and is based on the estimated remaining cashflows computed at a discount. The impairment is made up as follows:
 2007
 $
 2006
 $
 2005
 $
 Ghana
 (1)
 
 
 
 Impairment of Bibiani mine following an assessment and reduction in life of mine based on fair value
 -
 -
 37
 Impairment of goodwill held in Bibiani
 -
 -
 4
 Impairment of tax rate concession agreements
 -
 -
 20
 South Africa
 (2)
 
 
 
 Impairment of Goedgenoeg drilling and 1650 level decline drilling based on fair value
 -
 -
 2
 Impairment of East of Bank Dyke at TauTona access development based on fair value
 -
 -
 4
 Impairment of Western Ultra Deep Levels based on fair value
 -
 -
 74
 Other
 
 
 
 Impairment and write-off of various minor tangible assets and equipment
 1
 6
 -
 1
 6
 141
 (1)
 Based on a pre-tax discount rate of 6.5 percent in Ghana (at Bibiani) the estimated fair value amount did not support the carrying
 values and as a result, an impairment loss of $37 million on mining assets and $4 million on assigned goodwill was recorded during 2005.
 (2)
 As the Company did not have the intention to mine and no future cash flows were expected from the Western Ultra Deep Levels
 area (in South Africa), an impairment loss of $74 million was recorded during 2005.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)5.
 COSTS AND EXPENSES (continued)
 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. The carrying value of the related asset is compared to its fair value.
 The following estimates and assumptions were used by management when reviewing long-lived assets for impairments:
 ·
 point based on a 30-day average during the fourth-quarter of 2007 - $749 per ounce; (2006 - $630 per ounce).  Thereafter, the estimated future gold price has been increased by 2.25 percent (2006: 2.25 percent) per annum over the remaining life of the mines.  These prices have been adjusted for the effects of including the normal sale forward contracts to arrive at an average received price across all of the reporting units.  Prior to 2006, the normal sale forward contracts were allocated to each reporting unit, based on the then prevailing contractual relationship with hedge counterparts.  Following the removal of certain hedge counterpart restrictions and the granting of group level guarantees during 2006, the Company has applied an average received gold price across all reporting units.  The use of this approach has had a consequential impact on the fair value of the reporting units.
 ·
 purposes Proven and Probable Ore Reserves of approximately 72.2 million ounces (including joint ventures) as at December 31, 2007 were determined assuming a three year historical average gold price of $582 per ounce, A$746 per ounce in Australia and R125,743 per kilogram in South Africa;
 ·
 commercial production and deep level mining projects based on the discount rate applicable to the long-term dollar market rates;
 ·
  ·
  ·
 The real pre-tax discount rates applied in the 2007 impairment calculations on reporting units with significant assigned goodwill are as follows:
 Percentage
 AustraliaSunrise Dam
    TanzaniaGeita
  The Company reviews and tests the carrying value of long-lived assets, including goodwill, when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets.  For long-lived assets other than goodwill, if the sum of estimated future cash flows on an undiscounted basis is less than the carrying amount of the related asset group, the long-lived asset group is not recoverable and the fair value should be determined.  An impairment loss is measured by comparing estimated future cash flows on a discounted basis to the carrying amount of the asset. Goodwill is tested for impairment on an annual basis. Expected future cash flows used to determine the fair value of goodwill and long-lived assets are inherently uncertain and could materially change over time.  They are significantly affected by a number of factors including reserves and production estimates, together with economic factors such as spot and forward gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)5.
 COSTS AND EXPENSES (continued)
 Should management’s estimate of the future not reflect actual events, further impairments may be identified. The factors affecting the estimates include:
 ·   
  changes in Proven and Probable Ore Reserves as well as value beyond proven and probable reserves;        the grade of Ore Reserves as well as value beyond proven and probable reserves may vary significantly from time
 ·  differences between actual commodity prices and commodity price assumptions; ·  unforeseen operational issues at mine sites; and ·  changes in capital, operating mining, processing and reclamation costs and foreign exchange rates.
 Based on analysis, the carrying value and estimated fair values (on a discounted basis) of reporting units that are most sensitive to a 5 percent movement in gold price, ounces, costs and discount rate assumptions are:
 Carrying amount
 (including goodwill)
 $
 Estimated fair value
 (discounted)
 $
 2007 AustraliaSunrise Dam
 
 GhanaObuasi
 
 2006 South AfricaTau Lekoa
 
 GhanaObuasi
 
 Should any of the assumptions used change adversely and the impact is not mitigated by a change in other factors, this could result in an impairment of the above assets.
 It is impracticable to disclose the extent of the possible effects of changes in the assumptions for the future gold price and hence life of mine plans at December 31, 2007 because these assumptions and others used in impairment testing of long-lived assets and goodwill are inextricably linked.  In addition, for those operations with a functional currency other than the dollar, movements in the dollar exchange rate will also be a critical factor in determining the life of mine and production plans.
 Therefore it is possible that outcomes within the next financial year that are different from the assumptions used in the impairment testing process for goodwill and long-lived assets could require a material adjustment to the carrying amounts disclosed at December 31, 2007.
 Asset Retirement 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)5.
 COSTS AND EXPENSES (continued)
 These liabilities mainly relate to obligations at the Company’s active and inactive mines to perform reclamation and remediation activities 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.  The monies in the trust and bond are invested primarily in interest bearing debt securities and are included in Other long-term assets in the Company’s consolidated balance sheet.  Cash balances held in the trust and bond are classified as restricted cash in the Company’s consolidated balance sheets for all periods presented.  As at December 31, 2007 and 2006 the balances held in the trust and bond (cash and investments) amounted to $80 million and $91 million, respectively.  Besides these assets there were no other assets that were legally restricted for purposes of settling asset retirement obligations as at December 31, 2007.
 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 in terms of contracts entered with mining contractors to undertake mining at certain operations. The contracts are for specified periods and include escalation clauses.  Renewals are at the discretion of the respective operating mine and allow a right of first refusal on the purchase of the mining equipment in the case of termination of the contract. Certain contracts include the provision of penalties payable on early exiting or cancellation.
 Rental Expense
 (1)
 2007
 $
 2006
 $
 2005
 $
 Comprising of:Minimum rentals
    (1)
 Included in production costs for each period presented.
 Future minimum rental payments are: 2008
         Loss/(profit) on Sale of Assets, Realization of Loans, Indirect Taxes and Other
 2007
 $
 2006
 $
 2005
 $
 Profit on the sale of Mitchell Plateau and Cape Bougainville
 -
 -
 (1)
 Profit on disposal and abandonment of land, mineral rights and exploration properties
 (1)
 (10)
 (48)
 (2)
 Recovery of loans previously written off
 (2)
 -
 (14)
 -
 Non-recoverable value added state tax
 (3)
 5
 9
 -
 Reassessment of indirect taxes and royalties payable in Guinea
 11
 (3)
 -
 Reassessment of indirect taxes payable in Tanzania
 7
 20
 -
 Recovery of exploration costs previously expensed in South Africa and South America (Peru)
 (6)
 -
 -
 Buildings destroyed by fire in Guinea
 3
 -
 -
 10
 (36)
 (3)
 (1)
 
 Refers to the disposal and abandonment of land, mineral rights and exploration properties situated in Brazil, Ghana,
  South Africa, North America and Tanzania.
 (2)
 
 Relates mainly to loans previously expensed as exploration costs as part of funding provided to the Yatela Joint Venture.  The
  Yatela Joint Venture is accounted for under the equity method.  Refer to Note 15.
 (3)
 
 Represents the write-off of value added state tax (at AngloGold Ashanti Brasil Mineração and Serra Grande) not expected to be
  recovered from the Brazilian Government.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)5.
 COSTS AND EXPENSES (continued)
 Mining Contractor Termination Costs
 Mining contractor termination costs of $9 million (before taxation of $3 million) recorded in 2005 related to contractor termination costs at Geita, in Tanzania, on the transition to owner mining completed in early August 2005.  No mining contractor termination costs were recorded in 2007 and 2006.
 Other Operating Items
 2007
 $
 2006
 $
 2005
 $
 Comprising of: Provision (reversed)/raised on loss on future deliveries of other commodities
 (13)
 15
 (5)
 Unrealized (gain)/loss on other commodity physical borrowings
 (3)
 1
 14
 (16)
 16
 9
 
 RELATED PARTY TRANSACTIONS
 On October 26, 2005 Anglo American plc (AA plc) announced that it intended to reduce its shareholding in the Company, while still intending to remain a significant shareholder in the medium term.  During April 2006, AA plc reduced its shareholding in the Company to less than 50 percent interest held, as the result of the sale in a public offering, of some of its shares held in the Company and during October 2007, further to 16.61 percent interest held.  As at December 31, 2007, AA plc and its subsidiaries held an effective 16.58 percent (2006: 41.67 percent) interest in AngloGold Ashanti.  The Company had the following transactions with related parties during the years ended December 31, 2007, 2006 and 2005:
 
 December 31, 2007
 December 31, 2006
 December 31, 2005
 (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 with significant shareholder AA plc
 -
 -
 1
 -
 5
 Related party transactions with subsidiaries of AA plc
 (1)
 Boart Longyear Limited – mining services
 (2)
 -
 -
 -
 -
 5
 Mondi Limited – forestry
 -
 -
 5
 -
 16
 Scaw Metals – A division of Anglo Operations Limited – steel and engineering
 -
 -
 1
 -
 6
 Haggie Steel Wire Rope Operations
 (3)
 -
 -
 1
 -
 8
 Anglo Coal – a division of Anglo Operations Limited
 -
 -
 -
 -
 1
 
 
 Related party transactions of equity accounted joint ventures and associatesOro Group (Proprietary) Limited
 -
 (2)
 -
 (2)
 -
 Societe d'Exploitation des Mines d'Or de Sadiola S.A.
 (7)
 (2)
 (4)
 (1)
 -
 Societe d'Exploitation des Mines d'Or de Yatela S.A.
 (3)
 (1)
 (6)
 (1)
 (2)
 Societe des Mines de Morila S.A.
 (5)
 (2)
 (4)
 -
 (2)
 Trans-Siberian Gold plc
 (1)
 (11)
 -
 (10)
 -
 
 
 
 
 (1)
 Transactions to April 2006.
 (2)
 AA plc sold their interest in Boart Longyear Limited with effect from July 29, 2005.
 (3)
 Previously included in Scaw Metals – A division of Anglo Operations Limited.
 Amounts owed to/due by joint venture related parties and the loan balance due to Goldmed Medical Scheme of $1 million (2006: $nil), are unsecured, non-interest bearing and under terms that are no less favorable than those with third parties.
 The Trans-Siberian Gold plc loan bears interest at LIBOR plus 4 percent and is convertible into equity under certain circumstances at the option of the borrower.
 The Oro Group (Proprietary) Limited loan bears interest at a rate determined by the Oro Group (Proprietary) Limited’s board of directors and is repayable at their discretion.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)6.
 RELATED PARTY TRANSACTIONS (continued)
 The Company, which holds an equity interest of 29.8 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 cash consideration of $40 million. The companies acquired consist of Amikan (which holds the Veduga deposit, related exploration and mining licenses) and AS APK (which holds the Bogunay deposit, related exploration and mining licenses).
 In connection with the relocation of Roberto Carvalho Silva, an executive director of the Company since 2005, 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.  As at December 31, 2006, BRL728,580 ($340,458) of the purchase price remained to be paid to the Company’s subsidiary, with BRL657,717 ($341,352) remaining to be paid as at June 20, 2007. The remaining balance was 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 the years were: 2007: BRL634,023 ($329,055); 2006: BRL903,465 ($414,433) and in 2005: BRL311,923 ($127,837). The Company terminated the agreement with the Brazilian marketing, communications and corporate affairs services company with effect July 2007.
  TAXATION
 2007
 $
 2006
 $
 2005
 $
 (Loss)/income from continuing operations before income tax, equity income, minority interests and cumulative effect of accounting change was derived from the following jurisdictions:
 
 South Africa
 (44)
 79
 (179)
 Argentina
 56
 40
 30
 Australia
 81
 106
 66
 Brazil
 21
 114
 81
 Ghana
 (207)
 (128)
 (139)
 Guinea
 (106)
 (53)
 (18)
 Mali
 5
 6
 -
 Namibia
 9
 18
 11
 Tanzania
 (383)
 (213)
 (86)
 USA
 (93)
 (23)
 (37)
 Other, including Corporate and Non-gold producing subsidiaries
 (50)
 (42)
 (92)
 (711)
 (96)
 (363)
 (Charge)/benefit for income taxes attributable to continuing operations is as follows: Current:  South Africa
 (1)
 (92)
 (66)
 (40)
 Argentina
 (10)
 (13)
 -
 Australia
 (37)
 (25)
 (6)
 Brazil
 (2)
 (38)
 (38)
 (23)
 Ghana
 -
 (5)
 -
 Guinea
 -
 -
 -
 Mali
 (2)
 (2)
 -
 Namibia
 (7)
 (4)
 -
 Tanzania
 (3)
 (1)
 -
 USA
 (1)
 -
 1
 Other
 (1)
 (2)
 (2)
 Total current
 (191)
 (156)
 (70)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)7.
 TAXATION (continued)
 
 
 
 
 
 (1)
 Charges for current tax in 2007, 2006 and 2005 included an increase in provision in respect of estimated tax payable amounting to $1 million, $1 million
  and $40 million, respectively, as a result of the receipt of tax assessments for
  the years ended December 31, 1998 to December 31, 2003.  The increase in
  the taxation charge in 2007 and 2006 partly relates to the higher gold price and
  utilization of unredeemed capital expenditure.
 (2)
 Charges for current tax in 2005 included $13 million relating to tax obligations as a result of a change in interpretation of legislation made by the Brazilian
  Superior Justice Court.
 2007
 $
 2006
 $
 2005
 $
 Deferred:  
  South Africa
 (1)
 52
 (16)
 95
 Argentina
 (1)
 (2)
 (10)
 Australia
 10
 (4)
 (10)
 Brazil
 (20)
 4
 (3)
 Ghana
 (2)
 32
 39
 110
 Guinea
 (2)
 (2)
 (2)
 Mali
 -
 -
 -
 Namibia
 1
 (3)
 (4)
 Tanzania
 7
 20
 12
 USA
 -
 -
 -
 Other
 (6)
 (2)
 3
 Total deferred
 73
 34
 191
 
 
 
 
 
 Total income and mining tax (expense)/benefit
 (118)
 (122)
 121
 (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 mining operations. This formula 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 anticipated taxation rates at the time temporary differences reverse.
 
 During 2007, 2006 and 2005, deferred taxation was provided at a future anticipated taxation rate ranging between 39 percent to 37 percent for 2007, and prior years at 37 percent and 38 percent, respectively.  The increase in the deferred tax benefit over 2006 is mainly due to the unrealized non-hedge derivative losses due to the higher gold price.  In addition, charges for deferred taxation in 2005 included tax benefits of $13 million resulting from changes in enacted statutory tax rates.  There were no changes in the statutory tax rates for 2007 and 2006.
 
 The effect of the change in estimates on the results for 2007, 2006 and 2005 were as follows:
 Year ended December 31, 2007
 Impact
 $
 Per basic
 and diluted
 common share
 (a)(b)
 (cents)
 
 
 
 Net income
 23
 8
 (a)
 Per basic and diluted ordinary and E ordinary shares.
 (b)
 The calculation of diluted earnings per common share for 2007 did not assume
 the effect of 15,384,615 shares issuable upon the exercise of Convertible Bonds and 595,934 shares issuable upon the exercise of stock incentive options as their effects are anti-dilutive for this period.


F-30
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)7.
 TAXATION(continued)
 Year ended December 31, 2006
 Impact
 $
 Per basic
 and diluted
 common share
 (a)(b)
 (cents)
 
 
 
 Net income
 65
 24
 (a)
 Per basic and diluted ordinary and E ordinary shares.
 (b)
 The calculation of diluted earnings per common share for 2006 did not assume
 the effect of 15,384,615 shares issuable upon the exercise of Convertible Bonds and 854,643 shares issuable upon the exercise of stock incentive options as their effects are anti-dilutive for this period.
 Year ended December 31, 2005
 Impact
 $
 Per basic
 and diluted
 (a)
 common share
 (cents)
 Net income
 20
 8
 (a)
 The calculation of diluted earnings per common share for 2005 did not assume
 the effect of 15,384,615 shares issuable upon the exercise of Convertible Bonds and 601,315 shares issuable upon the exercise of stock incentive options as their effects are anti-dilutive for this period.
 
 
 
 
 
 (2)
 
 The deferred tax benefit in 2007 included $28 million arising from an increase in tax losses.  The deferred tax benefit in 2006 included $21 million resulting from an extension of tax losses granted by the Ghanaian Taxation Authorities which would have been forfeited during the year.  During 2005 tax benefits of $94 million resulted from changes in enacted statutory tax rates and is net of valuation allowances of $4 million.
 The unutilized tax losses of the North American operations which are available for offset against future profits earned in the United States of America, amount to $248 million (2006: $277 million, 2005: $198 million).
 The unutilized tax
  losses of the Ghanaian operation, which are available for offset against future profits earned in Ghana, amount to $nil
  2007
 $
 Analysis of Unrecognized Tax LossesAssessed losses utilized during the year
  
 
 
 
 
 Unutilized tax losses remaining to be used against future profits can be split into the following periods:
         247   248
 2007
 $  %
 2006
 $
 %
 2005
 $  %
 Reconciliation between corporate income tax and statutory income tax is as follows:
                  (1)
 
     
                      
 
    
   (1)
 Disallowable expenditure includes the impact of hedge losses in non-taxable jurisdictions and share expense costs.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)7.
 TAXATION (continued)
 2007
 $
 2006
 $
 Deferred taxation liabilities and assets on the balance sheet as of December 31, 2007 and 2006, relate to the following:
 Deferred taxation liabilities:    
  Depreciation, depletion and amortization
 1,778
 1,638
 Product inventory not taxed
 23
 3
 Derivatives
 72
 19
 Other comprehensive income deferred taxation
 18
 72
 Other
 4
 23
 Total
 1,895
 1,755
 Deferred taxation assets:   Provisions, including rehabilitation accruals
 (210)
 (171)
 Derivatives
 (97)                        
  (175)
 Other comprehensive income deferred taxation
 (273)
 (155)
 Other
 (10)                          
  (23)
 T ax loss carry forwards
 (366)                        
  (257)
 Total
 (956)                        
  (781)
 Less: Valuation allowances
 99
 97
 Total
 857
 (684)
 Disclosed as follows:   Long-term portion deferred taxation assets
 37
 39
 Short-term portion classified as other current assets
 275
 167
 Long-term portion deferred taxation liabilities
 1,345
 1,275
 Short-term portion classified as other current liabilities.  Refer to Note 17.
 5
 2
 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, 2007, the Company had no unredeemed capital expenditure, in South Africa (2006: $8 million), on which deferred tax had been provided at the future anticipated tax rate of 37 percent.
 Unremitted Earnings of Foreign Subsidiaries and Foreign Incorporated Joint Ventures
 No provision is made for the income tax effect that may arise on the remittance of unremitted earnings by certain foreign subsidiaries and foreign incorporated joint ventures. It is management’s intention that these earnings will be permanently re-invested in these entities. The amounts of these unremitted earnings as at December 31, 2007 totaled $1,155 million (2006: $955 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.
 Analysis of Valuation AllowancesThe movement in valuation allowances for the three years in the period ended December 31, is summarized as follows:
 Balance at
 beginning of
 period
 $
 Provision/
 (benefit)
 expenses
 $
 Other
 additions/
 (deductions)
 $
 Balance at
 end of period
 $


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)7.
 TAXATION (continued)
 The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance was recorded to reduce the total deferred tax asset to an amount that will, more likely than not, be realized in the future.  The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more likely than not that these items will not be realized in the ordinary course of operations.
 Although realization is not assured, we have 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 in the ordinary course of operations based on the available positive and negative 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
  (in $ millions)
               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, 2007, 2006 and 2005, the Company recognized approximately $9 million, $4 million and $26 million, respectively, in interest.  The Company had approximately $38 million and $28 million for the payment of interest accrued as at December 31, 2007 and 2006, respectively.
 As at December 31, 2007, the Company's South African tax filings for the years 1998 - 2003 remain open to scrutiny by the South African Revenue Service. As at December 31, 2007, 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.  The Company cannot estimate the amounts of possible changes as a result of an assessment.
 In all other jurisdictions, the revenue system is based on a self-assessment process, all tax filings due by December 31, 2007 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 8.
 DISCONTINUED OPERATIONS
 The Ergo reclamation surface operation, which forms part of the South African operations and is included under South Africa for segmental reporting, has been discontinued as the operation has reached the end of its useful life and the assets are no longer in use. After a detailed investigation of several options and scenarios, and based on management’s decision reached on February 1, 2005, mining operations at Ergo ceased on March 31, 2005 with only site restoration obligations remaining.  On June 8, 2007, the Company announced that it will sell, subject to certain conditions, to a consortium of Mintails South Africa (Pty) Limited/DRD South African Operations (Pty) Limited Joint Venture most of the remaining moveable and immovable assets of Ergo. Refer to Note 3 – Acquisitions and disposals of businesses and assets.  The environmental rehabilitation program to restore the site continues until all legal and sale conditions are met.  The Company has reclassified the income statement results from the historical presentation to profit/(loss) from discontinued operations in the condensed consolidated income statement for all periods presented. The condensed consolidated cash flow statement has been reclassified for discontinued operations for all periods presented. The results of Ergo for the years ended December 31, 2007, 2006 and 2005, are summarized as follows:
 Year ended December 31,
 2007                            
  2006                           
  2005
 $
 Per share
 (1)(2)
 (cents)
 $
 Per share
 (1)(2)
 (cents)  $
 Per share
 (2)
 (cents)
 
 Revenue
 1
 -
 4
 1
 18
 7
 
 Costs, expenses and recoveries
 5
 2
 2
 1
 (62)
 (24)
 
 Pre-tax profit/(loss)
 6
 2
 6
 2
 (44)
 (17)
 Taxation
 (4)
 (1)        
  -
 -         
  -
 
 -
 
 
 Net profit/(loss) attributable to discontinued operations
 2
 1
 6
 2
 (44)
 (17)
 
 
 
 
 (1)
 
 Per basic and diluted ordinary shares.  Impact of E Ordinary shares for 2007 and 2006 is not significant.
 (2)
 
 Basic and diluted earnings/(loss) per common share. The calculation of diluted earnings/(loss) per common share for 2007, 2006 and 2005 did not assume the effect of 15,384,615 shares, issuable upon the exercise of Convertible Bonds as their effects are anti-dilutive for these periods. The calculation of diluted earnings/(loss) per common share for 2007, 2006 and 2005 did not assume the effect of 575,316, 854,643 and 601,315 shares, respectively, issuable upon the exercise of stock incentive options as their effects are anti-dilutive for these periods.  The calculation of diluted earnings per common share for 2007 and 2006 did not assume the effect of conversion of E Ordinary shares as the Company recorded a loss from continuing operations during these periods.
  LOSS PER COMMON SHARE
 2007
 $
 2006
 $
 2005
 $
 
 
 
 
 
 
 The following table sets forth the computation of basic and diluted loss per share (in millions, except per share data):
 Numerator
 Loss before cumulative effect of accounting change
 (814)
 (142)
 (270)
 
 Cumulative effect of accounting change
 -
 -
 (22)
 Net  loss
 (814)
 (142)
 (292)
 Less  Dividends:
 Ordinary  shares
 124
 107
 149
 
 E Ordinary shares
 1
 -
 -
 Undistributed  losses
 (939)
 (249)
 (441)
 
 
 
 
 
 
 Ordinary shares undistributed losses
 (932)
 (249)
 (441)
 
 E Ordinary shares undistributed losses
 (1)
 (7)
 -
 -
 
 Total undistributed losses
 (939)
 (249)
 (441)
 
 
 
 
 
 
 Denominator for basic loss per ordinary share
 
 
 Ordinary shares
 276,805,309  272,214,937
 264,230,586
 
 Fully vested options
 (2)
 531,983
 398,326
 405,048
 
 Weighted average number of ordinary shares
 277,337,292  272,613,263
 264,635,634
 
 
 
 
 
 
 Effect of dilutive potential ordinary shares
 
 
 Dilutive potential of stock incentive options
 (3)
 -
 -
 -
 
 Dilutive potential of convertible bonds
 (4)
 -
 -
 -
 
 Dilutive potential of E Ordinary shares
 (5)
 -
 -
 -
 
 Denominator for diluted loss per share – adjusted weighted average number of ordinary shares and assumed conversions
 277,337,292  272,613,263
 264,635,634
 
 
 
 
 
 
 Weighted average number of E Ordinary shares used in calculation of basic and diluted loss per E Ordinary share
 4,117,815
 194,954
 -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)9.
 LOSS PER COMMON SHARE (continued)
 2007
 $
 2006
 $
 2005
 $
 
 
 
 
 
 
 Loss per share (cents)
 
 Before cumulative effect of accounting changes
 
 Ordinary
  shares
 (292)
 (52)
 (102)
 
 E Ordinary shares
 (146)
 (91)
 -
 
 Ordinary shares – diluted
 (292)
 (52)
 (102)
 
 E Ordinary shares – diluted
 (146)
 (91)
 -
 
 
 
 
 
 
 Cumulative effect of accounting changes
 
 Ordinary
  shares
 -
 -
 (8)
 
 E Ordinary shares
 -
 -
 -
 
 Ordinary shares – diluted
 -
 -
 (8)
 
 E Ordinary shares – diluted
 -
 -
 -
 
 
 
 
 
 Net
  loss
 Ordinary
  shares
 (292)
 (52)
 (110)
 
 E Ordinary shares
 (146)
 (91)
 -
 
 Ordinary shares – diluted
 (292)
 (52)
 (110)
 
 E Ordinary shares – diluted
 (146)
 (91)
 -
 (1)
 Rounded to zero in 2006.
 (2)
 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.
 (3)
 The calculation of diluted loss per common share for 2007, 2006 and 2005 did not assume the effect of 575,316, 854,643 and 601,315 shares,
 respectively, issuable upon the exercise of stock incentive options as their effects are anti-dilutive for these periods.
 (4)
 The calculation of diluted loss per common share for 2007, 2006 and 2005 did not assume the effect of 15,384,615 shares issuable upon the
 exercise of Convertible Bonds as their effects are anti-dilutive for these periods.
 (5)
 The calculation of diluted loss per common share for 2007 and 2006 did not assume the effect of conversion of E Ordinary shares as the Company
 recorded a loss from continuing operations during these periods.
  RESTRICTED CASH
 2007
 $
 2006
 $
 
 
 
 
 
                     INVENTORIES
 Short-term:
 
 
 
 
 
                       (1)
     (1)
 Short-term portion relating to heap leach inventory classified separate, as
 materials on the leach pad.
 Long-term:
               (1)
     (1)
 Long-term portion relating to heap leach inventory classified separate, as
 materials on the leach pad.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)11.   
  INVENTORIES(continued)
  The Company recorded aggregate write-downs of $29 million, $2 million and $nil million for the years ended December 31, 2007, 2006 and 2005, respectively, to reduce the carrying value of inventories to net realizable value.  Inventory write-downs for 2007 and 2006 are included in production costs.
  PROPERTY, PLANT AND EQUIPMENT, NET
 2007
 $
 2006
 $
 
 (1)
 
          
 
         (1)
 Includes interest capitalized of $10 million (2006: $10 million).  Refer to Note 5.
  Mining assets with a net book value of $38 million (2006: $6 million) are encumbered by capital leases.  Refer to Note 20.
  ACQUIRED PROPERTIES, NET
     
        GOODWILL AND OTHER INTANGIBLES
 GoodwillThe carrying amount of goodwill by reporting unit as of December 31, 2007 and 2006 and changes in the carrying amount of goodwill are summarized as follows:
 
 
 
 
 
 
 
 Australia  Ghana  Guinea  Namibia  Tanzania  Total  $
 $
 $
 $               
  $
 $
 
 
 
 
 
 
 
 
 Balance at January 1, 2006
 
 214
 118
 10
 1
 181
 524
 Impairment
  losses
 
 -
 -
 -
 -
 -
 -
 Translation
 
 18
 -
 -
 -
 -          
  18
 
 Balance at December 31, 2006
 
 232
 118
 10
 1
 181
 542
 Impairment
  losses
 
 -
 -
 -
 -
 -
 -
 Translation
 
 27
 -
 -
 -
 -          
  27
 
 Balance at December 31, 2007
 
 259
 118
 10
 1
 181
 569
 2007
 $
 2006
 $
 Other intangibles, net
   (1)
      (1)
 The government of Ghana agreed, as part of the AngloGold Ashanti Business Combination, to a concession on royalty payments at a fixed rate of 3 percent per year for a period of fifteen years. The fair value of the royalty rate concession is amortized on a straight line basis over a period of fifteen years with nil residual value.
  Amortization expense included in the consolidated statements of income amounted to $2 million for 2007 (2006: $2 million, 2005: $2 million).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)14.  
  GOODWILL AND OTHER INTANGIBLES(continued)
 2007
 $
  Based on carrying value at December 31, 2007, the estimated aggregate amortization expense for each of the next five years is as follows:
           OTHER LONG-TERM ASSETS
 2007
 $
 2006
 $
             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 debt securities – held to maturity
  Other non-current assets
   Investments in affiliates
 Unlisted The Company holds a 25.0 percent (2006: 25.0 percent) interest in Oro Group (Proprietary) Limited which is involved in the manufacture and wholesale of jewellery. The year end of Oro Group (Proprietary) Limited is March. Results are included for the twelve months ended September 30, 2007, adjusted for material transactions. On September 21, 2006, Oro Group (Proprietary) Limited repaid a shareholders loan of $1 million originally granted in 2000.  The loan granted to Oro Group (Proprietary) Limited of $2 million (2006: $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 Company holds a 29.8 percent (2006: 29.9 percent) interest in Trans-Siberian Gold plc which is involved in the exploration and development of gold mines. The Company’s initial 17.5 percent equity interest acquired in Trans-Siberian Gold plc during July 2004 was increased to 29.9 percent on May 31, 2005, the date on which the second subscription was completed. Refer to Note 3 – Acquisitions and disposals of businesses and assets. The year end of Trans-Siberian Gold plc is December. Results are included for the twelve months ended September 30, 2007, adjusted for material transactions.  On June 27, 2006, the Company advanced a loan of $10 million to Trans-Siberian Gold plc at LIBOR plus 4 percent which is convertible into equity under certain circumstances at the option of the borrower.  The market value of the Company’s share of the listed affiliate as at December 31, 2007 is $6 million.  During the years ended December 31, 2007, 2006 and 2005, the Company recorded impairment losses of $14 million, $7 million and $nil million on its investment.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)15.  OTHER LONG-TERM ASSETS(continued)
 Investments in equity accounted joint venturesThe Company holds the following interest in incorporated mining joint ventures, of which the significant financial operating policies are, by contractual arrangement, jointly controlled:
 December 31,
 2007
 percentage held
 December 31,
 2006
 percentage held
 
 Nufcor International Limited
 (1)
 50.00                       
  50.00
 Sadiola
 (2)
 38.00                       
  38.00
 Morila
 (2)
 40.00                       
  40.00
 Yatela
 (2)
 40.00                       
  40.00
 (1)
  (2)
   2007
 $
 2006
 $
 Investment in marketable equity securities – available for sale
    Available for sale investment in marketable equity securities consists of investments in ordinary shares, associated purchase warrants and options.
 Total gains on marketable equity securities included in other comprehensive income amount to $4 million (2006: $5 million).  Total losses on marketable equity securities included in other comprehensive income amount to $4 million (2006: $1 million).
 Investment in marketable debt securities – held to maturityInvestments in marketable securities represent held to maturity government and corporate bonds.  The investment is measured at amortized cost.
   Investment in non-marketable assets – held to maturityInvestments in non-marketable assets represent secured loans and receivables secured by pledge of assets.
   
 
 
 Investment in non-marketable debt securities – held to maturityInvestments in non-marketable securities represent the held to maturity fixed-term deposits required by legislation for the Environmental Rehabilitation Trust Fund and Environmental Protection Bond.
     Marketable debt securities
           Non-marketable debt securities
      1252
  Fair values of the held to maturity debt securities at December 31, 2007 and 2006 approximate cost.
 Other non-current assets Unsecured
   (1)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)15. OTHER LONG-TERM ASSETS(continued)
 2007
 $
 2006
 $
 Non-current debtors
          (2)
          (1)
 Other comprises loans and receivables of $2 million (2006: $4 million) measured at amortized cost and post retirement assets of $39 million (2006: $40 million) measured according to the
  employee benefits accounting policy.
 (2)
 Non-interest bearing and repayable over three years.
 Equity accounted joint ventures
  Summarized financial statements of the joint ventures which have been equity accounted are as follows (100 percent shown):
 2007
 $
 2006
 $
 2005
 $
 Statements of income for the period
                     Balance sheets at December 31,
                             ASSETS AND LIABILITIES HELD FOR SALE
 2007
 $
 2006
 $
 Effective June 30, 2005, the investment in the Weltevreden mining rights, located in South Africa, of $15 million, was classified as held for sale. This investment was previously recognised as a tangible asset. Weltevreden's rights were sold to Aflease Gold and Uranium Resources Limited on June 15, 2005. On December 19, 2005, Aflease was acquired by sxr Uranium One (formerly Southern Cross Inc.). In terms of these sale agreements, the purchase price would be paid in the form of sxr Uranium One shares to be issued to the Company. The conditions precedent to the agreement were not fulfilled by the expiry date of December 31, 2007.  Consequently, the agreement lapsed and a new agreement is being negotiated with Aflease Gold Limited. The negotiation terms include a purchase consideration of R288 million ($42 million) to be paid in the form of Aflease shares to be issued to the Company.  In addition, conditions precedent include the approval by the Minister of Minerals and Energy of the cession of the Weltevreden mining right from AngloGold Ashanti to Aflease, unconditional approval of the transaction by the Competition Commission and approval by the JSE Limited of the issue and allotment of Aflease shares.
 Rand Refinery Limited (a subsidiary of the Company) allocated parts of its premises previously recognized as a tangible asset, to held for sale.  Rand Refinery Limited intends to sell off parts of the estate that are no longer utilized within the next twelve months.  A buyer has been found, a sale agreement has been drawn up and parties are in the process of finalizing the agreement.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)16.   
  ASSETS AND LIABILITIES HELD FOR SALE(continued)
 2007
 $
 2006
 $
 
 
 
 Effective June 30, 2007, exploration properties acquired from Trans-Siberian Gold plc situated in Russia were classified as held for sale.  The expected cash sale of these exploration properties forms part of the strategic alliance between Polymetal and AngloGold Ashanti, which is expected to be concluded during 2008.
   Arising from the sale of the Bibiani assets in Ghana, effective December 28, 2006, to Central African Gold plc (CAG), the Company decided to apply $3 million of the partial proceeds to an investment of 15,825,902 CAG shares. Subsequent to this decision, local regulators required that the 15,825,902 shares in CAG be sold within 90 days of December 28, 2006. On February 14, 2007, the Company disposed of 7,000,000 CAG shares yielding total proceeds of £768,845 ($1.5 million) and during April 2007, disposed of the remaining 8,825,902 CAG shares yielding total proceeds of £894,833 ($1.8 million). The investment as at December 31, 2006 was carried at fair value less costs to sell.
   As at December 31, 2007 and 2006 the carrying amounts of major classes of assets and liabilities classified as held for sale, included:
     
       
   
   17.  OTHER CURRENT LIABILITIES  Deferred
           
         18.  SHORT-TERM DEBT
    19.  OTHER NON-CURRENT LIABILITIES  Deferred
      
     LONG-TERM DEBT
 UnsecuredConvertible bond
 (1)
 Fixed semi-annual coupon of 2.375% per annum. The bond is convertible, at the holders’ option, into ADSs up to February 2009 and is US dollar-based.  The bond is convertible at a price of $65.00 per ADS.
   Syndicated loan facility ($1,150  million)  -  Drawn down in US dollars and
 Australian dollars
 (2)
 Interest charged at LIBOR plus 0.4% per annum. Loan is repayable in December 2010 and is US dollar-based. The loan is subject to debt covenant arrangements for which no default event occurred.
   Corporate bond
 (3)
 Fixed semi-annual coupon of 10.5% per annum.  The bond is repayable on August 28, 2008 and is ZAR-based.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)20.
 LONG-TERM DEBT (continued)
 2007
 $
 2006
 $
 Syndicated loan facility ($700 million)Interest charged at LIBOR plus 0.4% per annum. Loan was repaid in December 2007 and was US dollar-based.  The loan was subject to certain debt covenant arrangements for which no default event occurred.
   Bank BelgolaiseInterest charged at LIBOR plus 1.5% per annum.  Loan was repayable in 24 equal monthly installments commencing October 2005 and was US dollar-based.
   Bank overdraftBank overdraft at market-related rates (2006: Ghanaian Cedi-based).
   Total unsecured borrowings
   SecuredCapital leasesTurbine Square Two (Proprietary) Limited
 (4)
 The leases are capitalized at an implied interest rate of 9.8% 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 12.
   Senstar Capital Corporation
 (5)
 Interest charged at a weighted average rate of 6.9% per annum. Loans are repayable in monthly installments terminating in November 2009 and are US dollar-based.  The equipment financed is used as security for these loans.  Refer to Note 12.
   Terex Africa (Proprietary) Limited
 (6)
 Interest charged at a rate of 9.0% per annum. Loan is repayable in January 2008 and is US dollar-based. The equipment financed is used as security for this loan. Refer to Note 12.
   UnsecuredCapital leases Csilatina Arrendamento Mercantil S.A.
 (7)
 Interest charged at an average rate of 5.0% per annum. Loans are repayable in monthly installments terminating in October 2010 and are Brazilian real-based.
   
 
 
 Total long-term debt


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)20.
 LONG-TERM DEBT (continued)
 2007
 $
 2006
 $
                                                 (a)
         
 
 
 (a)
  
 
 
 (1)
          On February 27, 2004, AngloGold Ashanti Holdings plc, a wholly-owned subsidiary of the Company, issued $1,000,000,000 2.375 percent guaranteed convertible bonds due 2009, convertible into ADSs and guaranteed by AngloGold Ashanti.
  Subject to certain restrictions, holders of convertible bonds are entitled to convert each convertible bond into an AngloGold Ashanti ADS at the then applicable conversion price at any time from April 8, 2004 to February 20, 2009, or, if the convertible bonds are called for redemption earlier than February 27, 2009, the seventh business day prior to the date of early redemption.
  If the bonds have not been converted by February 20, 2009, they will be redeemed at par on February 27, 2009.  AngloGold Ashanti Holdings plc has the option of calling an early redemption of all the bonds 3 years after their issuance, if the price of the ADSs exceeds 130 percent of the conversion price for more than 20 days during any period of 30 consecutive trading days.
  The initial conversion price for the convertible bonds was $65.00 per ADS.  The conversion premium to the reference volume weighted average price of the ADSs on the New York stock exchange of $40.625 on February 19, 2004, when the issue of the convertible bonds was announced, was 60 percent.  If all bond holders exercise their option to convert their bonds into ADSs and assuming no adjustments are made to the initial conversion price, up to 15,384,615 new ADSs will be issued.  The conversion ratio is subject to adjustment in case of various corporate events including share splits and capital distributions.
  The calculation of diluted loss per common share for 2007, 2006 and 2005 did not assume the effect of 15,384,615 shares issuable upon the exercise of Convertible Bonds as their effects are anti-dilutive for these periods. Refer to Note 9.
  The proceeds of the issue, after payment of expenses, were utilized by AngloGold Ashanti to refinance amounts outstanding under credit facilities, to meet transaction costs in connection with the acquisition of Ashanti and for general corporate purposes, including planned capital expenditure.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)20.
 LONG-TERM DEBT (continued)
 2007
 $
 2006
 $
 
 
 
 (2)
                  unsecured syndicated borrowing facility, at a margin of 0.4% over LIBOR. A commitment fee of 0.12% 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 ended December 31, 2007, the Company drew down $525 million under the $1,150 million syndicated facility.  The Company, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited have guaranteed all payments and other obligations of the wholly-owned subsidiaries AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited regarding the $1,150 million syndicated loan facility.
   
 
 
 (3)
                  amount of R2 billion ($300 million) at a fixed semi-annual coupon of 10.5% per annum.  The bond is repayable on August 28, 2008, subject to early redemption at the Company’s option and is listed on the Bond Exchange of South Africa.  The net proceeds of the bond are for general corporate purposes.
   
 
 
 
 
 
      (4)
      Renewals are at the discretion of the entity that holds the lease. As of December 31, 2007, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $36 million of assets under capital leases and $2 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, 2007. The weighted average interest rate on the leases existing at December 31, 2007 is 9.8%. Payments are made monthly, including interest, through 2022.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)20.
 LONG-TERM DEBT (continued)
    2007
 $
 (5)
    Renewals are at the discretion of the entity that holds the lease. As of
  December 31, 2007 and 2006, Property, plant and equipment, allocated to Buildings
  and mine infrastructure, includes $16 million and $16 million of assets under capital
  leases and $12  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, 2007 is 6.9%.
  Payments are made monthly, including interest, through 2009.
                 
      
 
 
 (6)
     option. As of December 31, 2007 and 2006, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $2 million and $2 million of assets under the capital lease and $2 million and $1 million of related accumulated depreciation, respectively. Amortization charges relating to the capital lease are included in Depreciation, depletion and amortization expense for the years ended December 31, 2007 and 2006. The weighted average interest rate on the lease existing at December 31, 2007 is 9.0%. The lease is to be repaid in January 2008.
 
 
 
                       
 
 
 (7)
     Renewals are at the discretion of the entity that holds the lease. As of December 31, 2007, Property, plant and equipment, allocated to Buildings and mine infrastructure, includes $1 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, 2007.  The average interest rate on the leases existing at December 31, 2007 is 5.0%.
  Payments are made monthly, including interest, through 2010.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)20.
 LONG-TERM DEBT (continued)
    2007
 $
 2006
 $
 
 
 
                                              PROVISION FOR ENVIRONMENTAL REHABILITATION
         Long-term environmental obligations comprising decommissioning and restoration are based on the group’s environmental management plans, in compliance with the current environmental and regulatory requirements.
   Decommissioning costsThe provision for decommissioning represents the cost that will arise from rectifying damage caused from establishing mining operations.
    Decommissioning costs, representing obligations associated with the retirement of long-lived assets that result from the acquisition, construction or normal operations of long-lived assets, are accounted for in accordance with the provisions of SFAS143. Decommissioning costs are further described in Note 5 – Asset retirement obligations.
   
 
 
 Restoration costsWhile the ultimate amount of rehabilitation cost to be incurred in the future is uncertain, the Company has estimated that the total cost for mine rehabilitation and closure, on an undiscounted basis, will be $1,188 million which includes a total estimated liability of $29 million in respect of equity accounted joint ventures. Refer to Note 15.  Certain amounts have been contributed to a rehabilitation trust and environmental protection bond under the Company's control. The monies in the trust and bond are invested primarily in interest bearing debt securities and are included in Other long-term assets in the Company’s consolidated balance sheet.  Cash balances held in the trust and bond are classified as restricted cash in the Company’s consolidated balance sheets for all periods presented.  AngloGold Ashanti USA has posted reclamation bonds with various federal and governmental agencies to cover environmental rehabilitation obligations.  Refer to Note 24.
    The Company intends to finance the ultimate rehabilitation costs from the monies invested with the rehabilitation trust fund, the environmental protection bond as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure.
      OTHER ACCRUED LIABILITIES
   
   
 
 
       (1)
      (2)
     (1)
 Consists of claims filed by former employees in respect of loss of employment, work-related accident injuries and diseases, government fiscal claims relating to levies and surcharges and
  closure costs of old tailings operations. These liabilities are anticipated to unwind over the next
  two to five years.
 (2)
 Comprises workers compensation claims with regard to work-related incidents.  The liability is
  anticipated to unwind over the next three to five years.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
    2007
 $
 2006
 $
 
 
 
  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.  The post-retirement medical liability is assessed in accordance with the advice of independent professionally qualified actuaries.  The actuarial method used is the projected unit credit actuarial valuation method.  Refer to Note 28.  The costs of post-retirement benefits are made up of those obligations which the Company has towards current and retired employees.
    COMMITMENTS AND CONTINGENCIES
    (1)
                                     (1)
 Including commitments 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 activated carbon.  Amounts stated include purchase obligations of equity accounted joint ventures.
   
 
 
     
 
 
  The Company had the following forward pricing Uranium commitments against future production:
   Year
 lbs('000)
 (1)
 Average contracted
 price ($/lbs)
 (2)
          (1)
 Certain contracts allow the buyer to adjust the purchase quantity within a specified range.
 (2)
 Certain contracts are subject to market related price adjustment mechanisms.  In these cases,
 the price disclosed indicates the previous periodic price resets.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)24.
 COMMITMENTS AND CONTINGENCIES (continued)
 2007
 $
 2006
 $
 
 
 
    
 
 
     
 
 
  The Company has identified a number of groundwater pollution sites at its current operations in South Africa and has investigated a number of different technologies and methodologies that could possibly be used to remediate the pollution plumes.  The geology of the area is typified by a dolomite rock formation that is prone to solution cavities.  Polluted process water from the operations has percolated from pollution sources to this rock formation and has been transported three dimensionally, creating pollution plumes in the dolomite aquifer.  Numerous scientific, technical and legal reports have been produced and the remedying of the polluted soil and groundwater is the subject of a continued research program between the University of the Witwatersrand and the Company.  Subject to the technology being developed as a proven remediation technique, no reliable estimate can be made for the obligation.
      Mineração Serra Grande S.A. (MSG), the operator of the Crixas mine in Brazil, has received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export namely, one assessment for the period between February 2004 and June 2005 and the other for the period between July 2005 and May 2006. The tax authorities maintain that whenever a taxpayer exports gold mined in the State of Goiás through a branch located in a different Brazilian state, it must obtain an authorization from the Goiás State Treasury by means of a Special Regime Agreement (Termo de Acordo re Regime Especial – TARE). The MSG operation is co-owned with Kinross Gold Corporation. The Company’s attributable share of the first assessment is approximately $39 million.  Although MSG requested the TARE in early 2004, the TARE, which authorized the remittance of gold to the Company’s branch in Minas Gerais specifically for export purposes, was only granted and executed in May 2006.  In November 2006 the administrative council’s second chamber ruled in favor of MSG and fully canceled 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 $24 million. The Company believes both assessments are in violation of federal legislation on sales taxes.
      Morro Velho and AngloGold Ashanti Brasil Mineração are involved in disputes with tax authorities.  These disputes involve eleven federal tax assessments including income tax, social contributions and annual property tax based on ownership of properties outside of urban perimeters (ITR).
      Mineração Serra Grande S.A. (MSG), received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold allegedly returned from the branch in Minas Gerais to the company head office in the State of Goiás. The tax administrators rejected the Company’s appeal against the assessment.  The Company is now appealing the dismissal of the case at the judicial sphere.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)24.
 COMMITMENTS AND CONTINGENCIES (continued)
 2007
 $
 2006
 $
    
 
 
 AngloGold Offshore Investments Limited guarantee of the Nufcor International Limited loan facility
   AngloGold Offshore Investments Limited, a wholly owned subsidiary of the Company, has guaranteed 50 percent of the Nufcor International Limited loan facility with First Rand (Ireland) plc (formerly RMB International (Dublin) Limited). Nufcor International Limited is accounted for under the equity method. Refer to Note 15.
      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 ($15 million). The suretyship agreements have a termination notice period of 90 days.  The probability of the non-performance under the suretyships is considered minimal, based on factors of no prior defaults, being well-established companies and recourse via general notarial bonds over the gold stocks of the subsidiaries of the Oro Group. These bonds should enable the Company to recover the majority of the guaranteed amount. The Company receives a fee from the associate for providing the surety and has assessed the possibility of a claim for non-performance.
   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:
   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, 2007 the carrying value of these obligations relating to AngloGold Ashanti USA amounted to $31 million and is included in the Provision for 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.  There are no recourse provisions that would enable AngloGold Ashanti to recover from third parties any of the amounts paid under the guarantee.
   The Company has guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc regarding the issued $1,000,000,000 2.375 percent convertible bonds due 2009. Refer to Note 20. The Company’s obligations regarding the guarantee are direct, unconditional and unsubordinated.
      AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited each have guaranteed all payments and other obligations of AngloGold Ashanti Holdings plc, AngloGold Ashanti USA Incorporated and AngloGold Ashanti Australia Limited regarding the $1.15 billion Syndicated loan facility dated December 13, 2007. This Syndicated loan facility replaced in its entirety the previous $700 million revolving credit facility dated January 26, 2005, which was repayable in January 2008. Refer to Note 20.
     
      The Company has issued gold delivery guarantees to several counterpart banks in 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)24.
 COMMITMENTS AND CONTINGENCIES (continued)
 2007
 $
 2006
 $
    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 Ashanti Treasury Services Limited (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, 2007 the marked-to-market valuation of the ATS hedge book was negative $1,494 million.
   Hedging guarantees of due performance by the Geita Management Company Limited (GMC)
   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 the 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. This guarantee remains in force until no sum remains to be paid under the Hedging Agreements and the Bank has irrevocably recovered or received all sums payable to it under the Hedging Agreements. 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, 2007 the marked-to-market valuation of the GMC hedge book was negative $520 million.
   In addition to the above, the Company has contingent liabilities in respect of certain tax assessments, claims, disputes and guarantees which are not considered to be material.
   With operations in several countries on several continents, many of which are emerging markets, AngloGold Ashanti is subject to, and pays annual taxes under the various tax regimes where it operates. Some of these tax regimes are defined by contractual agreements with the local government, but others are defined by the general corporate tax laws of the country. The Company has historically filed, and continues to file, all required tax returns and to pay the taxes reasonably determined to be due.  In some jurisdictions, tax authorities are yet to complete their assessments for the previous years. The tax rules and regulations in many countries are complex and subject to interpretation. From time to time the Company is subject to a review of its historic tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved. Management believes based on information currently to hand, that such tax contingencies have been adequately provided for, and as assessments are completed, the Company will make appropriate adjustments to those estimates used in determining amounts due.
   Vulnerability from concentrationsThe majority of AngloGold Ashanti’s 61,522 employees (2006: 61,453, 2005: 63,993) 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 August 2007, when the parties reached an agreement covering the period from July 1, 2007 to June 30, 2009.
   There is a concentration of risk in respect of recoverable value added tax and fuel duties from the Malian government.  Recoverable value added tax due from the Malian government to the Company amounts to $42
 (December 31, 2006: $34 million). The last audited value added tax return was for the period ended March 31, 2007 and as at December 31, 2007, $25 million was still outstanding and $17 million is still subject to audit. The accounting processes for the unaudited amount are in accordance with the processes advised by the Malian government in terms of the previous audits.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)24.
 COMMITMENTS AND CONTINGENCIES (continued)
 Recoverable fuel duties from the Malian government to the Company amount to $7 million at December 31, 2007 (December 31, 2006: $11 million). Fuel duty refund claims are required to be submitted before January 31 of the following year and are subject to authorization by, firstly, the Department of Mining, and secondly, the Customs and Excise authorities.  As at December 31, 2007, the Customs and Excise authorities have approved $2 million which is still outstanding, while $5 million is still subject to authorization. The accounting processes for the unauthorized amount are in accordance with the processes advised by the Malian government in terms of the previous authorizations.  With effect from February 2006, fuel duties are no longer payable to the Malian government.
  The Government of Mali is a shareholder in all of the Company’s entities in Mali.  Management is in negotiations with the Government of Mali to agree a protocol for the repayment of the outstanding amounts.  The amounts outstanding have been discounted to their present value at a rate of 6.5 percent.
   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 $16 million at December 31, 2007 (December 31, 2006: $14 million). The last audited value added tax return was for the period ended June 30, 2007 and as at December 31, 2007, $14 million was still outstanding and $2 million is still subject to audit.  The accounting processes for the unaudited amount are in accordance with the processes advised by the Tanzanian government in terms of the previous audits.  The amounts outstanding have been discounted to their present value at a rate of 7.8 percent.
   Recoverable fuel duties from the Tanzanian government to the Company amount to $37 million at December 31, 2007 (December 31, 2006: $18 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.  As at December 31, 2007, claims for refund of fuel duties amounting to $21 million have been lodged with the Customs and Excise authorities, which are still outstanding, whilst claims for refund of $16 million have not yet been submitted.  The accounting processes for the unauthorized amount are in accordance with the processes advised by the Tanzanian government in terms of the previous authorizations.  The amounts outstanding have been discounted to their present value at a rate of 7.8 percent.
    STOCKHOLDERS’ EQUITY
  The authorized common stock of the Company was increased in 1998 to 400,000,000 shares of common stock of 25 ZAR cents each principally to meet its obligations regarding the proposed merger of AAC gold interests through the Company.  During 2006, AngloGold Ashanti approved the Employee Share Ownership Plan for the employees in the South African operations and a Black Economic Empowerment transaction (BEE transaction) for which 4,280,000 E shares of common stock of 25 ZAR cents and 960,000 shares of common stock of 25 ZAR cents were authorized.  In addition, 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.
  During 2007, 1,221,318 shares of common stock and 94,230 E shares of common stock were issued by the Company, 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:
 ·
  ·
 E shares of common stock which were cancelled in accordance with the cancellation formula pertaining to the Employee Share Ownership Plan;
 ·


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)25.
 STOCKHOLDERS’ EQUITY (continued)
 ·
  (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.  As at December 31, 2007, there were 913,410 shares of common stock and 2,740,230 E shares of common stock in issue and outstanding in respect of the Employee Share Ownership Plan.
  During 2006, 11,297,721 shares of common stock and 4,185,770 E shares of common stock in the Company were issued as follows:
 ·
  ·
 of the Employee Share Ownership Plan and the BEE transaction for a consideration of $93 million, which are eliminated as shares held within the Company.
 ·
   During 2005, 475,538 shares of common stock in the Company were issued as part of the share incentive scheme for a consideration of $9 million.
 At a general meeting held on April 10, 2006, ordinary resolutions were passed with the requisite majority, providing authority to the directors to allot sufficient ordinary shares of the Company to allow it to raise $500 million before expenses and after underwriters’ fees in a public offering.  The offering was completed on April 20, 2006 and resulted in the issue of 9,970,732 new ordinary shares, along with the simultaneous sale of 19,685,170 AngloGold Ashanti shares held by Anglo American plc (AA plc), reducing AA plc’s holding in the Company to 41.8 percent.  The combined offering was priced at $51.25 per ADS and R315.19 per ordinary share (a 1 percent discount to the weighted average traded price of the shares on the Johannesburg Stock Exchange (JSE) over the 30 days prior to pricing).  Net proceeds to the Company of the primary offering was $498 million, which was used for project development capital, capital expenditure, repayment of local money-market short-term borrowings and other general corporate purposes.  During October 2007, AA plc further reduced its investment in the Company to 16.61 percent.  As at December 31, 2007, AA plc held a 16.58 percent interest in the Company.
  At a general meeting of shareholders held on May 4, 2007, shareholders approved, as a general authority, authorization to the board of directors to allot and issue, in their discretion, and for such purposes as they may determine, up to 10 percent of the authorized but unissued common stock of 25 ZAR cents each in the share capital of the Company (subject to the South African Companies Act and the Listings Requirements of the JSE Securities Exchange South Africa) after setting aside so many common stock of 25 ZAR cents each as may be required to be allotted and issued by the Company pursuant to the AngloGold Share Incentive Scheme, the Long-Term Incentive Plan and the Bonus Share Plan, the Bokamoso Employee Share Ownership Plan, the Black Economic Empowerment transaction and for the purposes of the conversion of the $1,000,000,000, 2.375 percent guaranteed Convertible Bonds issued by AngloGold Ashanti Holdings plc. Refer to Note 30 and Note 20. As at December 31, 2007 of the total unissued common stock of 122,542,529 of 25 ZAR cents each, of which 9,410,362 of 25 ZAR cents each was under the control of the directors until the forthcoming annual general meeting.  In terms of a specific authority granted at the general meeting of stockholders held on March 29, 1993, the directors are authorized to issue the 4,221,104 unissued B redeemable preferred stock of 1 ZAR cent each to Eastvaal Gold Holdings Limited.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 
 FINANCIAL RISK MANAGEMENT ACTIVITIES
  In the normal course of its operations, the Company is exposed to gold and other commodity price, currency, interest rate, liquidity and credit risks. In order to manage these risks, the Company enters into derivative transactions. The Company does not acquire, hold or issue derivatives for trading purposes. The Company has developed a comprehensive 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.
   ·
  ·
  ·   Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; ·   Ensuring that all contracts and agreements related to risk management activities are coordinated, consistent
   A number of products, including derivatives are used to satisfy these objectives. Forward purchase and sale contracts and call and put options are used by the Company to manage its exposure to gold price and currency fluctuations.  SFAS133 requires that derivatives be accounted for as follows:
 ·
 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.
 ·
 sheet, at fair value as either a derivative asset or derivative liability.  For cash flow hedges, the effective portion of changes in fair value of the hedging instruments are recognized in equity (other comprehensive income) until the underlying transaction occurs, then the gains or losses are recognized in product sales.  The ineffective portion of changes in fair value is reported in earnings as gains or losses on non-hedge derivatives in the period in which they occur.  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 $10 million (2006: $nil million; 2005: $nil million). Of the contracts accounted for as cash flow hedges, contracts with a carrying value of $194 million, a liability at December 31, 2007 are expected to be reclassified from other comprehensive income and recognized as a reduction in product sales during 2008.
 ·
   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 for all periods presented.  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 within the financing activities section 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.
  Loss on non-hedge derivatives of $808 million (2006: $208 million; 2005: $142 million), being derivatives not designated in formal hedge accounting relationships is included in the current year income statement.  The increase in the loss on non-hedge derivatives over 2006 is mainly the result of the revaluation of non-hedge derivatives resulting from changes in the prevailing spot gold price, exchange rates, interest rates and greater volatilities.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.
 FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
 Gold price and currency risk management activities
  Gold and currency hedging instruments are denominated in South African rands, US dollars, Australian dollars and Brazilian real. The hedging instruments utilized are forward sale and purchase contracts, purchased and sold put options, and purchased and sold call options and gold lease rate swaps. The mix of hedging 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 of up to ten years with counterparties.
  Some of the instruments described above are designated and accounted for as cash flow hedges. The cash flow hedged forecast transactions are expected to occur over the next 3 years, in line with the maturity dates of the hedging instruments.
  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 2007 was 108,403kg (2006: 122,133kg).
  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 and would benefit by the same quantity as the option loss by selling production in the open market.
 Net delta open hedge position as at December 31, 2007
 The Company has an established practice of actively managing its hedged commitments under changing market circumstances. A substantial restructuring of the hedge book was concluded between December 2004 and January 2005 which was followed by a smaller restructuring of the hedging commitments of the Geita Management Company following the repayment of project finance loans.   During 2006 and 2007, in addition to delivering in and buying back a number of non-hedge derivative contracts, the Company also restructured a number of hedge contracts maturing in the near term into later years.
 As of December 31, 2007, the hedge book reflected a net delta tonnage position of 10.39 million ounces (323 tonnes) or 36 percent of the next 5 years forecast production.  As of December 31, 2006, the hedge book reflected a net delta tonnage position of 10.16 million ounces (316 tonnes) or 32 percent of the next 5 years forecast production.
 The marked-to-market value of all hedge transactions, irrespective of accounting designation, making up the hedge positions was a liability of $4,273 million as at December 31, 2007 (as at December 31, 2006: a liability of $2,903 million).  These values were based on a gold price of $836.30 per ounce, exchange rates of $/R6.8104 and A$/$0.8798 and the prevailing market interest rates and volatilities at December 31, 2007.  The values as at December 31, 2006 were based on a gold price of $636.30 per ounce, exchange rates of $/R7.0010 and A$/$0.7886 and the prevailing market interest rates and volatilities at that date.
 The Company had the following net forward pricing commitments outstanding against future production as at December 31, 2007.
 Year
 2008
 2009
 2010
 2011
 2012
 2013-2015
 Total
 DOLLAR GOLDForward contracts
 Amount (kg)
 22,817
 21,738
 14,462
 12,931
 11,944
 12,364
 96,256
 $
 per
 oz
 $314
 $316
 $347
 $397
 $404
 $432
 $357
 *Forward contracts (Long)  Amount (kg)
 11,304
 
 11,304
 $
 per
 oz
 $647
 
 $647
 Put options sold
 Amount (kg)
 25,962
 3,748
 1,882
 1,882
 1,882
 3,764
 39,120
 $
 per
 oz
 $682
 $530
 $410
 $420
 $430
 $445
 $607
 Call options purchased
 Amount (kg)
 9,813
 
 9,813
 $
 per
 oz
 $427
 
 $427
 Call options sold
 Amount (kg)
 58,570
 45,950
 36,804
 39,385
 24,460
 39,924
 245,093
 $
 per
 oz
 $521
 $498
 $492
 $517
 $622
 $604
 $535


F-53
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.
 FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 Year
 2008
 2009
 2010
 2011
 2012
 2013-2015
 Total
 RAND GOLDForward contracts
                        AUD DOLLAR GOLDForward contracts
                                                             
 Hedge delta as a percentage of current production levels (%)***
     
   Indicates a long position from forward purchase contracts. The Company enters into forward purchase contracts as part of its strategy to manage and reduce the size of the hedge book.
  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, 2007.
  Year
 2008
 2009
 2010 2011
 2012-2015
 GOLD LEASE RATE SWAPS
     Gold borrowing cost associated with forward contracts
 (1)
            (2)
       (1)
   The Australian dollar denominated gold forward contract prices are shown on a net basis where the final price of the contract isdetermined by the cost of borrowing gold over the full duration of the contract.  The net prices shown 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 at the financial statement date.  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 statement.
 (2)
 The gold lease rate swaps are contracts where the Company receives a fixed percentage of the outstanding amount in gold and pays a floating market determined percentage in gold, quarterly in arrears.  The amount shown in the table above is the number of ouncesoutstanding at the beginning of each period.  The interest rate shown is the weighted average fixed rate that the Company will receive for that period.
 Year  2008
 2009
 2010
 2011
 2012
 2013-2015
 Total
 DOLLAR SILVERPut options purchased
                              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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.  FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
  Year
 2008
 2009
 2010
 2011
 2012           
  2013-2015
 Total
 RAND DOLLAR (000)Forward contracts
 Amount ($)
 35,000
 
 35,000
 
 Rand per $
 R6.94
 
 R6.94
 Put options purchased
 Amount ($)
 120,000
 
 120,000
 
 Rand per $
 R6.98
 
 R6.98
 Put options sold
 Amount ($)
 120,000
 
 120,000
 
 Rand per $
 R6.65
 
 R6.65
 Call options sold
 Amount ($)
 135,000
 
 135,000
 
 Rand per $
 R7.35
 
 R7.35
 AUD DOLLAR (000)Forward contracts
 Amount ($)
 190,000
 
 190,000
 
 $ per A$
 $0.84
 
 $0.84
 Put options purchased
 Amount ($)
 140,000
 
 140,000
 
 $ per A$
 $0.83
 
 $0.83
 Put options sold
 Amount ($)
 140,000
 
 140,000
 
 $ per A$
 $0.87
 
 $0.87
 Call options sold
 Amount ($)
 140,000
 
 140,000
 
 $ per A$
 $0.81
 
 $0.81
 BRAZILIAN REAL DOLLAR (000)Forward contracts
 Amount ($)
 31,000
 
 31,000
 
 BRL per $
 BRL 1.99
 
 BRL 1.99
 Put options purchased
 Amount ($)
 24,000
 
 24,000
 
 BRL per $
 BRL 1.87
 
 BRL 1.87
 Call options sold
 Amount ($)
 68,000
 
 68,000
 
 BRL per $
 BRL 1.92
 
 BRL 1.92
 As at December 31, 2007 certain of the hedging positions reported in the above tables were governed by early termination options in favor of certain counterparts.  No termination options were exercised early.
 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 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 of good credit standing.
 Cash and loans advanced maturity profile
 
 2007
 2006
 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
 32
 4.3
 66
 4.0
 35
 5.1
 64
 4.5
 ZAR
 525
 11.0
 888
 10.1
 513
 8.5
 837
 7.8
 AUD
 -
 -
 34
 6.5
 -
 -
 52
 6.0
 HKD
 -
 -
 1
 4.0
 -
 -
 -
 -
 BRL
 -
 -
 67
 8.9
 -
 -
 35
 13.2
 ARS
 -
 -
 9
 11.1
 -
 -
 13
 9.5
 NAD
 139
 9.7
 58
 9.5
 134
 8.3
 -
 -


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 Borrowings maturity profile
 Within one year
 Between
 one and two years
 Between
 two and five years
 After five years
 Currency
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Total
 Borrowings
 amount
 (million)
 $                   
  34
 5.8
 1,003
 2.4                 
  376
 8.5
 1,413
 ZAR              
  2,072
 10.5
 20            
  9.9
 63            
  9.9                
  165            9.8             
  2,320
 AUD
 
 
 172
 7.7
 
 172
 BRL
 1
 5.0
 
 
 1
 Interest rate risk
 Fixed for less than
 one year
 Fixed for between
 one and three years
 Fixed for greater than
 three years
 Currency
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Borrowings
 Amount
 (million)
 Effective
 Rate
 %
 Total
 Borrowings
 amount
 (million)
 $                      
  34                   
  5.8
 1,378                   
  4.1                         
  1
 6.7
 1,413
 ZAR                 
  2,072                 
  10.5
 41                    
  9.9                      
  207               
  9.8                
  2,320
 AUD
 172
 7.7
 
 172
 BRL
 1
 5.0
 
 1
 Interest rate swapsThe Company previously entered into a convertible interest rate swap. The swap was a derivative instrument as defined by SFAS133. The swap, done on the back of the $1 billion Convertible Bond, converted the fixed coupon of 2.375% per annum into a LIBOR-based floating rate. The swap was not designated as a fair value hedge. The swap was terminated and settled during September 2005, based on the Company’s view of US dollar interest rates.
 The Company previously entered into interest rate swap agreements to convert R750 million ($133 million) of its R2,000 million ($354 million) ZAR denominated fixed rate Bond to variable rate debt. The swaps were not designated as fair value hedges. The interest rate swaps were terminated and settled during April 2005, based on the Company’s view of ZAR interest rates.
 Credit riskRealization of all these contracts is dependent upon the counterparts performing in accordance with the terms of the contracts.  The Company generally does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparts.  The Company spreads its business over a number of financial and banking institutions of good credit quality and believes that no concentration of credit risk exists.  Limits foreach counterpart are based on the assessed credit quality of each counterpart.  The AngloGold Ashanti Treasury Committee makes recommendation for board approval of all counterparts and the limits to be applied against each counterpart. Where possible, management tries to ensure that netting agreements are in place.
 The combined maximum credit exposure at the balance sheet date amounts to $516 million (2006: $655 million) on a contract by contract basis. Credit risk exposure netted by counterparts amounts to $123 million (2006: $68 million). No set-off is applied to the balance sheet due to the different maturity profiles of assets and liabilities.
  Number of Counterparts
 Type
 Credit Rating (Fitch)
 1  International  Bank
 AA+
 9  International  Bank
 AA
 8  International  Bank
 AA-
 3  International  Bank
 A+
 1  International  Bank
 A
 5  International  Bank
 A-
 1
 South African Bank
 AAA(zaf) (International BBB+)
 2
 South African Bank
 AA+(zaf) (International BBB+)
 1
 South African Bank
 AA(zaf) (International BBB)
 1
 South African Bank
 AA-(zaf) (International BBB)
 4  Brazilian  Bank
 AAA(bra)
 3  Brazilian  Bank
 AA+(bra)
 2  Brazilian  Bank
 AA(bra)
 1  Brazilian  Bank
 AA-(bra)
 1
 Trade Finance House
 Not rated


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 Fair value of financial instrumentsThe estimated fair values of financial instruments are determined at discrete points in time based on relevant market information.  In certain cases these estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the Company’s financial instruments, as measured at December 31, 2007 and 2006, are as follows (assets (liabilities)):
 December 31, 2007
 December 31, 2006
 Carrying
 amount
 $
 Fair
 value
 $
 Carrying
 amount
 $
 Fair
 value
 $
 Cash and cash equivalents
 477
 477
 471
 471
 Restricted cash
 37
 37
 11
 11
 Short-term debt
 (319)
 (319)
 (33)
 (33)
 Long-term debt
 (1,564)
 (1,564)
 (1,472)
 (1,484)
 Derivatives                                                                               
  (2,563)
 (1)
 (4,342)
 (1)
 (1,524)
 (1)
 (2,954)
 (1)
 (1)
 Carrying amounts represent on-balance sheet derivatives and fair value includes off-balance sheet normal purchase and sale
 exempted contracts.
 The following is the fair value of the hedge book derivative (liabilities)/assets split by accounting designation
 December 31, 2007
 
 Normal
 purchase
 and
 sale exemption
 $
 Cash flow
 hedge
 accounted
 $
 Non-hedge
 accounted
 $
 Total
 $
 Forward sales type agreements
 (1,044)
 (336)
 
 (236)
 (1,616)
 Option contracts
 (708)
 -
 
 (2,030)
 (2,738)
 (1)
 Foreign exchange contracts
 -
 4
 
 7
 11
 Foreign exchange option contracts
 -
 -
 
 (6)
 (6)
 Interest rate swaps – Gold
 (27)
 -
 
 34
 7
 Total  (1,779)
 (332)
 
 (2,231)
 (4,342)
 (1)
 Includes deliverable call options sold.  A deliverable option is an option in terms of which the delivery quantity is fixed regardless of
 the market price on the exercise date.  In the event that the market price is lower than the strike price, gold is sold to the counterpart at the ruling spot price.
 December 31, 2006
 
 Normal purchase
 and
 sale exemption
 $
 Cash flow
 hedge
 accounted
 $
 Non-hedge
 accounted
 $
 Total
 $
 Forward sales type agreements
 (829)
 (375)
 (124)
 (1,328)
 Option contracts
 (567)
 -
 (1,056)
 (1,623)
 (1)
 Foreign exchange contracts
 -
 2
 2
 4
 Foreign exchange option contracts
 -
 -
 (12)
 (12)
 Interest rate swaps – Gold
 (34)
 -
 39
 5
 Total  (1,430)
 (373)
 (1,151)
 (2,954)
 (1)
 Includes deliverable call options sold.  A deliverable option is an option in terms of which the delivery quantity is fixed regardless of
 the market price on the exercise date.  In the event that the market price is lower than the strike price, gold is sold to the counterpart at the ruling spot price.
 Maturity profile of on-balance sheet derivatives, at carrying value
 Total
 $
 
 2007
 Assets
 $
 
 Liabilities
 $
 Amounts to mature within twelve months of balance sheet date
 (2,266)
 
 516
 
 (2,782)
 Amounts maturing between one and two years
 (148)
 
 -
 
 (148)
 Amounts maturing between two and five years
 (123)
 
 -
 
 (123)
 Amounts to mature thereafter
 (26)
 
 -
 
 (26)
 Total
 (2,563)
 516
 (3,079)


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)26.FINANCIAL RISK MANAGEMENT ACTIVITIES(continued)
 Total
 $
 2006
 Assets
 $
 Liabilities
 $
                           Cash and cash equivalents and short-term debtThe carrying amounts approximate fair value because of the short-term duration of these instruments.
 Long-term debtThe fair value of listed fixed rate debt and the Convertible Bonds are shown at their quoted market value.  The remainder of debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
 DerivativesThe fair value of volatility-based instruments are estimated based on market prices, volatilities and interest rates, while the fair value of forward sales and purchases are estimated based on the quoted market price for the contracts at December 31, 2007 and 2006.  The amounts include those contracts accounted for as normal purchase and sale exempt derivatives.
 ADDITIONAL CASH FLOW INFORMATION
 2007
 $
 2006
 $
 2005
 $
 Non-cash itemsReported as non-cash items in the statements of consolidated cash flows are the following:
 
 
 
 
 
     
 
 
 
 
     EMPLOYEE BENEFIT PLANS
 Defined Benefit Plans
  The Company has made provision for pension and medical schemes covering substantially all employees.  The retirement schemes as at December 31, 2007, 2006 and 2005, consists of the following which reflects the following provision values:
 2007
 $
 2006
 $
 2005
 $
     Post Retirement medical scheme for AngloGold Ashanti South African employees
        Sub Total
                Total Provision


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 South  Africa  Defined Benefit Pension Fund
 The plan is evaluated by independent actuaries on an annual basis as at December 31, of each year.  The previous statutory valuation had an effective date of December 31, 2005, and was completed in June 2006. The next statutory valuation will have an effective date no later than December 31, 2008. The valuation as at December 31, 2007 was completed at the beginning of 2008. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pensions as well as returns on investments.  The accumulated benefit obligation at December 31, 2007 is $218 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
 2007
 $
 2006
 $
 2005
 $
 Change in benefit obligation
 
 Benefit obligation at January 1,
 224
 222
 216
 Service cost
 7
 7
 6
 Interest cost
 18
 16
 14
 Plan participants’ contributions
 2
 2
 2
 Actuarial loss
 11
 12
 31
 Increase as a result of transfers into the fund
 1
 -
 -
 Benefits paid
 (12)                
  (14)
 (24)
 Translation
 6
 (21)
 (23)
 Benefit obligation at December 31,
 257
 224
 222
 Change in plan assetsFair value of plan assets at January 1,
 262
 230
 204
 Actual return on plan assets
 27
 62
 57
 Company contributions
 6
 6
 13
 Plan participants’ contributions
 2
 2
 2
 Increase as a result of transfers into the fund
 1
 -
 -
 Benefits paid
 (12)                
  (14)
 (24)
 Translation
 7
 (24)
 (22)
 Fair value of plan assets at December 31,
 293
 262
 230
 Funded status at end of year
 36
 38
 8
 Net amount recognized
 36
 38
 8
 Components of net periodic benefit costService cost
 7
 7
 6
 Interest cost
 18
 16
 14
 Actuarial gains and losses
 12
 (28)
 (10)
 Expected return on assets
 (28)
 (22)
 (16)
 Net periodic benefit cost
 9
 (27)
 (6)
 Pension benefits
 2007              
  2006
 2005
 Assumptions Weighted-average assumptions used to determine benefit obligations at December 31,Discount rate
 8.25%            
  8.00%
 7.75%
 Rate of compensation increase
 (1)
 6.00%            
  5.50%
 5.00%
 Weighted-average assumptions used to determine the net periodic benefit cost for the years ended December 31,Discount rate
 8.25%             
  8.00%
 7.75%
 Expected long-term return on plan assets
 11.14%
 10.50%
 10.14%
 Rate of compensation increase
 (1)
 6.00%
 5.50%
 5.00%
 Pension increase
 4.73%             
  4.28%
 4.05%
 (1)
 The short-term compensation rate increase is 8% (2006: 6%) and the long-term compensation rate increase is 6% (2006: 5.5%).
 The expected long-term return on plan assets is determined using the after tax return of RSA Government long bond yields as a guide.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 Pension benefits
 2007
 2006
 Plan assetsAngloGold Ashanti’s pension plan asset allocations at December 31, 2007 and 2006, by asset category are as follows: Asset CategoryEquity securities
           Investment PolicyThe 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.
 2007  2006
 No. of
 Shares
 Percentage of
 total assets
 Fair Value
 $
 No. of
 Shares
 Percentage of
 total assets
 Fair Value
 $
 Related PartiesInvestments held in related parties are summarized as follows:
 
 Equity SecuritiesAnglo American plc
 (1)
 -
 40,400  0.8%
 2
 AngloGold Ashanti Limited
 88,458
 1.3%
 4
 32,960
 0.6%
 2
 4
 
 4
 Other investments exceeding 5% of total plan assetsBondsRSA R157 Government Bonds 13.5%
 5.4%
 16
 
 -
 (1)
 During April 2006, AngloGold Ashanti Limited launched an
 equity offering which reduced Anglo American plc’s interest in AngloGold Ashanti Limited to 41.67%.  During October 2007, AA plc further reduced its investment in AngloGold Ashanti Limited to 16.61%.  As at December 31, 2007, AA plc held a 16.58% interest in AngloGold Ashanti Limited.
 Cash Flows ContributionsThe Company expects to contribute $6 million (2007: $6 million) to its pension plan in 2008.
 
 $
 Estimated future benefit paymentsThe following pension benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: 2008


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 South Africa post-retirement medical benefitsThe 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, 2007.
 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
 2007
 $
 2006
 $
 2005
 $
 Change in benefit obligation
 
 
 
                                         Components of net periodic benefit costService cost
           The assumptions used in calculating the above amounts are:
         Assumed health care cost trend rates at December 31, Health care cost trend assumed for next year
        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
 increase
 1-percentage point
 decrease
       Cash flowsPost-retirement medical plan
  The Company expects to contribute $28 million (2007: $25 million) to the post-retirement medical plan in 2008.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 Estimated future benefit payments
 $ million
 The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
             Other Defined Benefit Plans
  Other plans comprise the following and have been aggregated in the tables of change in benefit obligations, change in plan assets and components of Net Periodic Benefit Cost.
 
 Information with respect to the Ashanti Retired Staff pension plan, for the year ended December 31, is as follows:
  The pension scheme provides a retirement benefit to former Ashanti employees which were based at the former London office.  The scheme is closed to new members and participants are either retired or deferred members.  The plan is evaluated by actuaries on an annual basis using the projected unit credit funding method.  No contributions are made to the plan and it is funded with a marginal shortfall.
 2007               
  2006
 2005
 AssumptionsWeighted-average assumptions used to determine benefit obligations at December 31,Discount rate
    Weighted-average assumptions used to determine net periodic benefit cost at December 31,Discount rate
            The expected long-term return on plan assets is determined using the after tax return of domestic bonds, fixed deposits and equity securities.
 2007
 2006
 Plan assetsThe Ashanti Retired Staff defined benefit pension plan asset allocations at December 31, 2007 and 2006, by asset category are as follows:
 Asset CategoryEquity securities
              
 Information with respect to the Obuasi Mines Staff Pension Scheme, for the year ended December 31, is as follows:
  The scheme provides monthly payments in the Ghanaian currency (indexed to the US dollar) to retirees until death.  The benefits for the scheme are based on years of service and the compensation levels of the covered retirees.  The scheme is closed to new members and all the scheme participants are retired.  The scheme is unfunded and accordingly, no assets related to the scheme are recorded.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 2007  2006
 2005
 Assumptions Weighted-average assumptions used to determine benefit obligations at December 31,Discount rate
    Weighted-average assumptions used to determine net periodic benefit cost at December 31,Discount rate
        Information with respect to the Retiree Medical Plan, which includes benefits for AngloGold Ashanti USA employees, for the year ended December 31, is as follows:
 North America Retiree Medical Plan – AngloGold Ashanti USA provides health care and life insurance benefits for certain retired employees under the AngloGold North America Retiree Medical Plan (the “Retiree Medical Plan”).  With effect December 31, 1999, no additional employees were eligible to receive post-retirement benefits under the Retiree Medical Plan.  Curtailment accounting was applied at December 31, 1999.
  The Retiree Medical Plan is a non-contributory defined benefit plan.  This plan was last evaluated by independent actuaries in September 2007 who took into account reasonable long-term estimates of increases in health care costs and mortality rates in determining the obligations of AngloGold Ashanti USA under the Retiree Medical Plan.  The Retiree Medical Plan reflected liabilities of $2 million (2006: $2 million, 2005: $2 million).  The Retiree Medical Plan is an unfunded plan.  The Retiree Medical Plan is evaluated on an annual basis using the projected benefit method.
 Other
 benefits
 2007
 Other
 benefits
 2006
 Other
 benefits
 2005
 The assumptions used in calculating the benefit obligations at December 31,Discount rate
     (1)
 
  (1)
 The Company does not share in future cost increases and therefore the rate of compensation increase is not applicable.
 
 Information with respect to the Nufcor South Africa Retiree Medical Plan, which includes benefits for the Nufcor South Africa past employees, for the year ended December 31, is as follows:
 Assumptions Weighted-average assumptions used to determine benefit obligations at December 31,
             Plan AssetsThe asset allocation of the Nufcor South Africa post retirement medical fund at December 31, 2007 and 2006, by asset category is as follows:
 Asset CategoryUnit Trust Investment Funds


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 Information with respect to the Post Retirement Medical Plan and Obligation for the Rand Refinery Ltd employees, for the year ended December 31, is as follows:
 Other
 benefits
 2007
 Other
 benefits
 2006
 Other
 benefits
 2005
 Assumptions Weighted-average assumptions used to determine benefit obligations at December 31,Discount rate
            Other
 benefits
 2007
 Other
 benefits
 2006
 Plan AssetsThe asset allocation of the Rand Refinery post retirement medical fund at December 31, 2007 and 2006, by asset category is as follows:
 Asset CategoryDebt securities
        North America Supplemental Employee Retirement Plan (SERP)Certain former employees of Minorco (USA) Inc. were covered under the Minorco
  (USA) Inc. Supplemental Employee Retirement Plan (the SERP), a non-
  contributory defined benefit plan.  The SERP was last evaluated by independent
  actuaries in September 2007 who took into account long-term estimates of
  inflation and mortality rates in determining the obligation of AngloGold Ashanti
  USA under the SERP.  The SERP reflected liabilities of $1 (2006: $1 million, 2005: $1 million).  The SERP is an unfunded plan and is
  evaluated by actuaries on an annual basis using the projected benefit method.
 2007  2006
 2005
 Weighted-average assumptions used to determine benefit obligations at the end of the year are as follows:Discount rate
 
  Weighted-average assumptions used to determine the net periodic benefit cost of the year:Discount rate
 
   (1)
 
  (1)
 Pension benefits are fixed and pension inflation thus not relevant.
 
 
 
 
 Aggregated information in respect of the other defined benefit plans, for the year ended December 31, is set forth in the table below:
 2007
 $
 2006
 $
 2005
 $
 Change in benefit obligationsBalance at January 1,


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 2007
 $
 2006
 $
 2005
 $
 Change in plan assetsFair value of plan assets at January 1,
                                Components of net periodic benefit costInterest cost
               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 future benefit payments, which reflect the expected future service lives, as appropriate, are expected to be paid:
             
 Defined Contribution FundsContributions to the various retirement schemes are fully expensed during the year in which they are made and the cost of contributions to retirement benefits for the year amounted to $51 million (2006: $40 million, 2005: $31 million).
 Australia (Boddington and 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 $3 million (2006: $2 million, 2005: $2 million).
 
 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.  AngloGold Ashanti Limited seconded employees at Navachab remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti Limited.  The cost of providing retirement benefits for the year amounted to $1 million (2006: $1 million, 2005: $1 million).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)28.EMPLOYEE BENEFIT PLANS(continued)
 
 Mali (Sadiola, Yatela and Morila)The Malian operations do not have retirement schemes for employees.  All employees (local and expatriate) contribute towards the government social security fund, and the Company also makes a contribution towards this fund.  On retirement, Malian employees are entitled to a retirement benefit from the Malian Government.  Expatriate employees are reimbursed only their contributions to the social security fund. AngloGold Ashanti Limited seconded employees in Mali remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti Limited.  The cost of providing retirement benefits for the year amounted to $1 million (2006: $1 million, 2005: $2 million).  The Sadiola, Yatela and Morila Joint Ventures are equity accounted.  Refer to Note 15.
 
 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 Parastatal Provident Fund (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. AngloGold Ashanti Limited employees seconded in Tanzania remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti Limited. The Company contributes to the National Social Security Fund (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 $1 million (2006: $2 million, 2005: $2 million).
 South America (AngloGold Ashanti Brasil Mineração, Cerro Vanguardia and Serra Grande)The AngloGold Ashanti 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 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. Contributions amounted to $5 million (2006: $2 million, 2005: $1 million).
 Ghana and Guinea (Iduapriem, Obuasi and Siguiri)
  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 interest deposits and other projects.  The costs of these contributions for the year amounted to $4 million (2006: $3 million, 2005: $3 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 $36 million (2006: $29 million, 2005: $20 million).
 29.  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. Therefore, information regarding separate geographic segments is provided. During 2007, the Company changed the method of allocating hedging to individual mines. In prior periods, forward contracts were allocated to each reporting segment, based on the then prevailing contractual relationship with the counterparty. Following the removal of certain counterparty restrictions and the granting of group level guarantees during 2006, the Company has applied an average received gold price across all reporting segments. The average received gold price for each mine is thus similar to the Company’s average received gold price which includes realized gains/losses on non-hedge derivatives. Where applicable, the corresponding items of segment information for all earlier periods presented have been restated to reflect this. This information is consistent with the information used by the Company’s Chief Operating Decision Maker in evaluating operating performance of, and making resource allocation decisions among operations.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)29.   
  SEGMENT AND GEOGRAPHICAL INFORMATION(continued)
 Year ended December 31
 Business segment data
 2007
 $
 2006
 $
 2005
 $
 RevenuesRevenues from product sales:
   
    
    
    
     
     
     
     
     
    
                     Depreciation and amortization expense   
  South Africa
    
    
    
     
     
     
     
     
    
                 Segment income/(loss)   
  South Africa
    
    
    
     
  
   
     
     
    
    
        Reconciliation of segment income/(loss) to Net loss   
  Segment total


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)29.   
  SEGMENT AND GEOGRAPHICAL INFORMATION(continued)
 Year ended December 31
 
 Business segment data
 2007
 $
 2006
 $
 2005
 $
 Segment assets   
  South Africa
                                (1)
  (1)
  (1)
                           Expenditure for additions to long-lived assets   
  South Africa
                                                                     Geographical area dataTotal revenues  South Africa
     
                                                                     (1)
 Investment  held.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)29.    
  SEGMENT AND GEOGRAPHICAL INFORMATION(continued)
 Year ended December 31
 
 Business segment data
 2007
 $
 2006
 $
 2005
 $
 Long-lived assets by area   
  South Africa
     
    
    
    
    
    
  (1)
  (1)
  (1)
 
    
    
    
          (1)
 Investment held.
 ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS
 
 Employee Share Incentive SchemePrior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees, and related Interpretations”, as permitted by SFAS123.  On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), “Share-Based Payment”, using the modified prospective transition method.
  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 its continued growth, 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 which have been granted prior to May 1, 2002 remained subject to the conditions under which they were granted.  Although there are no automatically convertible unsecured debentures
 (1)
  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, 2007, the maximum number of ordinary shares that may be allocated for the purposes of the scheme is 7,630,080 (December 31, 2006: 7,596,494), 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, 2007 the maximum aggregate number of ordinary shares which may be acquired by any one participant in the scheme was 381,504 shares.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
  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 declared by the Company.
   (1)
 The debenture incentive options were cancelled on June 30, 2001 in exchange for stock incentive options.
 Total Plan Employee Costs
  On December 31, 2007, the Company has five stock-based compensation plans, which are described below.  Total compensation cost charged against income for these plans was $33 million, $42 million and $2 million for 2007, 2006 and 2005, respectively.  During the year ended December 31, 2007, $1 million (2006: less than $1 million) income tax benefit was recognized in the income statement for share-based compensation arrangements, no income tax benefit was recognised in 2005. The Company did not capitalize compensation cost as part of the cost of an asset during any of these periods.
  At the year end, the unallocated balance of shares subject to the Share Incentive Scheme amounts to 4,315,827 (2006: 3,396,674).
 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. It is personal to the employee to whom it is addressed and may only be accepted by him, his family, his company or his family trust.
   ·  Time related options
 As approved by shareholders at the general meeting held on June 4, 1998 and amended by shareholders at the general meeting held on April 30, 2002, time related options may be exercised over a five year period from date of grant, and may be exercised in tranches of 20 percent each in years 2, 3 and 4 and 40 percent in year five.
 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.
 A summary of time related options showing movement from the beginning of the year to the end of the year, is presented below:
 2007
 Options
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 473
 126
 Granted
 -                           
  -
 Exercised
 (266)                       
  126
 Forfeited (terminations)
 -
 -
 Outstanding at the end of the year
 207
 125
 Exercisable at the end of the year
 207
 125
 The total intrinsic value of options outstanding at year-end was R35 million (2006: R97 million), with a weighted average remaining contractual term of 2.4 years (2006: 3.5 years). The intrinsic value of options exercised during the years ended December 31, 2007, 2006 and 2005 was R48 million, R76 million and R53 million, respectively.
 During the years ended December 31, 2007, 2006 and 2005 the Company recognized less than $1 million, $1 million and $nil million, respectively, compensation expense related to time-based awards.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.  ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
 ·     
  Performance related options
 As approved by shareholders at the general meeting held on April 30, 2002, 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 condition is 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 condition, between three and ten years from date of grant.  As none of the performance criteria of the options issued in 2002 and 2003 were met in the initial three years, the grantor decided to roll the schemes forward on a “roll over reset” basis to be reviewed annually. The performance criteria of the options issued in 2002, 2003 and 2004 were achieved during 2006.
 The performance related options’ compensation expense is fixed at grant date and recorded when it is probable that the performance criteria will be met.
 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 this 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:
 2007
 Options
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 2,586
 248
 Granted
 -
 -
 Exercised
 (863)
 246
 Forfeited (terminations)
 (85)
 246
 Outstanding at the end of the year
 1,638
 249
 Exercisable at the end of the year
 1,638
 249
 The total intrinsic value of options outstanding at year-end was R72 million (2006: R213 million), with a weighted average remaining contractual term of 6 years (2006: 7 years). The intrinsic value of options exercised during the years ended December 31, 2007, 2006 and 2005 was R53 million and less than R1 million for 2006 and 2005, respectively.
 All options which have not been exercised within ten years from the date on which they were granted automatically expire.
 During the years ended December 31, 2007, 2006 and 2005 the Company recognized $3 million, $29 million and $nil million, respectively, compensation expense related to performance related awards.
 During 2007, a total of 1,128,574 common shares were issued under the share incentive scheme in terms of time-based and performance awards.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
  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 206,960 time related options and 1,638,200 performance related options outstanding as at December 31, 2007.
   No grants were made with respect to the time related scheme options and performance related options during 2005, 2006 and 2007.
 In accordance with APB No. 25, no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant. During the year ended December 31, 2005 there was no compensation expense recognized related to time-based awards as the exercise price of all awards was greater than or equal to the fair market value of the underlying stock on the date of grants.  During the year ended December 31, 2005 the Company recognized a compensation expense of $2 million related to Bonus Share Plan (BSP) and Long-Term Incentive Plan (LTIP) treated as equity settled compensation plans under APB No. 25.  As of December 31, 2005 no compensation expense was recognized, related to the performance awards under APB No. 25.
 On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), “Share-Based Payment”, using the modified prospective transition method. Under this method, compensation cost recognized in the year ended December 31, 2006 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS123, and b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS123(R). The results for prior periods have not been restated.
 As a result of adopting SFAS123(R) on January 1, 2006, the Company’s loss before income taxes and net loss for the years ended December 31, 2007 and 2006, are $3 million and $31 million higher, respectively, than if it had continued to account for share-based compensation under APB No. 25. Basic and diluted loss per ordinary share for the years ended December 31, 2007 and 2006 would have been $2.91 and $0.41, respectively, if the Company had not adopted SFAS123(R), compared to reported basic and diluted loss per share of $2.92 and $0.52, respectively.
 SFAS123(R) requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow.  This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.  This requirement did not impact the Company’s cash flow disclosure for the years ended December 31, 2007, 2006 and 2005.
 The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS123 to stock-based employee compensation in 2005. For purposes of this pro forma disclosure, the value of the options is estimated using a Black-Scholes option pricing model and amortized to expense over the options’ vesting periods.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.  ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
 Year Ended December 31, 2005
 (in millions, except per share data)
 $
 Net loss, as reported
 (292)
 Add:  Unearned stock awards compensation expense, calculated under APB No. 25
 
 2
 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects
 (2)
 Pro forma net loss
 (292)
 Loss per ordinary share (cents) Basic – as reported
 (110)
 Basic – pro forma
 (110)
 Diluted – as reported
 (1)
 (110)
 Diluted – pro forma
 (1)
 (110)
 (1)
 The calculation of diluted loss per common share for 2005 did not assume the effect of 15,384,615 shares issuable upon the
 exercise of Convertible Bonds as their effects are anti-dilutive for this period.  The calculation of diluted loss per common share for 2005 did not assume the effect of 601,315 shares issuable upon the exercise of stock incentive options as their effects areanti-dilutive for this period.
 
 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, which had been approved April 30, 2002.  Options which have been 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, unless the board of directors (the board) excludes such a company.  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.  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.
    The AngloGold Ashanti Remuneration Committee has at their discretion, the right to pay dividends, or dividend equivalents, to the participants of the BSP.  Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense.  The fair value is equal to the award value determined by the board.
  2007
 2006
 2005


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
  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:
 2007
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 481
 -
 Granted
 297
 -
 Exercised
 (41)  -
 Forfeited (terminations)
 (51)  -
 Outstanding at the end of the year
 686
 -
 Exercisable at the end of the year
 -
 -
  The total intrinsic value of awards outstanding at year-end was R201 million (2006: R159 million), with a weighted average remaining contractual term of 8 years (2006: 9 years). The intrinsic value of awards exercised during the years ended December 31, 2007 and 2006 was R13 million and R1 million, respectively. No awards were exercised during 2005.
 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 of participating companies.  Participating companies include AngloGold Ashanti, any subsidiary of AngloGold Ashanti or a company under the control of AngloGold Ashanti, unless the board excludes such a company.  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 be 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 AngloGold Ashanti Remuneration Committee has at their discretion, the right to pay dividends, or dividend equivalents, to the participants of the LTIP.  Having no history of any discretionary dividend payments, the fair value includes dividends and was used to determine the income statement expense.  The fair value is equal to the award value determined by the board.
    ·    ·    ·    ·    ·    ·    ·     ·


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
  2007
 2006
 2005
              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:
 2007
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 661
 -
 Granted
 322
 -
 Exercised
 -
 -
 Forfeited (terminations)
 (200)
 -
 Outstanding at the end of the year
 783
 -
 Exercisable at the end of the year
 -
 -
  The total intrinsic value of awards outstanding at year-end was R230 million (2006: R218 million), with a weighted average remaining contractual term of 8 years (2006: 9 years).  No awards were exercised during 2007, 2006 and 2005.
  During the years ended December 31, 2007, 2006 and 2005 the Company recognized a compensation expense of $12 million, $9 million and $2 million, respectively, related to BSP and LTIP awards.
  As of December 31, 2007, there was $19 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.
 Employee Share Ownership Plan (ESOP)
  On December 12, 2006, AngloGold Ashanti announced the finalization of the Bokamoso Employee Share Ownership Plan (Bokamoso ESOP) with the National Union of Mineworkers, Solidarity and United Association 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, and the seeking of shared growth solutions to build partnerships in areas of shared interest. 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 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
    The fair value of each free share awarded in 2007 is R306 (2006: R320).  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 in 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 the end of the year, is presented below:
 2007
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 929
 -
 Granted
 77
 -
 Exercised
 (47)
 -
 Forfeited (terminations)
 (49)
 -
 Outstanding at the end of the year
 910
 -
 Exercisable at the end of the year
 -
 -
 The total intrinsic value of awards outstanding at year-end was R267 million (2006: R306 million), with a weighted average remaining contractual term of 4 years (2006: 5 years). The intrinsic value of awards exercised during the year ended December 31, 2007 was R14 million. No awards were exercised during 2006 and 2005.
  The average fair value of the E ordinary shares awarded to employees in 2007 was R79 (2006: R105).  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.  The expected term of awards granted is derived from historical data on employee exercise behavior.  Expected volatility is based on the historical volatility of the Company’s stock.  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.  The Black-Scholes option-pricing model used the following assumptions for the years ended December 31, 2007 and 2006, weighted-average risk free interest rates of 7% (2006: 7%); dividend yield of 2.06% (2006: 2.30%) and volatility of 33% (2006: 36%).


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)30.ANGLOGOLD LIMITED SHARE INCENTIVE SCHEME AND PLANS(continued)
  A summary of E ordinary shares, awarded to employees, showing movement from the beginning of the year to the end of the year, is presented below:
 2007
 Options
 (000)
 2007
 Weighted-
 average
 exercise price
 R
 Outstanding at the beginning of the year
 2,786
 289
 Granted
 232
 307
 Exercised
 (140)
 298
 Forfeited (terminations)
 (147)
 297
 Outstanding at the end of the year
 2,731
 307
 Exercisable at the end of the year
 -
 -
 The options outstanding at year-end had no intrinsic value as the share price at year-end of R293 was lower than the weighted average exercise price of R307 (2006: total intrinsic value of awards outstanding totaled R114 million). The options have a weighted average remaining contractual term of 4 years (2006: 5 years). The intrinsic value of options exercised during the year ended December 31, 2007 was R1 million. No awards were exercised during 2006 and 2005.
 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, 2007 and 2006, the Company recognized a compensation expense of $18 million and $3 million, respectively, related to the ESOP scheme.
 As of December 31, 2007, there was $45 million of unrecognized compensation cost related to unvested awards of the ESOP scheme.  This cost is expected to be recognized over the scheme term of 6 years.
 MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT
 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 South Africa.
 The Mineral and Petroleum Resources Development Act (MPRDA) vests custodianship of South Africa’s mineral rights in the State. The State issues prospecting rights or mining rights to applicants. Prospecting, mining and mineral rights formerly regulated under the Minerals Act 50 of 1991 and common law are now known as old order mining rights and the transitional arrangements provided in Schedule II to the MPRDA give holders of such old order mining rights the opportunity to convert their old order mining rights into new order mining rights within specified time frames.
 The Department of Minerals and Energy (DME) has published, pursuant to the MPRDA, the Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry (the Charter). Compliance with the Charter, measured using a designated Scorecard, requires that every mining company achieve 15 percent ownership by Historically Disadvantaged South Africans (HDSAs) of its South African mining assets by May 1, 2009, and 26 percent ownership by May 1, 2014 and achieve participation by HDSAs in various other aspects of management referred to below. The Company has submitted to the DME two Social and Labor Plans – one for each of its main mining regions – detailing its specific goals in these areas.
 The Scorecard allows for a portion of ‘offset’ against the HDSAs equity participation requirements insofar as companies have facilitated downstream, value-adding activities in respect of the products they mine. AngloGold Ashanti carries out such downstream activities and believes these will be recognized in terms of a framework currently being devised by the South African government.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)31.  
  MINERAL AND PETROLEUM RESOURCES DEVELOPMENT ACT(continued)
 AngloGold Ashanti has completed a number of asset sales to companies owned by HDSAs in the past (estimated to have been equivalent to 20 percent of AngloGold Ashanti’s South African production as at August 1, 2005, when its applications for the conversion of its West Wits and Vaal River mineral rights from old order to new order mineral rights were approved). Furthermore, at the end of 2006 AngloGold Ashanti implemented an Employee Share Ownership Program (ESOP) and Black Economic Empowerment (BEE) transaction, collectively with a value equivalent to approximately 6 percent of its South African assets as calculated under IFRS. This is consistent with the Company’s stated strategic intention to develop means of promoting broad based equity participation in the Company by HDSAs and with an undertaking made to the DME as a condition for the granting to the Company of its new order mining rights. AngloGold Ashanti believes that it has made significant progress towards meeting the requirements of the 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, including the implementation of programs to help achieve the requirement of having 40 percent of management roles being held by HDSAs by 2010. AngloGold Ashanti will incur expenses in giving further effect to the Charter and the Scorecard and the implementation of the ESOP will affect the Company’s results of operations.
 AngloGold Ashanti was informed on August 1, 2005, by the Director General of Minerals and Energy that its applications to convert its old order mining rights to new order mining rights for its West Wits and Vaal River operations, as well as its applications for new mining rights to extend its mining areas at its TauTona and Kopanang mines, had been successful. These applications relate to all of its existing operations in South Africa. The notarial agreements for the converted West Wits mining right and Block 1C11 new mining rights have been executed and registered as well as the agreements for Jonkerskraal, Weltevreden, Moab Extension Area and the new right for Edom, all of which form part of the Vaal River operations. Two notarial agreements relating to the Vaal River operations are pending.
 Even where new order mining rights are obtained under the MPRDA, these rights may not be equivalent to the old order mining rights. The AngloGold Ashanti rights that have been converted and registered do not differ significantly from the relevant old order rights. The duration of the new rights will no longer be perpetual as was the case under old order mining rights but rather will be granted for a maximum period of 30 years, with renewals of up to 30 years each and, in the case of prospecting rights, a maximum period of five years with one renewal of up to three years. Furthermore, the MPRDA provides for a retention period after prospecting of up to three years with one renewal of up to two years, subject to certain conditions, such as non-concentration of resources, fair competition and non-exclusion of others. In addition, the new order rights will only be transferable subject to the approval of the Minister of Minerals and Energy.
 The new order mining rights can be suspended or cancelled by the Minister of Minerals and Energy if, upon notice of a breach from the Minister, the entity breaching its obligations to comply with the MPRDA or the conditions of the notarial agreement fails to remedy such breach. 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 the Company’s South African operations in light of the new, as well as existing, environmental requirements.
 The South African government has announced the details of the proposed new legislation whereby new order rights will be subject to a State royalty. The third draft of the Mineral and Petroleum Resources Royalty Bill was published on December 6, 2007 and provides for the payment of a royalty according to a formula based on earnings before interest, tax and depreciation. It is estimated that the formula could translate to a royalty rate of more than 4 percent of gross sales in terms of current pricing assumptions. The latest proposal results in a large increase from the 1.5 percent rate proposed in the second draft in 2006, and the Company is making representations to the government through the South African Chamber of Mines to retain the proposed 1.5 percent rate. The payment of royalties is currently scheduled to begin on May 1, 2009, if the Bill is passed by Parliament in its current form.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED
 CONSOLIDATING FINANCIAL INFORMATION
  These parent-only-financial statements and supplemental condensed consolidating financial information should be read in conjunction with the Company’s consolidated financial statements.
 
 Transfer of certain of AngloGold Ashanti’s operations located outside South Africa to wholly-owned subsidiary
  With effect from October 1, 2004, AngloGold Ashanti has transferred certain of its operations and assets located outside South Africa (excluding certain operations and assets in the United States, Australia and Africa) to AngloGold Ashanti Holdings plc (originally SMI Holdings Limited and formerly AngloGold Holdings plc) (“IOMco”), its wholly-owned subsidiary.  IOMco is an Isle of Man registered Company.
  IOMco has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”).  Refer to Note 20 and Note 24.  The following is condensed financial information of the registrant and consolidating financial information for the Company as of December 31, 2007 and 2006 and for the years ended December 31, 2007, 2006 and 2005, with a separate column for each of IOMco as Issuer, AngloGold Ashanti Limited as Guarantor and the other businesses 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.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.    
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
  2007
 $
 AngloGold Ashanti
 
 2007
 $
 IOMco
 2007
 $
 Other subsidiaries
 2007
 $
 Cons adjustments
 2007
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Sales and other income
 1,432
 
 3
 1,670
 (10)
 3,095
 Product sales
 1,399
 
 -
 1,650
 (1)
 3,048
 Interest, dividends and other
 33
 
 3
 20
 (9)
 47
 Costs and expenses
 1,484
 
 (49)
 2,330
 41
 3,806
 Production costs
 864
 
 -
 1,053
 -
 1,917
 Exploration costs
 4
 
 -
 113
 -
 117
 Related party transactions
 (16)
 -
 -
 -
 (16)
 General and administrative expenses/(recoveries)
 108
 
 (107)
 66
 63
 130
 Royalties paid
 -
 
 -
 70
 -
 70
 Market development costs
 10
 
 -
 6
 -
 16
 Depreciation, depletion and amortization
 296
 
 -
 359
 -
 655
 Impairment of assets
 -
 
 -
 1
 -
 1
 Interest expense
 27
 
 36
 12
 -
 75
 Accretion expense
 9
 
 -
 11
 -
 20
 Employment severance costs
 5
 
 -
 14
 -
 19
 (Profit)/loss on sale of assets, realization of loans, indirect taxes and other
 (11)
 
 22
 21
 (22)
 10
 Mining contractor termination costs
 -
 
 -
 -
 -
 -
 Non-hedge derivative loss and other commodity contracts
 188
 
 -
 604
 -
 792
 (Loss)/income before income tax provision
 (52)
 52
 (660)
 (51)
 (711)
 Taxation expense
 (34)
 (2)
 (82)
 -
 (118)
 Minority interest
 -
 
 -
 (28)
 -
 (28)
 Equity income/(loss) in affiliates
 59
 
 (18)
 -
 -
 41
 Equity (loss)/income in subsidiaries
 (785)
 
 -
 -
 785
 -
 (Loss)/income from continuing operations
 (812)
 32
 (770)
 734
 (816)
 Discontinued operations
 2
 
 -
 -
 -
 2
 (Loss)/income after discontinued operations
 (810)
 32
 (770)
 734
 (814)
 Preferred stock dividends
 (4)
 -
 (5)
 9
 -
 
 (Loss)/income before cumulative effect of accounting change
 (814)
 32
 (775)
 743
 (814)
 Cumulative effect of accounting change
 -
 
 -
 -
 -
 -
 Net (loss)/income   applicable to common stockholders
 (814)
 32
 (775)
 743
 (814)
  The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.   
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
  2006
 $
 AngloGold Ashanti
 
 2006
 $
 IOMco
 2006
 $
 Other subsidiaries
 2006
 $
 Cons adjustments
 2006
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Sales and other income
 1,370
 
 5
 1,355
 (15)
 2,715
 Product sales
 1,347
 
 -
 1,336
 -
 2,683
 Interest, dividends and other
 23
 
 5
 19
 (15)
 32
 Costs and expenses
 1,297
 
 (61)
 1,547
 28
 2,811
 Production costs
 683
 
 -
 854
 2
 1,539
 Exploration costs
 4
 
 -
 54
 -
 58
 Related party transactions
 (6)
 -
 -
 -
 (6)
 General and administrative expenses/(recoveries)
 129
 
 (77)
 60
 28
 140
 Royalties paid
 -
 
 -
 59
 -
 59
 Market development costs
 8
 
 -
 8
 -
 16
 Depreciation, depletion and amortization
 321
 
 -
 378
 -
 699
 Impairment of assets
 -
 
 -
 1
 5
 6
 Interest expense
 30
 
 38
 9
 -
 77
 Accretion expense
 8
 
 -
 5
 -
 13
 Employment severance costs
 7
 
 -
 15
 -
 22
 Profit on sale of assets, realization of loans, indirect taxes and other
 (3)
 
 (22)
 (6)
 (5)
 (36)
 Mining contractor termination costs
 -
 
 -
 -
 -
 -
 Non-hedge derivative loss/(gains) and other commodity contracts
 116
 
 -
 110
 (2)
 224
 Income/(loss) before income tax provision
 73
 
 66
 (192)
 (43)
 (96)
 Taxation expense
 (78)
 (3)
 (41)
 -
 (122)
 Minority interest
 -
 
 -
 (29)
 -
 (29)
 Equity income/(loss) in affiliates
 108
 
 (9)
 -
 -
 99
 Equity (loss)/income in subsidiaries
 (244)
 
 -
 -
 244
 -
 (Loss)/income from continuing operations
 (141)
 54
 (262)
 201
 (148)
 Discontinued operations
 6
 
 -
 -
 -
 6
 (Loss)/income after discontinued operations
 (135)
 54
 (262)
 201
 (142)
 Preferred stock dividends
 (7)
 -
 (8)
 15
 -
 
 (Loss)/income before cumulative effect of accounting change
 (142)
 54
 (270)
 216
 (142)
 Cumulative effect of accounting change
 -
 
 -
 -
 -
 -
 Net (loss)/income   applicable to common stockholders
 (142)
 54
 (270)
 216
 (142)
 -80
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.    
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of income
 FOR THE YEAR ENDED DECEMBER 31,
  2005
 $
 AngloGold Ashanti
 
 2005
 $
 IOMco
 2005
 $
 Other subsidiaries
 2005
 $
 Cons adjustments
 2005
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Sales and other income
 1,170
 
 22
 1,318
 (25)
 2,485
 Product sales
 1,153
 
 -
 1,300
 -
 2,453
 Interest, dividends and other
 17
 
 22
 18
 (25)
 32
 Costs and expenses
 1,292
 
 76
 1,512
 (32)
 2,848
 Production costs
 785
 
 -
 857
 -
 1,642
 Exploration costs
 5
 
 -
 39
 -
 44
 Related party transactions
 39
 
 -
 (2)
 -
 37
 General and administrative expenses/(recoveries)
 58
 
 39
 8
 (34)
 71
 Royalties paid
 -
 
 -
 39
 -
 39
 Market development costs
 8
 
 -
 5
 -
 13
 Depreciation, depletion and amortization
 218
 
 -
 375
 -
 593
 Impairment of assets
 80
 
 -
 61
 -
 141
 Interest expense
 28
 
 35
 17
 -
 80
 Accretion expense
 4
 
 -
 1
 -
 5
 Employment severance costs
 25
 
 -
 1
 -
 26
 (Profit)/loss on sale of assets, realization of loans, indirect taxes and other
 -
 
 (10)
 7
 -
 (3)
 Mining contractor termination costs
 -
 
 -
 9
 -
 9
 Non-hedge derivative loss and other commodity contracts
 42
 
 12
 95
 2
 151
 (Loss)/income before income tax provision
 (122)
 (54)
 (194)
 7
 (363)
 Taxation benefit/(expense)
 48
 
 (1)
 74
 -
 121
 Minority interest
 -
 
 -
 (23)
 -
 (23)
 Equity income/(loss) in affiliates
 40
 
 (1)
 -
 -
 39
 Equity (loss)/income in subsidiaries
 (180)
 
 -
 -
 180
 -
 (Loss)/income from continuing operations
 (214)
 (56)
 (143)
 187
 (226)
 Discontinued operations
 (44)
 -
 -
 -
 (44)
 (Loss)/income after discontinued operations
 (258)
 (56)
 (143)
 187
 (270)
 Preferred stock dividends
 (12)
 -
 (13)
 25
 -
 
 (Loss)/income before cumulative effect of accounting change
 (270)
 (56)
 (156)
 212
 (270)
 Cumulative effect of accounting change
 (22)
 
 -
 -
 -
 (22)
 Net (loss)/income   applicable to common stockholders
 (292)
 (56)
 (156)
 212
 (292)
  The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.    
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating balance sheets
 AT DECEMBER 31,
 (In millions, except share information)
 2007
 $
 AngloGold Ashanti
 2007
 $
 IOMco
 2007
 $
 Other subsidiaries
 2007
 $
 Cons adjustments
 2007
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 ASSETS Current Assets
 1,549  2,636  4,923  (6,995)
 2,113
 
 Cash and cash equivalents
 188
 40
 249
 -
 477
 Restricted cash
 26  -  11  -
 37
 
 Receivables and other current assets
 1,335
 2,596
 4,663
 (6,995)
 1,599
 Trade and other receivables and deferred taxation assets
 284
 9
 190
 (3)
 480
 Inter-group balances
 784
 2,587
 3,621
 (6,992)
 -
 Derivatives
 182  -  334  -
 516
 
 Inventories
 70  -  453  -
 523
 
 Materials on the leach pad
 -
 -
 49
 -
 49
 Assets held for sale
 15
 -
 16
 -
 31
 Property, plant and equipment, net
 1,953  -
 3,574  -
 5,527
 
 Acquired properties, net
 258  -
 1,022  -
 1,280
 
 Goodwill
 -  247  589  (267)
 569
 
 Other intangibles, net
 -  -  22  -
 22
 
 Derivatives
 -  -  -  -
 -
 
 Other long term inventory
 -  -  84  -
 84
 
 Materials on the leach pad
 -  -  190  -
 190
 
 Other long-term assets and deferred taxation assets
 2,263  2,461
 516  (4,644)
 596
 
 Total assets
 6,023  5,344  10,920  (11,906)
 10,381
 
 LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 Current liabilities
 2,277  64
 8,422
 (6,968)
 3,795
 
 Accounts payable and other current liabilities
 200
 -
 438
 (4)
 634
 Inter-group balances
 815
 53
 6,096
 (6,964)
 -
 Derivatives
 978  -
 1,804  -
 2,782
 
 Short-term debt
 304  9  6  -
 319
 
 Tax
 (21)
 2  78  -
 59
 
 Liabilities held for sale
 1
 -
 -
 -
 1
 Other non-current liabilities
 134  -  106  (94)
 146
 
 Long-term debt
 36  1,306
 222
 -
 1,564
 
 Derivatives
 90  -  207  -
 297
 
 Deferred taxation liabilities
 627  -  702  16
 1,345
 
 Provision for environmental rehabilitation
 140  -  254  -
 394
 
 Other accrued liabilities
 -  -  45  -
 45
 
 Provision for pension and other post-retirement medical benefits
 167  -  13  -
 180
 
 Minority interest
 -  -  62  1
 63
 
 Commitments and contingencies
 -  -  -  -
 -
 
 Stockholders’ equity
 2,552  3,974
 887  (4,861)
 2,552
 
 Stock issued
 10  3,625
 901  (4,526)
 10
 
 Additional paid in capital
 5,607
 89
 332
 (421)
 5,607
 Accumulated (deficit)/profit
 (2,440)
 260
 (1,511)
 1,251
 (2,440)
 Accumulated other comprehensive income
 (625)
 -
 1,165
 (1,165)
 (625)
  Total liabilities and stockholders’ equity
 6,023  5,344  10,920  (11,906)
 10,381
 
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.    
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating balance sheets
 AT DECEMBER 31,
 (In millions, except share information)
 2006
 $
 AngloGold Ashanti
 2006
 $
 IOMco
 2006
 $
 Other subsidiaries
 2006
 $
 Cons adjustments
 2006
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 ASSETS Current Assets
 1,390  2 ,275  4,733  (6,522)
 1,876
 
 Cash and cash equivalents
 180
 32
 259
 -
 471
 Restricted cash
 5  -  6  -
 11
 
 Receivables and other current assets
 1,205
 2,243
 4,468
 (6,522)
 1,394
 Trade and other receivables and deferred taxation assets
 150
 6
 181
 (10)
 327
 Inter-group balances
 756
 2,237
 3,518
 (6,511)
 -
 Derivatives
 225  -  425  (1)
 649
 
 Inventories
 59  -  295  -
 354
 
 Materials on the leach pad
 -
 -
 46
 -
 46
 Assets held for sale
 15
 -
 3
 -
 18
 Property, plant and equipment, net
 1,790  -
 3,183  4
 4,977
 
 Acquired properties, net
 273  -
 1,016  -
 1,289
 
 Goodwill
 -  247  562  (267)
 542
 
 Other intangibles, net
 -  -  24  -
 24
 
 Derivatives
 5  -  1  -
 6
 
 Other long term inventory
 -  -  68  -
 68
 
 Materials on the leach pad
 -  -  149  -
 149
 
 Other long-term assets and deferred taxation assets
 2,858  2,437
 480  (5,193)
 582
 
 Total assets
 6,316  4,959  10,216  (11,978)
 9,513
 
 LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 Current liabilities
 1,769  71
 7,047
 (6,420)
 2,467
 
 Accounts payable and other current liabilities
 182
 -
 310
 6
 498
 Inter-group balances
 778
 60
 5,620
 (6,458)
 -
 Derivatives
 712  -
 1,037  33
 1,782
 
 Short-term debt
 11  9  13  -
 33
 
 Tax
 80  2  67  (1)
 148
 
 Liabilities held for sale
 6
 -
 -
 -
 6
 Other non-current liabilities
 -  -  117  (93)
 24
 
 Long-term debt
 286  1,080
 106
 -
 1,472
 
 Derivatives
 124  -  307  (34)
 397
 
 Deferred taxation liabilities
 533  -  730  12
 1,275
 
 Provision for environmental rehabilitation
 137  -  173  -
 310
 
 Other accrued liabilities
 -  -  27  -
 27
 
 Provision for pension and other post-retirement medical benefits
 159  -  13  -
 172
 
 Minority interest
 -  -  61  -
 61
 
 Commitments and contingencies
 -  -  -  -
 -
 
 Stockholders’ equity
 3,308  3 ,808  1,635  (5,443)
 3,308
 
 Stock issued
 10  3,625
 898  (4,523)
 10
 
 Additional paid in capital
 5,539
 1
 357
 (358)
 5,539
 Accumulated (deficit)/profit
 (1,476)
 182
 (659)
 477
 (1,476)
 Accumulated other comprehensive income
 (765)
 -
 1,039
 (1,039)
 (765)
  Total liabilities and stockholders’ equity
 6,316  4,959  10,216  (11,978)
 9,513
 
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.    
  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions, except share information)
 2007
 $
 AngloGold Ashanti
 2007
 $
 IOMco
 2007
 $
 Other subsidiaries
 2007
 $
 Cons adjustments
 2007
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Net cash provided by/(used) in operating activities
 304
 (346)
 612
 (9)
 561
 
 Net (loss)/income – applicable to common stockholders
 (814)
 
 32
 (775)
 743
 (814)
 Reconciled to net cash provided by/(used) in operations:
 
 Cumulative effect of accounting change
 -
 
 -
 -
 -
 -
 (Profit)/loss on sale of assets, realization of loans, indirect taxes and other
 (11)
 
 22
 25
 (22)
 14
 Depreciation, depletion and amortization
 296
 -
 359
 -
 655
 
 Deferred stripping costs
 -
 -
 -
 -
 -
 
 Impairment of assets
 -
 -
 1
 -
 1
 
 Deferred taxation
 (51)
 -
 (22)
 -
 (73)
 Other non cash items
 880
 (82)
 792  (730)
 860
 
 Net increase in provision for environmental rehabilitation and pension and other post-retirement medical benefits
 36
 -
 54
 -
 90
 
 Effect of changes in operating working capital items:
 
 Net movement inter-group receivables and payables
 (51)
 
 (319)
 370
 -
 -
 Receivables
 (11)
 (1)
 (65)
 -
 (77)
 Inventories
 (12)
 -
 (228)
 -
 (240)
 Accounts payable and other current liabilities
 44
 2
 101
 -
 147
 
 Net cash provided by/(used) in continuing operations
 306
 (346)
 612
 (9)
 563
 
 Net cash used in discontinued operations
 (2)
 
 -
 -
 -
 (2)
 Net cash (used)/generated in investing activities
 (340)
 -
 (691)
 -  (1,031)
 Acquisition of assets
 -
 -
 (40)
 -
 (40)
 Increase in non-current investments
 -
 -
 (27)
 -
 (27)
 Additions to property, plant and equipment
 (371)
 
 -
 (644)
 -
 (1,015)
 Proceeds on sale of mining assets
 14
 -
 15
 -
 29
 
 Proceeds of sale of discontinued assets
 1
 -
 -
 -
 1
 
 Proceeds on sale of available for sale investments
 -
 -
 25
 -
 25
 
 Dividends from available for sale investments
 2
 -
 -
 -
 2
 
 Cash effects from hedge restructuring
 14
 -
 5
 -
 19
 
 Net loans repaid/(advanced)
 -
 -
 -
 -
 -
 
 Change in restricted cash
 -
 -
 (25)
 -
 (25)
 Net cash generated by financing activities
 39
 354
 60
 9
 462
 
 Net changes in short-term debt
 -
 (275)
 73
 -
 (202)
 Issuance of stock
 34
 88
 (88)
 -
 34
 
 Share issue expenses
 -
 -
 -
 -
 -
 
 Net changes in long-term debt
 -
 497
 28
 -
 525
 
 Cash effects from hedge restructuring
 86
 -
 163
 -
 249
 
 Dividends (paid)/received
 (81)
 44
 (116)
 9
 (144)
 Net increase/(decrease) in cash and cash equivalents
 3
 8
 (19)
 -
 (8)
 Effect of exchange rate changes on cash
 5
 -
 9
 -
 14
 
 Cash and cash equivalents – January 1
 180
 32
 259
 -
 471
 
 -84
 Cash and cash equivalents – December 31,
 188
 40
 249
 -
 477
 
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions, except share information)
 2006
 $
 AngloGold Ashanti
 2006
 $
 IOMco
 2006
 $
 Other subsidiaries
 2006
 $
 Cons adjustments
 2006
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Net cash provided by/(used) in operating activities
 542
 (119)
 362
 (15)
 770
 
 Net (loss)/income – applicable to common stockholders
 (142)
 
 54
 (270)
 216
 (142)
 Reconciled to net cash provided by/(used) in operations:
 
 Cumulative effect of accounting change
 -
 
 -
 -
 -
 -
 (Profit)/loss on sale of assets, realization of loans, indirect taxes and other
 (3)
 
 (7)
 21
 (5)
 6
 Depreciation, depletion and amortization
 321
 -
 378
 -
 699
 
 Deferred stripping costs
 -
 -
 -
 -
 -
 
 Impairment of assets
 -
 -
 1
 5
 6
 
 Deferred taxation
 (16)
 -
 (18)
 -
 (34)
 Other non cash items
 394
 (29)
 196
 (231)
 330
 
 Net decrease in provision for environmental rehabilitation and pension and other post-retirement medical benefits
 (44)
 
 -
 (18)
 -
 (62)
 Effect of changes in operating working capital items:
 
 
 
 Net movement inter-group receivables and payables
 41
 (144)
 103
 -
 -
 
 Receivables
 15
 -
 (4)
 -
 11
 
 Inventories
 (25)
 -
 (140)
 -
 (165)
 Accounts payable and other current liabilities
 2
 7
 113
 -
 122
 
 Net cash provided by/(used) in continuing operations
 543
 (119)
 362
 (15)
 771
 
 Net cash used in discontinued operations
 (1)
 
 -
 -
 -
 (1)
 Net cash (used)/generated in investing activities
 (304)
 5
 (312)
 -
 (611)
 Acquisition of assets
 -
 -
 -
 -
 -
 
 Increase in non-current investments
 (59)
 
 (10)
 49
 -
 (20)
 Additions to property, plant and equipment
 (317)
 
 -
 (494)
 -
 (811)
 Proceeds on sale of mining assets
 5
 -
 52
 -
 57
 
 Proceeds of sale of discontinued assets
 9
 -
 -
 -
 9
 
 Proceeds on sale of available for sale investments
 -
 -
 11
 -
 11
 
 Dividends from available for sale investments
 -
 -
 -
 -
 -
 
 Cash effects from hedge restructuring
 58
 -
 83
 -
 141
 
 Net loans repaid/(advanced)
 -
 15
 (10)
 -
 5
 
 Change in restricted cash
 -
 -
 (3)
 -
 (3)
 Net cash (used)/generated by financing activities
 (57)
 110
 51
 15
 119
 
 Net changes in short-term debt
 (118)
 -
 -
 -
 (118)
 Issuance of stock
 112
 330
 70
 -
 512
 
 Share issue expenses
 (5)
 -
 -
 -
 (5)
 Net changes in long-term debt
 -
 (220)
 (56)
 -
 (276)
 Cash effects from hedge restructuring
 68
 -
 70
 -
 138
 
 Dividends (paid)/received
 (114)
 -
 (33)
 15
 (132)
 Net increase/(decrease) in cash and cash equivalents
 181
 (4)
 101
 -
 278
 
 Effect of exchange rate changes on cash
 (3)
 -
 -
 -
 (3)
 Cash and cash equivalents – January 1
 2
 36
 158
 -
 196
 
 -  85
 Cash and cash equivalents – December 31,
 180
 32
 259
 -
 471
 
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)32.  CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT AND SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION(continued)
 ANGLOGOLD ASHANTI LIMITED
 Condensed consolidating statements of cash flows
 FOR THE YEAR ENDED DECEMBER 31,
 (In millions, except share information)
 2005
 $
 AngloGold Ashanti
 2005
 $
 IOMco
 2005
 $
 Other subsidiaries
 2005
 $
 Cons adjustments
 2005
 $
 Total
 (the “Guarantor”)
 (the “Issuer”)
 (the “Non-Guarantor
 subsidiaries”)
 Net cash provided by/(used) in operating activities
 258
 (327)
 441
 (25)
 347
 
 Net (loss)/income – applicable to common stockholders
 (292)
 
 (56)
 (156)
 212
 (292)
 Reconciled to net cash provided by/(used) in operations:
 
 Cumulative effect of accounting change
 22
 
 -
 -
 -
 22
 (Profit)/loss on sale of assets, realization of loans, indirect taxes and other
 -
 (10)
 7
 -
 (3)
 Depreciation, depletion and amortization
 218
 -
 375
 -
 593
 
 Deferred stripping costs
 -
 -
 (28)
 -
 (28)
 Impairment of assets
 80
 -
 61
 -
 141
 
 Deferred taxation
 (88)
 2
 (105)
 -
 (191)
 Other non cash items
 272
 (18)
 80
 (237)
 97
 
 Net increase in provision for environmental rehabilitation and pension and other post-retirement medical benefits
 16
 1
 35
 -
 52
 
 Effect of changes in operating working capital items:
 
 Net movement inter-group receivables and payables
 75
 (265)
 190
 -
 -
 
 Receivables
 (1)
 (2)
 11
 -
 8
 
 Inventories
 20
 -
 (78)
 -
 (58)
 Accounts payable and other current liabilities
 (33)
 
 21
 49
 -
 37
 Net cash provided by/(used) in continuing operations
 289
 (327)
 441
 (25)
 378
 
 Net cash used in discontinued operations
 (31)
 
 -
 -
 -
 (31)
 Net cash (used)/generated in investing activities
 (295)
 10
 (339)
 -
 (624)
 Acquisition of assets
 -
 -
 -
 -
 -
 
 Increase in non-current investments
 -
 (15)
 (12)
 -
 (27)
 Additions to property, plant and equipment
 (349)
 
 -
 (361)
 -
 (710)
 Proceeds on sale of mining assets
 -
 10
 (2)
 -
 8
 
 Proceeds of sale of discontinued assets
 4
 -
 -
 -
 4
 
 Proceeds on sale of available for sale investments
 -
 -
 1
 -
 1
 
 Dividends from available for sale investments
 -
 -
 -
 -
 -
 
 Cash effects from hedge restructuring
 55
 -
 29
 -
 84
 
 Net loans (advanced)/repaid
 (5)
 15
 (11)
 -
 (1)
 Change in restricted cash
 -
 -
 17
 -
 17
 
 Net cash generated/(used) by financing activities
 6
 300
 (131)
 25
 200
 
 Net changes in short-term debt
 126
 -
 (273)
 -
 (147)
 Issuance of stock
 9
 -
 -
 -
 9
 
 Share issue expenses
 -
 -
 -
 -
 -
 
 Net changes in long-term debt
 1
 300
 151
 -
 452
 
 Cash effects from hedge restructuring
 31
 -
 24
 -
 55
 
 Dividends (paid)/received
 (161)
 -
 (33)
 25
 (169)
 Net decrease in cash and cash equivalents
 (31)
 (17)
 (29)
 -
 (77)
 Effect of exchange rate changes on cash
 16
 -
 (19)
 -
 (3)
 Cash and cash equivalents – January 1
 17
 53
 206
 -
 276
 
 -  86
 Cash and cash equivalents – December 31,
 2
 36
 158
 -
 196
 
 The accompanying notes are an integral part of these Consolidated Financial Statements.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
 SUBSEQUENT EVENTS
 Golden Cycle acquisitionOn January 14, 2008, AngloGold Ashanti announced that it had agreed to acquire 100 percent of Golden Cycle Gold Corporation (GCGC) through a transaction in which GCGC’s shareholders will receive 29 AngloGold Ashanti ADRs for every 100 shares of GCGC common stock held. GCGC holds a 33 percent shareholding in Cripple Creek & Victor while AngloGold Ashanti holds the remaining 67 percent. The transaction will result in Cripple Creek & Victor being wholly-owned by AngloGold Ashanti. The transaction is subject to a number of regulatory and statutory approvals, including approval by GCGC shareholders. The transaction, at the date of announcement, was valued at approximately $149 million.
 Investment in B2Gold CorpOn February 14, 2008, AngloGold Ashanti announced that it had entered into a binding memorandum of agreement (MOA) with B2Gold Corp. (B2Gold).  The MOA provides for the existing Colombian joint venture agreements between AngloGold Ashanti and B2Gold to be amended to provide that B2Gold acquire from AngloGold Ashanti additional interest 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.   Subsequently, the transaction was finalized, as announced by AngloGold Ashanti on May 16, 2008.
 Eskom power supplyOn April 14, 2008, it was announced that, following the stabilization of power provided by Eskom (the South African electricity supply body) to the South African operations during the quarter, AngloGold Ashanti forecast the first quarter production to be approximately 1.19 million ounces.  The revised production outlook was approximately 8 percent above guidance provided in the fourth quarter of 2007.  AngloGold Ashanti had also fully delivered into maturing hedge contracts during the quarter. On January 25, 2008, the South African national power supplier, Eskom, had communicated that it could not guarantee power supply to AngloGold Ashanti’s South African operations. Precautionary steps were taken for the safety of employees, including ceasing the transportation of employees underground to carry-out mining activities and the cessation of milling activities. Following extensive discussions with Eskom and the South African government, Eskom agreed to guarantee a power supply equivalent to 90 percent of previous supply and undertook to more reliably warn companies when power outages may occur. Mining operations resumed on Wednesday, January 30, 2008 at AngloGold Ashanti’s South African mines and in late March 2008, Eskom increased power supply to 96.5 percent of previous levels. At these power levels and as a result of the Company’s previously implemented and ongoing initiatives to improve its energy efficiencies, the Company has been able to restore production back to 100 percent of previous capacity.  Since 2004, AngloGold Ashanti and Eskom have undertaken and committed funds and other resources to various initiatives to improve energy efficiencies and reduce power consumption at AngloGold Ashanti’s South African mines. These combined efforts have resulted in a decline in the use of electricity, fuel and coal and have to date achieved a 17 percent improvement in energy efficiencies at the Company’s South African operations. AngloGold Ashanti views these initiatives as being important not only in the light of power shortages and related disruption to its mining operations but also in that it anticipates that these initiatives will assist in managing future operating cost increases in the light of anticipated increases in unit electrical power, fuel and other energy costs.
 Rights issueOn May 6, 2008, AngloGold Ashanti announced that it intends to proceed, subject to certain conditions, with an approximate one-for-four renounceable rights offer, which would result in AngloGold Ashanti issuing approximately 69.4 million shares at a minimum share price of ZAR172 raising approximately ZAR11.9 billion ($1.6 billion based on an exchange rate of ZAR7.56/$1.00  on May 5, 2008).  The proposed rights offer is being fully underwritten subject to certain customary conditions.  The final rights offer price will be announced at the time of the announcement of the rights offer. The proposed rights offer will materially change the number of common shares in issue.  The proposed rights offer will be subject to approval at a general meeting of AngloGold Ashanti shareholders to be held on May 22, 2008.


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(continued)33.  
  SUBSEQUENT EVENTS(continued)
 The principal purpose of the rights offer is to provide AngloGold Ashanti with additional financial resources to improve its financial flexibility.  In particular, the net proceeds from the rights offer will allow AngloGold Ashanti both to significantly restructure and reduce its existing gold hedging position, which has adversely affected its financial performance in recent years, while also being able to continue to fund its principal development projects and exploration growth initiatives. Pending this use of proceeds, the net proceeds of the rights offer may, in the interim, be used by AngloGold Ashanti to reduce its short-term borrowings and the borrowings outstanding on AngloGold Ashanti’s revolving credit facility or retained as cash and invested in accordance with AngloGold Ashanti’s cash management policies.


SOCIÉTÉ DES MINES DE MORILA S.A.
 FINANCIAL STATEMENTS  for the year ended December 31, 2007
 Registration number: 15430 Incorporated in the Republic of Mali


F-90
 Société des Mines de Morila S.A. Financial Statementsfor the year ended December 31, 2007
 Report of Independent Registered Public Accounting Firm
 Income statement
 Balance sheet
 Statement of changes in shareholders’ equity
 Cash flow statement
 Notes to the financial statements


Report of the Independent Registered Public Accounting Firm
 To the Board of Directors and Shareholders 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, 2006, 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. We were not engaged to perform an audit of the Company's internal control over financial reporting. 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, 2006 and the results of its operations and its cash flows for the year then ended, in conformity with International Financial Reporting Standards.
 We also audited the adjustments described in note 2.5 that were applied to restate the 2005 and 2004 financial statements.  In our opinion, such adjustments are appropriate and have been properly applied.
 As discussed in note 2.5, in 2006 the Company changed its method of accounting for stripping costs incurred during the production phase of a mine.
 Ernst & Young Inc. Registered Auditor
 Johannesburg, Republic of South Africa June 15, 2007


Report of the Independent Registered Public Accounting Firm
 The Board of Directors and Shareholders of Société des Mines de Morila S.A.
 In our opinion, the balance sheet as of December 31, 2005 and the related the related income statements, cash flow statements and statements of changes in shareholders equity for each of two years in the period ended December 31, 2005, before the effects of the adjustments to retrospectively change the method of accounting for stripping costs incurred during the production phase of a mine as described in Note 2.5, present fairly, in all material respects, the financial position of Société des Mines de Morila S.A. (the “Company”) at December 31, 2005, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2005, in conformity with International Financial Reporting Standards (the 2005 financial statements before the effects of the adjustments discussed in Note 2.5 are not presented herein).  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, before the effects of the adjustments described above, of these statements 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively change the method of accounting for stripping costs incurred during the production phase of a mine described in Note 2.5 and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have properly applied.  Those adjustments were audited by other auditors.
 PricewaterhouseCoopers Inc. Director: Faan Lombard Registered Auditor
 Sunninghill, South Africa March 9, 2006


Société des Mines de Morila S.A. Income Statementsfor the years ended December 31,
 Note
 Unaudited
 2007
 $’000
 2006
 $’000
 2005
 $’000
 Restated
 (note 2.5)


Société des Mines de Morila S.A. Balance sheetsAt December 31,
 
 
 Unaudited
 
 
 
 
 2007
 
 2006
 
 Note
 $’000
 
 $’000
      Non current assets
                                    Current assets
            
                         Total assets
                                             Shareholder’s equity
                                                                                  Total shareholders’ equity and liabilities


Société des Mines de Morila S.A. Statements of changes in shareholders’ equityfor the years ended December 31,
 Share
 capital
 $’000
 Retained
 income
 $’000
 Total
 $’000
 
 
 
 Balance at January 1, 2005
 
                   Balance at December 31, 2005
 
                   Balance at December 31, 2006
 
                   Balance at December 31, 2007


Société des Mines de Morila S.A. Cash flow statementsfor the years ended December 31,
 Note
 
 Unaudited
 2007
 $’000
 
 2006
 $’000
 2005
 $’000
 Restated
 (note 2.5)
 Cash flows from operating activities
           Cash generated by operating activities before changes in working capital
 
                                                                   Cash flows from investing activities
                                Cash flows from financing activities
                                                                                       The principal non-cash transactions are the acquisition of mining assets through finance leases (note 7) and the off-set of income taxes against indirect tax receivables (note 15.3).


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 1.
 Nature of operations
 Société des Mines de Morila S.A. (the “Company”) owns the Morila gold mine in Mali. The Company is owned 80% by Morila Limited and 20% by the Government of Mali. Randgold Resources Limited and AngloGold Ashanti Limited (formerly AngloGold Limited) each own 50% of Morila Limited.  The Company is engaged in gold mining and related activities, including exploration, extraction, processing and smelting.  Gold bullion, the Company’s principal product, is currently produced and sold in Mali.
 2.  Significant  accounting  policies
 The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented and are consistent with prior years, except for the change in accounting policy relating to stripping costs. Refer note 2.5.
 2.1
 Basis of preparation
 These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (IASB). The financial statements have been prepared under the historical cost convention, as modified by certain financial assets and financial liabilities (including derivative instruments), which are carried at fair value.
 The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The more significant areas requiring the use of management estimates and judgment relate to the determination of ore reserves that are the basis for future cash flow estimates and units-of-production depreciation calculations, future rehabilitation obligations, estimates of recoverable gold and other materials in gold in process and stockpiles, and asset impairments.
 2.2  General
 The financial statements are measured and presented in US dollars, as it is the primary measurement currency in which transactions are undertaken. Monetary assets and liabilities in foreign currencies are translated to US dollars at rates of exchange ruling at the end of the financial period. Translation gains and losses arising at period-end, as well as those arising on the translation of settled transactions occurring in currencies other than the functional currency, are included in net income.
 2.3
 Foreign currency translation
 
 The consolidated financial statements are presented in US dollars, which is the Company’s functional and presentation currency.
 
 Foreign currency transactions are translated into the measurement currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 2.4
 Property, plant and equipment
 
 Undeveloped properties upon which the Company has not performed sufficient exploration work to determine whether significant mineralization exists, are carried at original cost. Where the directors consider that there is little likelihood ofthe properties being exploited, or the values of the exploitable rights have diminished below cost, an impairment is recorded.
 
 Long-lived assets including development costs and mine plant facilities are initially recorded at cost.  Where relevant the estimated cost of dismantling the asset and remediating the site is included in the cost of property, plant and equipment, subsequently they are measured at cost less accumulated amortisation and impairment. Development costs and mine plant facilities relating to existing and new mines are capitalised.  Development costs consist primarily of direct expenditure incurred to establish or expand productive capacity, and are capitalised until commercial levels of production are achieved, after which the costs are amortised.
 
  
 Long-lived assets include mining properties, mine development costs and mine plant facilities. Depreciation and amortization in respect of long-lived assets are charged over the life of the mine based on estimated ore tons contained in proven and probable reserves. Proven and probable ore reserves reflect estimated quantities of economically recoverable reserves, which can be recovered in the future from known mineral deposits. Short-lived assets, which include motor vehicles, office equipment and computer equipment, are depreciated over estimated useful lives of between two to five years, using the straight-line method but limited to the life of mine.
 
 The carrying amounts of the long-lived assets of the Company are compared to the recoverable amount of the assets whenever events or changes in circumstances indicate that the net book value may not be recoverable. The recoverable amount is the higher of value in use and fair value less cost to sell.
 In assessing the value in use, the expected future cash flows from the asset is determined by applying a discount rate to the anticipated pre-tax future cash flows. The discount rate used is derived from the Company’s credit-adjusted risk-free rate.  Working costs and sustaining capital expenditure are estimated based on the approved mine plan.  An impairment is recognized in the income statement to the extent that the carrying amount exceeds the assets’ recoverable amount. The revised carrying amounts are depreciated in line with accounting policies.
 A previously recognized impairment loss is reversed if the recoverable amount increases as a result of a reversal of the conditions that originally resulted in the impairment. This reversal is recognized in the income statement and is limited to the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized in prior years.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 The estimates of future discounted cash flows are subject to risks and uncertainties including the future gold price. It is therefore reasonably possible that changes could occur which may affect the recoverability of mining assets.
 2.5  Stripping  costs
 The Company changed its accounting policy on stripping costs under IFRS in the prior year.  Previously, costs of production stage waste stripping in excess of the expected pit life average stripping ratio were deferred and then charged to production when the actual stripping ratio was below the expected pit life average stripping ratio. Under the revised accounting policy all stripping cost incurred during the production phase of a mine are treated as variable production costs and as a result are included in the cost of the inventory produced during the period that the stripping costs are incurred.
  US$000
 
 December 31, 2005
                   US$000
 Year  ended
 December 31, 2005
    2.6  Inventories
 Inventories, which include consumable stores, gold in process and ore stockpiled, are stated at the lower of cost or net realizable value. The cost of ore stockpiles and gold produced is determined principally by the weighted average cost method using related production costs.  Costs of gold inventories include all costs incurred up until production of an ounce of gold such as milling costs, mining costs and directly attributable mine general and administration costs but exclude transport costs, refining costs and royalties.
 All stockpile grades are currently being processed and all ore is expected to be fully processed.  This does not include high grade tailings, which are carried at zero value due to uncertainty as to whether they will be processed through the plant.
 The processing of ore in stockpiles occurs in accordance with the life of mine processing plan that has been optimized based on the known mineral reserves, current plant capacity and mine design.
 Consumable stores are valued at average cost after appropriate provision for redundant and slow moving items have been made.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 2.7
 Interest and borrowing cost
 Interest and borrowing cost is recognised on a time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity.   Borrowing cost is expensed as incurred except to the extent that it relates directly to the construction of property, plant and equipment during the time that is required to complete and prepare the asset for its intended use, when it is capitalised as part of property, plant and equipment.  Borrowing cost is capitalised as part of the cost of the asset where it is probable that the asset will result in economic benefit and where the borrowing cost can be measured reliably.
 2.8  Financial  instruments
 Financial instruments are measured as indicated below. Financial instruments carried on the balance sheet include cash and cash equivalents, receivables, accounts payable and borrowings.
 2.9  Receivables
 Receivables are recognised initially at fair value. There is a rebuttable presumption that the transaction price is fair value unless this could be refuted by reference to market indicators. Subsequently, receivables are measured at amortised cost using the effective interest method, less provision for impairment.
 A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of receivables.
 Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired.  The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.
 2.10  Cash and cash equivalents
 Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short term highly liquid investments with a maturity of three months or less at the date of purchase and bank overdrafts. In the balance sheet, bank overdrafts are included in current liabilities.
 2.11  Rehabilitation costs
 The net present value of estimated future rehabilitation cost estimates is recognized and provided for in the financial statements and capitalized to mining assets on initial recognition. Initial recognition is at the time of the disturbance occurring and thereafter as and when additional environmental disturbances are created. The estimates are reviewed annually to take into account the effects of inflation and changes in estimates and are discounted using rates that reflect the time value of money.
 Annual increases in the provision are charged to income and consist of finance costs relating to the change in present value of the provision and inflationary increases in the provision estimate. The present value of additional environmental disturbances created are capitalized to mining assets against an increase in the rehabilitation provision. The rehabilitation asset is depreciated as noted previously. Rehabilitation projects undertaken, included in the estimates, are charged to the provision as incurred.
 Environmental liabilities, other than rehabilitation costs, which relate to liabilities arising from specific events, are expensed when they are known, probable and may be reasonably estimated.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 2.12  Provisions
 Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
 2.13  Borrowings
 Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.
 Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
 2.14  Accounts  payable
 Accounts payable and other short-term monetary liabilities, are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
 2.15  Employee  benefits
  The Company has a defined contribution plan. A defined contribution plan is a plan under which the Company pays fixed contributions. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees.
 Retirement benefits for employees of the Company are provided by the Mali Government social security system to which the Company and its employees contribute a fixed percentage of payroll costs each month. The Company has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
  Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
 2.16  Finance  Leases
 Leases of plant and equipment where the Company assumes a significant portion of risks and rewards of ownership are classified as a finance lease. Finance leases are capitalized at the estimated present value of the underlying lease payments. Each lease payment is allocated between the liability and the finance charges to achieve a constant rate on the finance balance outstanding. The interest portion of the finance payment is charged to the income statement over the lease period. The plant and equipment acquired under the finance lease are depreciated over the shorter of the lease term or useful lives of the assets.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 2.17  Revenue  recognition
  
   As gold sales are subject to customer survey adjustment, sales are initially recorded on a provisional basis using the Company’s best estimate of contained metal.  Subsequently adjustments are recorded in turnover to take into account final assay and weight certificates from the refinery, if different from the initial certificates. Historically the differences between the estimated and actual contained gold have not been significant.
  Interest income - Interest is recognized on a time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity.
 2.18  Exploration  costs
 The Company expenses all exploration and evaluation expenditures until the directors conclude that a future economic benefit is more likely than not of being realised, i.e. “probable”.  In evaluating if expenditures meet this criterion to be capitalised, the directors utilise several different sources of information depending on the level of exploration.  While the criteria for concluding that expenditure should be capitalised is always probable, the information that the directors use to make that determination depends on the level of exploration.
  Exploration and evaluation expenditure on greenfields sites, being those where the Company does not have any mineral deposits which are already being mined or developed, is expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of proved and probable reserves at this location.
  Exploration and evaluation expenditure on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed, is expensed as incurred until the directors are able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased proved and probable reserves after which the expenditure is capitalised as a mine development cost.
 
 or developed, including expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development
  2.19  Current  Taxation
 Current tax is the tax expected to be payable on the taxable income for the year calculated using rates (and laws) that have been enacted or substantively enacted by the balance sheet date.  It includes adjustments for tax expected to be payable or recoverable in respect of previous periods.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 2.20  Deferred  taxation
 Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the temporary difference arise from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for.
 Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.  Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
 2.21  Recent accounting pronouncements
  The following standards and interpretations which have been recently issued or revised have not been adopted early by the group.  Their expected impact is discussed below:
 IFRS 8 Operating Segments (effective for annual periods beginning on or after 1 January 2009) The objective of this IFRS is to require entities to disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates. The company will apply IFRS 8 from 1 January 2009, but it is not expected to have any impact on the accounts of the company.
 IAS 23 Borrowing Costs (revised) (effective for accounting periods beginning on or after 1 January 2009). The main change from the previous version is the removal of the option of immediately recognising as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale.  The company will apply IAS 23 (revised) from 1 January 2009, but it is not expected to have any impact on the accounts of the company as the policy currently applied is already in line with IAS 23.
 IFRIC Interpretation 11 IFRS 2 Share-based Payment - Group and Treasury Share Transactions (effective for annual periods beginning on or after 1 March 2007). This interpretation addresses the classification of a share-based payment transaction (as equity- or cash-settled), in which equity instruments of the parent or another group entity are transferred, in the financial statements of the entity receiving accounts of the company.
 IFRIC Interpretation 12 Service Concession Arrangements (effective for annual periods beginning on or after 1 January 2008). This interpretation provides guidance to private sector entities on certain recognition and measurement issues that arise in accounting for public to private service concession arrangements. The company will apply IFRIC 12 from 1 January 2008, but it is not expected to have any impact on the accounts of the company.
 IFRIC 13 Customer loyalty programmes (for annual periods beginning on or after 1 July 2008) This interpretation addresses sale transactions in which the entities grant customers aware credits that, subject to meeting any further qualifying conditions, the customers can redeem in future for free discounted goods or services. The company will apply IFRIC 13 from 1 July 2008, but it is not expected to have any impact on the accounts of the company.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 2.
 Significant accounting policies (continued)
 IFRIC 14 and IAS 19 The limits on defined asset, minimum funding requirements and their interaction – (for annual periods beginning on or after 1 January 2008). This interpretation clarifies when refunds or reductions in future contributions should be regarded as available in accordance with paragraph 58 of IAS19, how a minimum funding requirement might affect the availability of reductions in future contributions and when a funding requirement might give rise to a liability.  The company will apply IFRIC 14 from 1 January 2008, but it is not expected to have any impact on the accounts of the company.
 
  IFRS 7 Financial Instruments Disclosure and complementary amendment to IAS 1, Presentation of Financial Statements –Capital Disclosures (effective for annual periods beginning on or after 1 January 2007). The objective of this IFRS is to require entities to provide disclosures in their financial statements that enable users to evaluate the significance of financial instruments for the entity’s financial position; and the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the reporting date, and how the entity manages those risks.  The amendment to IAS 1 introduces disclosures about the level of an entity's capital and how it manages capital.  The adoption of IFRS 7 and the amendment to IAS 1 had a significant impact on disclosures.
  The group has adopted the following standards and interpretations which are effective for the first time this year without any significant impact:
 IFRIC Interpretation 7, Applying the restatement approach under IAS 29, Financial Reporting in Hyperinflationary Economies (effective for accounting periods beginning on or after 1 March 2006)
  IFRIC Interpretation 9 Reassessment of Embedded Derivatives (effective for annual periods beginning on or after 1 June 2006)
 IFRIC Interpretation 10 Interim Financial Reporting and Impairment (effective for annual periods beginning on or after 1 November 2006)
 3.
 Critical accounting estimates and judgements
 Some of the accounting policies require the application of significant judgement by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgements are subject to an inherent degree of uncertainty and are based on historical experience, terms of existing contracts, management’s view on trends in the gold mining industry and information from outside sources.
 The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
  The net present value of current rehabilitation estimates have been discounted to their present value at 4% per annum (2006: 6%), being an estimate of the cost of borrowings. Expenditure is expected to be incurred at the end of the mine life.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 3.
 Critical accounting estimates and judgements (continued)
  There are numerous uncertainties inherent in estimating ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated.
  The Company has to apply judgement in determining whether exploration and evaluation expenditure should be capitalised or expensed, under the policy described in note 2.
  Given their slow moving nature, the group has had to apply judgement in determining when amounts will be recovered with respect to indirect taxes owing by the Mali Government. The amounts reflected in the financial statements are based on the directors’ best estimate of the timing of the recovery of these amounts.
  There are several methods for calculating depreciation, i.e. the straight-line method, the units of production method using ounces produced and the units of production method using tonnes milled. The directors believe that the tonnes milled method is the best indication of plant and infrastructure usage.
 4.  Share  capital
 Share capital consists of the following authorized and issued ordinary par value shares with a nominal value of Communauté Financière Africaine franc (“CFA”) 10 000 ($16.356) each:
 Number of shares
 authorized and
 issued
 Unaudited
 2007
 $’000
 2006
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 5.  Shareholder’s  loan
 Unaudited
 2007
 $’000
 2006
 $’000
                 The shareholder loan is denominated in US dollars and interest accrues at a LIBOR dollar rate plus 2% per annum and has no fixed terms of repayment. The weighted average interest rate as at December 31, 2007 on the shareholders’ subordinated loans was 7% (December 31, 2006: 6.2%).
 6.
 Environmental rehabilitation provision
 Unaudited
 2007
 $’000
 2006
 $’000
          11,218
 10,012
 The provisions for close down and restoration costs include estimates for the effect of future inflation and have been discounted to their present value at 4% per annum, being an estimate of the risk free pre-tax, cost of borrowing.
 While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the Company has estimated that the remaining costs for Morila, in current monetary terms, will be $14.86 million (December 31, 2006:  $13.2 million), the majority of which will only be expended at the end of the mine life.
 Although limited environmental rehabilitation regulations currently exist in Mali to govern the mines, management has based the environmental rehabilitation provision using the standards as set by the World Bank which require an environmental management plan, an annual environmental report, a closure plan, an up-to-date register of plans of the facility, preservation of public safety on closure, carrying out rehabilitation works and ensuring sufficient funds exist for the closure works.  However, it is reasonably possible that the Company’s estimate of its ultimate rehabilitation liabilities could change as a result of changes in regulations or cost estimates.
 The Company is committed to rehabilitation of its properties and to ensure that it is adequately provided to do so it makes use of independent environmental consultants to advise it.  It also uses past experience in similar situations to ensure that the provisions for rehabilitation are adequate.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 6.
 Environmental rehabilitation provision (continued)
 While the ultimate closure costs may be uncertain, there are no uncertainties with respect to joint and several liability that may affect the magnitude of the contingency as these are clearly defined in the Company’s mining convention.
  The Company carries insurance against pollution including cost of cleanup.  At present, there are no losses and or claims outstanding.
 7.
 Interest Bearing Borrowings
 Unaudited
 2007
 $’000
 2006
 $’000
       
          
 
  Rolls Royce finance lease
 This lease relates to five generators leased from Rolls Royce.  The lease is repayable over ten years commencing April 1, 2001 and bears interest at a variable rate which as at December 31, 2007 was approximately 23% (2006: 21%) per annum.  The lease is collateralized by plant and equipment whose net book value at December 31, 2007 amounted to $8.9 million (2006:  $10.3 million).  Average annual lease payment of $3.8 million (capital and interest) are payable in instalments over the term of the lease. Randgold Resources Limited guaranteed the repayment of the lease.
  Air Liquide finance lease
 The Air Liquide finance lease relates to three oxygen generating units leased from Air Liquide.  The lease is payable over 10 years commencing December 1, 2000 and bears interest at a variable rate which as at December 31, 2007 was approximately 3.09% (2006: 3.48%) per annum.  The lease is collateralized by the production units whose net book value at December 31, 2007 amounted to $1.3 million (2006: $1.6 million).


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 7.
 Interest Bearing Borrowings (continued)
  Unaudited
 2007
 $’000
 2006
 $’000
                                 Unaudited
 2007
 $’000
 2006
 $’000
          Carrying amount
 
 Fair value
 Unaudited
 2007
 $'000
 2006
 $'000
 
 Unaudited
 2007
 $'000
 2006
 $'000
            The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant.  The fair values are based on cash flows discounted using a rate based on the borrowing rate.
  Unaudited
 2007
 $’000
 2006
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 8.  Mining  assets
 Unaudited
 2007
 $'000
 2006
 $'000
     
     
     
       Long-lived  assets
 Long-lived assets are those assets which are amortized over the life of the mine and are comprised of the metallurgical plant, tailings and raw water dams, power plant and mine infrastructure.  The net book value of these assets was $74 million as at December 31, 2007 (2006:  $83 million).
 Short-lived assets
 Short-lived assets are those assets which are amortized over their useful life but limited to the life of the mine and are comprised of motor vehicles and other equipment. The net book value of these assets was $3.2 million as at December 31, 2007 (2006:  $3.6 million).
 9.  Deferred  taxation
 Deferred tax is calculated in full on temporary differences under the liability method using a principal tax rate of 35% (2006: 35%).
   Unaudited
 2007
 $'000
 2006
 $'000
        
       Deferred taxation liability
 
       Deferred taxation asset


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 10.
 Accounts receivable
 Unaudited
 2007
 $’000
 2006
 $’000
                                               
 
    As of 31 December 2007, an unused impairment provision of $3,9 million was reversed (2006: $1,1million impairment).  The amount of the provision was $2,8million as of 31 December 2007 (2006: $6.7 million).
  Unaudited
 2007
 $’000
 2006
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 11.  Inventories
 
 Unaudited
 2007
 $'000
 2006
 $'000
                    
 
    12.
 Accounts payable
 Unaudited
 2007
 $'000
 2006
 $'000
              
        
 
 13.
 Operating profit
 Unaudited
 2007
 $’000
 2006
 $’000
 2005
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 14.  Taxation
 
  Major items causing the Company’s actual income tax charge to differ from estimates at the standard charge of 35 percent of taxable income are as follows:
 Unaudited
 2007
 $'000
 2006
 $’000
 2005
 $’000
 (Restated)
               
     The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the statutory tax rate as follows:
                                            The Company benefited from a five year tax holiday in Mali which expired on November 14, 2005. The benefit of the tax holiday to the Company was to increase its net income by $38.7 million, due to not recording a tax expense for the taxable income generated by the Morila mine for the year ended December 31, 2005.  Under Malian tax law upon expiration of the tax holiday, the Company’s income tax expense will be based on the greater of 35 percent of taxable income or 0.75 per cent of gross revenue.
 The Morila operations have no assessable capital expenditure carry forwards or assessable tax losses, as at December 31, 2007, 2006 and 2005 respectively, for deduction against future mining income.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 15.
 Notes to the cash flow statement
 
 Unaudited
 2007
 $’000
 2006
 $’000
 2005
 $’000
 (Restated)
 
 
 
                                              
                         
                                        16.  Financial  risk  management
 In the normal course of its operations, the Company is exposed to commodity price, currency, interest, liquidity and credit risk.  In order to manage these risks, the Company may enter into transactions which include mainly gold forward and gold option contracts.
 
 16.1  Concentration of credit risk
  The Company’s financial instruments do not represent a concentration of credit risk because the Company sells its gold to and deals with a variety of major financial institutions.  Its receivables and loans are regularly monitored and assessed and a provision for bad debts is maintained.   Gold bullion, the Company’s principal product, is produced in Mali.  The gold produced is sold to a reputable gold refinery.  Because of the international market for gold the Company believes that no concentration of credit risk exists with respect to the selected refinery to which the gold is sold.
  Included in accounts receivable is $47.9 million (2006: $40.4 million) relating to indirect taxes owing to the Company by the Government of Mali, which is denominated in Communauté Financière Africaine franc.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 16.  Financial  risk  management (continued)
 
 16.2  Foreign currency and commodity price risk
  In the normal course of business, the Company enters into transactions denominated in  USD.  In addition, the Company enters into transactions in a number of different currencies (primarily Communauté Financière Africaine franc).  As a result, the Company is subject to transaction exposure from fluctuations in foreign currency exchange rates.
 Unaudited
 2007
 $’000
 2006
 $’000
                          
        Generally the Company does not hedge its exposure to gold price fluctuation risk and sells at market spot prices.  These prices are in US dollars and do not expose the Company to any currency fluctuation risk. However, during periods of capital expenditure or loan finance, the company may use forward contracts or options to reduce the exposure to price movements, while maintaining significant exposure to spot prices.  The Company does not currently use any forward contracts or options.
 16.3  Interest rates and liquidity risk
 Fluctuations in interest rates impact on the value of short term cash investments and interest payable on financing activities (including long term loans), giving rise to interest rate risk.  In the ordinary course of business, the company receives cash from its operations and is required to fund working capital and capital expenditure requirements.  The company generally enters into variable interest bearing borrowings.  This cash is managed to ensure surplus funds are invested in a manner to achieve maximum returns while minimising risks.  The company has in the past been able to actively source financing through shareholder loans and third party loans.  A 1% change in interest rates on the Company's net cash (cash and cash equivalents less borrowings)  would result in a US$2.4 million (2006: US$1 million) negative impact on profit before tax.
 16.4  Capital risk management
 The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital.  Net debt is calculated as total borrowings (including borrowings and trade and other payables, as shown in the balance sheet) less cash and cash equivalents. Total capital is calculated as equity, as shown in the balance sheet, plus net debt.


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 17.
 Fair value of financial instruments
  The following table presents the carrying amounts and fair values of the Company's financial instruments outstanding at December 31, 2006 and 2005.  The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
 
 Unaudited
 December 31, 2007
 December 31, 2006
 
   
   
       Financial assets
                   Financial liabilities
                         Estimation of fair values
 Receivables, restricted cash, accounts payable and cash and equivalentsThe carrying amounts are a reasonable estimate of the fair values because of the short maturity of such instruments.
 Long term debtThe fair value of market-based floating rate long-term debt is estimated using the expected future payments discounted at market interest rates.
 18.
 Post employment benefits
 Retirement benefits for employees of the Company are provided by the Mali Government social security system to which the Company and its employees contribute a fixed percentage of payroll costs each month.  Fund contributions by the Company for the years ended December 31, 2007, 2006 and 2005 amounted to $2.2 million, $2.6 million and $2.5 million respectively.
 19.  Commitments
  Unaudited
 2007
 $’000
 2006
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 19.  Commitments  (continued)
    Unaudited
 2007
 $’000
 2006
 $’000
        
   20.
 Related party transactions
 In terms of the Operator Agreement between Morila SA and AngloGold Services Mali SA, a management fee, calculated as 1% of the total sales of Morila, is payable to AngloGold Service Mali SA quarterly in arrears. The management fees for the year ended December 31, 2007 amounted to $3.2 million (2006:  $3.1 million) (2005: $2.6 million).
 Royalties are payable to the Government of Mali in the form of Ad Valorem taxes and CPS at a total rate of 6% of total sales. The royalties for the year ended December 31, 2007 amounted to $19.1 million (2006: $18.9 million) (2005: $17.8 million). Refer to the Value added tax receivable and Fuel duty receivable in note 10 to the financial statements for the balances owed by the Government of Mali to the Company.
 Notes 10 and 12 to the financial statements set out the other balances receivable and payable relating to fellow subsidiaries.
  Unaudited
 2007
 $’000
 2006
 $’000


Société des Mines de Morila S.A. Notes to the financial statementsfor the year ended December 31, 2007
 20. Related
 party
 transactions (continued)
  Unaudited
 2007
 $’000
 2006
 $’000
 2005
 $’000


Société d’Exploitation des Mines d’Or de Sadiola S.A.


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Financial statements and report of the Independent Registered Public Accounting FirmFor the year ended December 31, 2007
 Report of the Independent Registered Public Accounting Firm Income statements Balance sheets Statements of changes in stockholders’ equity  Cash flow statements Notes to the financial statements


Report of the Independent Registered Public Accounting Firm
 The board of directors and stockholders of Société d’Exploitation des Mines d’Or de Sadiola S.A.
 We have audited the accompanying balance sheets of Société d’Exploitation des Mines d’Or de Sadiola S.A. as of December 31, 2006 and 2005, and the related statements of income, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2006.  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 audits provide 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 d’Exploitation des Mines d’Or de Sadiola S.A. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2006, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
  Johannesburg, South Africa June 25, 2007


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Income StatementsFor the years ended December 31,
  Unaudited
 2007
 2006 2005
 
 Notes
 US$
 
 
 Revenue
 
      
 Gross profit
                       Special impairments of indirect taxes receivable and special expenses for indirect taxes payable
     Operating profit
 
                 Profit before taxation
        
         Profit for the year


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Balance SheetAs at December 31,
 Unaudited
 2007  2006
 
 Notes
 US$
 ASSETS
       Non-current assets
        
             Current assets
    
                   Total assets
      EQUITY AND LIABILITIES
       Equity
           Non-current liabilities
    
            Current liabilities
                    Total liabilities
      Total equity and liabilities


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Statement of changes in stockholders’ equityFor the years ended December 31,
 Ordinary stock
 (note 16)
 Non-
 distributable
 reserve
 Retained
 earnings
 Total
 stockholders'
 equity
 
 Note
 US$
                                                                                    The non-distributable reserve is a legal reserve created in 1997 and is a requirement of the commercial law of Mali. This law prescribes the transfer of 10% of profits, restricted to a maximum of 20% of ordinary share capital, to a non-distributable reserve.  Such reserve only becomes distributable in the event the company is liquidated.


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Cash flow statementsFor the years ended December 31,
 Unaudited
 2007
 2006  2005
 
 Notes
 US$
 Net cash provided by operating activitiesProfit for the year
 
           
    
   
   
   
   
   
    
  
  Special impairments of indirect taxes refundable and special provision for indirect taxes payable
             
        
   
    
        Net cash used in investing activities
        
    
      Net cash used in financing activities


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 1.  Business  activities
 Société d’Exploitation des Mines d’Or de Sadiola S.A. (Semos) is a company registered in Mali. The Company operates a mine for the commercial exploitation of gold in the Kayes region of Western Mali. Commercial production commenced on March 4, 1997.
 2.  Accounting  policies
 Statement  of  compliance
    The company financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) and Interpretations of those standards, as adopted by the International Accounting Standards Board (IASB) and applicable legislation.
  During the current financial year, the following new and revised accounting standards, amendments to standards and new interpretations were adopted by Société d’Exploitation des Mines d’Or de Sadiola S.A:
      In addition, the following interpretation was early adopted by Société d’Exploitation des Mines d’Or de Sadiola S.A. during previous financial years:
    
  In addition, the following revised accounting standard and new interpretations were early adopted by Société d’Exploitation des Mines d’Or de Sadiola S.A during the current financial year:
          IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
     The adoption of the accounting standards, amendments to standards and new interpretations had no material financial impact on the financial statements identified above.
  The following accounting standards, amendments to standards and new interpretations, which are not yet mandatory for Société d’Exploitation des Mines d’Or de Sadiola S.A, have not been adopted in the current year:
   Effective  years  beginning  on  or  after 1 January 2009
      Effective years beginning on or after 1 January 2009
  The company has assessed the significance of these new standards, amendments to standards and new interpretations, which will be applicable from 1 January 2009 and later years and concluded that they will have no material financial impact.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.1
 Basis of preparation
 The financial statements are prepared according to the historical cost accounting convention, except for the revaluation of certain financial instruments to fair value. The company's accounting policies as set out below are consistent in all material respects with those applied in the previous year, except for the adoption of the new and revised standards mentioned above.  The financial statements are presented in US dollars.
 2.2
 Changes in accounting policies
 The adoption of the following new/revised standards, amendments to standards and interpretations did not have any consequential effect on the accounting policies:
              IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
 IAS 1 Amendment – Capital Disclosures
 The company adopted IAS 1 Amendment - Capital Disclosures as of 1 January 2007.  The amendment requires additional disclosures about the company’s objectives, policies and processes of managing capital. The adoption of the amendment did not have any effect on the financial position or performance of the company.
 IAS 23 Borrowing Costs (revised)
 The company adopted IAS 23 – Borrowing Costs (revised) as of 1 January 2007.  This revision to the standard will have no financial effect on the results of operation or the reporting of the financial condition of Société d’Exploitation des Mines d’Or de Sadiola S.A as the company had already adopted the capitalisation of interest principle for qualifying assets under the allowed alternative of the old IAS 23.
 IFRS 7 Financial Instruments: Disclosures
 The company adopted IFRS 7 - Financial Instruments: Disclosures as of 1 January 2007. The statement introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about the exposure to risks arising from financial instruments including a sensitivity analysis to market risk. The adoption of the statement did not have any effect on the financial position or performance of the company.
 IFRIC 11 IFRS 2 – Group and Treasury Share Transactions
 The company elected to adopt IFRIC Interpretation 11 as of 1 January 2007. This interpretation requires arrangements whereby an employee of the company is granted rights, by the parent, to an entity or its parent’s equity instruments to be accounted for as an equity-settled scheme, even if the entity buys the instruments from another party, or the shareholders provide the equity instruments needed. The adoption of this interpretation did not have any effect on the financial position or performance of the company.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.2
 Changes in accounting policies (continued )
 IFRIC 12 Service Concession Arrangements
 The company elected to adopt IFRIC Interpretation 12 as of 1 January 2007. This interpretation requires arrangements where a public-to-private service concession has been established to be accounted for as balance sheet assets and liabilities at inception. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 IFRIC 13 Customer Loyalty Programmes
 The company elected to adopt IFRIC Interpretation 13 as of 1 January 2007. This interpretation requires the entity that grants the customer loyalty award to account for the sales transaction that gives rise to the award credits as a “multiple element revenue transaction” and allocate the fair value between the award credits granted and the other components of the revenue transaction. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
 The company elected to adopt IFRIC Interpretation 14 as of 1 January 2007. This interpretation requires the entity to measure any economic benefits available to it in the form of refunds or reductions in future contributions at the maximum amount that is consistent with the terms and conditions of the plan, when determining the limit on a defined benefit asset. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 2.3
 Significant accounting judgements and estimates
 Use of estimates:The preparation of the financial statements requires the company’s management to make estimates and 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 the reporting period. The determination of estimates requires the exercise of judgement based on various  assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
 The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments, write-downs of inventory to net realisable value; post-employment, post-retirement and other employee benefit liabilities, the fair value and accounting treatment of financial instruments and deferred taxation.
 Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
 The company is exposed to numerous legal risks. The outcome of currently pending and future proceedings cannot be predicted with certainty. Thus, an adverse decision in a lawsuit could result in additional costs that are not covered, either wholly or partly, under insurance policies and that could significantly influence the business and results of operations.
 The judgements that management have applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3
 Significant accounting judgements and estimates (continued)
 Carrying value of property, plant and equipment
 All mining assets are amortised using the units-of-production (UOP) method where the mine operating plan calls for production from well-defined mineral reserves over proved and probable reserves.
 For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proved and probable mineral reserves as the useful lives of these assets are considered to be limited to the life of the mine.
 The calculation of the UOP rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proved and probable mineral reserves. This would generally result to the extent that there are significant changes in any of the factors or assumptions used in estimating mineral reserves.
  ·
 ·
 ·
 ·
 ·
 ·
  the grade of mineral reserves may vary significantly from time to time; differences between actual commodity prices and commodity price assumptions; unforeseen operational issues at mine sites; changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates; and changes in mineral reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine.
 The recoverable amounts of individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the gold price assumption may change which may then impact the estimated life of mine determinant and may then require a material adjustment to the carrying value of property, plant and equipment.
 The company defers stripping costs incurred during the production stage of its open-pit operations, where this is the most appropriate basis for matching the costs against the related economic benefits.  This is generally the case where there are fluctuations in stripping costs over the life of the mine.
 In the production stage of the open-pit operations, further development of the mine requires a phase of unusually high overburden removal activity that is similar in nature to preproduction mine development.  The costs of such unusually high overburden removal activity are deferred and charged against reported profits in subsequent periods on a units-of-production basis.  This accounting treatment is consistent with that for stripping costs incurred during the development phase of a mine, before production commences.
 If the company were to expense production stage stripping costs as incurred, this would result in volatility in the year to year results from open-pit operations and excess stripping costs would be expensed at an earlier stage of the mine’s operation.
 Deferred stripping costs are included in ‘Mine development costs’, within Property, plant and equipment.  These form part of the total investment in the individual asset, which is reviewed for impairment if events or a change in circumstances indicate that the carrying value may not be recoverable.  Amortisation of deferred stripping costs is included in operating costs.
 The company reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3
 Significant accounting judgements and estimates (continued)
 Carrying value of property, plant and equipment (continued)
 Expected future cash flows used to determine the value in use of property, plant and equipment are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and future gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.
 Production start date
 The company assesses the mine construction project to determine when it moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of the construction project such as the complexity of a plant and its location. The company considers various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moves into the production stage. Some of the criteria would include, but, are not limited to, the following:
 ·
  ·
  ·
  ·
  When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements or reserve development.
 Income taxes
 The company is subject to income tax. Significant judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
 The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the balance sheet date could be impacted.
 Additionally, future changes in tax laws in the jurisdiction in which the company operates could limit the ability of the company to obtain tax deductions in future periods.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3  Significant accounting judgements and estimates (continued)
 Provision for environmental rehabilitation obligations
 The company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The company recognises management’s best estimate for decommissioning and restoration 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. Such changes could similarly impact the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.
 Stockpiles, gold in process and product inventories
 Costs that are incurred in or benefit the production process are accumulated as stockpiles, gold in process and product inventories. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.
 Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.
 Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of gold actually recovered (metallurgical balancing), the nature of the 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.
 Recoverable tax, rebates, levies and duties
 Société d’Exploitation des Mines d’Or de Sadiola S.A. is due refunds of input tax which remain outstanding for periods longer than those provided for in the respective statutes. In addition Société d’Exploitation des Mines d’Or de Sadiola S.A. has unresolved tax disputes. If the outstanding input taxes are not received and the tax disputes are not resolved in a manner favourable to Société d’Exploitation des Mines d’Or de Sadiola S.A. it could have an adverse effect upon the carrying value of these assets.
 Ore Reserve estimates
 Ore Reserves are estimates of the amount of product that can be economically and legally extracted from the company’s properties.  In order to calculate Ore Reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.
 Estimating the quantity and/or grade of Ore Reserves requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples.  This process may require complex and difficult geological judgements and calculations to interpret the data.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3  Significant accounting judgements and estimates (continued)
  additional geological data is generated during the course of operations, estimates of Ore Reserves may change from period to period.  Changes in reported Ore Reserves may affect the company’s financial results and financial position in a number of ways, including the following:
 ·
  ·
 depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units-of-production basis, or where the useful economic lives of assets change.
 ·
 overburden removal costs recorded on the balance sheet or charged in the income statement may change due to changes in stripping ratios or the units-of-production basis of depreciation.
 ·
 Decommissioning, site restoration and environmental provisions may change where changes in estimated Ore Reserves affect expectations about the timing or cost of these activities.
 ·
 the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
 Exploration and evaluation expenditure
 The company’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the income statement.
 Development expenditure
 Development activities commence after project sanctioning by the appropriate level of management.  Judgement is applied by management in determining when a project has reached a stage at which economically recoverable reserves exist such that development may be sanctioned.  In exercising this judgement, management is required to make certain estimates and assumptions similar to those described above for capitalised exploration and evaluation expenditure.  Any such estimates and assumptions may change as new information becomes available.  If, after having started the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.
 Contingencies
 By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of judgement and estimates of the outcome of future events.
 Litigation and other judicial proceedings may raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the company may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the company could be materially affected by the unfavourable outcome of litigation.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies
 Foreign currency translation
 Functional currency
 Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).   The functional currency of United States Dollars (US$) is used as opposed to the currency of the country in which the enterprise is domiciled, namely Franc de la Communauté Financière d’Afrique (F CFA).  The decision has been taken on the basis of US$ being the functional currency in which the enterprise receives its revenue and majority of costs are mainly influenced by the US dollar.
 Transactions and balances
 Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the year-end exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for derivative balances that are within the scope of IAS 39. Translation differences on these balances are reported as part of their fair value gain or loss.
 Non monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
 Property, plant and equipment
 Property, plant and equipment are recorded at cost less accumulated amortisation and impairments. Cost includes pre-production expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
 Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
 If there is an indication that the recoverable amount of any property, plant and equipment is less than the carrying value, the recoverable amount is estimated and an allowance is made for the impairment in value.
  associated with the item will flow to the company, and the cost of the addition can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
  dismantling and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added to and/or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount, this effect is recognised as income. The change in depreciation charge is recognised prospectively.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Amortisation of assets is calculated to allocate the cost of each asset to its residual value over its estimated useful life for those assets not amortised on the units-of-production method as follows:
 buildings up to life of mine; plant and machinery up to life of mine; equipment and motor vehicles up to five years; computer equipment up to three years; and leased assets over the period of the lease.
 Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.
  Gains and losses on disposals are determined by comparing net sales proceeds with the carrying amount. These are included in the income statement.
 Mine development costs
 ·
 ·
 ·
 ·
 ·
 Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in existing orebodies, to expand the capacity of the mine and to maintain production. Where funds have been borrowed specifically to finance a project, the amount of interest capitalised represents the actual borrowing costs incurred. Mine development costs include acquired proved and probable Mineral Resources at cost at the acquisition date.
 Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on estimated proved and probable mineral reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. These reserves are amortised from the date on which commercial production begins.
 Stripping costs incurred in open-pit operations during the production phase to remove additional waste are charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne. The average stripping ratio is calculated as the number of tonnes of waste material expected to be removed during the life of mine per tonne of ore mined. The average life of mine cost per tonne is calculated as the total expected costs to be incurred to mine the orebody, divided by the number of tonnes expected to be mined. The average life of mine stripping ratio and the average life of mine cost per tonne are recalculated annually in the light of additional knowledge and changes in estimates.
 The cost of the “excess stripping” is capitalised as mine development costs when the actual mining costs exceed the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio multiplied by the life of mine cost per tonne. When the actual mining costs are below the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes  multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonne, previously capitalised costs are expensed to increase the cost up to the average.
 The cost of stripping in any period will be reflective of the average stripping rates for the orebody as a whole. Changes in the life of mine stripping ratio are accounted for prospectively as a change in estimate.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Mine infrastructure
 Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production method based on estimated proved and probable mineral reserves. Other property, plant and equipment comprising vehicles and computer equipment are depreciated by the straight-line method over their estimated useful lives.
 Exploration and Evaluation assets
 All exploration costs are expensed until the directors conclude that a future economic benefit will more likely than not  be realised. In evaluating if expenditures meet this criterion to be capitalised, the directors use several different sources of information depending on the level of exploration. While the criteria for concluding that expenditure should be capitalised is always probable, the information that the directors use to make that determination depends on the  level of exploration.
  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 proved and probable reserves at this location.
  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 proved and probable reserves after which the expenditure is capitalised as a mine development cost.
  expenditure on the definition of mineralisation of such mineral deposits, is capitalised as a mine development cost.
  Impairment of assets
 ·
 ·
 ·
 Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable.
 An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value, less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.
 Impairment calculation assumptions include life of mine plans based on published reserves and resources, management’s estimate of the future gold price, based on current market price trends, foreign exchange rates, and a pre-tax discount rate adjusted for country and project risk. It is therefore reasonably possible that changes could occur which may affect the recoverability of property, plant and equipment and intangible assets.
 Leased assets
 Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Exploration and research expenditure
 Pre – licence costs are recognised in profit or loss as incurred. Exploration and research expenditure is expensed in the year in which it is incurred. These expenses include: geological and geographical costs, labour, mineral resources and exploratory drilling costs.
 Inventories
 ·
 ·
 ·
 ·
 ·
 Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and slow moving items. Cost is determined on the following bases:
 gold in process is valued at the average total production cost at the relevant stage of production; gold doré / bullion is valued on an average total production cost method; ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-current asset where the stockpile exceeds current processing capacity; by-products are valued on an average total production cost method.  Mine operating supplies are valued at average cost
  Provisions
 Provisions are recognised when the company has a present obligation, whether legal or constructive, because 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. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a separate asset. Where the company has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
 Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the 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.
 Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
 A contingent liability is disclosed when the possibility of an outflow of resources embodying economic benefits is not remote.
 Employee benefits
 Short-term employee benefitsThe cost of all short-term employee benefits is recognised during the period in which the employee renders the related service.
 The provisions for employee entitlements to wages, salaries, and annual leave represent the amount which the company has a present obligation to pay as a result of employees’ services provided to the balance sheet date.  The provisions have been calculated at undiscounted amounts based on current wage and salary rates.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Employee benefits
 Long-term employee benefitsLiabilities for employee benefits which are not expected to be settled within 12 months are discounted at a pre tax rate that reflects current market assessments of the time value of money.
 The Company and all employees contribute towards the Malian Government social security fund. Accordingly, on retirement, the Malian employees are entitled to a retirement benefit from the Malian Government. Expatriate employees are reimbursed their contributions made to the social security fund.
 Environmental expenditure
 The company has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past operations which are based on the company's environmental management plans, in compliance with current environmental and regulatory requirements. Provisons for non-recurring remediation costs are made when there is a present obligation, it is probable that expense on remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean up, laws and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
 Decommissioning costs
 The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Accordingly an asset is recognised and included within mine infrastructure.
 Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement.
 Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset.  Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
  Restoration costs
 The provision for restoration represents the cost of restoring site damage after the start of production. Increases in the provision are charged to the income statement as a cost of production.
 Gross restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability.


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Revenue recognition
 Revenue is recognised at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following criteria must also be present:
 the sale of mining products is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer; interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the company; and Where a by-product is not regarded as significant, revenue is credited against cost of sales, when the significant risks and rewards of ownership of the products are transferred to the buyer.
 Taxation
 ·
 ·
 ·
 Deferred taxation is provided on all qualifying temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
 Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
 The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
 Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted at the balance sheet date.
  Current tax is measured on taxable income at the applicable statutory rate enacted or substantially enacted at the balance sheet date.
 Special items
 Items of income and expense that are material and require separate disclosure, in accordance with IAS 1.86, are classified as “special items” on the face of the income statement. Special items that relate to the underlying performance of the business are classified as “operating special items” and include impairment charges and reversals. Special items that do not relate to underlying business performance are classified as “non-operating special items” and are presented below “Operating (loss) profit” on the income statement.
 Dividend distribution
 Dividend distribution to the company’s shareholders is recognised as a liability in the company’s financial statements in the period in which the dividends are declared by the board of directors of  Société d’Exploitation des Mines d’Or de Sadiola S.A..


Société d’Exploitation des Mines d’Or de Sadiola S.A. Notes to the financial statementFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Financial instruments
 Financial instruments are initially measured at fair value when the company becomes a party to their contractual arrangements. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit and loss. The subsequent measurement of financial instruments is dealt with below.
 A financial asset is derecognised when the right to receive cash flows from the asset has expired or the company has transferred its rights to receive cash and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
  On derecognition of a financial asset, the difference between the proceeds received or receivable and the carrying amount of the asset is included in income.
 On derecognition of a financial liability, the difference between the carrying amount of the liability extinguished or transferred to another party and the amount paid is included in income.
  Other non-current assets
 Loans and receivables are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that loans and receivables are impaired, the carrying amount of the assets is reduced and the loss recognised in the income statement.
 Trade and other receivables
 ·
 Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less accumulated impairment. Impairment of trade and other receivables is established when there is objective evidence as a result of a loss event that the company will not be able to collect all amounts due according to the original terms of the receivables. Objective evidence includes failure by the counterparty to perform in terms of contractual arrangements and agreed terms. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The impairment is recognised in the income statement.
 Cash and cash equivalents
 Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.  They are measured at cost which is deemed to be fair value as they have a short-term maturity.
 Financial liabilities


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 
 
 Unaudited
 2007
 2006  2005
 
 US$
 3  Revenue
  
 4  Operating  profit
                                           
                  
 Mining contractor fees Operating leases
 42,431,789 29,457,981
 29,057,225 26,214,997
 24,706,278 19,054,434
 5
 Special impairments of indirect taxes receivable and special expenses for indirect taxes payable
                               
 5.1
 Impairment of advance on tax dispute
  During November 2003, the Government of Mali performed a tax audit of the corporate taxation and various indirect taxes at the company for fiscal years 2000 to 2002.  The results of the audit indicated that the company owed the Government of Mali F CFA 7.9 billion (US$16.4 million as of December 31, 2004) of various taxes and penalties, which was communicated by way of a formal letter of assessment to the company.  According to Government of Mali officials the main reasons for the additional taxes were:
 ·
  ·
  ·
  ·
  The company was of the opinion that the tax filings and indirect tax submissions by the Company were in compliance with applicable laws and regulations.
 Towards the end of the 2003 financial year the Government of Mali proposed that the company and the Government of Mali settle their differences on the tax audit findings by way of the Company paying F CFA 2.5 billion (US$5.2 million as of December 31, 2004) to the Government of Mali.  In January 2004, the Government of Mali threatened to close down the operations of the company if the taxes were not paid and, as a result the Government of Mali requested that an advance of F CFA 2.5 billion (US$5.2 million as of December 31, 2004) be made to them in order for the company to continue operations.  The agreement with the Government of Mali was that this advance was not an acknowledgement of any taxes payable and that the advance would allow the company and the Government of Mali time to resolve their differences in tax interpretation, or to allow the Company the right to arbitration.  No cash payment was made as a transfer was made from the current account held with the Government of Mali.  Numerous attempts to resolve the dispute between the Government of Mali and the company between January and June 2004 failed.


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 Without admitting that the company filings have been prepared in an incorrect manner in terms of the prevailing laws and regulations, the directors decided that the advance should be abandoned in order to close this issue and allow management to concentrate on the company’s core business.  Accordingly, the abandonment was recorded as an special item rather than as an under provision of prior year taxation.  Abandonment of this amount enabled the company to reach an agreement with the Government of Mali on all corporate taxation issues which were in dispute and to establish a protocol for the indirect taxes that were in dispute for the future.
 5.2  Impairment of VAT refundable by Government of Mali
 The gross amount of VAT refundable by the Government of Mali amounted to US$29.2 million at December 31, 2005.  Management estimated that only US$27.3 million was recoverable based on previous VAT audits performed by the authorities.  Accordingly, an impairment of VAT refundable of US$1.9 million was made.  Management estimates that the gross amount of VAT refundable by the Government of Mali at December 31, 2006 is recoverable, accordingly no impairment was made in 2006.
 5.3
 Payment relating to the 2003/2004 tax audit
 5.4
 5.5
 During the 2005 financial year a tax assessment was received for corporate tax and various indirect taxes by Government of Mali authorities for the 2003 and 2004 fiscal years.  Management objected to the assessment as it did not reflect the protocol agreement reached between the company and the Government of Mali with regard to the tax audit of the Company for fiscal years 2000 to 2002 (note 5.1).  As discussed in note 5.1 the Government of Mali required an advance be made which the Company refused.  Without admitting guilt the Company decided to pay the Government of Mali an amount agreed by both parties. The Company and the Government of Mali reached settlement on the disputes relating to the 2003 and 2004 fiscal year tax assessments in 2006. The additional settlement of $4.1 million has been recorded as an special payment of indirect taxes.
 Payment relating to the 2005/2006 tax auditDuring 2007 the Malian tax authorities conducted a tax audit of the corporate taxation and various indirect tax submissions of the company for previous years. The result of the audit, which was communicated to the company in October, indicated that the company owed the Government of Mali an amount of F CFA 10.5 billion (US$23.6 million as of December 31, 2007). The company objected to the claim as management was of the opinion that the tax submissions of the company were in compliance with applicable laws and regulations. The company however provided an amount F CFA 877 million (US$1.98 million as of December 31, 2007) in respect of indirect taxes and F CFA 403 million (US$ 0.9 million as of December 31, 2007) in respect of corporate taxation based on the uncertainty of the interpretation of certain rules (Refer Note 17.3).
 Provision relating to the 2007 tax submissionsThe company has reviewed it’s 2007 tax submissions based on the interpretations applied by the tax authorities in conducting the 2005 / 2006 audit. Management has determined that there may be an under payment of F CFA 295 million (US$0.67 million as of December 31, 2007) which has been provided for in the 2007 financial results.
   
 
 Unaudited
 2007  2006
 2005
 
 US$
 6  Taxation


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 Mine
 development
 costs
 Work in
 progress
 Mine infra-
 structure  Total
 
 
 US$
 US$
 US$
 US$
 7  Property, plant and equipment at December 31, 2007
 Cost
            
               Accumulated amortization
                        Carrying amount at December 31, 2007 (unaudited)
 53,942,280
 4,382,026
 69,390,407
 127,714,713
       Mine
 development
 costs
 Work in
 progress
 Mine infra-
 structure  Total
 US$
 US$
 US$
 US$
 Property, plant and equipment at December 31, 2006Cost
             
               Accumulated amortization
                        Carrying amount at December 31, 2006
 50,859,215
 -
 61,588,139
 112,447,354
 
 
 
 
 
 Unaudited
 2007
 2006
 US$
 8  Inventories
    Non-current portion of inventories
    
       Current portion of inventories
    
                Consumable stores


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 Unaudited
 2007
 2006
 US$
 9
 Trade and other receivables
    Related party receivables
                        
                 
           
                            9.1
 Stamp duties refundable by the Government of MaliDuring 2002, a dispute arose between the company and the Government of Mali with regards to the payment of stamp duties on gold exports due to different interpretations of the Convention Agreement and the Mining Code.  In order to ensure the continuation of gold exports, the company paid stamp duties raising an amount receivable from the Government of Mali.
 The company entered into arbitration to resolve the dispute. The Tribunal decision was announced in February 2003, indicating that the company would no longer be obliged to pay stamp duties and that stamp duties to the value of F CFA2.2 billion (US$3.2 million) should be reimbursed to the company.
 During the 2004, 2005 and 2006 financial years, management communicated with the Minister of Finance (MOF), Minister of Domains (MOD) and the Minister of Mines (MOM) several times in an effort to recover the outstanding stamp duties. However, at the end of December 2006, the amount of US$1.0 million (2005: US$3.9 million) was still outstanding and is reflected in trade and other receivables.
 The MOD represented the Government of Mali during the arbitration proceedings. In order for the MOF to be able to settle with the company the outstanding stamp duties, the MOD is required to officially notify the MOF advising that the Government of Mali lost the arbitration case. Subsequently the MOF has confirmed to management of the company that they will settle the long outstanding stamp duty. F CFA 800 million (US$1.4 million) was reimbursed early in January 2006. An impairment of US$0.6 million was made in December 2005 for the portion of the amount that management did not expect to recover. Following the settlement of the indirect taxes disputes the company and the Government of Mali have signed a protocol agreement. Repayments received in 2006 have been in accordance with the protocol agreement.
 
 
 
 
 
 
 
 
 
 
 Unaudited
 2007  2006
 
 
 
 US$
 10
 Cash and cash equivalents


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 
 
 
 
 Unaudited
 2007
 2006
 
 
 
 US$
 11 Provisions
     Environmental rehabilitation obligation
                                   Employee long service obligation
                                   
  
       Assumptions applicable to provisionsEstimated gross future environmental rehabilitation costs      Estimated gross future employee long service costs
             
                The average discount period is based on the current estimate of the life of mine, which is subject to revision annually. The estimated gross future costs are based on management's best estimates at December 31, 2007, and are also subject to revision annually. The change in estimate arises due to the change in the assumption of the discount rate applicable and a change in the estimate of the gross future costs.
       Malian Government social security fund
     The company and all employees contribute to the Malian Government social security fund. On retirement, the Malian employees are entitled to a retirement benefit from the fund. The fund reimburses expatriate employees only their own contributions made to the fund. Accordingly, there is no obligation for defined employee benefits.  The company's contributions to the Malian Government social security fund are disclosed in note 4.
       12
 Deferred taxation


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 
 
 Unaudited
 2007
 2006
 US$
 13
 Trade and other payables
   Related party payables
                       
      
 
 
         
 
 
 
 Unaudited
 2007
 2006  2005
 
 
 US$
 14
 Dividends paid
                     
 
                 15
 Income tax paid
                                   16  Ordinary  stock
            Held by:
 Number of
 outstanding
 stock in
 issue
 Unaudited
 2007  2006
    US$
 AngloGold Mali Holdings 1 (subsidiary of AngloGold Ashanti Ltd)
 
                            17
 Contractual Commitments and contingencies
     17.1
 Operating leases
     At December 31, 2007, the company was committed to making the following minimum payments in respect of operating leases for amongst others, hire of plant and equipment and land and buildings.
       Unaudited
 2007
 2006
    US$
 
     
  
  
 
 
 
 These balances are calculated based on the minimum rentals due in terms of the contract up to and including the expiry date (December 2009) or minimum notice period (six months), whichever is the lesser. The contract does not provide for guaranteed escalations. The company has no other restrictions on any of its leasing arrangements.


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 
 
 
 Unaudited
 2007
 2006
 
 
 
 US$
 17.2
 Capital Commitments
     
     
   
          Purchase obligations
           The proposed capital expenditure for mine infrastructure and other purchase obligations will be financed from cash resources generated by operating activities of the company.
 17.3
 The company is subject to and pays taxes in Mali. Some of these taxes are defined by contractual agreements with the local government, but others are defined by the general corporate tax laws of the country. The company has historically filed, and continues to file, all required tax returns and to pay the taxes reasonably determined to be due. The tax rules in Mali are complex and subject to interpretation. From time to time the company is subject to a review of its historic tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the company’s business conducted in Mali. During 2007 the Malian tax authorities conducted a tax audit of the corporate taxation and various indirect tax submissions of the company for previous years. The result of the audit, which was communicated to the company in October, indicated that the company owed the Government of Mali an amount of F CFA 10.5 billion (US$23.6 million as of December 31, 2007). The company objected to the claim as management was of the opinion that the tax submissions of the company were in compliance with applicable laws and regulations. The company however provided an amount F CFA 877 million (US$1.98 million as off December 31, 2007) in respect of indirect taxes and F CFA 403 million (US$ 0.9 million as of December 31, 2007) in respect of corporate taxation based on the uncertainty of the interpretation of certain rules. The tax authorities subsequently reviewed their claim and submitted a revised claim of F CFA 5.2 billion (US$ 11.7 million as at 29 February 2008) on the 19 February 2008. The company has objected to the revised claim as management is of the opinion that the authorities have no grounds for reassessing submissions for fiscal years that have previously been closed.  The ultimate outcome cannot be presently determined.
 18  Related  parties
      18.1
 Identity of related parties
      The stockholders of the company are disclosed in note 16. Entities within the AngloGold Ashanti group and with which the Company has transacted, are listed in note 18.2.  The directors of the company are listed below:


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 18.2
 Material related party transactions
 Transactions
 with related
 parties
 Net amounts
 due by/
 (owed to)
 related parties
 (notes 9 & 13)
 Transactions
 with related
 parties
 Net amounts
 due by/ (owed
 to) related
 parties (notes
 9 & 13)
 Transactions
 with related
 parties
 Net amounts
 due by/
 (owed to)
 related parties
 Material related party transactions are as follows:
 Unaudited
  2007
 2006
 2005
 US$
 –  AngloGold Ashanti Mali S.A.
 3,239,467
 (1,485,597)
 5,105,740
 (493,841)
 4,362,040
 (468,043)
 –  Société des Mines de Morila
 S.A. (Morila)
 225,674
 (98,473)
 (476,657)
 174,237
 (573,185)
 21,234
 –  Siguiri Gold Mine
 (153,345)  123,699  (153,345)  153,345
 -
 -
 – Société d’Exploitation des
 Mines d’Or de Yatela S.A. (Yatela)
 (2,619,552)  493,053  (2,865,379)  381,436
 (3,100,621)  160,821
 – AngloGold Ashanti Limited
 7,318,000
 (2,997,170)
 3,662,857
 (156,096)
 3,667,155
 (192,071)
 – Rand Refinery Limited
 (267,391,388)
 5,426,583
 (300,178,723)
 23,892
 (197,691,634)
 11,309
 – Key Management Personnel
 remuneration  1,056,175
 -
 506,223
 -
 850,407
 -
 - Salary
 991,990
 -
 414,803
 -
 803,602
 -
 - Performance related        payments
 64,185
 -
 91,420
 -
 46,805
 -
 
 
 
 
 
 AngloGold Ashanti Mali S.A. is a service organisation within the AngloGold Ashanti group and, accordingly, provides management services to the company. Included in transactions with AngloGold Ashanti Mali S.A. are management fees paid by the Company of US$2,679,111 (2006: US$3,007,271 and 2005: US$1,981,333) (refer note 4). Morila and Yatela are fellow subsidiaries to the company, also located in Mali. Sadiola shares certain employees with Yatela, as well as the elution and smelting of the gold production process. The company incurs only ad hoc transactions with Morila.
 Rand Refinery Limited is a subsidiary company within the AngloGold Ashanti group. The company has entered into contractual agreements with Rand Refinery Limited for the provision of all services required for the collection, transport, refining and purchase of the doré bars produced by the company. Included in transactions with Rand Refinery Limited are sales by the company of US$267.9 million (2006: US$300.7 million and 2005: US$198.1 million) and purchases by the company of US$0.5 million (2006: US$0.5 million and 2005: US$0.4 million).
 19
 ·
 ·
 ·
 ·
 Risk management activities
 In the normal course of its operations, the company is exposed to gold price, other commodity price, foreign exchange, interest rate, liquidity, price and credit risks. In order to manage these risks, the company may enter into transactions which make use of both on- and off-balance sheet derivatives. The company does not acquire, hold or issue derivatives for trading purposes. The company has access via its shareholders to a developed comprehensive risk management process to facilitate, control and monitor these risks.
         ensuring that all contracts and agreements related to risk management activities are coordinated and consistent throughout the company and that they comply where necessary with all relevant regulatory and statutory requirements.
 19.1
 Gold price and currency riskGold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold.  The company does not hedge against the effects of fluctuations in the gold price.


Société d’Exploitation des Mines d’Or de Sadiola S.A.  Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 19.2
 Credit risk
   The company does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counter parties. Although the company sells gold to only one counter party, the company does not believe that this concentration of credit results in significant credit risk as the majority of proceeds are received within two working days of the gold leaving  the mine. There is however a concentration of credit risk with respect to various taxes receivable from the Malian State. These taxes and the measures taken to ensure recoverability thereof are discussed in note 5, note 9 and below.
 19.2.1
 Vulnerability from concentrations of VAT refundable by the Government of MaliValue added taxes receivable from the Government of Mali amounts to US$38.9 million at 31 December 2007 (2006: US$38.5 and 2005: US$26.2 million).  VAT is refundable from the government in F CFA.  The last audited VAT return was for the period ended March 31, 2007 and at 31 December 2007 US$16.2 million (2006: US$26.0 million and 2005: US$21.7 million) is still outstanding and US$22.7 million (2006: US$12.5 million and 2005: US$6.8 million) is still subject to audit.  The accounting processes for the unaudited amount are in accordance with the processes advised by the Government of Mali in terms of the previous audits. The Government of Mali is a shareholder in the company and protocol agreements were signed on July 5, 2006. All payments as scheduled in terms of the protocol agreements have been recovered up to December 2007. Certain amounts are expected to be received after 12 months of the balance sheet date and are classified as non-current accordingly.  These amounts provided for have been discounted to their present value at a rate of 6.5% per annum.
 19.2.2
 Vulnerability from concentrations of refundable tax on fuelFuel duties receivable from the Government of Mali amounts to US$5.3 million at 31 December 2007 (2006: US$8.7 million and 2005: US$9.9 million).  Fuel duties are paid on receipt of the fuel supply and are refundable in F CFA, requiring the claim to be submitted before January 31, of the following year, and are subject to authorisation by firstly the Department of Mining and secondly the Customs and Excise authorities.  The Customs and Excise authorities have approved US$0 million (2006: US$1.5 million and 2005: US$6.64 million), whilst US$5.3 million (2006 US$7.2 million and 2005: US$3.56 million) is still subject to authorisation.  The accounting processes for the unauthorised amount are in accordance with the processes advised by the Government of Mali in terms of the previous authorisations.  The Government of Mali is a shareholder in the company and protocol agreements have been signed.  All payments as scheduled in terms of the protocol agreements have been recovered up to December 2007. With effect from February 2006, fuel duties are no longer payable to the Government of Mali.  These amounts provided for have been discounted to their present value at a rate of 6.5% per annum.
 19.3
 Currency riskSince the functional currency of the company is US Dollars, currency risk is incurred primarily as a result of purchases made in other currencies, such as the Euro, South African Rand and the Franc de la Communauté Financière d’Afrique (F CFA). The company does not use derivatives to hedge foreign currency transactions.
 As the company does not enter into financial instruments for trading purposes, the risks inherent to financial instruments are always offset by the underlying risk being hedged.  The company further manages such risks by ensuring that when decisions are made to utlise hedging the level of hedge cover will not exceed expected requirements in future periods, that the tenor of instruments will not exceed the life of mine and that no basis risk exist.
 19.4
 Fair values of financial instrumentsThe estimated fair values of the current financial instruments are determined based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the company’s current financial instruments as at December 31, 2007 approximates the carrying amount of such financial instruments as reflected in the balance sheet.
 US$30.3 million, included in non-current trade and other receivables relates to VAT and fuel duties which are expected to be refunded in periods subsequent to the 2008 financial year.  The fair value of this receivable approximates its carrying amount. All other amounts are expected to be recoverable or payable within the 2008 financial year.
 20.  Capital  management
 The primary objective of managing the company’s capital is to ensure that there is sufficient capital available to support the funding requirements of the company, including capital expenditure, in a way that optimizes the cost of capital, maximizes shareholders’ returns and ensures that the company remains in a sound financial position.  There were no changes to the company’s overall capital management approach during the current year.  The company manages and makes adjustments to the capital structure as and when funding is required.  This may take the form of raising shareholder or bank debt or hybrids thereof.


Société d’Exploitation des Mines d’Or de Yatela S.A.


Société d’Exploitation des Mines d’Or de Yatela S.A.  Financial statements and report of the Independent Registered Public Accounting FirmFor the year ended December 31, 2007
 Report of the Independent Registered Public Accounting Firm Income statements Balance sheets Statements of changes in stockholders’ equity  Cash flow statements Notes to the financial statements


Report of the Independent Registered Public Accounting Firm
 The board of directors and stockholders of Société d’Exploitation des Mines d’Or de Yatela S.A.
 We have audited the accompanying balance sheet of Société d’Exploitation des Mines d’Or de Yatela S.A. as of December 31, 2006 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 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.  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 Société d’Exploitation des Mines d’Or de Yatela S.A. as of December 31, 2006 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 International Accounting Standards Board.
  Johannesburg, South Africa June 25, 2007


Société d’Exploitation des Mines d’Or de Yatela S.A. Income StatementFor the years ended December 31,
 Unaudited
 2007  2006
 Unaudited
 2005
 Notes
 US$
 
 
 Revenue
          Gross profit
                         Special impairments of indirect taxes receivable and special expenses for indirect taxes payable
     Operating profit
                        Profit before taxation
                   Profit for the year


Société d’Exploitation des Mines d’Or de Yatela S.A. Balance SheetAs at December 31,
 Unaudited
 2007  2006
 Notes
 US$
 ASSETS
       Non-current assets
                
  Current assets
    
           
     Total assets
       EQUITY AND LIABILITIES
       Equity
           Non-current liabilities
    
        Current liabilities
                Total liabilities
      Total equity and liabilities


Société d’Exploitation des Mines d’Or de Yatela S.A. Statements of changes in stockholders’ equityFor the years ended December 31,
 
 
 Ordinary
 stock
 (note 18)
 Non-
 distributable
 reserve
 Retained
 earnings
 Total
 stockholders
 ' equity
 
 Note
 US$
                                    
                       
                  The non-distributable reserve is a legal reserve created in 2000 and is a requirement of the commercial law of Mali. This law prescribes the transfer of 10% of profits, restricted to a maximum of 20% of ordinary share capital, to a non-distributable reserve.  Such reserve only becomes distributable when the company is liquidated.


Société d’Exploitation des Mines d’Or de Yatela S.A. Cash flow statementsFor the years ended December 31,
   Unaudited
 2007  2006
 Unaudited
 2005
 Notes  US$
 Net cash provided by operating activities
                                                  - employee long service obligation charge to the income statement
                               Special impairments of indirect taxes refundable and Special expenses for indirect taxes payable
                                                       Net cash used in investing activities
                         Net cash used in financing activities


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2004, 2005 and 2006
 1.  Business  Activities
 Société d’Exploitation des Mines d’Or de Yatela S.A. (Yatela) is a company registered in Mali. The company operates a mine for the commercial exploitation of gold in the Kayes region of Western Mali. Commercial production commenced on July 3, 2001.
 2  Accounting  policies
 Statement  of  compliance
    The company financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) and Interpretations of those standards, as adopted by the International Accounting Standards Board (IASB) and applicable legislation.
  During the current financial year, the following new and revised accounting standards, amendments to standards and new interpretations were adopted by Société d’Exploitation des Mines d’Or de Yatela S.A:
      In addition, the following interpretation was early adopted by Société d’Exploitation des Mines d’Or de Yatela S.A. during previous financial years:
  Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds.
  In addition, the following revised accounting standard and new interpretations were early adopted by Société d’Exploitation des Mines d’Or de Yatela S.A during the current financial year:
          IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
  The adoption of the accounting standards, amendments to standards and new interpretations had no material financial impact on the financial statements identified above.
  The following accounting standards, amendments to standards and new interpretations, which are not yet mandatory for Société d’Exploitation des Mines d’Or de Yatela S.A, have not been adopted in the current year:
   Effective  years  beginning  on  or  after 1 January 2009
      Effective years beginning on or after 1 January 2009
  The company has assessed the significance of these new standards, amendments to standards and new interpretations, which will be applicable from 1 January 2009 and later years and concluded that they will have no material financial impact.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.1
 Basis of preparation
 The financial statements are prepared according to the historical cost accounting convention, except for the revaluation of certain financial instruments to fair value. The company's accounting policies as set out below are consistent in all material respects with those applied in the previous year, except for the adoption of the new and revised standards mentioned above.  The financial statements are presented in US dollars.
 2.2
 Changes in accounting policies
 The adoption of the following new/revised standards, amendments to standards and interpretations did not have any consequential effect on the accounting policies:
              IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
 IAS 1 Amendment – Capital Disclosures
 The company adopted IAS 1 Amendment - Capital Disclosures as of 1 January 2007.  The amendment requires additional disclosures about the company’s objectives, policies and processes of managing capital. The adoption of the amendment did not have any effect on the financial position or performance of the company.
 IAS 23 Borrowing Costs (revised)
 The company adopted IAS 23 – Borrowing Costs (revised) as of 1 January 2007.  This revision to the standard will have no financial effect on the results of operation or the reporting of the financial condition of Société d’Exploitation des Mines d’Or de Yatela S.A as the company had already adopted the capitalisation of interest principle for qualifying assets under the allowed alternative of the old IAS 23.
 IFRS 7 Financial Instruments: Disclosures
 The company adopted IFRS 7 - Financial Instruments: Disclosures as of 1 January 2007. The statement introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about the exposure to risks arising from financial instruments including a sensitivity analysis to market risk. The adoption of the statement did not have any effect on the financial position or performance of the company.
 IFRIC 11 IFRS 2 – Group and Treasury Share Transactions
 The company elected to adopt IFRIC Interpretation 11 as of 1 January 2007. This interpretation requires arrangements whereby an employee of the company is granted rights, by the parent, to an entity or its parent’s equity instruments to be accounted for as an equity-settled scheme, even if the entity buys the instruments from another party, or the shareholders provide the equity instruments needed. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 IFRIC 12 Service Concession Arrangements
 The company elected to adopt IFRIC Interpretation 12 as of 1 January 2007. This interpretation requires arrangements where a public-to-private service concession has been established to be accounted for as balance sheet assets and liabilities at inception. The adoption of this interpretation did not have any effect on the financial position or performance of the company.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 IFRIC 13 Customer Loyalty Programmes
 The company elected to adopt IFRIC Interpretation 13 as of 1 January 2007. This interpretation requires the entity that grants the customer loyalty award to account for the sales transaction that gives rise to the award credits as a “multiple element revenue transaction” and allocate the fair value between the award credits granted and the other components of the revenue transaction. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
 The company elected to adopt IFRIC Interpretation 14 as of 1 January 2007. This interpretation requires the entity to measure any economic benefits available to it in the form of refunds or reductions in future contributions at the maximum amount that is consistent with the terms and conditions of the plan, when determining the limit on a defined benefit asset. The adoption of this interpretation did not have any effect on the financial position or performance of the company.
 2.3
 Significant accounting judgements and estimates
 Use of estimates:The preparation of the financial statements requires the company’s management to make estimates and 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 the reporting period. The determination of estimates requires the exercise of judgement based on various  assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
 The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; estimates of recoverable gold and other materials in heap leach pads; asset impairments, write-downs of inventory to net realisable value; post-employment, post-retirement and other employee benefit liabilities, the fair value and accounting treatment of financial instruments and deferred taxation.
 Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
 The company is exposed to numerous legal risks. The outcome of currently pending and future proceedings cannot be predicted with certainty. Thus, an adverse decision in a lawsuit could result in additional costs that are not covered, either wholly or partly, under insurance policies and that could significantly influence the business and results of operations.
 The judgements that management have applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
 Carrying value of property, plant and equipment
 All mining assets are amortised using the units-of-production (UOP) method where the mine operating plan calls for production from well-defined mineral reserves over proved and probable reserves.
 For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proved and probable mineral reserves as the useful lives of these assets are considered to be limited to the life of the mine.
 The calculation of the UOP rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proved and probable mineral reserves. This would generally result to the extent that there are significant changes in any of the factors or assumptions used in estimating mineral reserves.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3
 Significant accounting judgements and estimates (continued)
  
 changes in proved and probable mineral reserves; the grade of mineral reserves may vary significantly from time to time; differences between actual commodity prices and commodity price assumptions; unforeseen operational issues at mine sites; changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates; and changes in mineral reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine.
 The recoverable amounts of individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the gold price assumption may change which may then impact the estimated life of mine determinant and may then require a material adjustment to the carrying value of property, plant and equipment.
 The company defers stripping costs incurred during the production stage of its open-pit operations, where this is the most appropriate basis for matching the costs against the related economic benefits.  This is generally the case where there are fluctuations in stripping costs over the life of the mine.
 In the production stage of the open-pit operations, further development of the mine requires a phase of unusually high overburden removal activity that is similar in nature to preproduction mine development.  The costs of such unusually high overburden removal activity are deferred and charged against reported profits in subsequent periods on a units-of-production basis.  This accounting treatment is consistent with that for stripping costs incurred during the development phase of a mine, before production commences.
 If the company were to expense production stage stripping costs as incurred, this would result in volatility in the year to year results from open-pit operations and excess stripping costs would be expensed at an earlier stage of the mine’s operation.
 Deferred stripping costs are included in ‘Mine development costs’, within Property, plant and equipment.  These form part of the total investment in the individual asset, which is reviewed for impairment if events or a change in circumstances indicate that the carrying value may not be recoverable.  Amortisation of deferred stripping costs is included in operating costs.
 The company reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of property, plant and equipment are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and future gold prices, discount rates, foreign currency exchange rates, estimates of costs to produce reserves and future capital expenditure.
 Production start date
 The company assesses the mine construction project to determine when it moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of the construction project such as the complexity of a plant and its location. The company considers various relevant criteria to assess when the mine is substantially complete and ready for its intended use and moves into the production stage. Some of the criteria would include, but, are not limited to, the following:
 ·
 ·
 ·
 ·
 ·
 ·
 ·
  ·
  ·
  ·
  When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements or reserve development.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3
 Significant accounting judgements and estimates (continued)
 Income taxes
 The company is subject to income tax. Significant judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
 The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the balance sheet date could be impacted.
 Additionally, future changes in tax laws in the jurisdiction in which the company operates could limit the ability of the company to obtain tax deductions in future periods.
 Provision for environmental rehabilitation obligations
 The company’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The company recognises management’s best estimate for decommissioning and restoration 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. Such changes could similarly impact the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.
 Stockpiles, gold in process, ore on leach pad and product inventories
 Costs that are incurred in or benefit the production process are accumulated as stockpiles, gold in process, ore on leach pads and product inventories. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing and long-term metals prices, less estimated costs to complete production and bring the product to sale.
 Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.
 Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of gold actually recovered (metallurgical balancing), the nature of the 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.
 Recoverable tax, rebates, levies and duties
 Société d’Exploitation des Mines d’Or de Yatela S.A. is due refunds of input tax which remain outstanding for periods longer than those provided for in the respective statutes. In addition Société d’Exploitation des Mines d’Or de Yatela S.A. has unresolved tax disputes. If the outstanding input taxes are not received and the tax disputes are not resolved in a manner favourable to Société d’Exploitation des Mines d’Or de Yatela S.A. it could have an adverse effect upon the carrying value of these assets.
 Ore Reserve estimates
  company’s properties.  In order to calculate Ore Reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.3
 Significant accounting judgements and estimates (continued)
 Estimating the quantity and/or grade of Ore Reserves requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples.  This process may require complex and difficult geological judgements and calculations to interpret the data.
    additional geological data is generated during the course of operations, estimates of Ore Reserves may change from period to period.  Changes in reported Ore Reserves may affect the company’s financial results and financial position in a number of ways, including the following:
 ·
  ·
 depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units-of-production basis, or where the useful economic lives of assets change.
 ·
 overburden removal costs recorded on the balance sheet or charged in the income statement may change due to changes in stripping ratios or the units-of-production basis of depreciation.
 ·
 Decommissioning, site restoration and environmental provisions may change where changes in estimated Ore Reserves affect expectations about the timing or cost of these activities.
 ·
 the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
 Exploration and evaluation expenditure
 The company’s accounting policy for exploration and evaluation expenditure results in certain items of expenditure being capitalised for an area of interest where it is considered likely to be recoverable by future exploitation. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure, a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written off to the income statement.
 Development expenditure
 Development activities commence after project sanctioning by the appropriate level of management.  Judgement is applied by management in determining when a project has reached a stage at which economically recoverable reserves exist such that development may be sanctioned.  In exercising this judgement, management is required to make certain estimates and assumptions similar to those described above for capitalised exploration and evaluation expenditure.  Any such estimates and assumptions may change as new information becomes available.  If, after having started the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement.
 Contingencies
 By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of judgement and estimates of the outcome of future events.
 Litigation and other judicial proceedings may raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the company may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the company could be materially affected by the unfavourable outcome of litigation.
 2.4  Summary of significant accounting policies
 Foreign currency translation
 Functional currency
 Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’).   The functional currency of United States Dollars (US$) is used


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 as opposed to the currency of the country in which the enterprise is domiciled, namely Franc de la Communauté Financière d’Afrique (F CFA).  The decision has been taken on the basis of US$ being the functional currency in which the enterprise receives its revenue and majority of costs are mainly influenced by the US dollar.
 Transactions and balances
 Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the year-end exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for derivative balances that are within the scope of IAS 39. Translation differences on these balances are reported as part of their fair value gain or loss.
 Non monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
 Property, plant and equipment
 ·
 ·
 ·
 ·
 ·
 Property, plant and equipment are recorded at cost less accumulated amortisation and impairments. Cost includes pre-production expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
 Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
 If there is an indication that the recoverable amount of any property, plant and equipment is less than the carrying value, the recoverable amount is estimated and an allowance is made for the impairment in value.
  associated with the item will flow to the company, and the cost of the addition can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
  dismantling and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added to and/or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount, this effect is recognised as income. The change in depreciation charge is recognised prospectively.
 Amortisation of assets is calculated to allocate the cost of each asset to its residual value over its estimated useful life for those assets not amortised on the units-of-production method as follows:
 buildings up to life of mine; plant and machinery up to life of mine; equipment and motor vehicles up to five years; computer equipment up to three years; and leased assets over the period of the lease.
 Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.
  Gains and losses on disposals are determined by comparing net sales proceeds with the carrying amount. These are included in the income statement.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Mine development costs
 Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in existing orebodies, to expand the capacity of the mine and to maintain production. Where funds have been borrowed specifically to finance a project, the amount of interest capitalised represents the actual borrowing costs incurred. Mine development costs include acquired proved and probable Mineral Resources at cost at the acquisition date.
 Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on estimated proved and probable mineral reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in the future from known mineral deposits. These reserves are amortised from the date on which commercial production begins.
 Stripping costs incurred in open-pit operations during the production phase to remove additional waste are charged to operating costs on the basis of the average life of mine stripping ratio and the average life of mine costs per tonne. The average stripping ratio is calculated as the number of tonnes of waste material expected to be removed during the life of mine per tonne of ore mined. The average life of mine cost per tonne is calculated as the total expected costs to be incurred to mine the orebody, divided by the number of tonnes expected to be mined. The average life of mine stripping ratio and the average life of mine cost per tonne are recalculated annually in the light of additional knowledge and changes in estimates.
 The cost of the “excess stripping” is capitalised as mine development costs when the actual mining costs exceed the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio multiplied by the life of mine cost per tonne. When the actual mining costs are below the sum of the adjusted tonnes mined, being the actual ore tonnes plus the product of the actual ore tonnes multiplied by the average life of mine stripping ratio, multiplied by the life of mine cost per tonne, previously capitalised costs are expensed to increase the cost up to the average.
 The cost of stripping in any period will be reflective of the average stripping rates for the orebody as a whole. Changes in the life of mine stripping ratio are accounted for prospectively as a change in estimate.
 Mine infrastructure
 ·
 ·
 ·
 Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production method based on estimated proved and probable mineral reserves. Other property, plant and equipment comprising vehicles and computer equipment are depreciated by the straight-line method over their estimated useful lives.
 Exploration and Evaluation assets
 All exploration costs are expensed until the directors conclude that a future economic benefit will more likely than not be realised. In evaluating if expenditures meet this criterion to be capitalised, the directors use several different sources of information depending on the level of exploration. While the criteria for concluding that expenditure should be capitalised 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 proved 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 proved and probable reserves after which the expenditure is capitalised 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 mineralisation of such mineral deposits, is capitalised as a mine development cost.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Impairment of assets
 Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable.
 An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value, less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows.
 Impairment calculation assumptions include life of mine plans based on published reserves and resources, management’s estimate of the future gold price, based on current market price trends, foreign exchange rates, and a pre-tax discount rate adjusted for country and project risk. It is therefore reasonably possible that changes could occur which may affect the recoverability of property, plant and equipment and intangible assets.
 Leased assets
 Operating lease rentals are charged against operating profits in a systematic manner related to the period the assets concerned will be used.
 Exploration and research expenditure
 Pre – licence costs are recognised in profit or loss as incurred. Exploration and research expenditure is expensed in the year in which it is incurred. These expenses include: geological and geographical costs, labour, mineral resources and exploratory drilling costs.
 Inventories
 ·
 ·
 ·
 ·
 ·
 ·
 Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and slow moving items. Cost is determined on the following bases:
 gold in process is valued at the average total production cost at the relevant stage of production; gold doré / bullion is valued on an average total production cost method; ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classifiedas a non-current asset where the stockpile exceeds current processing capacity; by-products are valued on an average total production cost method.  Mine operating supplies are valued at average cost; and heap leach pad materials are measured on an average total production cost basis. The cost of materials on the leach pad from which gold is expected to be recovered in a period greater than 12 months is classified as a non-current asset.
  Provisions
 Provisions are recognised when the company has a present obligation, whether legal or constructive, because 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. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a separate asset. Where the company has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
 Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the 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.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
 A contingent liability is disclosed when the possibility of an outflow of resources embodying economic benefits is not remote.
 Employee benefits
 Short-  term employee benefits
 The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service.
 The provisions for employee entitlements to wages, salaries, and annual leave represent the amount which the company has a present obligation to pay as a result of employees’ services provided to the balance sheet date.  The provisions have been calculated at undiscounted amounts based on current wage and salary rates.
 Long-  term employee benefits
 Liabilities for employee benefits which are not expected to be settled within 12 months are discounted at a pre tax rate that reflects current market assessments of the time value of money.
 The Company and all employees contribute towards the Malian Government social security fund. Accordingly, on retirement, the Malian employees are entitled to a retirement benefit from the Malian Government. Expatriate employees are reimbursed their contributions made to the social security fund.
 Environmental expenditure
 The company has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past operations which are based on the company's environmental management plans, in compliance with current environmental and regulatory requirements. Provisons for non-recurring remediation costs are made when there is a present obligation, it is probable that expense on remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean up, laws and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
 Decommissioning costs
 The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Accordingly an asset is recognised and included within mine infrastructure.
 Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement.
 Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset.  Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
  Restoration costs
 The provision for restoration represents the cost of restoring site damage after the start of production. Increases in the provision are charged to the income statement as a cost of production.
 Gross restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money and risks specific to the liability.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 Revenue recognition
 Revenue is recognised at the fair value of the consideration received or receivable to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following criteria must also be present:
 the sale of mining products is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer; interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the company; and Where a by-product is not regarded as significant, revenue is credited against cost of sales, when the significant risks and rewards of ownership of the products are transferred to the buyer.
 Taxation
 ·
 ·
 ·
 Deferred taxation is provided on all qualifying temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
 Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
 The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset tobe utilised.
 Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted at the balance sheet date.
  Current tax is measured on taxable income at the applicable statutory rate enacted or substantially enacted at the balance sheet date.
 Special items
 Items of income and expense that are material and require separate disclosure, in accordance with IAS 1.86, are classified as “special items” on the face of the income statement. Special items that relate to the underlying performance of the business are classified as “operating special items” and include impairment charges and reversals. Special items that do not relate to underlying business performance are classified as “non-operating special items” and are presented below “Operating (loss) profit” on the income statement.
 Dividend distribution
 Dividend distribution to the company’s shareholders is recognised as a liability in the company’s financial statements in the period in which the dividends are declared by the board of directors of  Société d’Exploitation des Mines d’Or de Yatela S.A..
 Financial instruments
 Financial instruments are initially measured at fair value when the company becomes a party to their contractual arrangements. Transaction costs are included in the initial measurement of financial instruments, except financial instruments classified as at fair value through profit and loss. The subsequent measurement of financial instruments is dealt with below.
 A financial asset is derecognised when the right to receive cash flows from the asset has expired or the company has transferred its rights to receive cash and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
  On derecognition of a financial asset, the difference between the proceeds received or receivable and the carrying amount of the asset is included in income.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 2.4  Summary of significant accounting policies (continued)
 On derecognition of a financial liability, the difference between the carrying amount of the liability extinguished or transferred to another party and the amount paid is included in income.
  Other non-current assets
 ·
 Loans and receivables are subsequently measured at amortised cost using the effective interest rate method. If there is evidence that loans and receivables are impaired, the carrying amount of the assets is reduced and the loss recognised in the income statement.
 Trade and other receivables
 Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less accumulated impairment. Impairment of trade and other receivables is established when there is objective evidence as a result of a loss event that the company will not be able to collect all amounts due according to the original terms of the receivables. Objective evidence includes failure by the counterparty to perform in terms of contractual arrangements and agreed terms. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The impairment is recognised in the income statement.
 Cash and cash equivalents
 Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.  They are measured at cost which is deemed to be fair value as they have a short-term maturity.
 Financial liabilities
    Unaudited
 2007
 2006
 Unaudited
 2005
 
 US$
 3  Revenue
           4  Operating  profit
    :
    Cost  of  sales
    
                                  
        
           
                
 Other operating expenses / (income)


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
   Unaudited
 2007
 2006
 Unaudited
 2005
 
 US$
 5
 Special impairments of indirect taxes receivable and special expenses for indirect taxes payable
                            
  5.1
 Payment relating to 2000 to 2002 tax audit
    During November 2003, the Malian authorities performed a tax audit of the corporate taxation and various indirect taxes at the company for fiscal years 2000 to 2002. The results of the audit indicated that the Company owed the Government of Mali F CFA 790 million (US$1.4 million as of December 31, 2004) of various taxes and penalties, which was communicated by way of a formal letter of assessment to the company. According to Malian government officials the main reasons for the additional taxes were: •  withholding
 •  fringe benefits on certain facilities provided to expatriate employees that should have been taxed differently; and •  different interpretations of the law with respect to VAT payable on interest paid.  The company was of the opinion
  Without admitting that the tax submissions had been prepared in an incorrect manner in terms of the prevailing laws and regulations, the directors decided to make a payment of F CFA 350 million (US$0.6 million) to the Government of Mali in order to close this issue and allow management to concentrate on the company's core business.  Accordingly, the payment was recorded as a special item rather than as an under provision of prior year taxation.  Payment of this amount enabled the company to reach agreement with the Government of Mali on all taxation issues which were in dispute and to establish a protocol for the indirect taxes that were in dispute for the future.
 
 
 
 5.2
 Impairment of VAT refundable by Government of Mali
    The gross amount of VAT refundable by the Government of Mali amounted to US$11.7 million at December 31, 2005.  Management estimated that only US$11.5 million was recoverable based on previous VAT audits performed by the authorities.  Accordingly, an impairment of VAT refundable of US$0.2 million was made.  In 2006 an additional impairment of VAT refundable of $0.5 million was made (Refer Note 19.2.1).
 
 
 
 5.3
 Payment relating to 2003 / 2004 tax audit
    During the 2005 financial year, a tax assessment was received for various indirect taxes from the Malian authorities for the 2003 and 2004 fiscal years.  Management objected to the assessment as it did not reflect the legal position for the years assessed and thus a dispute arose between the Government of Mali and the company.  Without admitting guilt the Company decided to pay the Government of Mali F CFA 446.1 million (US$0.8 million) as agreed by both parties.
 
 
 
 5.4
 Impairment of fuel taxes refundable by Government of Mali
    At 31 December 2005, a gross amount of US$5.7 million relating to fuel taxes was receivable from the Government of Mali.  However, as a result of differences between the company and the Government of Mali, an impairment of US$0.6 million was made by the Company (Refer Note 19.2.2).
 
 
 
 5.5
 Assessment relating to the 2005 / 2006 tax audit
    During October 2007, the Malian authorities performed a tax audit of the corporate taxation and various indirect taxes submissions of the company for the fiscal years 2005 to 2006. The results of the audit indicated that the Company owed the Government of Mali F CFA 2,639 million (US$6.0 million as of December 31, 2007) of various indirect taxes and penalties, which was communicated by way of a formal letter of assessment to the company.  The company was of the opinion that the tax submissions by the Company were in compliance with applicable laws and regulations.  Management has however decided to make a provision for this assessment in anticipation of a settlement with the tax authorities.
 
 
 
 5.6
 Provision relating to the 2007 tax submission
    The company has reviewed its 2007 tax submissions based on the interpretations applied by the tax authorities in conducting the 2005 / 2006 audit. Management has determined that there may be an under payment of F CFA 101 million (US$0.23 million) as of December 31, 2007 which has been provided for in the 2007 financial results.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 
 
 Unaudited
 200 7 2006
 Unaudited
 2005
 
 US$
 6  Taxation
    All pre-tax income and income tax expense is related to operations in Mali. The convention agreement specified that the company will be taxed at 0% until July 2006.
                      
              -Special impairment of indirect taxes receivable and special expenses for indirect taxes payable
                    Mine
 development
 costs
 Work in
 progress
 Mine infra-
 structure
 Total
 US$
 US$
 US$
 US$
 7
 Property, plant and equipment at December 31, 2007
     Cost
          
       
          Accumulated  amortisation
                        
 Carrying amount at December 31, 2007 (unaudited)
 10,064,911
 3,358,871
 10,143,569
 23,567,351
 Mine
 development
 costs
 Work in
 progress
 Mine infra-
 structure
 Total
 
 
 US$
 US$
 US$
 US$
 
 Property, plant and equipment at December 31, 2006
     Cost
          
    
                  Accumulated  amortization
               
             
 Carrying amount at December 31, 2006
 27,634,485
 1,217,320
 11,938,291
 40,790,096
 Included within the net book value of Mine Development costs is US$7.3 million (2006: US$23.6 million and 2005: US$18.4 million) of capitalised stripping costs.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
   Unaudited
 2007  2006
 
 US$
 8  Inventories
  
  
 
  Consumable stores
 
          9
 Trade and other receivablesRelated party receivables– Société des Mines d’Or de Sadiola S.A.
    3,731,848    3,926,803 3,731,848  3,927,065
     
     
          10  Deferred  taxation
 The deferred taxation asset / (liability)  relating to temporary differences is made up as follows: - Property, plant and equipment
       
       
             11
 Cash and cash equivalentsMalian bank balances
       
 
 12  Provisions
 
 Environmental rehabilitation obligationBalance at beginning of year
               Employee long service obligationBalance at beginning of year


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
   Unaudited
 2007  2006
 
 US$
 Assumptions applicable to environmental rehabilitation obligationEstimated gross future environmental rehabilitation costs
    
  
    The average cash flow period is based on the current estimate of the time necessary to fulfil all obligations, which is subject to revision annually. The estimated gross future costs are based on management's best estimates at December 31, 2007, and are also subject to revision annually. The change in estimate arises due to the change in the assumption of the discount rate applicable and a change in the estimate of the gross future costs.
 Malian Government social security fundThe company and all employees contribute to the Malian Government social security fund. On retirement, the Malian employees are entitled to a retirement benefit from the fund. The fund reimburses expatriate employees only their own contributions made to the fund. Accordingly, there is no obligation for defined employee benefits.  The company's contributions to the Malian Government social security fund are disclosed in note 4.
 Unaudited
 2007
 2006
 US$
 13
 Trade and other payablesRelated party payables– AngloGold Ashanti Limited
         
  
    
 Unaudited
 2007  2006
 Unaudited
 2005
 US$
 14  Dividend  paid
                       15
 Income tax paid
                           16
 Contractual commitments and contingencies
 
 16.1  Operating leases
 
 At December 31, 2007, the company was committed to making the following minimum payments in respect of operating leases for amongst other, hire of plant and equipment.
 Unaudited
 2007
 2006
 US$
 
 
 
 These balances are calculated based on the minimum rentals due in terms of the contract up to and including the expiry date (October 2007) or minimum notice period (six months), whichever is the lesser. The contract does not provide for guaranteed escalations. The company has no other restrictions on any of its leasing arrangements.


Société d’Exploitation des Mines d’Or de Yatela S.A
 .
 Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 Unaudited
 2007
 2006
 US$
 16.2  Capital commitments  Contracted
 
 
 
     The proposed capital expenditure for mine infrastructure will be financed from cash resources generated by operating activities of the company.
 16.3
 local government, but others are defined by the general corporate tax laws of the country. The company has historically filed, and continues to file, all required tax returns and to pay the taxes reasonably determined to be due. The tax rules in Mali are complex and subject to interpretation. From time to time the company is subject to a review of its historic tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the company’s business conducted in Mali. Management believes based on information currently on hand that no such tax contingencies exist, and as assessments are completed, the company will make appropriate adjustments to those estimates used in determining amounts due. The ultimate outcome cannot be presently determined.
       17  Ordinary  stock
 
     Authorised and issued: ordinary par value stock with a nominal value of F CFA 10 000 (US$14.513) each.
     Held by:
 Number of
 outstanding
 stock in issue
 Unaudited
 2007
 2006
 US$
                                              18  Related  parties
 18.1
 Identity of related partiesThe stockholders of the company are disclosed in note 17.  Entities within the AngloGold Ashanti group and with which the company has transacted, are listed in note 18.2.  The directors of the company are listed below:
 
 
 
 
 
 
 
 
  
 
 
 
 J McCombe (Canadian)M Diallo (Malian)


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 18.2
 Material related party transactions
 Material related party transactions are as follow:
 Transactions
 with related
 parties
 Net amounts
 due by/
 (owed to)
 related parties
 (notes 9 & 14)
 Transactions
 with related
 parties
 Net amounts
 due by/
 (owed to)
 related parties
 (notes 9 & 14)
 Transactions
 with related
 parties
 Net amounts
 due by/
 (owed to)
 related parties
 
 
 Unaudited 2007
 2006
 Unaudited 2005
 US$
 AngloGold Ashanti Mali S.A
 2,892,386
 (364,612)
 3,447,035
 (446,404)
 2,150,765
 (44,992)
 Société des Mines de Morila S.A (Morila)  2,327
 -
 1,673
 -
 2,082
 (22)
 Société d’Exploitation des Mines d’Or de Sadiola S.A. (Sadiola)
 2,619,552  (493,053)  2,865,379  (381,436)
 3,100,621  (160,821)
 AngloGold Ashanti Limited
 2,981,852
 (771,625)
 1,089,223
 (222,632)
 1,201,062
 (106,016)
 Rand Refinery Limited
 (208,846,031)
 3,731,848
 (214,136,050)
 3,926,803
 (110,021,719)
 3,247,206
 Sadiola Exploration Limited
 -
 -
 1,111,147
 -
 3,587,294
 (49,665,396)
 Key management personnel remuneration  863,863
 -
 674,485
 -
 553,506
 -
 - Salary
 774,434
 -
 619,860
 -
 485,779
 -
 - Performance related payments
 58,059
 -
 16,995
 -
 21,343
 -
 - Pension Scheme Contributions
 18,676
 -
 26,158
 -
 46,384
 -
 -Other Benefits
 12,694
 -
 11,472
 -
 -
 -
 
 
 
 
 
 
 
       Rand Refinery Limited is a subsidiary company within the AngloGold Ashanti group. The company has entered into contractual agreements with Rand Refinery Limited for the provision of all services required for the collection, transport, refining and purchase of the doré bars produced by the company. Included in transactions with Rand Refinery Limited are sales by the company of US$208.8 million (2006: US$214.5 million and 2005: US$110.3 million) and purchases by the company of US$0.4 million (2006: US$0.4 million and 2005: US$0.2 million).
       19
 Risk management activities
       In the normal course of its operations, the company is exposed to gold price, other commodity price, foreign exchange, interest rate, liquidity, price and credit risks. In order to manage these risks, the company may enter into transactions which make use of both on- and off-balance sheet derivatives. The company does not acquire, hold or issue derivatives for trading purposes. The company has access via its shareholders to a developed comprehensive risk management process to facilitate, control and monitor these risks.
 The financial risk management objectives of the company are defined as follows: •  safeguarding the company’s core earnings stream from its major assets through the effective control and
   effective and efficient usage of credit facilities in both the short and long term through the adoption of reliable liquidity management planning and procedures;
     throughout the company and that they comply where necessary with all relevant regulatory and statutory requirements.
 19.1
 Gold price riskGold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The company does not hedge against the effects of fluctuations in the gold price.
 19.2
 Credit riskCredit risk arises from the risk that a counter party may default or not meet its obligations in a timely manner.The company does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counter parties. Although the company sells gold to only one counter party, the company does not believe that this concentration of credit results in significant credit risk as the majority of proceeds are received within two working days of the gold leaving the mine. There is however a concentration of credit risk with respect to various taxes receivable from the Malian State. These taxes and the measures taken to ensure recoverability thereof are discussed in note 5, note 9 and below.


Société d’Exploitation des Mines d’Or de Yatela S.A. Notes to the financial statementsFor the years ended December 31, 2005, 2006 and 2007
 19.2.1  Vulnerability from concentrations of VAT refundable by the Government of Mali
 Value added taxes receivable from the Government of Mali amounts to US$30.6 million at 31 December 2007 (2006: US$21.7 million and 2005: US$11.5 million).  VAT is refundable from the government in F CFA.  The last audited VAT return was for the period ended March 31, 2007 and at December 31, 2007 US$21.5 million (2006: US$13.4 million and 2005: US$7.5 million) is still outstanding and US$9.1 million (2006: US$8.3 million and 2005: US$ 4.0 million) is still subject to audit.  The accounting processes for the unaudited amount are in accordance with the processes advised by the Malian government in terms of the previous audits. The Government of Mali is a shareholder in the company and protocol agreements were signed on July 5, 2006.  All payments as scheduled in terms of the protocol agreements have been recovered up to December 2007. Certain amounts are expected to be received after 12 months of the balance sheet date and are classified as non-current accordingly.  These amounts provided for have been discounted to their present value at a rate of 6.5% per annum.
 19.2.2  Vulnerability from concentrations of refundable tax on fuel by the Government of Mali
 Fuel duties receivable from the Government of Mali amounts to US$2.6 million at 31 December 2007 (2006: US$3.6 million and 2005: US$4.3 million).  Fuel duties are paid on receipt of the fuel supply and are refundable in  F CFA, requiring the claim to be submitted before January 31 of the following year, and are subject to authorisation by  firstly the Department of Mining and secondly the Custom and Excise authorities.  The Customs and Excise authorities have approved US$0 million (2006: US$ 1.3 million and 2005: US$3.2 million) which is still outstanding, whilst US$2.6 million (2006: US$2.3 million and 2005: US$1.1 million) is still subject to authorisation.  The accounting processes for the unauthorised amount are in accordance with the processes advised by the Malian government in terms of the previous authorisations.  The Government of Mali is a shareholder in the company and protocol agreements have been signed. All payments as scheduled in terms of the protocol agreements have been recovered up to December 2007. With effect from February 2006, fuel duties are no longer payable to the Government of Mali.  These amounts provided for have been discounted to their present value at a rate of 6.5% per annum.
 19.3
 Currency riskSince the functional currency of the company is US Dollars, currency risk is incurred primarily as a result of purchases made in other currencies, such as the Euro, South African Rand and the Franc de la Communauté Financière d’Afrique (F CFA). The company does not use derivatives to hedge foreign currency transactions.
 As the company does not enter into financial instruments for trading purposes, the risks inherent to financial instruments are always offset by the underlying risk being hedged.  The company further manages such risks by ensuring that when decisions are made to utilise hedging the level of hedge cover will not exceed expected requirements in future periods, that the tenor of instruments will not exceed the life of mine and that no basis risk exist.
 19.4
 Fair values of financial instrumentsThe estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the company’s current financial instruments as at December 31, 2007 approximates the carrying amount of such financial instruments as reflected in the balance sheet.
 US$19.3 million, included in non-current trade and other receivables, relates to VAT and fuel duties which are expected to be refunded in periods subsequent to the 2008 financial year.  The fair value of this receivable approximates its carrying amount.  All other amounts are expected to be recoverable or payable within the 2008 financial year.
 20  Capital  management
       The primary objective of managing the company’s capital is to ensure that there is sufficient capital available to support the funding requirements of the company, including capital expenditure, in a way that optimises the cost of capital, maximises shareholders’ returns and ensures that the company remains in a sound financial position. There were no changes to the company’s overall capital management approach during the current year. The company manages and makes adjustments to the capital structure as and when funding is required. This may take the form of raising shareholder or bank debt or hybrids thereof.


SIGNATURES
 The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 ANGLOGOLD ASHANTI LIMITED
 /s/ Srinivasan Venkatakrishnan Name:  Srinivasan Venkatakrishnan Title:


Exhibits to Form 20-F
 Exhibit Number                 
  Description                                                           
  Remarks
  Memorandum and Articles of Association of AngloGold Limited as in effect on May 6, 2008
  Trust Deed dated February 27, 2004 between AngloGold Holdings plc as Issuer, AngloGold Limited as Guarantor and the Law Debenture Trust Corporation plc as Trustee
 Incorporated by reference to Exhibit 19.2 of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on March 19, 2004
  AngloGold Limited Share Incentive Scheme in effect April 4, 2003
 Incorporated by reference to Exhibit 19.4(c) of AngloGold’s annual report on Form 20-F filed with the Securities and Exchange Commission on June 28, 2002
     Long-Term Incentive Plan in effect April 29, 2005
 Incorporated by reference to Exhibit 19.4.1.3 of AngloGold Ashanti’s annual report on Form 20-F filed with the Securities and Exchange Commission on March 20, 2006
  Registration rights agreement dated March 3, 2006 between AngloGold Ashanti Limited and Anglo South African Capital (Proprietary) Limited
 Incorporated by reference to AngloGold Ashanti’s Form 6-K filed with the Securities and Exchange Commission on March 23, 2006
  Letter confirming appointment of M Cutifani as chief executive officer of AngloGold Ashanti Limited
     AngloGold Ashanti International Services Limited
  Statement regarding how loss/earnings per share information was calculated
 See note 9 to the consolidated financial statements
    Certification of Mark Cutifani, Chief Executive Officer of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  Certification  of  Srinivasan  Venkatakrishnan, Chief Financial Officer of AngloGold Ashanti Limited, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  Consents  of  Ernst  &  Young,  independent registered public accounting firm
  Consents of KPMG, independent registered public accounting firm
   Consent of PricewaterhouseCoopers, independent registered public accounting firm


EXHIBIT 19.1
 Form CM2
 REPUBLIC OF SOUTH AFRICA
 COMPANIES ACT 1973
 MEMORANDUM OF ASSOCIATION
 of a Company having a share capital
 [Section 54(1); Regulation 17(1)  and  17(2)1]
 Paste revenue receipt here or affix revenue stamps here or impress revenue franking machine impression here
  Name
   AngloGold Ashanti Limited
 
 N/A
 
 N/A
 Reproduced under Government Printer's Copyright Authority 9836 dated 14 July 1994
 Amendments  included in this Memorandum and
 Articles of Association was approved by shareholders
 at the annual general meeting held on 6 May 2008
 Registration  No. of Company
 1944/017354/06


REPUBLIC OF SOUTH AFRICA
 COMPANIES ACT 1973
 Form CM 2A
 Purpose describing the main business
    Main object
  “To engage in all aspects of the business of gold exploration, the mining and production of gold, the manufacturing, marketing and selling of gold products and the development of markets for gold”
  Ancillary objects excluded
   N/A
  Powers
   N/A
   N/A
  Conditions
   N/A


REPUBLIC OF SOUTH AFRICA
 COMPANIES ACT 1973
 Form CM 2B
  Pre-incorporation contracts (if any)
 NIL
  Capital
  Par value
     #
   No par value
       ordinary share capital being amended from 200,000,000 ordinary par value shares of 50 cents each to 400,000,000 ordinary par value shares of 25 cents each.  The sub-division of the ordinary share capital of the Company was approved by members, in general meeting on 5 December 2002 – Special Resolution No. 2, and registered by the
  #
  members, in general meeting on 11 December 2006 – Special Resolution No. 1, and registered by the Registrar of Companies on 11 December 2006 and increased the capital of the Company by R1,070,000.


FORM CM44A
 REPUBLIC OF SOUTH AFRICA
 COMPANIES ACT, 1973
 ARTICLES OF ASSOCIATION
 of a Company having a share capital
 not adopting Schedule 1
 [Section 60(1); Regulation 18]
  AngloGold Ashanti Limited
  The articles of Table A or Table B contained in Schedule 1 to the Companies Act, 1973, shall not apply to the Company.
   Reproduced under Government Printer's Copyright Authority 9836 dated 14 July 1994
 Registration  No. of Company
 1944/017354/06


ARTICLES OF ASSOCIATION
 INDEX
 Article No
 Page No
 ACCOUNTS
  Balance sheet and accounts with directors' and auditors'    reports to be sent to each member prior to annual general    meeting
 Inspection of, by directors only  Proper accounts to be kept re-opening of, not permissible after being laid before annual
 general Meeting Stock Exchanges, accounts to be sent to
   132 131 130
 135 132
   47 46 46
 48 47
  ACQUISITION OF OWN SECURITIES
  ACT
  ADJOURNMENT OF MEETINGS
   ALLOTMENT
  ALTERATIONS OF CAPITAL
 ALTERATIONS OF MEMORANDUM
   ALTERNATE DIRECTORS
 ANNUAL FINANCIAL STATEMENTS
  ANNUAL GENERAL MEETINGS
   ARTICLES
  AUDITORS
  AUTHENTICATION OF DOCUMENTS
 BORROWING POWERS
   97 97


Article No
 Page No
 BUSINESS OF COMPANY
 Directors may undertake all branches of Management and control of, vested in directors
 Directors may arrange for any branch of to be carried on    through any subsidiary
       CAPITAL (SHARES)
 Cancellation of shares not taken Consolidation and division, of Conversion of, having a par value into stated capital
 Increase ofFractions on consolidation of Modifying rights attached to different classes of shares in
 New shares considered part of present capital Redeemable preference shares, Company may issue Reserve at Company's disposal
         86
   15 16
  17 16 15
 76
  CAPITALISATION OR BONUS ISSUE
 CAPITAL REDEMPTION RESERVE FUND
   CERTIFICATES
  Definition of Issue of, member entitled to within one month of allotment    or 21 days after lodgement of transfer
 Joint holders, one certificate forlost or defaced certificates, replacement of numbering of, if applicable
 payment for, after the first, as the directors shall from time to    time determine signing ofTransfer offices, any of, may issue
   12 14 13
   11 17
 81
 899
     CHAIRMAN
 Casting vote of -
        CLOSING OF REGISTERS
  COMMISSIONS AND BROKERAGE


Article No
 Page No
 CONSOLIDATION OF SHARES
  CONSTITUTION
    CONVERSION OF SHARES INTO STOCK
   DEBENTURES
   DEFINITIONS
  DIRECTORS
 Absence from meetings, effect of  AlternateAppointment of, additional:  by company
  casual vacancies, how filled contracts with Company by declarations of interests by
 definition of insolvency of, effect disqualification of
 fees, expenses, travelling and other, payment of interests in contracts with Company lunacy of, effect
 Managing (see Executive Officers) May be directors of Company’s subsidiaries or associates Number of
 Other office of profit, may hold Powers of (see Powers of Directors) Proceedings of (see Proceedings of Directors)
    89 92 92
 79 79
  75.1 75.5
     72 76
  30 33
 35 35 35
 31 31
  29 30 29 31
   29 30
   Removal of, by ordinary resolution Remuneration, by ordinary resolution Remuneration, for special services
 Request to resign, from all other directors, effect of Resignation of Resolutions in writing Rotation and retirement of (see Rotation of Directors)
 Vacancies, power to fill/act Vacation of office, compulsorily, by Validity of acts
   73 74
 75.3 75.6
      29 29 29
 29 30 40
 35 29 41


DIRECTORS
 Voting by, when personally interested Voting powers of Company in other companies, exercised by    directors
       DIVIDENDS AND PAYMENTS TO MEMBERS
 Apportionment of Company cannot increase , but may decrease directors’    recommendation on
 Currency of Date for payment of Declaration of, Company or directors may make Delegation of Company’s obligation in respect of, to its
 bankers Foreign currency, payment in Joint holders, payment to
 Legal incapacity of member, dividend rights on  Method of payment of dividend Rescission before payment of
    118 117 116
       117 122 119
  42 42 42
    43 13
  42 43 43
 DOCUMENTS
   115 114
 42 41
 ELECTRONIC MAIL
 Definition of Notices by
     E ORDINARY SHARES
   EXECUTIVE OFFICERS
   FINANCIAL STATEMENTS (see Annual Financial    Statements)
 FRACTIONS
 Capitalisation or bonus issue, on Consolidation, on
      17 45
 GAZETTE


Article No
 Page No
 GENERAL MEETINGS
 Accidental omission to give notice of; or delay or non-receipt of     notice of
 Adjournment of Annual, holding of Chairman of (and casting vote)
 General meeting, convening of by directors or on requisition Lack of quorum Notice ofPlace and time of
 Poll at Postponement, cancellation of Proceedings at (see Proceedings at General Meetings)
 Proxies (see Proxies) Quorum for Representation of corporation at
 Separate meeting place Special business: -
          43 52
 46 42 59
  50 51 55
 48 46
      19 22
 20 19 24
  21 22 23
 21 20
  INCREASE OF CAPITAL
  INDEMNITY AND RESPONSIBILITYCompany's indemnity to directors and officers non-liability of directors or other officials of Company for each    other
     INDEPENDENT EXTERNAL AUDITORS
   INTERPRETATION
       IN WRITING
    JOINT HOLDERS
  Notice to Votes
     50 26


Article No
 Page No
 LEGAL INCAPACITY
    LIABILITY OF DIRECTORS AND OFFICERS
  LOCAL OR DIVISIONAL BOARDS, AGENTS AND COMMITTEES OF THE BOARD
  Committees, directors may delegate to Local boards and agencies, directors may appoint
      38 38 37
  MANAGEMENT AND CONTROL OF BUSINESS OF COMPANY
  MANAGING AND EXECUTIVE DIRECTORS AND MANAGERS
  Powers of Remuneration of
  101 103
   38 39
 29 38
 MEETINGS, GENERAL
 MEMBERS
  Death, or insolvency – transmission of shares on Definition of Demand for a poll by
         Financial statements – rights to receive Inspection of books by
 Notices to Proxy, appointment of Register of (see Register of Members)
 Transfer of shares (see Transfer of Shares) Votes of
 132 131
    47 46
    MEMORANDUM
   MEMBERS, VOTES OF


Article No
 Page No
 MINUTE BOOK
 to be considered prima facie evidence of proceedings at general meetings
  MODIFICATION OF RIGHTS
  new shares ranking pari passu, not a modification of existing    rights written consent for
       MONTH
    NOTICES
 Accidental omission to give, or delay or non-receipt of Address of member for service of
 Advertisement of Binding on successors in title to securities Deemed receipt of
 Definition of Directors' meetings, of Effect of accidental omission to give
 How days of notice of general meeting to be counted Joint holders, to Legal incapacity, notice valid despite member under
 Manner of giving Member's right to receive on whom binding
 period of Stock Exchanges, notices of general meetings to be given to Time when notice deemed served
  136 136
    136 141
   139 136 136
 139 140 136
  20 48 48
 50 49
  48 51 20 50
 50 48 48
 50 51 48
  ODD-LOT OFFERS
   OFFICE
    PAYMENTS TO MEMBERS
      POLL
  POWERS OF DIRECTORS
 Alternate directors, power to appoint Borrowing powers


POWERS OF DIRECTORS
  through Capitalisation or distribution of profits co-option to board, by directors
 delegation to committee any of their powers documents, authentication of local boards and committees, power to appoint (See Local, Divisional Boards, Agents and Committees of the
 Board) management of business of Company vested in directors pensions to directors, ex-directors, officers, employees and
 families, directors may pay quotation of Company's shares on Stock Exchanges, power    of directors to obtain
 Article No
    100 115
    Page No
 36 45 35
 38 42
    PREFERENCE SHARES
       PROCEEDINGS AT GENERAL MEETINGS
  Casting vote of chairman  Chairman of general meetings Chairman's declaration of result on show of hands conclusive    evidence
 General nature of business to be disclosed in notice    convening Minutes of (see Minutes)
 no amendment of resolution proposed without approval objections to voting or voter at procedure if no quorum
   58 53
    61 52 59
  24 22
    24 22 24
  Representation of corporation at Resolutions at, passed on show of hands unless poll    demanded
 Result of poll deemed to be resolution Separate meeting place Scrutineers, to conduct poll
 Special and ordinary business, definition of Votes, admission or rejection of
    57 55 60
 48 61
    24 23 24
 21 24


Article No
 Page No
 PROCEEDINGS OF DIRECTORS OR COMMITTEES
 acts of directors or committees valid notwithstanding defective    appointment
 appointment of committees (see Local Boards, Agents and    Committees) chairman and deputy chairman, election of
 chairman's casting vote convening of meetings of directors' resolutions signed by all available directors held by alternative means of communication/media
 meetings of directors, procedure at meeting may exercise all directors' powers notice of
 quorum  vacancies, meeting only for filling if below minimum voting at
  106 107 104
 109 112 104
 108 136 104
 105 107
  40 40 39
 40 41 39
 40 48 39
 39 40
 PROFITS
   PROXIES
 Depositing at branch office outside South Africa Instrument appointing a proxy may be created by electronic    or other means
 Entitled to vote on poll only Form of proxy instrument Legal incapacity of member, validity of proxy after
 May confer power of delegation or sub-delegation Member of Company, proxy need not be Must be received 48 hours before meetingSeveral proxies, member may appoint
    69 67 69
 71 69 67
 69 66 69
   26 26 26
 28 26 26
 26 26 26
  QUORUM
 Directors’ meetings General meetings
   39 21
 REGISTER OF MEMBERS
 Closing of Branch, directors may open Definition of
 Main register, to be kept Registers, main or branch, closing of
         939
 94


Article No
 Page No
 REQUISITION OF GENERAL MEETING
  RESERVES
  Directors may set aside profits to  Fractions on distribution of Investment of
  126 125
 127 125 125
 45 44
 45 44 44
 RESOLUTION IN WRITING SIGNED BY DIRECTORS
   ROTATION OF DIRECTORS
  Number to retire at Annual General Meeting Retiring directors eligible for re-election Vacated offices to be filled at general meetings
   87 86 87
 88 87 86
 34 33 34
 34 34 33
 SECRETARY
       SECURITIES
  Allotment of  Certificated, definition of Certificates for (see Certificates)
 Commission on issue of Consolidation of Control of unissued
 Definition Fractions of (see Fractions)  General meeting to determine rights attaching to
       62
 77
      64
 66
  Legal incapacity of member, title to share  Modifying rights attached to different classes of  Numbering of, if applicable
 Power to pay commissions for subscription of shares    preference (see Preference Shares) Redeemable preference, power to create
   26 39 12
     12 18


SECURITIES
  Transfers of certificated (see Transfer of Securities)  Transmission of certificated, on death of member
  Article No
   Page No
   SHARE CAPITAL
 SHAREHOLDERS
 SHAREHOLDERS’ MEETINGS
 SHARE PREMIUM ACCOUNT
    SUB-DIVISION OF SHARES
  TRANSFER OFFICE
       TRANSFER OF SECURITIES
 Instrument of transfer, form of Member may transfer in common form
 Office to which transfer form must be sent  Power of directors to refuse to register transfer in other    circumstances
 Powers of attorney to remain in force until written notice of    revocation Refusal of directors to register, notice of to be given
 Renunciations of allotment Securities of deceased members Signatures, on instruments of transfer
 Transfer deed, form of Transfer instrument, to be retained by Company Transfers to be signed by transferor, by transferee only when    required
 19 18 18
   22 24 18
 19 18 20
  10 10 10
   11 12 10
 10 10 11
  TRANSFER SECRETARY


Article No
 Page No
 TRANSMISSION OF CERTIFICATED SECURITIES
 Deceased member, only executors or administrators    recognised
 Joint holders, only survivors of recognised Person becoming entitled through legal incapacity of    member, rights to transfer and vote
 Persons becoming entitled through legal incapacity of    member, rights to dividend
 25 25
   12 12
   TRUSTEES, PAYMENTS TO
  TRUSTS
   UNCERTIFICATED SECURITIES
  UNCLAIMED DIVIDENDS
  VOTES OF MEMBERS
 Body corporate member, voting by representative Joint holders Poll, on
 Proxies (see Proxies) Show of hands, on Special provisions as to (if any)
 Validity of votes by proxy (see Proxies) When member is a body corporate
  65 63
     26 25
    WAIVER BY STOCK EXCHANGE
   WINDING-UP
   142 142
 51 51
 YEAR


TABLES A AND B
     INTERPRETATION
   the interpretation or construction thereof.  In the interpretation of these articles, if not inconsistent with the subject or context, the words standing in the first column
 of the following table shall bear the meanings set opposite to them respectively in the second column hereof:
 WORDS
   MEANINGS


2
  the directors for the time being of the Company and the alternate directors thereof or, as the case may be,
 the directors assembled as a board at which a quorum is present.
  includes, but is not limited to, information generated, displayed, sent, received or stored by electronic means,
 including websites, electronic data exchange and electronic mail, as determined by the directors from
     written or produced by any substitute for writing or partly written and partly so produced and including
 printing, typewriting or lithography or any other mechanical process or partly one and partly another.
   death; insolvency; or judicial management or liquidation, or placing under curatorship by reason of
 insanity or prodigality; infancy or minority; or marriage of a female member subject to the marital power
 (whether in community of property or out of community of property); or any other event which
 satisfies the directors that a member is deprived of his legal capacity to act and that it is vested in some other


includes, but is not limited, to any one or more of the following- annual reports, circulars, dividend notices,
 interest notices, interim reports, listings particulars, proxy forms, quarterly reports and any such other
 information as the Company may wish to distribute to such persons as are entitled to receive same, in
 accordance with the provisions of these articles and/or the Act and/or the rules of any stock exchange
 upon which any shares of the Company are listed or quoted.
      a depository institution accepted by a CSD as a participant in terms of the CAS Act.
  a person duly appointed in accordance with these articles to represent a member at any meeting or
    terms of a form of proxy, power of attorney or other document, complying with article 69.
  the register of members of the Company and any branch register kept by the Company pursuant to


the secretary of the Company for the time being or any person duly authorised thereto by the directors
 acting in the place of such secretary for the time being or any person appointed by the directors to perform
 any of the duties of the secretary; or any person duly authorised to represent a body corporate or a
          in force concerning companies and affecting the Company.
  the record of uncertificated securities administered and maintained by a participant (which forms part of
    of receiving for registration transfers of shares, debentures or other securities of the Company.


any person appointed by the directors to act for the time being in place of or in addition to the secretary
 for the purpose of registering transfers of shares, debentures or other securities of the Company,
 keeping registers and other records required by the Act to be kept at the office or the transfer office and
 issuing certificates of title to shares, debentures or other securities of the Company and any person
 appointed to be a secretary to any local committee under article 17 hereof;  or any person duly authorised
 to represent a body corporate which is the transfer secretary of the Company.
  securities  transferable without a written instrument and which are not evidenced by a certificate.
      Words importing persons shall where the context so admits include firms and bodies corporate.
    The expression “dividend” shall where the context so admits include bonus; but shall not, unless otherwise resolved by the Company in general meeting, include any


The expression “sign” or “signature” includes respectively lithography, printing and names impressed with a rubber or other kind of stamp or by any mechanical means.
 Reference to any provision of the Act shall be construed as a reference to such provision as modified or re-enacted by any Statute for the time being in force.
    SHARES
  Subject always to the provisions of Sections 221 and 222 of the Act, the listings requirements of any stock exchange on which the shares of the Company are listed
 or quoted and these articles, any shares for the time being unissued (whether forming part of the original or any increased capital) shall, subject as hereinafter provided,
 only be disposed of or dealt with in such manner as the Company in general meeting may have directed or may direct, but so that the Company in general meeting may
 resolve that all or any of such shares shall be at the disposal of the directors, who may in such event allot, grant options over, or otherwise deal with or dispose of
   proper; but so that no shares shall be issued at a discount except in accordance with Section 81 of the Act.
   existing shares and subject to any provisions of these articles, any share in the Company may be issued with or have attached thereto such preferred, deferred or
 other special rights or such restrictions, whether in regard to dividend, return of share capital or otherwise, and (subject as provided by the Act) such limited or
 suspended rights to voting as the Company in general meeting may from time to time determine; provided that the Company may by resolution passed at a general


conditions, and with such rights, privileges or restrictions attached thereto as the directors may determine.
   preference shares may, with the sanction of a special resolution, provide or may be varied so that they are, or at the option of the Company are to be liable, to be
 redeemed on such terms and in such manner as the Company may by such or subsequent special resolution determine.
   80 of the Act; provided that the rate or amount of the commission paid or agreed to be paid and the number of shares which persons have agreed for a commission to
   price at which the shares in respect whereof the same is paid are issued.  Such commission may be satisfied by the payment of cash.  The Company may also on any
     in the register or be receivable by the Company, and the Company shall not, except as otherwise provided by these articles or by the Statutes or by any Order of a Court
 of competent jurisdiction, be bound by or compelled in any way to recognise any equitable, contingent, future, partial or representative interest in any security or any
 right in or in respect of any security, other than an absolute right to the entirety thereof in the registered holder and such other rights in case of transmission thereof
  CERTIFICATES
  Certificates in respect of certificated securities shall be issued under the authority of the directors or of a local committee or board when authorised thereto by the


and shall (subject as hereinafter provided) bear the autographic signatures of two directors or of one director and one officer authorised thereto by the directors; or of
 two members of a local committee or board or of one member and the secretary of such local committee or board, provided that:
   case or cases that the signatures of such directors or director and officer or members or member and secretary (or any of them) need not be autographic
     For the purposes of this article only the expression “sign” or “signature” shall not include names impressed with a rubber or other kind of stamp.
    after lodgement for transfer of one certificate for all his certificated securities of any one class, or several certificates each for one or more of his certificated securities of
 such class upon payment of such sum for every certificate after the first, as the directors shall from time to time determine.  Every certificate of certificated
 securities shall specify the number of shares in respect of which it is issued and the amount paid up thereon at the date of issue.  In the case of a member who has
 transferred a part of his holding of certificated securities of any class he shall be entitled to receive a certificate free of charge for the balance of his holding, provided
 that notwithstanding anything herein contained or implied to the contrary where certificated securities are registered in the names of two or more persons they shall


stamp duty payable on the new certificate and on such terms (if any) as to evidence and indemnity and payment of the out-of-pocket expenses of the Company of
 investigating such evidence and, in the case of loss or destruction, of advertising the same, as the directors may think fit and, in the case of defacement, on delivery of the
     or to his authorised agent, and in case of the legal incapacity of any one or more of the joint registered holders of any shares, the survivor then first named in the register
 shall be the only person recognised by the Company as being entitled to such certificate, or any new certificate which may be issued in place thereof, provided
 always that the Company shall not be bound to register more than four persons as the holders of any certificated security.
 REGISTER OF MEMBERS
    registers in any foreign country or countries and, subject to the provisions of the Statutes, make and vary such regulations as they may think fit respecting the keeping
  TRANSFER OF SECURITIES
  The transfer books and register may upon notice being given by advertisement in the Gazette and a newspaper circulating in the district in which the office is situate, and
 in the case of any branch register in the manner required by the Statutes, be closed during such time as the directors may think fit, not exceeding in the whole sixty days


or elsewhere, as the directors may from time to time prescribe.  The directors may appoint local committees (to be designated “Registrars” or by such other title (if any)
 as the directors may think fit) whether in South Africa or elsewhere consisting of two or more individual persons or of a body corporate to whom the directors may
 delegate all or any of their powers, authorities and discretions with regard to the registration of transfers, the keeping of registers and other records required by the
 Act to be kept at the office or the transfer office and the issuing of certificates and may appoint a person to be a secretary to such local committee or authorise such
     transfer and to the provisions of these articles any member may transfer all or any of his certificated securities (to the extent that such member is not prevented from
 doing so in terms of Section 91A of the Act), but 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 relating to the security comprised therein is for the time being kept or at such other place as the
   transferred and such other evidence (if any) as the directors or other person in charge of such register may require to prove the title or capacity of the intending transferor
 or transferee or the rights of the intending transferor to transfer the securities;  provided that any transfer instruction given by telefax or electronic mail shall be


thereof.  All instruments of transfer in respect of certificated securities, when registered, shall either be retained by the Company or disposed of in such manner as
 the directors shall from time to time decide; but any instrument of transfer in respect of certificated securities, which the directors may decline to register shall (unless the
      accompanied (unless the directors either generally or in any particular case otherwise resolve) by the certificate for the securities to which it relates, and
 such other evidence as the Company may reasonably require to show the right or capacity of the transferor to make the transfer and of the transferee to
          on which the instrument of transfer was lodged, send to the transferee notice of the refusal.
   transferring or accepting the transfer of certificated securities, which may be lodged, produced or exhibited with or to the Company at the transfer office where the


and the grantor of such powers or other authorities, be taken and deemed to continue and remain in full force and effect, and the Company may allow the same to
 be acted upon until such time as express notice in writing of the revocation (“the revocation notice”) of the same shall have been given and lodged at the place
 aforesaid.  Even after the giving and lodging of such revocation notice, the Company shall be entitled to give effect to any instrument signed under the authority and
 certified by any officer of the Company as being in order before the giving and lodging of such notice.  The Company shall not be bound to allow the exercise of
 any act or matter by an agent for a member or intending transferee of certificated securities unless a certified copy of such agent's authority be produced and filed with
      TRANSMISSION OF CERTIFICATED SECURITIES
   upon the estates of deceased persons, the executors or administrators of a deceased member (not being one of several joint holders) shall be the only persons recognised
 by the Company as having any title to a certificated security registered in the name of such member, and in the case of the death of any one or more of the joint holders of
 any certificated security, the survivors or survivor, or the executor or administrator of the deceased, shall be the only person or persons recognised by the Company as
 having any title to or interest in such certificated security, but nothing herein shall release the estate of a deceased joint holder, from any liability in respect of any
     accordance with these articles, upon producing such evidence as may sustain the character in respect of which he proposes to act under this article or of his title, as


the directors may think sufficient, may, with the consent of the directors (which they shall not be under obligation to give) either be registered himself as a member in
 respect of such certificated securities or elect to have some person nominated by him registered as the transferee thereof.  If the person so becoming entitled shall elect to
 be registered himself he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.  If he shall elect to have his nominee
 registered he shall testify his election by executing to his nominee a transfer of such certificated security.  All the limitations, restrictions and provisions of these articles
 relating to the right to transfer and the registration of certificated securities shall be applicable to any such notice of transfer or registration under this article as if the
 legal incapacity or other means had not occurred and the notice of transfer were a transfer executed by the member.
   becoming entitled to a certificated security in consequence of the legal incapacity of a member or by any lawful means otherwise than by transfer in accordance with these
 articles shall (upon supplying to the Company such evidence as the directors may reasonably require to show this title to the securities concerned) be entitled to the
 same dividends and other advantages to which he would be entitled if he were the registered holder of the certificated securities except that he shall not be entitled in
 respect thereof to exercise any right conferred by membership in relation to meetings of the Company until he shall have been registered as a member in respect of such
  CONVERSION OF SHARES INTO STOCK
   shares into stock, and may reconvert any stock into paid-up shares of any denomination.


such interests, in such manner as the directors or the Company in general meeting shall direct, but in default of any such direction, then in the same manner and subject
 to the same regulations as and subject to which any paid-up shares may be transferred, or as near thereto as circumstances will permit; but the directors may
 from time to time, if they think fit, fix the minimum amount of stock transferable, which shall not exceed the nominal amount of the shares from which the stock
 arose, and direct that fractions of such minimum shall not be dealt with, but with power, nevertheless at their discretion to waive such rules in any particular case.
   the same rights, privileges and advantages as regards participation in profits, voting at general meetings of the Company, and other matters, as if they held the shares from
 which the stock arose, but no such privilege or advantage (except participation in the profits and in assets on a reduction of capital or a winding up) shall be conferred by
 any amount of stock which would not, if existing in shares, have conferred such privilege or advantage.  No such conversion shall affect or prejudice any preference
     INCREASE AND REDUCTION OF CAPITAL
     into shares of such amount, or may constitute shares of no par value or may increase the number of its shares of no par value to such number, as the


issue, or by these articles, any capital raised by the creation of new shares shall be considered part of the present capital and shall be subject to the provisions herein
 contained with reference to transfer and transmission, and otherwise as if it had been part of the present capital.
   imposed by the Act, the rules and requirements of any stock exchange on which the securities of the Company are or may be listed or quoted, by ordinary resolution,
 reduce, dispose of, distribute or otherwise deal with in any manner whatsoever, the Company’s share capital, share premium, stated capital, reserves and/or capital
  CONSOLIDATION, SUBDIVISION, ACQUISITION OF OWN SECURITIES,
 CONVERSION OF PREFERENCE SHARES, ALTERATION OF
 MEMORANDUM
            thereof, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled;


by or pursuant to its memorandum of association and so that the resolution whereby any share is subdivided, may determine that, as between the holders
 of the shares resulting from such subdivision one or more of the shares may have such preferred or other rights over, or may have such qualified or
 deferred rights, or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or to new
     consent or sanction required from the holders of that and/or any other class of shares under article 39;
   securities of the Company are listed or quoted, approve the acquisition of securities issued by the Company or, if the Company is a subsidiary, issued by
 its holding company, which approval may be a general approval subject to the provisions of the Statutes or a specific approval for a particular acquisition;
  convert all its shares of one class having a par value into stated capital constituted by shares of no par value or such of its stated capital as is
 constituted by shares of no par value into share capital consisting of shares having a par value;


subject to any conditions imposed by the Act, so far as they shall be applicable, and so far as they shall not be applicable, in accordance with the terms of the special
 resolution authorising the same and, so far as such special resolution shall not be applicable, in such manner as the directors deem most expedient.  Whenever as the
 result of any consolidation or other transaction on the part of the Company, a fraction of a share is included in the holding of any member, the directors may in
     When a fraction is sold as aforesaid the person so appointed to sell it shall be deemed to be authorised to make such sale the validity of which shall not be
            by capitalising any amount available for distribution to members notwithstanding that not all of the members may participate in such


Company or, any consolidation or subdivision of capital or from any other cause (but excluding any unclaimed dividends) shall be held in trust by the Company until
 lawfully claimed by the member; provided that no such amount shall be lawfully claimable by the member unless claimed by no later than 3 years after it became due
  ODD-LOT OFFERS
   with the requirements of any stock exchange on which the securities of the Company are listed or quoted, there are members holding less than 100 (or such other number
   increase their odd-lots to holdings of 100 (or such other number as the directors may determine) ordinary securities in accordance with the terms of the odd-lot offer made
 by the Company, such members shall be deemed to have agreed to sell their odd-lot holdings (whether to the Company by way of a repurchase or otherwise) and the
 Company shall cause the odd-lots of such members to be sold or repurchased on such basis as the directors may determine and the Company shall account to such
  MODIFICATION OF RIGHTS


Company at a separate general meeting of the holders of the shares of that class.  To every such separate general meeting all the provisions of these
 articles relating to general meetings of the Company shall mutatis mutandis apply except that the quorum shall be not less than two persons holding or
 representing by proxy not less than one-half of the issued shares of that class, but if at any adjourned meeting such quorum is not present the members
      dividend after the said preference shares and/or ordinary shares shall not be deemed to be a modification or variation of the rights of the holders of any preference shares
      GENERAL MEETINGS
          meetings of the holders of any class of shares shall be held at such time and place as the directors shall determine.


the provisions of the Statutes, the directors may by notice to members postpone, cancel or change the place for holding a general meeting of which notice has been
        NOTICES OF GENERAL MEETINGS
  Twenty-one days' notice at least shall be given in the manner hereinafter mentioned to such persons as are, in accordance with the provisions of these articles entitled to
 receive such notices from the Company of any annual general meeting or a meeting called for the passing of a special resolution and fourteen days' notice at least shall be
 so given of any other general meeting.  The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and
 shall specify the place, day and time of the meeting and in the case of special business the general nature of such business.  Whenever notice of a meeting is given pursuant
 to this article the Company shall at the same time as such notice is given forward a copy thereof to the auditors of the Company and to the appropriate officer of any
     of proxy to, or the non-receipt or delay in receipt of notice of a meeting or such instrument of proxy by any person entitled to receive notice shall not invalidate the
 proceedings at that meeting.  Furthermore, a member who is present at a general meeting whether in person or by proxy, shall be deemed to have waived any
 objection which such member may have to the failure to give notice or proper notice of the meeting.


PROCEEDINGS AT GENERAL MEETINGS
    meeting, with the exception of sanctioning or declaring a dividend, the consideration of the annual financial statements, the election of directors, the appointment of the
 Company’s independent external auditors, the placing under control of the directors, as a general authority, of the unissued securities and the authorising of the directors
 to issue the unissued securities for cash and such other business which might through usual commercial practices be regarded as ordinary business.
        person may move any amendment to a proposed resolution, the terms of which are set out in the notice convening the meeting or to a document which
     passing special resolutions, a quorum for a general meeting shall be three members entitled to vote, personally present, or if a member is a body corporate, represented,
 provided that if the Company is a subsidiary company there shall be no quorum unless one of those present or represented is a representative of the Company’s


be present when the meeting proceeds to business.  A body corporate, being a member of the Company, and present by a representative duly appointed in
 accordance with Section 188 of the Act, shall be deemed to be a member personally present for the purposes of these articles.
   present, the meeting, if convened upon the requisition of members, shall be dissolved.  In any other case it shall stand adjourned to the same day in the next week
 (or if that be a public holiday to the next succeeding day other than a public holiday, a Saturday or a Sunday) at the same time and place or to such other day and at such
 other time or place as the chairman of the meeting shall appoint.  If at such adjourned meeting a quorum as defined is not present within ten minutes from the
 time appointed for holding the meeting, those members who are present in person and are entitled to vote shall be a quorum and may transact the business for which
     such chairman or deputy chairman, or if at any meeting neither the chairman nor the deputy chairman is present within ten minutes after the time appointed for holding
 the meeting, or if neither of them be willing to act as chairman, the directors present shall choose one of their number to act, or if one director only be present he shall
 preside as chairman if willing to act.  If no director be present, or if all the directors present decline to take the chair, the members present shall elect one of their number
    time to time and from place to place, but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the
 meeting from which the adjournment took place.  Save as provided by Section 192 of the Act, it shall not be necessary to give any notice of an adjournment or of the


to attend the meeting, he or she may arrange for any person whom he or she considers cannot be seated in the main meeting room to observe or attend the
 meeting in a separate room.  Even if the members present in the separate room are not able to participate in the conduct of the meeting, the meeting will nevertheless be
 treated as validly held in the main room.  If a separate meeting place is linked to the main place of a general meeting by an instantaneous audio-visual communication
        enables the members in the separate meeting place to vote on a show of hands or on a poll,
 a member present at the separate meeting place is taken to be present at the general meeting and entitled to exercise all rights as if he or she was present at the main
     the show of hands, or otherwise) demanded by the chairman of the meeting or as provided in Section 198(1)(b) of the Act.  Unless a poll be so demanded and the
 demand be not withdrawn a declaration by the chairman of the meeting that a resolution has on a show of hands been carried, or carried unanimously, or by a
 particular majority, or not carried by a particular majority, or lost, and an entry to that effect in the book containing the minutes of the proceedings of the Company shall
 be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.


is demanded, shall be entitled to a second or casting vote in addition to the vote or votes to which the chairman may be entitled as a member.
   question of adjournment.  A poll demanded on any other question shall be taken at such time and place and in such manner as the chairman of the meeting directs, and
 any business, other than upon which a poll has been demanded, may be proceeded with pending the taking of the poll.
  The chairman of a meeting may appoint any one or more firms or persons to act as scrutineer for the purpose of checking forms of proxy deposited for use and for
 counting the votes at such meeting and he may thereafter act on a certificate given by any such scrutineer without requiring production at the meeting of the forms of
     the error shall not vitiate the resolution unless it be pointed out at the meeting and not in that case unless it shall, in the opinion of the chairman of the meeting, be of
 sufficient magnitude to vitiate the resolution.  No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the
 vote objected to is given or tendered, and every vote not disallowed at such meeting or adjourned meeting shall be valid for all purposes.  Any such objection made in due
 time shall be referred to the chairman of the meeting, whose decision shall be final and conclusive.


minute books of the Company, if signed by any person purporting to be the chairman of the meeting to which it relates, or by any person present thereat and
 appointed by the directors to sign the same in his place, or by the chairman of a subsequent meeting of the directors, shall be receivable as evidence of the facts
  VOTES OF MEMBERS
   special terms as to voting upon which any share may be issued or may for the time being be held:
   have only one vote irrespective of the number of shares he holds or represents;  and
  upon a poll, every member present in person or by proxy and entitled to that proportion of the total votes in the Company which the aggregate amount of
     its directors or other governing body, authorise such person as it thinks fit to act as its representative at one or more general meetings of the Company or at one or more
 meetings of holders of any class of shares of the Company, as provided by Section 188 of the Act and such representative shall be entitled to exercise the same powers
 on behalf of the body corporate which he represents as that body corporate could exercise if it were an individual member of the Company.  The directors may but
 shall not be obliged to require proof to their satisfaction of the appointment or authority of such representative to act.


whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in
 which the names stand in the register or in the case of persons entitled to a share by transmission the order in which their names were given in the notice to the Company
  PROXIES AND VOTING UNDER POWER OF ATTORNEY
   appointed proxy and may appoint more than one proxy to attend on the same occasion.
                    shall be accompanied by such documentary or other evidence as may be required by the directors in order to establish the validity and/or authenticity


before the time appointed for the holding of the meeting or adjourned meeting at which the person named in such proxy instrument proposes to vote, or in
 the case of a poll taken subsequently to the date of a meeting or adjourned meeting, not less than forty-eight hours (or such shorter period as the directors
 may from time to time determine) before the time appointed for the taking of the poll failing which the proxy instrument shall not be treated as valid;
 provided that if the member is registered at a branch register kept at any branch or other office outside South Africa, any proxy instrument executed by
 such member may be received at the office at which he is registered.  In determining the said period of forty-eight hours (or such shorter period as the
 directors may from time to time determine), Saturdays, Sundays and public holidays shall not be taken into account;
   six months from the date of submission of such proxy instrument, except at an adjourned meeting or at a poll demanded at a meeting originally held within six
        reason other than it was not lodged timeously for the meeting from which the adjournment took place;


appointed in terms thereof so that any proxy so appointed may appoint any other person as proxy in his stead;
   directors may determine from time to time) shall be submitted to the electronic mail address as notified by the Company from time to time.
   office of the Company outside South Africa, it shall not be necessary for any proxy instruments appointing proxies, and the powers of attorney or other authorities (if
 any) under which they are signed, relating to members registered on such branch register to be received at the office or such other place designated in the notice
        authorised person, may from time to time direct, a summary of all the votes for and against each resolution represented by valid proxy instruments duly
 accepted by them, and so that such communication shall be received by the Company before the time appointed for the meeting to commence.
   valid notwithstanding the previous legal incapacity of the principal or revocation of the proxy instrument or the transfer of the share in respect of which the vote is
 given, unless an intimation in writing of such legal incapacity or transfer shall have been received by the Company not less than forty-eight hours (or such shorter
 period as the directors may from time to time determine) before commencement of the meeting or the taking of the poll at which the proxy instrument is used.


DIRECTORS
          Africa for any purposes of the Company, or who otherwise performs services which, in the opinion of the directors, are outside the scope of the ordinary duties of a
 director, may be paid such extra remuneration, in addition to the remuneration to which he may be entitled as a director, as the directors may determine.  The directors
 shall also be paid all their travelling and other expenses properly and necessarily expended by them in and about the business of the Company and in attending
        suspends payments generally, or enters into a compromise with his creditors, or files an application for the surrender of his estate;
    if  he  is  requested  in  writing  to  resign  by  not  less  than  three-quarters  of  the directors ;


months by an alternate director, and the directors resolve that his office be, by reason of such absence, vacated; provided that the directors shall have power
 to grant to any director not resident in South Africa leave of absence for any or an indefinite period.
  A director may hold any other office or position under the Company (except that of external auditor) in conjunction with his office of director for such period and on
 such remuneration terms (in addition to the remuneration to which he may be entitled as a director) and otherwise as a disinterested quorum of the directors may
     interested as shareholder or otherwise and (except insofar as otherwise decided by the directors), he shall not be accountable for any remuneration or other benefits
 received by him as a director or officer of or from his interest in such other company.
   Company (otherwise than as the Company’s external auditor) and he or his firm shall be entitled to remuneration for professional services as if he were not a director.


arrangement or proposed contract or arrangement with the Company or its subsidiary, shall declare the nature of his interest to the Company, mutatis mutandis, in
     other office or position under the Company or in any company promoted by the Company or in which the Company is interested or in respect of professional
 services rendered or to be rendered by such director or as vendor, purchaser or in any other manner whatever, nor shall any such contract or arrangement entered into
 by or on behalf of the Company in which any director is in any way interested be liable to be avoided, nor shall any director so contracting or being so interested be
 liable to account to the Company for any profit realised by any such appointment, contract or arrangement by reason of such director holding the office or of the
     or position under the Company or in respect of any contract or arrangement in which he is interested, but this prohibition shall not apply to:
  any arrangement for giving to any director any security of indemnity in respect of money lent by him to, or obligations undertaken by him for the benefit of,


generally, or in respect of any particular contract or arrangement, by the Company 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 the Company or any company in which the Company is interested, such proposals may be divided and considered in relation to each director
 separately and in such cases each of the directors concerned shall be entitled to vote (and be counted in the quorum) in respect of each resolution except that concerning
     voting, such question shall be referred to the chairman of the meeting and his ruling in relation to any other director shall 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.
   company held or owned by the Company in such manner and in all respects as they think fit, including the exercise thereof in favour 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


ALTERNATE DIRECTORS
    during his absence and may at his discretion remove such alternate director.  A person so appointed shall, except as regards power to appoint an alternate, and
 remuneration, be subject in all respects to the terms and conditions existing with reference to the other directors of the Company, and each alternate director, whilst
 so acting, shall be entitled to receive notices of all meetings of the directors or of any committee of the directors of which his appointor is a member, and to attend and
 vote at any such meeting at which his appointor is a member, and to attend and vote at any such meeting at which his appointor is not personally present and he shall
 generally be entitled to exercise and discharge all the functions, powers and duties of his appointor in such appointor's absence as if he were a director.  Any director
 acting as alternate shall (in addition to his own vote) have a vote for each director for whom he acts as alternate.  An alternate director shall ipso facto cease to be an
 alternate director if his appointor ceases for any reason to be a director; provided that if any director retires by rotation or otherwise but is re-elected at the same
 meeting, any appointment made by him pursuant to this article which was in force immediately before his retirement shall remain in force as though he had not retired.
 Any appointment or removal of an alternate director shall be effected by instrument in writing delivered at the office and signed by the appointor.  The remuneration of
 an alternate director shall be payable only out of the remuneration payable to the director appointing him and he shall have no claim against the Company for his
  RETIREMENT OF DIRECTORS IN ROTATION
   the time being or if their number is not a multiple of three, then the number who shall retire from office shall be rounded down to the nearest whole number which is
 a multiple of three.  The directors so to retire at every annual general meeting, unless otherwise determined by the board, shall be those who have been 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 shall (unless they otherwise agree among
 themselves) be determined by lot; provided that notwithstanding anything herein contained:
   for a period of three years since his last election or appointment, he shall retire at such meeting either as one of the directors to retire in pursuance of the
          election, appointment or date upon which he was deemed re-elected.  A director retiring at a meeting shall retain office until the close of the meeting or in the case of
     election to the office of a director at any general meeting unless not more than thirty days but not less than twenty-one days before the day appointed for the meeting,
 there shall have been left at the office, a notice in writing by some member duly qualified to be present and vote at the meeting for which such notice is given, of his
 intention to propose such person for election and also notice in writing signed by the person to be proposed of his willingness to be elected.
  Subject to article 87, the Company at the meeting at which a director retires in manner aforesaid, may fill the vacated office by electing a person thereto.


director, but so that the total number of directors shall not exceed at any time the maximum number (if any) fixed in accordance with these articles.
    POWERS OF DIRECTORS
  The directors on behalf of the Company may pay a gratuity or pension or allowance on retirement or other benefit to any director or ex-director or other officer or
 employee of the Company, its holding company (if any) or any subsidiary of the Company whether or not he has held any other salaried office or position with the
 Company or to his widow or dependants and make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or
     directors shall have power at any time and from time to time to appoint any person to be a director, either to fill a casual vacancy or as an addition to the existing board,
 but so that the total number of directors shall not at any time exceed the maximum number (if any) fixed in accordance with these articles.  Any director so appointed
 shall hold office only until the next following annual general meeting and shall then be eligible for re-election but shall not be taken into account in determining the


stock exchange in any country or state and may accept responsibility for and pay and discharge all taxes, duties, fees, expenses or other sums which may be payable in
 relation to any of the matters aforesaid and may subscribe to and comply with the laws and regulations of any such country or state and the rules or regulations of any
     or times as they shall think fit, and further may be discontinued or suspended by the directors, whether such branch or kind of business may have been actually
 commenced or not, so long as the directors may deem it expedient not to commence or proceed with the same.
   directors who in addition to the powers and authorities by these articles expressly conferred upon them, may exercise all such powers and do all such acts and things as
 may be exercised or done by the Company, and are not hereby or by the Statutes expressly directed or required to be exercised or done by the Company in general
 meeting, but subject nevertheless to such management and control not being inconsistent with these articles nor with any resolution passed by the Company in
 general meeting; but so that no such resolution shall invalidate any prior act of the directors which would have been valid if such resolution had not been passed.  The
 general powers given by this article shall not be limited or restricted by any special authority or power given to the directors by any other article.
   Company or any other business in which the Company may be interested, shall be carried on by or through one or more subsidiaries of the Company and they may on
 behalf of the Company make such arrangements as they think advisable for taking the profits or bearing the losses of any branch or business so carried on, or for
 financing, assisting or subsidising any such subsidiary or guaranteeing its contracts, obligations or liabilities.


BORROWING POWERS
    directors may borrow from time to time for the purposes of the Company or secure the payment of such sums as they think fit and may secure the repayment or payment
 of any such sums by bond, mortgage or charge upon all or any of the property or assets of the Company or by the issue of debentures or otherwise as they may think
 fit, and may make such regulations regarding the transfer of debentures, the issuing of certificates therefor (subject always to article 11 hereof) and all such other matters
 incidental to debentures as they may think fit; provided that no special privileges as to allotment of shares in the Company, attending and voting at general meetings,
 appointment of directors or otherwise, shall be given to the holders of debentures of the Company save with the sanction of the Company in general meeting.
 LOCAL OR DIVISIONAL BOARDS, AGENTS AND COMMITTEES OF THE
 BOARD
   or elsewhere for managing any of the affairs of the Company and may appoint any persons to be members of such local or divisional boards, or any managers or agents
 and may fix their remuneration, and may delegate to any local or divisional board, manager or agent any of the powers, authorities and discretions vested in the
 directors with power to sub-delegate, and may authorise the members of any local or divisional board or any of them to fill any vacancies therein and to act
 notwithstanding vacancies, and any such appointment or delegation may be made upon such terms and subject to such conditions as the directors may think fit, and
 the directors may remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such


fluctuating body of persons, whether nominated directly or indirectly by the directors, to be the attorney or agent of the Company for such purposes and with
 such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these articles) and for such period and subject to such
 conditions as they may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such
 attorney as the directors may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him or
    Any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may from time to time be imposed on it by the directors and
  EXECUTIVE OFFICERS
  managing director, deputy managing director, chief executive officer, deputy chief executive officer, general manager or executive director (with or without specific
 designation) of the Company or to other executive office with the Company as the directors shall think fit, and may from time to time remove or dismiss him or them
   appointed any director appointed to any position or executive office pursuant to article 101 shall not, (while he continues to hold that position or office under a
 written contract of employment), be subject to retirement by rotation during the currency of such contract and he shall not, in such case, be taken into account in
 determining the rotation of retirement of directors but, subject to any provisions in such contract, he shall be subject to the same removal terms as the other directors of


the Company and, if he ceases to hold office as director, his appointment to such position or executive office shall ipso facto and immediately be terminated but
 without prejudice to any claims or damages which may accrue under any such contract in respect of such termination;  provided that the directors shall not appoint
 any director to any position or executive office under a contract as aforesaid which provides for him to be so exempted, if at the time of such appointment under such
 contract the effect of such exemption would be to cause one-half or more of the directors to be exempt from retirement by rotation.
  to any position or executive office under article 101 such of the powers exercisable under these articles by the directors as they think fit, and may confer such powers for
 such time, and to be exercised for such objects and purposes and upon such terms and conditions and with such restrictions, as they think expedient, and they may
 confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the directors in that regard, and may from time to time
  PROCEEDINGS OF DIRECTORS AND COMMITTEES
  their meetings as they think fit, and may determine the quorum necessary for the transaction of business.  Until otherwise determined by the directors, two directors
 shall form a quorum.  A director may at any time, and the secretary upon the request of a director, shall at any time convene a meeting of the directors.
  and so long as their number be reduced below the minimum number fixed by or in accordance with these articles, they may act only for the purpose of filling up
 vacancies in their body or of summoning general meetings of the Company but not for any other purpose, and may act for either of the purposes aforesaid whether or
 not their number be reduced below the minimum number fixed by or in accordance with these articles as a quorum.


40
   the chairman) of their meetings and determine the period for which they are to hold office, but if no such chairman or deputy chairman is elected or if at any meeting the
 chairman or deputy chairman be not present within ten minutes after the time appointed for holding the same, the directors present shall choose one of their
    that should the quorum be two and should only two directors be present at the meeting, the chairman shall not have a second or casting vote.
  exercise all or any of the powers, authorities and discretions by or under these articles for the time being vested in or exercisable by the directors generally.
   transmission or some other form of electronic means and which may consist of several documents in like form each signed by one or more directors), shall be as
 valid and effectual as if it had been passed at a meeting of the directors duly called and constituted; provided that where a director is not so present, but has an alternate
 who is so present, then such resolution must also be signed by such alternate.  All such resolutions shall be described as “directors' resolutions” and shall be forwarded
 or otherwise delivered to the secretary without delay, and shall be recorded by him in the Company's minute book and noted at the meeting of the directors next following
    meetings and proceedings of directors so far as the same are applicable thereto and are not superseded by any regulations made or imposed by the directors.


as a director or a member of a committee, shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of the
 directors or persons acting aforesaid, or that they or any of them were disqualified from or had vacated office, shall be as valid as if every such person had been duly
 appointed and was qualified and had continued to be a director or member of such committee.
  means of such telephonic, electronic or other communication facility or media as permits all persons participating in the meeting to communicate with each other
 simultaneously and instantaneously and directors so participating shall be deemed to be present at such meeting.
 SECRETARY
   complying with the requirements of the Act) shall be appointed by the directors for such term, at such remuneration and upon such conditions as they may think fit and
 any secretary so appointed may not be removed without the approval of the directors.  A provision of the Statutes or these articles requiring or authorising a
 thing to be done by or to a director and the secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of,
  AUTHENTICATION AND ELECTRONIC ARCHIVING OF DOCUMENTS
   have power to store any documents affecting the constitution of the Company and any resolutions passed by the Company or the directors, and any books, records,


means and to certify copies thereof or extracts therefrom as true copies or extracts; and where any books, records, documents or accounts are elsewhere than at the
 office the local manager or other officer of the Company having the custody thereof shall be deemed to be the person appointed by the directors aforesaid.
  from the minutes of a meeting of the directors which is certified as such in accordance with the provisions of article 114 shall be conclusive evidence in favour
 of all persons dealing with the Company upon the faith thereof that such resolution has been duly passed or, as the case may be, that such extract is a true and accurate
  DIVIDENDS AND OTHER PAYMENTS TO MEMBERS
  on which the Company’s securities are listed or quoted, the Company may make payments to its members from time to time.
  directors referred to in article 121) or the directors may from time to time declare a dividend or make any other payment to members (or any class of members) in such
 currency as the directors or the general meeting may determine and in proportion to the number of shares held by them in each class.  Dividends and other payments
 shall be declared payable to members registered as such on a date subsequent to the date of the declaration thereof as determined by the directors or the Company in
   payment thereof if the directors decide that the Company’s financial position no longer justifies such payment.


116 and 117 may be invested or otherwise be made use of by the directors for the benefit of the Company until claimed, provided that any dividend or other payment
 to members remaining unclaimed for a period of not less than three years from the date on which it became payable may be forfeited by resolution of the directors for
        to members, able to pay its debts as they become due in the ordinary course of business;  and
   of the dividend or other payment to members, not be less than the consolidated liabilities of the Company
    registered address or, in the case of joint holders, addressed to the holder whose name stands first on the register in respect of the share at his registered address, or
 addressed to such person and at such address as the holder or joint holders may in writing direct, or by electronic transfer into the bank account nominated by the
   warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the person to whom it is addressed and shall be sent at the risk of the


holder or joint holders.  Every such electronic transfer shall be made at the risk of the holder or joint holders.  The Company shall not be responsible for the loss in
 transmission of any cheque or warrant or of any document (whether similar to a cheque or warrant or not) sent through the post as aforesaid or the loss or
 misdirection of any electronic transfer.  Payment of any such cheque or warrant, or the making of such electronic transfer, to whomsoever effected, shall be a good
    or in cash, or in any one or more of such ways as the directors or the Company in general meeting may at the time of declaring the dividend determine and direct, and
 where any difficulty arises in regard to such distribution the directors may settle the same as they think expedient and in particular may fix the value for distribution of
 such specific assets and may determine that cash payments shall be made to any member on the basis of the value so fixed in order to secure equality of distribution
 and may vest any such assets in trustees upon such trusts for the persons entitled to the dividend as may seem expedient to the directors.
  regard to the payment of dividends to members having registered addresses outside South Africa, and such regulations may provide for the payment of such dividends in
 any foreign currency and the rate of exchange at which such payment shall be made and such other matters as the directors may think fit.
 RESERVES
   application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the directors may from time to time
 think fit.  The directors may also, without placing the same to reserve, carry forward any sum which they may think prudent not to distribute.


any time and from time to time resolve that it is desirable to capitalise all or any part of the amount for the time being standing to the credit of any of the Company's
 reserves or of any share premium account or capital redemption reserve fund or to the credit of the income statement or otherwise available for distribution and not
 required for the payment of the fixed dividends on any preference shares of the Company, and accordingly that such amount be set free for distribution among the
 members or any class of members who would be entitled thereto if distributed by way of dividend and in the same proportions on the basis that the same be not paid
 in cash but either be applied in paying up unissued shares of the Company to be issued to such members as fully paid capitalisation shares having a par value or be
 transferred to the Company's stated capital and be applied in distributing to such members shares of no par value.
 DIRECTORS' POWERS ON CAPITALISATION OR DISTRIBUTION OF
 PROFITS
  may settle the same as they think it expedient.  They may make all appropriations and applications of the sum resolved to be capitalised thereby, and all allotments and
 issues of securities, if any, and generally shall do all acts and things required to give effect thereto, with full power to the directors to provide that fractions shall be
 ignored altogether, or by payment in cash or otherwise, as they think fit, in the case of securities becoming distributable in fractions.  The directors may also appoint any
 person to enter, on behalf of all members entitled to the benefit of such appropriations and applications or to participate in such distribution, into any
 contract requisite or convenient for giving effect thereto, and such appointment and contract made under such appointment shall be effective and binding on all such


SHARE PREMIUM ACCOUNT AND CAPITAL REDEMPTION RESERVE
 FUND
  imposed by the Statutes, by ordinary resolution authorise the directors to distribute all or any part of the amount for the time being standing to the credit of or deal with,
 in any way recommended by the directors or authorised by the Statutes, any share premium account or capital redemption reserve fund of the Company, save that the
 provisions of this article shall not apply in respect of any action properly taken by the Company in terms of Sections 76(3) or 98(4) of the Act.
 FOREIGN CURRENCY PAYMENTS
   address outside South Africa and any payment to a member whose registered address is outside South Africa may be paid in such currency or currencies other than the
 currency of South Africa as may be stipulated by the directors.  The directors may also stipulate the date upon which the currency of South Africa will be converted
  ACCOUNTS
    Section 284 of the Act) at such other place as the directors think fit, and shall at all times be open to inspection by the directors.  Except as provided by the Statutes or
 by the authority of the directors no member (other than a director) shall have any right to inspect any accounting record book, account or document of the Company.


made out in accordance with and consisting of the documents specified in Section 286 of the Act which is to be laid before the Company in annual general meeting,
        (and at the same time there shall be forwarded to the secretary or other proper officer of any stock exchange on which any shares of the Company are listed or
 quoted such number of copies of such documents as for the time being may be required under its regulations or practice) at least twenty-one clear days before such
 annual general meeting.  Notwithstanding the foregoing, this article shall not require a copy of the said documents to be sent:
    who is not entitled to receive notice of general meetings of the Company;
        INDEPENDENT EXTERNAL AUDITORS


independent external auditor, shall as regards all persons dealing in good faith with the Company, be valid notwithstanding that there was some defect in his
     NOTICES
           may be, to such address or telefacsimile number, as the case may be;  or
  sending an electronic mail advising that a notice is posted on a website and containing the web address of such website;  provided
 that such notice is available on such website for at least the period commencing on the day after the date on which such notice was
 sent and expiring on the later of the twenty-first day succeeding that day or the day of the meeting, if any, to which the notice


provided that any member who has notified the Company of his electronic mail address or telefacsimile number may by written notice to
 the Company withdraw such notification of his electronic mail address or telefacsimile number;  or
    any member or director by delivering it or sending it through the post, properly addressed, to:
      if the Company is prevented through circumstances beyond its control from so giving notice, then notice may be given by advertisement.
 Should it be necessary to give notice by advertisement, such notice shall, subject to the provisions of the Statutes, be advertised in the Gazette and
 in such newspapers as the directors may from time to time determine;  provided that where a branch register or transfer office has been
 established, such advertisement shall also be inserted in at least one leading newspaper circulating in the town or district in which such
   appropriate official or department of any recognised stock exchange on which the shares of the Company are listed or quoted, in accordance with the
 requirements of that stock exchange.  Any such notice to members shall also be advertised in accordance with the requirements of any such stock exchange;


if it, or a message referred to in article 136.1.1.2, is sent by telefacsimile, on the day on which it was successfully transmitted,
   otherwise in writing direct and the directors agree, be given to that one of the joint holders whose name stands first in the register, and notice so given shall be sufficient
  security which, previously to his name and address being entered on the register, shall have been given to the person from whom he derived his title to such security.
  provisions of these articles shall notwithstanding that such member be then under legal incapacity, and whether or not the Company has notice of his legal incapacity, 
  be deemed to have been duly served in respect of any security registered in the name of such member as a sole or joint holder unless his name shall at the time of the 
  service of the notice or document have been removed from the register as the holder of the security;  and such service shall for all purposes of these articles be deemed a 
  sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the security.


,
 extending over any period, is required to be given, the days of service shall not, unless it is otherwise provided, be counted in such number of days or other period.
  to any member or director, as the case may be, shall not invalidate any resolution passed at such meeting.
 WINDING UP
   any part of the assets of the Company and may for such purpose set such value as he deems fair upon any asset and may determine how the division shall be carried out as
 between the members or different classes of members.  The liquidator may with the like sanction, vest the whole or any part of such assets in trustees to be held in trust
 for the benefit of the members or any of them on such terms as the liquidator, with the like sanction, shall think fit.  Any such resolution may provide for and sanction a
 distribution of any specific assets amongst different classes of members otherwise than in accordance with their existing rights, but each member shall in that event
 have a right of dissent and other ancillary rights in the same manner as if such resolution were a special resolution passed pursuant to Section 390 of the Act.
 INDEMNITY
    indemnified out of the funds of the Company against all liabilities incurred by him as such director, manager, secretary or officer in defending any
 proceedings, whether civil or criminal, in which judgment is given in his favour, or in which he is acquitted, or in connection with any application under


it shall be the duty of the directors out of the funds of the Company, to pay all costs, losses and expenses which any such person may incur or become liable
 to by reason of any contract entered into or act or deed done by him as such director, secretary, manager or officer of the Company or in any way in the
  
  any other director, manager, secretary or officer or servant, or for joining in any receipt or other act for conformity, or for loss or expense happening to the
 Company through the insufficiency or deficiency of title to any property acquired by order of the directors for and on behalf of the Company, or for the insufficiency or
 deficiency of any security in or upon which any of the moneys of the Company shall be invested, or for any loss or damage arising from the insolvency or delict of any
 person with whom any moneys, securities or effects shall be deposited, or for any loss or damage occasioned by any error of judgment or oversight on his part, or for
 any other loss, damage or misfortune whatsoever which shall happen in the execution of his duties of office or in relation thereto, unless the same happen
  WAIVER BY STOCK EXCHANGE
 
 action or matter is expressed in these articles to be subject to compliance with the listing requirements or rules of any stock exchange on which the Company’s
 securities are listed or quoted, a waiver of such requirements or rules by the stock exchange concerned shall constitute compliance with those requirements or rules for


RIGHTS ATTACHING TO PREFERENCE SHARES
       Limited (formerly Vaal Reefs Exploration and Mining Company Limited) by virtue of Deeds of Cession of Mining Leases Nos 23/92 and 26/92 and as
 reflected in the diagrams attaching to the Mining Leases being RMT Nos 52/91 and 53/91.
        pari passu
 pari passu
      after payment in full of the annual dividend on the B preference shares, the right to an annual dividend equivalent to the balance of
 the after tax profits arising from income derived from mining the Moab Lease Area as determined by the directors in each financial
 year, but shall confer no right to any dividend payment from any other profits of the Company.


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.  Any amount
 transferred to the share premium account of the Company pursuant to Section 76(2) of the Act consequent upon the
 issue of such shares may be used to provide for any premium on the redemption of the shares.
   such shares shall be fully redeemed and shall constitute part of the authorised and unissued share capital of the Company.
  The A preference shares shall have no right to redemption from any proceeds otherwise arising.
   receive notice of, and to attend, any meeting of the Company and to vote thereat and on a poll shall entitle the holder to one vote for each A
 preference share held provided that at every general meeting of the Company at which the holders of the ordinary shares, the A preference
 shares and the B preference shares are present and entitled to vote, on a poll the holder of the A preference shares shall be entitled to 50 votes
 for each A preference share held, the holders of the ordinary shares shall be entitled to 50 votes for each ordinary share held and the holder of the
 B preference shares shall be entitled to one vote for each B preference share held.


provisions of the articles relating to the voting at general meetings of ordinary shareholders and the appointment of proxies to act thereat,
 shall apply, mutatis mutandis, except that at any such separate meeting the sole holder of the A preference shares shall constitute a quorum.
   Company, in priority to any payment in respect of the ordinary shares in the capital of the Company then issued, but after any payment in respect
 of the B preference shares in the capital of the Company then issued, to receive only so much of the net proceeds from the disposal of the assets
            allotted to Eastvaal Gold Holdings Limited at a price of R250,00 per share and are not transferable.
  pari passu
 as provided for in this article shall rank pari passu with the A preference shares.
  The B preference shares shall confer the following rights on the holder thereof:


cent of the issue price of the B preference shares or an amount equivalent to the balance of the after tax profits arising from
 income derived from mining the Moab Lease Area as determined by the directors in each financial year.  The annual dividend shall
 be a first charge on any profit available for distribution from the Moab Lease Area but shall not be payable from any other profits
        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.  Any such premium shall be payable from so much of the share
         the Moab Lease Area following permanent cessation of mining operations in the Moab Lease Area, but shall have no right to
    receive notice of, and to attend, any meeting of the Company provided that:


been declared and during which such B preference dividend or any part of such B preference dividend remains in arrear
     interests of the holders of the B preference shares, including a resolution for the winding-up of the Company or for the
    disposal of the whole or substantially the whole of the undertaking of the Company or the whole or the greater part
 of the assets of the Company, or the whole or the greater part of the assets relating to the operations in the Moab
     shares are present and entitled to vote, on a poll the holder of the A preference shares shall be entitled to 50 votes for each A
 preference share held, the holders of the ordinary shares shall be entitled to 50 votes for each ordinary share held and the holder of
 the B preference shares shall be entitled to one vote for each B preference share held.


provisions of the articles relating to the voting at general meetings of ordinary shareholders and the appointment of proxies to act thereat,
 shall apply, mutatis mutandis, except that at any such separate meeting the sole holder of the B preference shares shall constitute a quorum.
   Company, in priority to any payment in respect of the ordinary shares or the A preference shares in the capital of the Company then issued, 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 per B preference share of the capital paid-up thereon and any share premium paid on the issue of the B preference shares
            being directly affected or modified by the creation by the Company of any further shares of any class unless those new shares rank as regards
 participation in the assets or profits of the Company from the Moab Lease Area in some or all respects in priority to or pari passu with the A


preference shares or the prior sanction of resolutions at separate general meetings of the holders of the A and B preference shares passed in the
 mutatis mutandis
      participation in the assets or profits of the Company arising from operations in the Moab Lease Area in some or all respects in
 priority to or pari passu with the A and B preference shares shall be created.
  The A preference shares and the B preference shares shall be redeemed, but only after cessation of mining operations in the Moab Lease Area
  CONDITIONS ATTACHING TO THE E ORDINARY SHARES
     dividend ranking pari passu with all of the dividends that may from time to time be declared to the holders of the ordinary shares, equal to one-half of the
    Holder from time to time of a written notice (“the Transaction Notice”) delivered at such times and in such manner as the Company shall agree from
 time to time with each relevant E Holder, to reduce the issued share capital of the Company by cancelling the E ordinary shares, or any portion of the E
 ordinary shares, and by crediting an amount equal to the par value of the E ordinary shares so cancelled to the non-distributable reserve account in the


books of the Company.  In the event that the relevant E Holder shall fail, for whatsoever reason, to deliver a Transaction Notice at the time or times and in
 the manner as agreed from time to time between the Company and such relevant E Holder, the Company shall be entitled to cancel the E ordinary
 shares, or such portion of them as shall have been agreed between the Company and such relevant E Holder, at such times and in such manner as
     entitled to cancel the E ordinary shares, or any portion of them, as agreed from time to time between the Company and each relevant E Holder (it being
 recorded that, for the purposes of this Article 147, the E Holder shall be deemed to have given a Transaction Notice to the Company at such time or
     on the Business Day on which the Transaction Notice shall have been given, or shall be deemed to have been given (“the Transaction Notice
        Cancellation Shares shall be credited to the Non-Distributable Reserve Account in the books of the Company;
   Transaction Notice shall have been given, or such number of E ordinary shares as the Company shall at that time be entitled in terms of its


agreement with the relevant E Holder to deal with by way of deemed Transaction Notice, (collectively “the Transaction Notice Shares”) and
 which shall not have been cancelled set out in this Article 147 (“the Conversion Shares”), into ordinary shares, by not later than 5 Business
 Days after the Transaction Notice Closing Date (“the Transaction Notice Closing Date”);
   shares, shall be listed on the JSE by not later than 5 Business Days after the Transaction Notice Closing Date;  and
     Holder held with its Central Securities Depository Participant with the ordinary shares into which the Conversion Shares shall have been
       A = __________
    is the number of Cancellation Shares which the Company shall be entitled to cancel, which number shall not be greater than the number of
    share on the date on which the E Holder shall have subscribed for and the Company shall have allotted and issued the E ordinary shares to the


E Holder (“Subscription Date”) multiplied by the number of Transaction Notice Shares (“the Opening Balance”);
  is the amount (“the Reduction”) equal to 50% of the aggregate dividends per ordinary share paid by the Company during the period commencing
 on the Subscription Date and terminating on the Transaction Notice Date (“the Relevant Period”), multiplied by the number of Transaction
    Factor”) of such percentage as the Company shall have agreed with the E Holder from time to time, nominal annual compounded monthly in
 arrears, to the Opening Balance in respect of the Relevant Period, provided that there shall be taken into account, in the application of the
 Factor, the Reduction and further provided that the Reduction shall be deemed to have reduced the total amount to which the Factor shall be
 applied from time to time, on the same dates and in the same proportions as the Company shall from time to time have declared and
     mutatis mutandis
  held by the E Holder and to convert the balance of such E ordinary shares into ordinary shares, mutatis mutandis on the basis described in those Articles) in
     Section 311 or Section 440K of the Companies Act (collectively “the Take-out Transaction”);  and


Transaction and the Company shall have delivered, at its election, a written notice (“the Take-out Conversion Notice”) to the E Holder,
 advising the E Holder that the Company intends to and shall apply the provisions of Articles 147.2, 147.3 and 147.44 to all, but not a portion
   to be the date on which such party shall so acquire the entire issued ordinary share capital of the Company or, in the event that the Company shall have
 delivered a Take-out Conversion Notice to the E Holder, the date specified in such notice.
  pari passu
 all respects with the ordinary shares, it being recorded, for the avoidance of doubt, that in the event that the Company shall take any action of whatsoever
 nature in relation to and/or in connection with the amendment of any of the rights attaching to the ordinary shares and/or the par value of the ordinary
 shares (including, without limitation, by the subdivision and/or consolidation of the E ordinary shares, or any of them) the Company shall take the same
 mutatis mutandis


RULES OF THE
 ANGLOGOLD ASHANTI LIMITED
 BONUS SHARE PLAN 2005
 Approved by shareholders of the Company at the Annual General Meeting held on 29 April 2005
 Amendments approved by shareholders at the annual general meeting held on 6 May 2008
 180 Strand
 London WC2R 1BL
 Tel: 020 7936 3000


CONTENTS


RULES OF THE ANGLOGOLD ASHANTI LIMITED
 BONUS SHARE PLAN 2005
 PURPOSE OF THE PLAN:
      1
 DEFINITIONS AND INTERPRETATION
    “Anglo American”
  “Annual Accounts”
    “Appropriate Period”
                 “Award”


“Board”
   “Bonus Period”
    “Bonus Share Award”
           “Cash Bonus”
      “Committee”


“Compliance Officer”
    “Closing Price”
         “Company”
   “Companies Act”
   “Control”
        “Date of Grant”
  “Dealing Day”


“Eligible Employee”
       “Financial Year”
  “Grant Period”


“Grantor”
    “Group Member”
    “Individual limits”
                     “ITASA”
  “JSE”
   “Market Value”


“Participant”
    “Participating Company”
       “Performance Targets”
    “Plan”
    “Remuneration Committee”
   “Retirement”
   “Rules”


“Share”
  “Subsidiary”
   “Tax Liability”
            “Trustees”
    “Vesting Date”


“Vesting Period”
                 2
 GRANT OF AWARDS





3
 NUMBER OF SHARES IN RESPECT OF WHICH AWARDS MAY BE GRANTED
                             4
 RIGHTS OF VESTING AND EXERCISE OF AWARDS





5
 RIGHTS OF VESTING AND EXERCISE ON DEATH
                 6
 GENERAL PROVISIONS ON TERMINATION OF EMPLOYMENT
          7
 RESTRICTION ON GRANT AND EXERCISE


8
 LAPSE OF AWARDS


9
 CHANGE OF CONTROL, REORGANISATION, WINDING UP AND TAKEOVER





10
 MANNER OF VESTING AND EXERCISE


11
 DIVIDENDS


12
 TRANSFER OF SHARES
                       13
 ADJUSTMENTS


14
 ADMINISTRATION


15
 ALTERATIONS


16
 LEGAL ENTITLEMENT


17
 GENERAL





1
 EXHIBIT 19.4.1.5
 MDS/1275  –  M  Cutifani
 
 29 October 2007
 PERSONAL
 Mr M Cutifani 21 Methwold Way SAXONWOLD  2196
  APPOINTMENT AS CHIEF EXECUTIVE OFFICER OF ANGLOGOLD ASHANTI
 I am pleased to confirm your appointment to the position of CEO of AngloGold Ashanti Limited, based at the Corporate Office in Johannesburg. Your employment will be with effect from 17 September 2007 and will be for an initial fixed period of two years, after which it will be renewable annually. Your employment is subject to you holding valid documentation enabling your employment in South Africa.
 1.
 REMUNERATION PACKAGE AND EMPLOYMENT CONDITIONS
 1.1
 Salary
 Your basic salary will be R5 240 076.00 (Five Million, Two Hundred and Forty Thousand and Seventy Six rand) per annum and will be paid on a monthly basis in twelve equal payments of R436 673,00 (Four Hundred and Thirty Six Thousand, Six Hundred and Seventy Three rand).  All payments are subject to normal South African tax deductions.
  AngloGold Ashanti Limited \ Reg. No.1944/017354/06  76 Jeppe Street \ Newtown \ 2001 \ PO Box 62117 \ Marshalltown \ 2107 \ South Africa Tel +27 (0)11 637 6000 \ Fax +27 (0)11 637 6624 \ Website: www.AngloGoldAshanti.com


2
 1.2  Incentive  Schemes
   
  As CEO, you may earn up to 60% of your base salary as an annual cash bonus.  The annual bonus is determined by the achievement of a number of Company level performance targets (70% weighting) and personal targets (30% weighting).
    Your annual cash bonus will be matched by an award of shares (Bonus Shares) to the same value.  Each grant of bonus shares has a vesting period of three years.
  In your case, we guarantee a minimum payment of 60% of maximum annual bonus and BSP shares for the balance of 2007 and all of 2008.
    LTIP shares are awarded annually to executive and senior managers.  In the case of the CEO, the value of the annual grant is set at 120% of base salary.
  Each award is linked to a set of stretched company performance measures, assessed at the end of the following three years.
 1.3  Car  Allowance
  The Company will provide you with two rental vehicles for up to three months after your arrival in Johannesburg.  Once you have purchased your own vehicles you may nominate a car allowance for your vehicle from your salary of up to 30%, which is intended to compensate you for the use of your private vehicle for business purposes.
  1.4  Annual  Leave
  Your annual leave entitlement will be 30 working days per year.  You are required to take at least 15 working days leave each leave cycle.  The remaining 15 working days may be encashed or accumulated up to a maximum of 30 days.
 2.
 RETIREMENT BENEFITS, HEALTH CARE AND INSURANCES
 2.1  Retirement  Funding
  The Company will contribute 18.25% of your basic salary to a retirement fund of your choice.  This contribution is not subject to tax provided it is made to an approved retirement fund.


3
 2.2
 Medical Aid
 You will be required to join the Discovery Health medical scheme which provides comprehensive cover for you and your family. Monthly contributions are of the order of R4000, paid in equal part by you and the Company.
 2.3
 Accident Insurance Cover
 This cover currently provides for a death benefit of 36 months annual earnings and a permanent total disablement benefit of 36 months annual earnings dependent on the degree of disablement, as well as medical cover up to R100 000,00.  The Company pays the premium.
 This insurance policy also covers you for any medical expenses that you incur as a result of any accidental injury that you sustain, whether or not you are on duty and even if there is no permanent disability.
 2.4
 Unemployment Insurance Fund
 You will be required to contribute towards the UIF.  Your contribution will be 1% of your taxable earnings, up to a maximum contribution of R1399.00 per annum.
 3. GENERAL
 3.1  Other  Employment
 Employment with AngloGold Ashanti precludes you from doing work for your own account or for any other employer other than a member of the AngloGold Ashanti Group unless you have received the written permission of AngloGold Ashanti.
 3.2
 Removal and Relocation
 AngloGold Ashanti Limited will meet the cost of business class travel between Toronto and Johannesburg for you, your wife and your children.
 AngloGold Ashanti will bear the reasonable cost of transporting your household and personal effects from Sudbury, Canada to Johannesburg, South Africa.  The Company will pay you a relocation allowance of one month of your salary (i.e. R436 673,00) upon your arrival. This allowance is tax free but the Receiver of Revenue may ask for proof that it was spent on expenses incurred as a result of your relocation to Johannesburg.


4
 
 3.3  Temporary  Accommodation
 AngloGold Ashanti will provide furnished accommodation for yourself and your family for up to six months after your arrival in order to give you time to find suitable accommodation.  Should you move out of the Company provided accommodation before six months, the allowance referred to under 3.4 (i) will be paid to you for the remaining balance of 24 months (i.e. the Company will provide you with accommodation or an accommodation allowance for the first 2 years of your stay in South Africa.)
 3.4
 Allowances
  Once you have found suitable accommodation the Company will pay you a housing allowance of R83 333.00 per month which is fully taxable at a rate of 40%.  It will be paid to you for up to 24 months after which it will fall away. The provision of the allowance does not preclude you from purchasing property in Johannesburg.
  You, your wife and your immediate dependents will be allowed one business class flight per annum from Johannesburg to your nominated home base.
  The Company will assist with schooling costs by providing an allowance of R65 000 per annum per child living with you.  The allowance is fully taxable.
 3.5
 Termination of Employment
 Your contract of employment is initially fixed for a period of 2 years, after which it will be renewable annually, for further periods of 12 months at a time, at the election of the Board.
  It is recorded that there is a mutual expectation that your contract will be renewed for each 12 month period following the expiry of the fixed term, subject to the Company's right to refuse to renew the contract for reasons recognised by the Labour Relations Act, being misconduct, incapacity and reasons related to the Company's operational requirements. AngloGold Ashanti has policies and procedures to regulate termination of employment in each case, and to ensure that employment is terminated for a fair reason and after a fair procedure has been followed.  Should the Company refuse to renew your contract in these circumstances, you will be paid the equivalent of 12 months' salary in lieu of notice.  Despite this provision, your services may be terminated summarily, at any stage during any fixed term of employment, for any reason justifiable by law.


5
  Should you wish to terminate your contract of employment, you may do so by giving the Company notice, by a date no later than the commencement of any renewed contract, of your intention not to seek further renewal of your contact after the expiry of the fixed term.
 3.6
 Change of Control
  In the event that AngloGold Ashanti becomes a subsidiary of another company, or all, or substantially all, of the businesses, assets and undertakings of AngloGold Ashanti become owned by any person, firm or company, and within a period of twelve months your employment is terminated as a consequence, you will be paid an amount equal to 24 months earnings, including benefits and bonuses.
 If you would like clarity on any of these terms and conditions, please contact the undersigned or Nigel Unwin.
 If is the above terms are acceptable to you, please would you sign the attached copy and return it to me.
    RP EDEYCHAIRMAN
 ACCEPTANCE
 
    DATE
 M CUTIFANI


1
 EXHIBIT 19.4.1.6
 AngloGold Ashanti International
 Services Limited
 Correspondence Address:
        Mark Cutifani 21 Methwold Way Saxonwold 2196
 29 October 2007 Your Ref:
 
 Our Ref:
 071008 Cutifani
 Dear Mark
 RETAINER AGREEMENT
 AngloGold Ashanti International Services Limited (“the Company”) is a subsidiary of AngloGold Ashanti Holdings Plc (“AGAH”), which holds and manages the non-South African assets and investments of AngloGold Ashanti Limited. The Company has contracted with AGAH to provide various specialist services to AGAH, its subsidiaries and affiliates (“the AngloGold Ashanti Offshore Group”) and any joint ventures involving the AngloGold Ashanti Offshore Group.
 You are hereby retained to provide, on behalf of the Company, management services to the AngloGold Ashanti Offshore Group outside of South Africa, on the following terms and conditions:
 1.
 The term of this retainer ("the Term") will be from 17 September 2007 until such time as it is terminated in terms of paragraph 7 below.
 2.
 During the Term the Company may at any time require of you to make your services available to it or to assist it with matters relating to its business or any business of the AngloGold Ashanti Offshore Group outside of South Africa.
 3.
 In consideration of your services in terms of this agreement, you will be paid a gross annual retainer ("the Retainer") in the amount of the USD equivalent of ZAR 2.1 million, quarterly in arrears in equal instalments at the prevailing USD / ZAR exchange rate, regardless of the time spent discharging your duties hereunder. The Company will make such deductions from the amount payable as may be required by law.
 4.
 In addition to the Retainer, the Company will contribute an amount equal to 18.25% thereof to any pension fund, benefit trust or other retirement arrangement of your choice.


2
  The Company will also procure that your participation in the Annual Bonus Scheme, the Bonus Share Plan and the Long Term Incentive Plan (and any other incentive scheme that might apply to your employment by AngloGold Ashanti Limited) will be calculated on the basis that your base salary includes the Retainer.
  The Company will reimburse you for your reasonable travelling, telephone, hotel, entertainment and other business expenses incurred in the course of your duties provided that you comply with the Company's regulations from time to time in this respect and provide the Company with receipts or other proof of payment as the Company may reasonably require within 3 months of expenditure.
  The provisions of your employment contract with AngloGold Ashanti Limited as regards termination will apply to this letter mutatis mutandis.
  In the event that AngloGold Ashanti becomes a subsidiary of another company, or all, or substantially all, of the businesses, assets and undertakings of AngloGold Ashanti become owned by any person, firm or company, and within a period of twelve months your employment with AngloGold Ashanti is terminated as a consequence, you will be paid an amount equal to 24 months of the Retainer.
  Any payment due in terms of this letter for a period less than a full quarter will be adjusted on a pro-rata basis.
  During the Term and after the termination of this agreement, you will not directly or indirectly disclose or make use of any confidential information of the Company or the AngloGold Ashanti Offshore Group for any purpose other than a legitimate purpose of the Company or the AngloGold Ashanti Offshore Group save that nothing in this clause shall be construed as preventing you from making any disclosure required by law.
  During the Term you will not, save with the approval of the board of the Company, be concerned with or engaged in any business than that of the Company, the AngloGold Ashanti Offshore Group or AngloGold Ashanti Limited. This expression "concerned with or engaged in" shall, without limitation, mean any employee, advisor, partner, consultant, contractor, director, shareholder or otherwise, engaged in a business competing with, or similar to that of the Company, the AngloGold Ashanti Offshore Group or AngloGold Ashanti Limited.
   If you are in agreement with the terms of this letter, please sign your acceptance on the attached copy and return same to us at your earliest convenience.
   DIRECTOR
 ACCEPTANCE DATE


ANGLOGOLD ASHANTI LIMITED
 Exhibit 19.
 8
 
 
 
 
 
 INVESTMENT IN PRINCIPAL SUBSIDIARIES AND JOINT VENTURE INTERESTS
 AT DECEMBER 31, 2007
       Country
 of
 Incorpo-
 ration
 Nature
 of
 business
 Shares Held
 Shares Held  Percentage held
 2007
 2006
 2007
 %
 2006
 
 
 
 
 
 %            
  %
 
 Direct investments
 
 
 
 
 
 Advanced Mining Software Limited
 18
 C
 40,000                 
  40,000
 100
 100
 AGRe Insurance Company Limited
 18
 F
 2                          
  2
 100
 100
 AngloGold American Investments Limited
 5
 B
 1,001                   
  1,001
 100
 100
 100
 AngloGold Ashanti USA Incorporated
 21
 B
 * 500
 100          
  100         100
 AngloGold Ashanti Health (Pty) Limited
 18
 E
 8                          
  8
 100
 100
 AngloGold Ashanti Holdings plc
 5
 B
 2,077,313,678     
  2,077,313,678
 100        
  100
 AngloGold Offshore Investments Limited
 10
 B
 5,000,000            
  5,000,000
 100
 100
 Eastvaal Gold Holdings Limited
 18
 B
 454,464,000        
  454,464,000          100         
  100
 Masakhisane Investment Limited
 18
 B
 100                      
  100
 100
 100
 Nuclear Fuels Corporation of SA (Pty) Limited
 18
 D
 1,450,000            
  1,450,000
 100
 100
 Rand Refinery Limited  **
 18
 G
 208,471               
  208,471
 53.03
 53.03
 Xinjiang Yunhai Mining Company Limited
 7
 H
 
 
 60            
  –
 
 
 
 
 
 
 Indirect investments
 
 
 
 
 AG Mali Holdings 1 Limited
 5
 B
 10,002                 
  10,002
 100
 100
 AG Mali Holdings 2 Limited
 5
 B
 10,002                 
  10,002
 100
 100
 AngloGold Argentina Limited
 5
 B
 1                          
  1
 100
 100
 AngloGold Argentina S.A.
 1
 B
 1,331,093            
  1,331,093
 100
 100
 AngloGold Ashanti Australia Limited
 2
 B
 257,462,077        
  257,462,077           100        
  100
 AngloGold Ashanti (Colorado) Corp.
 21
 B
 1,250                   
  1,250
 100
 100
 AngloGold Ashanti Exploration (Ghana) Limited
 9
 H
 2                          
  2
 100
 100
 AngloGold Ashanti (Ghana) Limited
 9
 A
 132,419,585        
  132,419,585           100        
  100
 AngloGold Ashanti (Iduapriem) Limited
 9
 A
 66,270                 
  53,010
 100
 80
 AngloGold Ashanti (Nevada) Corp. 21
 B
 100                      
  100
 100
 100
 AngloGold Ashanti North America Inc.
 21
 B
 7,902                   
  7,902
 100
 100
 AngloGold Australia Investment Holdings Limited
 5
 B
 1,000                   
  1,000
 100
 100
 AngloGold Australia (Sunrise Dam) Pty Limited
 2
 A
 2                          
  2
 100
 100
 AngloGold Ashanti Brasil Mineração Ltda
 4
 A/B
 8,827,437,875  8,827,437,875
 100  100
 AngloGold Brazil Limited
 4
 B
 1  1
 100
 100
 AngloGold CV 1 Limited  5
 B
 11,002  11,002
 100
 100
 AngloGold CV 2 Limited
 5
 B
 1,002  1,002
 100
 100
 AngloGold CV 3 Limited  5
 B
 1,002  1,002
 100
 100
 AngloGold Finance Australia Holdings Limited
 16
 B
 2  2
 100
 100
 AngloGold Finance Australia Limited
 16
 B
 2  2
 100
 100
 AngloGold Geita Holdings Limited
 5
 B
 3,513  3,513
 100
 100
 AngloGold Investments Australasia Limited
 5
 B
 1,000  1,000
 100
 100
 AngloGold Investments Australia Pty Ltd
 2
 B
 1  1
 100
 100
 AngloGold Investments (Sadex) Limited
 5
 B
 1,000'A'  1,000'A'
 100
 100
 AngloGold Morila Holdings Limited
 5
 B
 1,000  1,000
 100
 100
 AngloGold Namibia (Pty) Ltd
 17
 A
 10,000  10,000
 100
 100
 AngloGold Offshore Investments Limited  5
 B
 422,510,000*  422,510,000*  100  100
 AngloGold South America Limited
 5
 B
 488,000  488,000
 100
 100


2
 Country
 of
 Incorpo-
 ration
 Nature
 of
 business
 Shares Held
 Shares Held  Percentage held
 2007
 2006
 2007
 2006
 
 
 
 
 
 %
 
 Indirect investments (continued)
 
 
 
 
 AngloGold South American Holdings Limited
 5
 B
 1  1
 100
 100
 Ashanti Goldfields Belgium S.A.
 3
 B
 2,500  2,500
 100
 100
 Ashanti Goldfields (Cayman) Limited
 6
 B
 2  2
 100
 100
 Ashanti Goldfields Holding (Luxembourg) S.A.
 14
 B
 3,000,000  3,000,000
 100
 100
 Ashanti Goldfields Kilo Scarl
 8
 H
 15,520  15,520
 86.22
 86.22
 Ashanti Goldfields Services Limited
 20
 B
 588,409  588,409
 100
 100
 Ashanti Goldfields Teberebie Limited
 6
 B
 2  2
 100
 100
 Ashanti Treasury Services Limited
 12
 I
 250,000  250,000
 100
 100
 Australian Mining & Finance (Pty) Limited
 2
 B
 48  48
 100
 100
 Cerro Vanguardia S.A.
 1
 A
 13,875,000  13,875,000
 92.50
 92.50
 Chevaning Mining Company Limited
 20
 B
 1,000  1,000
 100
 100
 Cluff Mineral Exploration Limited
 20
 B
 500,000  500,000
 100
 100
 Cluff Oil Limited
 20
 B
 19,646,377  19,646,377  100  100
 Cluff Resources Limited
 20
 B
 93,638,562  93,638,562  100  100
 Cripple Creek & Victor Gold Mining Company
 21
 A
 –  –
 67
 67
 Erongo Holdings Limited
 5
 B
 13,334"A"  13,334"A"  100
 100
 Geita Gold Mining Limited
 19
 A
 2  2
 100
 100
 Golden Shamrock Mines Limited
 14
 B
 2,000,000  2,000,000
 100
 100
 GSM Gold S.A.
 2
 B
 325,000  325,000
 100
 100
 Mineração Serra Grande S.A.
 4
 A
 499,999,997  499,999,997  50  50
 Morila Limited  13
 B
 1  1
 50
 50
 Pioneer Goldfields Limited
 5
 B
 75,000,000  75,000,000  100  100
 Sadiola Exploration Limited
 5
 B
 5,000 'A'
 5,000 'A'
 50
 50
 Societé Ashanti Goldfields de Guinée S.A.
 11
 A
 3,486,134  3,486,134  85  85
 Teberebie Goldfields Limited
 9
 A
 2,066,667  1,860,000
 100  90
 
 
 
 
 Joint ventures
 
 
 
 
 Nufcor International Limited **
 20
 D
 3,000,000  3,000,000  50  50
 Société des Mines de Morila S.A.
 15
 A
 400  400
 40
 40
 Société d'Exploitation des Mines d'Or de Sadiola S.A.
 15
 A
 38,000  38,000
 
 38
 38
 Société d'Exploitation des Mines d'Or de Yatela S.A.  15
 A
 400  400
 40
 40
 BGM Management Company Pty Ltd
 2
 A
 3'B'  3'B'
 33.33
 33.33
 
 
 
 
 
 
 *
 Indicates preference shares
 **  The statutory year-ends of Rand Refinery Limited and Nufcor International Limited are 30 September and 30 June respectively. AngloGold Ashanti does not
 consider these companies significantly material subsidiaries requiring an alignment of year-end.
 Countries of incorporation1.
  Argentina 2. Australia 3. Belgium 4. Brazil 5. British
 
 7.
  China 8.
 9. Ghana 10. Guernsey 11.
 
 13. Jersey 14. Luxembourgh 15. Mali 16.
  Malta
 Countries of incorporation (continued)17. Namibia 18.
 19. Tanzania 20. United
 
 Nature of businessA Mining B Investment
 
 
 
 
 
 H Exploration I Treasury


EXHIBIT 19.12.1
 CERTIFICATION
  
 
 fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods  presented in this report;
 
 procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
 
 designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 designed under our supervision, 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;
 
 conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
 financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):
 
 reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
 
   /s/ Mark Cutifani     Mark Cutifani      Chief Executive Officer


EXHIBIT 19.12.2
 CERTIFICATION
  
 
 fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
 
 procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
 
 designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 designed under our supervision, 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;
 
 conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
 
 financial reporting, to the company’s auditors and the audit committee of company’s board of directors (or persons performing the equivalent functions):
 
 reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
 
   /s/ Srinivasan Venkatakrishnan      Srinivasan Venkatakrishnan       Chief Financial Officer


EXHIBIT 19.13
 CERTIFICATION PURSUANT TO
 18 U.S.C. SECTION 1350,
 AS ADOPTED PURSUANT TO
 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
  ending December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certify that to the best of our knowledge:
    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


EXHIBIT 19.15.1a
 Consent of Independent Registered Public Accounting Firm
          of our report dated May 16, 2008, with respect to the consolidated financial statements of AngloGold Ashanti Limited and the effectiveness of internal control over financial reporting of AngloGold Ashanti Limited included in this Annual Report (Form 20-F) for the year ended December 31, 2007.
  Ernst & Young Inc. Registered Auditor
 Johannesburg Republic of South Africa May 16, 2008


EXHIBIT 19.15.1b
 Consent of Independent Registered Public Accounting Firm
 We consent to the incorporation by reference in the Registration Statement on Form F-3 (File No. 333-132662), the Registration Statement on Form F-4 (File No. 333-149068) and the Registration Statements on Form S-8 (File No. 333-10990 and 333-113789) of AngloGold Ashanti Limited of our report date June 15, 2007, with respect to the balance sheet of Société des Mines de Morila S.A. as of December 31, 2006, and the related statement of income, cash flows, and changes in shareholders’ equity for the year then ended, as included in the December 31, 2007 Annual Report on Form 20-F of AngloGold Ashanti Limited.
  Ernst & Young Inc. Registered Auditor
 Johannesburg Republic of South Africa May 16, 2008


EXHIBIT 19.15.2a
 Consent of Independent Registered Public Accounting Firm
 We consent to the incorporation by reference in the Registration Statement on Form F-4 (File No. 333-149068), the Registration Statement on Form F-3 (File No. 333-132662) and the Registration Statements on Form S-8 (File No. 333-10990 and 333-113789) of AngloGold Ashanti Limited of our report dated June 25, 2007, with respect to the balance sheets of Société d’Exploitation des Mines d’Or de Yatela S.A. as of December 31 2006, and the related statements of income, changes in stockholders’ equity and cash flows for the year then ended, which report appears in the December 31, 2007 annual report on Form 20-F of AngloGold Ashanti Limited.
   Johannesburg South Africa April 18, 2008


EXHIBIT 19.15.2b
 Consent of Independent Registered Public Accounting Firm
 We consent to the incorporation by reference in the Registration Statements on Form F-4 (File No. 333-149068), the Registration Statement on Form F-3 (File No. 333-132662) and the Registration Statements on Form S-8 (File No. 333-10990 and 333-113789) of AngloGold Ashanti Limited of our report dated June 25, 2007, with respect to the balance sheets of Société d’Exploitation des Mines d’Or de Sadiola S.A. as of December 31 2006 and 2005, and the related statements of income, changes in stockholders’ equity and cash flows for each of the year in the two-year period ended December 31, 2006, which report appears in the December 31, 2007 annual report on Form 20-F of AngloGold Ashanti Limited.
   Bloemfontein South Africa April 18, 2008


EXHIBIT 19.15.3
 Consent of Independent Registered Public Accounting Firm
 We hereby consent to the incorporation by reference in the Registration Statement on Form F-4 (No. 333-149068), the Registration Statement on Form F-3 (No. 333-132662) and the Registration Statements on Form S-8 (No. 333-10990 and 333-113789) of AngloGold Ashanti Limited of our report dated March 9, 2006, with respect to the statements of income, cash flows, and changes in shareholders’ equity of Société des Mines de Morila S.A. for the year ended December 31, 2005, which appears in this Form 20-F.
  PricewaterhouseCoopers Inc. Registered Accountants and Auditors Chartered Accountants (S.A.)
 Johannesburg Republic of South Africa May 16, 2008