SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2003.
ASHANTI GOLDFIELDS COMPANY LIMITED
(Translation of Registrant's Name Into English)
Gold House, Patrice Lumumba Road
Roman Ridge, P.O. Box 2665
Accra, Ghana
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
----- -----
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
----- -----
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_____.
ASHANTI GOLDFIELDS COMPANY LIMITED
PRESS RELEASE
FOR IMMEDIATE RELEASE 30 JULY 2003
SECOND QUARTER REPORT 2003
ASHANTI SET TO IMPROVE UPON FIRST TWO QUARTERS' OPERATIONAL PERFORMANCE
OVERVIEW
Total gold production in the second quarter was 370,978 ounces, 8% lower than
the 403,734 ounces recorded in the second quarter of last year but in line with
the previously announced lower production profile for the first half of 2003.
Having successfully replaced the damaged mill pinion at Obuasi, substantially
completed the waste stripping in Nyankanga at Geita, and with the progress made
on the plant expansion at Iduapriem, Ashanti believes it has laid the foundation
to improve upon its first two quarters' operational performance.
Cash operating costs for the Group rose from US$192 to US$222 per ounce mainly
as a result of lower gold production, the impact of increased wages and fuel
prices, higher costs of other inputs and increased costs associated with the
Nyankanga pit cut back at Geita.
During the quarter, Ashanti completed the sale of its rights in the Mampon
concession to Golden Star Resources Limited for US$9.5 million consideration.
Ashanti's earnings (including an exceptional gain of US$7.0 million after tax of
US$0.8 million arising from the sale of the Mampon property) were US$14.8
million. Earnings, excluding the exceptional gain and related tax, were US$7.8
million, down US$11.0 million on the corresponding period last year, but up
US$1.0 million on the previous quarter. The reduction in earnings compared with
last year was mainly in line with the previously announced lower production
profile for the first half of 2003 and higher cash operating costs, offset
partially by higher spot prices. Earnings per share before exceptional items for
the quarter were US$0.06 (2002: US$0.17) and after exceptional items were
US$0.12 (2002: loss US$0.03).
During the quarter, Ashanti repaid US$10.0 million towards its Revolving Credit
Facility reducing the amounts drawn under the facility from US$149.0 million to
US$139.0 million.
On the safety front, the Group maintained its strong safety standard with the
Group's Lost Time Injury Frequency Rate (LTIFR) of 0.24 injuries per 200,000
hours worked as compared to 0.38 for the corresponding period in 2002.
Underground exploration at Obuasi continued to yield encouraging results both
above and below 50 level. On 41 level, the three intersections from the 252
cross cut near the BSVS shaft returned 11.5 g/t over 8.2 metres, 11.2 g/t over
27.3 metres and 7.5 g/t over 15.38 metres. On 58 level, two intersections from
155 and 206 cross cuts yielded 41.9 g/t over 3.1 metres and 26.9 g/t over 6.6
metres respectively. At Geita, exploration drilling continued to yield good
results at Nyankanga West and Geita Hill.
Ashanti has been advised by the Government of Ghana (the "Government") that it
has appointed a consortium led by Societe-Generale to act as advisers to the
Government as a shareholder, holder of the golden share in Ashanti and as a
regulator of the mining industry in Ghana, and to assist the Government in
arriving at a decision on the proposed merger of Ashanti and AngloGold.
- Quarter's earnings of US$14.8 million including exceptional gain of
US$7.0 million
- Total gold production of 370,978 ounces, 8% lower than last year
- Cash operating cost of US$222 per ounce, up US$30 per ounce on last
year, but marginally better than first quarter 2003
- Rights to Mampon concession sold for US$9.5 million consideration
- Amounts drawn under the Revolving Credit Facility reduced by US$10.0
million
- Continued encouraging results from exploration at Obuasi and Geita
- Group's safety record improved further during the quarter
3 MONTHS TO 3 months to 6 MONTHS TO 6 months to
HIGHLIGHTS 30 JUNE 03 30 June 02 30 JUNE 03 30 June 02
FINANCIAL (US$m)
Total turnover 128.3 141.2 257.2 278.1
Earnings before
exceptional items 7.8 18.8 14.6 36.3
Earnings after
exceptional items 14.8 (3.7) 21.6 12.8
Total operating profit
before exceptional items 13.6 27.2 25.3 52.5
Group EBITDA before
exceptional items 28.4 44.1 54.7 84.0
Total EBITDA before
exceptional items 33.0 53.2 64.3 101.6
Earnings per share before
exceptional items (US$) 0.06 0.17 0.11 0.32
Earnings per share after
exceptional items (US$) 0.12 (0.03) 0.17 0.11
GOLD PRODUCTION (ounces)
Total 370,978 403,734 751,907 813,118
Attributable 352,795 385,907 716,135 777,743
GOLD PRICE (US$ per ounce)
Realised by Ashanti 346 350 342 342
Spot price 349 315 350 304
PRODUCTION COSTS (US$ per ounce)
Cash operating costs 222 192 223 191
Royalties 11 9 11 9
Depreciation and amortisation 51 63 51 60
Total 284 264 285 260
OPERATIONS REVIEW
GHANA
OBUASI
Obuasi's gold production for the quarter was 125,447 ounces approximately 10,000
ounces short of its annualized target, but 5,396 ounces above the 120,051 ounces
achieved in the second quarter of 2002. The shortfall in production was due to
the lower than planned feed grade, 6.92 g/t compared to the target of 7.40 g/t,
and low milled tonnage at the Sulphide Treatment Plant (STP). At US$202 per
ounce, the cash operating cost for the quarter was marginally below the US$205
per ounce achieved in the second quarter last year.
Mining. Underground production of 600,000 tonnes was lower than the 609,000
tonnes reported in the second quarter of 2002 while the head grade at 7.26 g/t
is a decrease on the 7.45 g/t reported for the same period last year. The
decrease in mined grades reflects the higher proportion of the total mined
tonnage now arising from the lower grade ore blocks where bulk mining open
stoping methods are being applied.
Underground infrastructure. In June, the development crews working on 50 level
at the BSVS were relocated to the 51 level loading box excavation section of the
shaft to complete excavation of the chamber ahead of civils work and shaft
equipping which is scheduled to commence in the fourth quarter. Surface. A total
of 152,000 tonnes grading 2.11 g/t was mined from the Homase, Kunka and T3 open
pits during the quarter, compared with 29,000 tonnes at 2.48 g/t for the
corresponding period in 2002. Processing. Throughput at STP was 582,000 tonnes,
the same as that for the corresponding period of last year whilst the head grade
increased to 6.92 g/t from 6.88 g/t. and recovery decreased to 83.2% from 84.6%.
Gold production at STP was 107,710 ounces compared to 109,006 ounces in the
second quarter of 2002. Production tonnage was affected by a damaged mill pinion
on the SAG mill which necessitated operating the mill at a reduced throughput
rate. The mill pinion was changed and the girth gear turned at the end of the
second quarter. Gold production at the Oxide Treatment Plant (OTP) was 7,050
ounces whilst the Tailings Treatment Plant produced 10,687 ounces in the quarter
compared to 11,024 ounces for the corresponding period in 2002.
Exploration. Underground exploration yielded good results both above and below
50 level. On 41 level, three intersections from the 252 crosscut in the vicinity
of the BSVS returned 11.5 g/t over 8.2 metres, 11.2 g/t over 27.3 metres and 7.5
g/t over 15.38 metres; on 58 level, intersections of 41.9 g/t over 3.1 metres
and 26.9 g/t over 6.6 metres were returned at the 155 and 206 crosscut positions
respectively which are located near to the KMS section. Development was
completed in the 19 south crosscut on 50 level which is located close to the
Adansi shaft and a diamond drill rig will be relocated there in July to commence
testing the deeper levels in the north section of the mine.
IDUAPRIEM/TEBEREBIE
Second quarter gold production at Iduapriem was 57,090 ounces compared with
39,769 ounces produced in the second quarter last year when there was a fire in
the elution section of the plant. In June, 19,484 ounces were produced from the
expanded CIL plant. At the end of the quarter, most of the outstanding
commissioning works on the expanded CIL plant were complete and the new and old
circuits within the plant were largely integrated and performing to design
specification. The first phase of overland conveyor and primary crushing section
of the upgrade was commissioned during the second quarter and work is ongoing to
commission the second phase. The cash operating costs were US$225 per ounce
compared to US$226 per ounce for the corresponding quarter last year. Cash
operating costs should decrease once the second phase of the conveyor/crusher
component of the project is completed eliminating the high interim ore re-handle
costs. Relative to the same quarter last year, gold production from the heap
leach operation reduced from 8,559 ounces to 4,929 ounces because of lower
recovery associated with harder feed material and lower tonnage throughput.
BIBIANI
Bibiani produced 52,867 ounces of gold from processing 623,000 tonnes of ore at
3.41 g/t. Metallurgical recovery was 77.4% and the cash operating cost was
US$208 per ounce. Production for the corresponding period in 2002 was 61,219
ounces from 634,000 tonnes at 3.72 g/t and a metallurgical recovery of 80.8%, at
US$183 per ounce. The lower tonnage, grade and metallurgical recovery resulted
in the lower gold production.
The increase in the cash operating cost reflects the lower gold production and
the increased depth of the pit. Further progress was made on the underground
decline and development to access the old levels below the final pit elevation
was on schedule. The third deep exploration hole, drilled to a depth of 1,254
metres intersected mineralisation returning 4.9 g/t over 8.0 metres (including
13.2 g/t over 2.1 metres). A secondary deflection from the same hole intersected
the shear zone at the predicted point returning 8.0 g/t over 1.3 metres.
During the quarter, work commenced on removing the flotation plant and regrind
mill from Obuasi and installing and re-commissioning this plant at Bibiani in
the fourth quarter 2003. This is expected to improve recovery to approximately
85%.
GUINEA
SIGUIRI (85% OWNED)
Siguiri gold production of 64,130 ounces compared to 79,077 ounces achieved in
the second quarter of 2002. Stacked tonnage increased to 2.56 million tonnes
from 2.47 million tonnes whilst the feed grade declined to 1.15 g/t from 1.18
g/t. The reduction in production was due to increased gold in process as the
higher-grade ore was stacked towards the end of the quarter as well as the lower
than planned feed grades and stacked tonnage in the first quarter. The cash
operating cost for the quarter was US$274 per ounce compared to US$185 per ounce
for the same period last year reflecting the lower production, an increased rate
of cement consumption to cater for a higher SAP to CAP ore blend and increased
fuel prices.
The feasibility of the CIP plant expansion project is under review following
recent difficulties with and termination of the construction contract.
Discussions are curently underway with potential replacement contractors.
Expenditure to date of approximately US$7.2 million continues to be capitalised
pending the outcome of the project review.
ZIMBABWE
FREDA-REBECCA
Freda-Rebecca gold production for the quarter was 9,560 ounces compared with
27,214 ounces in the second quarter of 2002. This was principally due to a
shortfall in higher grade underground ore production resulting from low
availability of loaders, haul trucks and blasthole drill rigs caused by a
shortage of critical component spares. Mill throughput in the second quarter was
304,000 tonnes at 1.46 g/t compared to 287,000 tonnes at 3.48 g/t for the
corresponding period in 2002. Metallurgical recovery was impacted by the low
grades and frequent mill shut downs due to power interruptions and recovery
decreased to 66.9% from the 86.9% achieved in the second quarter of 2002.
Management continues to negotiate with the Central Bank and suppliers to secure
foreign exchange and an adequate supply of spare parts in order to effect the
production recovery plan.
TANZANIA
GEITA (50% OWNED)
Gold production at Geita was 123,767 ounces compared with 152,809 ounces
produced in the second quarter of 2002. Plant feed for the quarter was 1.49
million tonnes at 2.82 g/t compared to 1.24 million tonnes at 4.10 g/t for the
corresponding period last year. Mining activities were concentrated on the
Nyankanga cut 3 waste strip in order to access higher grade ore and at the end
of June, the mining face had reached the splays in the higher grade mineralised
zone. By the middle of August the main high-grade zone should be exposed and
third quarter gold production is therefore forecast to increase significantly.
Cash operating costs rose to US$214 per ounce from US$156 per ounce in the
corresponding second quarter as a result of the lower gold production and the
increase in strip ratio, reflecting the cut back required for the enlarged
optimised pit.
SUMMARY OF PRODUCTION AND CASH OPERATING COSTS PER OUNCE
Iduapriem/
Obuasi Teberebie Bibiani Siguiri
3 MONTHS TO 30 JUNE 2003
Production (ounces) 125,447 57,090 52,867 64,130
Cost per ounce (US$) 202 225 208 274
3 MONTHS TO 30 JUNE 2002
Production (ounces) 120,051 39,769 61,219 79,077
Cost per ounce (US$) 205 226 183 185
6 MONTHS TO 30 JUNE 2003
Production (ounces) 257,365 104,336 104,138 134,141
Cost per ounce (US$) 203 241 221 256
6 MONTHS TO 30 JUNE 2002
Production (ounces) 260,147 87,613 121,025 148,219
Cost per ounce (US$) 196 208 184 205
Freda- Total/
Rebecca Geita Average
3 MONTHS TO 30 JUNE 2003
Production (ounces) 9,560 61,884 370,978
Cost per ounce (US$) 262 214 222
3 MONTHS TO 30 JUNE 2002
Production (ounces) 27,214 76,404 403,734
Cost per ounce (US$) 224 156 192
6 MONTHS TO 30 JUNE 2003
Production (ounces) 26,505 125,422 751,907
Cost per ounce (US$) 264 208 223
6 MONTHS TO 30 JUNE 2002
Production (ounces) 50,300 145,814 813,118
Cost per ounce (US$) 225 151 191
EXPLORATION
EAST AFRICA
TANZANIA
GEITA
During the quarter, exploration drilling continued at Nyankanga West and East
and at Geita Hill. At Nyankanga West, positive results were reported from
preliminary drilling undertaken to follow up on the earlier drilled high grade
intersection reported from hole NYDD0097 (15 metres grading 20.16 g/t). Better
follow up results included intersections of 5 metres grading 34.39 g/t from 179
metres in hole NYDD136; 23 metres @ 5.21 g/t from 113 metres in hole NYDD0138;
and 18 metres @ 2.39 g/t from 136 metres in hole NYDD0139. This drilling
confirms the presence of a relatively shallow (< 200 metres), moderate to high
grade zone of mineralisation immediately west of the currently designed
Nyankanga pit margin. Additional follow up holes have been planned for the third
quarter to further define the geometry and extent of the mineralisation after
which a preliminary resource estimation will be undertaken.
Core drilling at Geita Hill continues to produce positive results. Continuity of
mineralisation between the Geita Main and North East Extension deposits was
proved with better intersections of 9 metres grading 3.4g/t from 216 metres in
hole GHDD0114; 22 metres @ 2.1g/t from 273 metres in hole GHDD0115; and 18
metres @ 2.8g/t from 244 metres in hole GHDD0116.
TANZANIA REGIONAL
Stream sediment sampling results on the Kigosi reconnaissance licence in the
south western part of the Lake Victoria Goldfields are currently being followed
up.
D.R. CONGO
Ashanti considers the recent stationing of French troops in Bunia under the
auspices of the United Nations as a positive step in the quest for peace and
stability in the general area.
WEST AFRICA
GUINEA
At Siguiri, exploration drilling concentrated on the SEK area (the general area
surrounding the Bidini, Eureka Hill, Sanu Tinti and Tubani pits) and defined
several small resources in both laterite and saprolite.
MALI
Auger drilling assay results from the M'pebougoula and Koumantou Exploration
Authorisations were disappointing with no anomalous areas for further follow up
being defined.
SIERRA LEONE
A low entry option agreement was signed with respect to AFCAN's Nimini Hills
project in eastern Sierra Leone whereby Ashanti can earn a 80% equity interest.
The area of interest is centred on a significant two square kilometre plus 0.5
g/t soil geochemical anomaly outlined by a previous EU sponsored aid survey in
an area of complexly folded Archaean banded ironstone formations. Initial
fieldwork is being focused on verifying this geochemical anomaly.
GHANA
In Ghana, stream and soil sampling and trenching continued on the Sefwi Asafo,
Sefwi Sui, Sefwi Boako and Subriso prospecting licences. Shallow reverse
circulation drilling commenced on the Subriso concession, 50 kilometres north of
Bibiani at the end of the quarter.
COTE D'IVOIRE
It is understood that during the second quarter, progress was made towards
resolving the political and security situation in Cote d'Ivoire. It is expected
that exploration field work will recommence during the second half of the year.
GOLD PRODUCTION SUMMARY
3 MONTHS TO 3 months to 6 MONTHS TO 6 months to
30 JUNE 2003 30 June 2002 30 JUNE 2003 30 June 2002
OBUASI
UNDERGROUND MINING
Ore production (000 tonnes) 600 609 1,183 1,199
Ore grade (g/t) 7.26 7.45 7.60 7.47
SURFACE MINING (HOMASE)
Ore production (000 tonnes) 152 29 324 29
Ore grade (g/t) 2.11 2.48 2.39 2.48
Waste mined (000 tonnes) 430 72 1,303 72
Strip ratio 2.8 2.5 4.0 2.5
SULPHIDE TREATMENT PLANT
Ore processed (000 tonnes) 582 582 1,162 1,165
Head grade (g/t) 6.92 6.88 6.95 7.44
Recovery (%) 83.2 84.6 83.9 85.9
Gold produced (ounces) 107,710 109,006 217,945 239,432
POMPORA TREATMENT PLANT
Ore processed (000 tonnes) -- -- -- --
Head grade (g/t) -- -- -- --
Recovery (%) -- -- -- --
Gold produced (ounces) -- 21 -- 195
OXIDE TREATMENT PLANT
Ore processed (000 tonnes) 162 -- 390 --
Head grade (g/t) 1.90 -- 1.84 --
Recovery (%) 71.2 -- 78.2 --
Gold produced (ounces) 7,050 -- 18,047 --
TAILINGS TREATMENT PLANT
Ore processed (000 tonnes) 452 433 952 873
Head grade (g/t) 2.30 2.38 2.22 2.31
Recovery (%) 32.0 33.2 31.5 31.7
Gold produced (ounces) 10,687 11,024 21,373 20,520
OBUASI TOTAL PROCESSED
Ore processed (000 tonnes) 1,197 1,015 2,505 2,038
Head grade (g/t) 4.49 4.96 4.35 5.24
Recovery (%) 72.6 74.0 73.6 75.8
Total gold produced (ounces) 125,447 120,051 257,365 260,147
OBUASI PRODUCTION DISTRIBUTION
Obuasi underground (ounces) 107,710 109,027 217,945 239,627
Obuasi surface (ounces) 7,050 -- 18,047 --
Obuasi tailings (ounces) 10,687 11,024 21,373 20,520
Obuasi total (ounces) 125,447 120,051 257,365 260,147
IDUAPRIEM
MINING
Ore production (000 tonnes) 956 1,161 1,843 2,101
Ore grade (g/t) 1.87 1.63 1.81 1.62
Waste mined (000 tonnes) 3,994 4,062 7,469 8,260
Strip ratio 4.2 3.5 4.1 3.9
CIL PLANT
Ore processed (000 tonnes) 911 642 1,755 1,298
Head grade (g/t) 1.97 1.85 1.84 1.93
Recovery (%) 90.4 81.6 89.5 91.1
Gold produced (ounces) 52,161 31,210 92,948 69,501
HEAP LEACH (IDUAPRIEM/TEBEREBIE)
Ore stacked (000 tonnes) 271 306 578 805
Head grade (g/t) 1.55 1.09 1.33 1.09
Recovery (%) 36.5 79.8 46.1 64.2
Gold produced 4,929 8,559 11,388 18,112
IDUAPRIEM TOTAL (OUNCES) 57,090 39,769 104,336 87,613
GOLD PRODUCTION SUMMARY
3 MONTHS TO 3 months to 6 MONTHS TO 6 months to
30 JUNE 2003 30 June 2002 30 JUNE 2003 30 June 2002
BIBIANI
MINING
Ore production (000 tonnes) 859 707 1,520 1,051
Ore grade (g/t) 3.13 3.85 3.51 3.68
Waste mined (000 tonnes) 1,288 3,000 3,416 6,003
Strip ratio 1.5 4.2 2.2 5.7
CIL PLANT
Ore processed (000 tonnes) 623 634 1,234 1,211
Head grade (g/t) 3.41 3.72 3.38 3.60
Recovery (%) 77.4 80.8 77.7 81.9
GOLD PRODUCED (OUNCES) 52,867 61,219 104,138 121,025
SIGUIRI
MINING
Ore production (000 tonnes) 2,325 2,483 4,859 4,396
Ore grade (g/t) 1.17 1.21 1.16 1.22
Waste mined (000 tonnes) 1,392 1,788 3,669 4,018
Strip ratio 0.6 0.7 0.8 0.9
HEAP LEACH
Ore stacked (000 tonnes) 2,554 2,465 5,030 4,855
Head grade (g/t) 1.15 1.18 1.11 1.17
Recovery (%) 68.2 84.8 74.7 81.2
GOLD PRODUCED (OUNCES) 64,130 79,077 134,141 148,219
FREDA-REBECCA
UNDERGROUND MINING
Ore production (000 tonnes) 98 285 268 548
Ore grade (g/t) 2.55 2.96 2.57 3.09
SURFACE MINING
Ore production (000 tonnes) 24 66 42 110
Ore grade (g/t) 1.91 2.61 1.86 2.52
PROCESSING
Ore processed (000 tonnes) 304 287 648 570
Head grade (g/t) 1.46 3.48 1.17 3.33
Recovery (%) 66.9 86.9 74.4 84.2
GOLD PRODUCED (OUNCES) 9,560 27,214 26,505 50,300
GEITA
SURFACE MINING
Ore mined (000 tonnes) 1,316 1,023 2,353 2,839
Grade (g/t) 2.88 3.63 2.94 3.49
Waste mined (000 tonnes) 15,697 9,684 28,160 15,234
Strip ratio 11.0 9.5 12.2 5.4
PROCESSING
CIL PLANT
Ore processed (000 tonnes) 1,493 1,240 2,890 2,438
Head grade (g/t) 2.82 4.10 2.95 4.00
Recovery (%) 91.5 93.3 91.5 92.3
GOLD PRODUCED (OUNCES) 123,767 152,809 250,844 291,628
ASHANTI'S 50% SHARE (OUNCES) 61,884 76,404 125,422 145,814
GROUP SUMMARY
Managed gold production (ounces) 309,094 327,330 626,485 667,304
Geita JV 50% 61,884 76,404 125,422 145,814
Sub-total 370,978 403,734 751,907 813,118
Less minority interests 18,183 17,827 35,772 35,375
GROUP ATTRIBUTABLE TOTAL (OUNCES) 352,795 385,907 716,135 777,743
FINANCIAL REVIEW
EARNINGS
Ashanti's earnings for the second quarter were US$14.8 million. This included an
exceptional gain after tax of US$7.0 million, arising from the sale of the
Mampon property. Earnings for the second quarter (excluding the exceptional gain
and related tax) were US$7.8 million, down US$11.0 million on the corresponding
period last year, but up US$1.0 million on the previous quarter. The reduction
in earnings compared to last year is as a result of the previously announced
lower production profile for the first half of 2003 and higher cash operating
costs, offset partially by higher spot prices.
Earnings per share before exceptional items for the second quarter were US$0.06
(2002: US$0.17) and after exceptional items US$0.12 (2002: loss US$0.03).
Earnings before exceptional items for the six months to 30 June 2003 were
US$14.6 million compared to US$36.3 million in 2002. Earnings after exceptional
items of US$7.0 million were US$21.6 million (2002: US$12.8 million).
REVENUE
Total spot revenue for the quarter was US$129.4 million, equivalent to US$349
per ounce (2002: US$315 per ounce). Total hedging income for the quarter was
negative US$1.1 million, comprising US$3.2 million of deferred hedging income
and US$4.3 million of net cash payments in respect of maturing hedge contracts
for both the Ashanti and Geita hedge books. Total realised price for the quarter
was US$346 per ounce (2002: US$350 per ounce). Based on year to date total
revenue of US$257.2 million (2002: US$278.1 million) the realised gold price
equates to US$342 per ounce (2002: US$342 per ounce).
HEDGING
At 30 June 2003 Ashanti had 4.5 million ounces protected at an average price of
US$360 per ounce, with commitments of 6.4 million ounces. The mark-to-market
valuation of the Ashanti hedge book at 30 June 2003 was negative US$108 million
based on a spot price of US$346 per ounce. Ashanti's 50% share of Geita's hedge
book was negative US$39 million.
CASH OPERATING COSTS
Total cash operating costs for the second quarter were US$222 per ounce, up
US$30 per ounce on last year and similar to the previous quarter. Costs, as in
the first quarter, were mainly impacted by lower production, increased wages and
fuel prices, higher costs of other inputs, increased costs associated with the
Nyankanga pit cut-back at Geita and higher ore rehandling at Iduapriem.
PROFIT
Total operating profit before exceptional items for the quarter was US$13.6
million (2002: US$27.2 million). Non-mine site exploration expenditure written
off in the second quarter was US$0.9 million bringing year to date to US$1.6
million. Corporate administration expenditure for the quarter was US$6.3 million
and year to date US$12.3 million.
Interest charge for the quarter of US$4.6 million was US$1.7 million lower than
last year following the refinancing in June 2002 and lower interest rates.
EXCEPTIONAL ITEM
In June 2003 Ashanti sold its interest in the Mampon property near Obuasi to
Bogoso Gold Limited and Golden Star Resources Limited for a cash consideration
of US$9.5 million resulting in a profit on sale before taxes of US$7.8 million.
TAX
The tax charge for the quarter was US$1.8 million and comprised US$0.8 million
tax on the sale of the Mampon property, US$0.8 million in respect of Geita's
profits subject to United Kingdom tax and other tax of US$0.2 million.
CASH FLOWS AND BALANCE SHEET
Cash inflow from operating activities for the quarter was US$15.3million (2002:
US$21.8 million) and US$32.1 million for the year to date (2002: US$45.0
million). Net interest payments in the quarter were US$2.2 million compared to
US$5.1 million last year, which included the final interest payment on the
exchangeable notes.
Capital expenditure for the quarter of US$20.5 million (2002: US$15.7 million)
included US$8.6 million at Obuasi, US$4.3 million at Iduapriem and US$5.9
million at Siguiri.
In May, US$6.6 million was raised from the exercise of a further 2.18 million
warrants. As a result the stated capital increased to 130.8 million shares (31
December 2002: 127.5 million shares) and 2.5 million warrants remain
outstanding.
During the quarter, Ashanti paid down US$10.0 million of its Revolving Credit
Facility, reducing the amounts drawn to US$139.0 million. At the quarter end,
the Group's gross debt level (excluding the 50% share of the non-recourse Geita
project finance loan) was lower at US$245.7 million (31 March 2003:US$255.9
million) analysed as follows:
US$M
US$200 million Revolving Credit Facility ("RCF") 139.0
Iduapriem/Teberebie project finance loans 22.1
Other loans (net of deferred loan fees) 9.6
170.7
Mandatorily Exchangeable Notes ("MENs") 75.0
Ashanti Group's gross debt as at 30 June 2003 245.7
OTHER MATTERS
Ashanti has been advised by the Government of Ghana (the "Government") that it
has appointed a consortium led by Societe-Generale, to act as financial advisers
to the Government as a shareholder, the holder of the golden share in Ashanti
and as a regulator of the mining industry in Ghana, and to assist the Government
in arriving at a decision on the proposed merger of Ashanti and AngloGold.
In Zimbabwe, Temple Assets (Private) Limited has been appointed as the
Depositary, in replacement of Deloitte & Touche Executor & Trust Company (Pvt)
Limited, to hold the Ashanti ordinary shares on behalf of holders of the
Zimbabwe Depositary Receipts. This change took effect from 1 June 2003.
INDEPENDENT REVIEW REPORT TO ASHANTI GOLDFIELDS COMPANY LIMITED
INTRODUCTION
We have been instructed by the company to review the financial information for
the six months ended 30 June 2003 which comprises the profit and loss account,
the balance sheets, the cash flow statement and related notes 1 to 3 and we have
read the other information contained in the second quarter report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose.To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone, other
than the company, for our review work, for this report, or for the conclusions
we have formed.
DIRECTORS' RESPONSIBILITIES
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the United Kingdom Financial Services Authority which requires that the
accounting policies and presentation applied to the interim figures should be
consistent with those applied in preparing the preceding annual accounts except
where any changes, and the reasons for them, are disclosed.
REVIEW WORK PERFORMED
We conducted our review in accordance with guidance contained in United Kingdom
Bulletin 1999/4 issued by the United Kingdom Auditing Practices Board. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly, we do not
express an audit opinion on the financial information.
REVIEW CONCLUSION
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.
Deloitte & Touche - Accra
Chartered Accountants
29 July 2003
GROUP PROFIT AND LOSS ACCOUNT
Unaudited
3 MONTHS TO 3 months to
30 JUNE 2003 30 June 2002
INTEREST
IN JOINT
GROUP VENTURE TOTAL Group
Note US$M US$M US$M US$m
---- ---- ---- ---- ----
TURNOVER 2 109.0 19.3 128.3 118.7
Cash operating costs 2 (69.2) (13.2) (82.4) (65.5)
Other costs (8.1) (0.9) (9.0) (6.1)
Exceptional costs -- -- -- (22.5)
Royalties (3.3) (0.6) (3.9) (3.0)
Depreciation and amortisation (17.2) (2.2) (19.4) (22.8)
TOTAL COSTS (97.8) (16.9) (114.7) (119.9)
OPERATING PROFIT/(LOSS) 2 11.2 2.4 13.6 (1.2)
Share of operating profit of joint venture 2.4 5.9
TOTAL OPERATING PROFIT 13.6 4.7
Exceptional profit on sale of investment 7.8 --
PROFIT BEFORE INTEREST AND TAXATION 21.4 4.7
Net interest payable:group (3.4) (5.2)
joint venture (1.2) (1.1)
PROFIT/(LOSS) BEFORE TAXATION 16.8 (1.6)
Tax: group (1.0) (2.1)
joint venture (0.8) --
PROFIT/(LOSS)AFTER TAXATION 15.0 (3.7)
Minority interests (0.2) --
PROFIT/(LOSS)ATTRIBUTABLE TO SHAREHOLDERS 14.8 (3.7)
DIVIDENDS -- --
RETAINED PROFIT/(LOSS) FOR THE PERIOD 14.8 (3.7)
EARNINGS PER SHARE (US$):
BEFORE EXCEPTIONALS 0.06 0.17
AFTER EXCEPTIONALS 0.12 (0.03)
6 MONTHS TO 6 months to
30 JUNE 2003 30 June 2002
INTEREST
IN JOINT
GROUP VENTURE TOTAL Group
US$M US$M US$M US$m
---- ---- ---- ----
TURNOVER 218.6 38.6 257.2 235.6
Cash operating costs (141.7) (26.1) (167.8) (133.3)
Other costs (15.5) (1.7) (17.2) (12.5)
Exceptional
costs -- -- -- (23.5)
Royalties (6.7) (1.2) (7.9) (5.8)
Depreciation and amortisation (34.5) (4.5) (39.0) (42.8)
TOTAL COSTS (198.4) (33.5) (231.9) (217.9)
OPERATING PROFIT/(LOSS) 20.2 5.1 25.3 17.7
Share of operating profit of joint venture 5.1 11.3
TOTAL OPERATING PROFIT 25.3 29.0
Exceptional profit on sale of investment 7.8 --
PROFIT BEFORE INTEREST AND TAXATION 33.1 29.0
Net interest payable: group (7.0) (10.1)
joint venture (2.3) (2.2)
PROFIT/(LOSS) BEFORE TAXATION 23.8 16.7
Tax: group (1.0) (3.9)
joint venture (0.8) --
PROFIT/(LOSS)AFTER TAXATION 22.0 12.8
Minority interests (0.4) --
PROFIT/(LOSS)ATTRIBUTABLE TO SHAREHOLDERS 21.6 12.8
DIVIDENDS -- --
RETAINED PROFIT/(LOSS) FOR THE PERIOD 21.6 12.8
EARNINGS PER SHARE (US$):
BEFORE EXCEPTIONALS 0.11 0.32
AFTER EXCEPTIONALS 0.17 0.11
GROUP BALANCE SHEET
Unaudited
As at As at
AS AT 30 30 June 2002 31 Dec 2002
JUNE 2003
INTEREST IN
GROUP JOINT VENTURE TOTAL Group Group
US$M US$M US$M US$m US$m
---- ---- ---- ---- ----
FIXED ASSETS
Intangible assets 16.0 53.3 69.3 18.0 17.3
Tangible assets 607.0 109.0 716.0 601.0 602.7
Investments
- Geita joint venture 93.2 (93.2) -- 90.8 91.2
- Loans to joint venture and other investments 31.1 -- 31.1 32.6 32.6
747.3 816.4 742.4 743.8
CURRENT ASSETS
Stocks 72.9 10.2 83.1 72.9 76.6
Debtors due within one year 9.3 17.1 26.4 20.9 14.0
Debtors due after more than one year 12.5 -- 12.5 -- 8.8
Cash 39.2 8.6 47.8 78.5 41.3
133.9 35.9 169.8 172.3 140.7
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Creditors (116.5) (15.8) (132.3) (148.3) (131.1)
Borrowings (7.8) (10.8) (18.6) (12.9) (2.7)
(124.3) (26.6) (150.9) (161.2) (133.8)
NET CURRENT ASSETS 9.6 9.3 18.9 11.1 6.9
TOTAL ASSETS LESS CURRENT LIABILITIES 756.9 835.3 753.5 750.7
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Creditors (15.0) (39.9) (54.9) (47.4) (24.0)
Borrowings (237.9) (35.2) (273.1) (291.0) (254.2)
PROVISIONS FOR LIABILITIES AND CHARGES (24.3) (3.3) (27.6) (20.2) (25.0)
479.7 479.7 394.9 447.5
CAPITAL AND RESERVES
Stated capital 598.4 587.0 588.2
Reserves (120.3) (194.1) (141.9)
EQUITY SHAREHOLDERS' FUNDS 478.1 392.9 446.3
Equity minority interests 1.6 2.0 1.2
479.7 394.9 447.5
The financial information for the second quarter and six months ended 30 June
2003 were approved by the Board of directors on 29 July 2003 and signed on its
behalf by:
S E Jonah S Venkatakrishnan
Director Director
GROUP CASH FLOW STATEMENT
Unaudited
3 MONTHS TO 3 months to 6 MONTHS TO 6 months to
30 JUNE 2003 30 June 2002 30 JUNE 2003 30 June 2002
US$M US$m US$M US$m
CASH INFLOW FROM OPERATING ACTIVITIES 15.3 21.8 32.1 45.0
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 0.2 0.2 0.3 0.3
Interest paid (2.4) (5.3) (4.9) (13.4)
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS
AND SERVICE OF FINANCE (2.2) (5.1) (4.6) (13.1)
TAXATION
Corporate tax paid -- (1.1) -- (1.7)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTS
Purchase of tangible fixed assets (20.5) (15.7) (37.6) (30.6)
Sale of investment 9.5 -- 9.5 --
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT (11.0) (15.7) (28.1) (30.6)
CASH INFLOW/(OUTFLOW) BEFORE USE OF LIQUID
RESOURCES AND FINANCING 2.1 (0.1) (0.6) (0.4)
Management of liquid resources 2.5 4.9 8.5 11.6
CASH INFLOW BEFORE FINANCING 4.6 4.8 7.9 11.2
FINANCING
Loans drawn down -- 265.0 -- 265.0
Loan repayments (11.4) (270.8) (12.3) (280.4)
Issue of shares 6.6 41.8 10.2 41.8
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (4.8) 36.0 (2.1) 26.4
(DECREASE)/INCREASE IN CASH (0.2) 40.8 5.8 37.6
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
(Decrease)/increase in cash (0.2) 40.8 5.8 37.6
Decrease in liquid resources (2.5) (4.9) (8.5) (11.6)
(2.7) 35.9 (2.7) 26.0
Cash outflow from decrease in debt 11.4 5.8 12.3 15.4
Other (0.2) 4.1 (0.5) 3.9
MOVEMENT IN NET DEBT 8.5 45.8 9.1 45.3
Net debt at beginning of period (215.0) (271.2) (215.6) (270.7)
NET DEBT AT END OF PERIOD (206.5) (225.4) (206.5) (225.4)
NOTES TO THE FINANCIAL INFORMATION
1. BASIS OF PREPARATION
The unaudited results for the six months ended 30 June 2003 have been prepared
in accordance with the accounting policies set out in the Annual Report and
Accounts for the year ended 31 December 2002.
2. OPERATING PROFIT ANALYSIS BY BUSINESS AREA
6 MONTHS TO 30 JUNE 2003 IDUA-
OBUASI PRIEM BIBIANI SIGUIRI
Production ounces 257,365 104,336 104,138 134,141
US$ million
Revenue - spot 90.0 36.4 36.6 47.0
Revenue - hedging -- -- -- --
90.0 36.4 36.6 47.0
Operating costs (52.3) (25.1) (23.0) (34.3)
Other costs -- (0.6) (0.2) (0.8)
Royalties (3.0) (1.1) (1.1) (1.5)
EBITDA 34.7 9.6 12.3 10.4
Depreciation and amortisation (15.4) (2.9) (4.7) (7.8)
OPERATING PROFIT/(LOSS) 30.6.2003 19.3 6.7 7.6 2.6
Operating profit/(loss) 30.6.2002 7.5 5.3 5.8 3.8
6 MONTHS TO 30 JUNE 2003 FREDA- HEDGING EXPLORA- CORP.
REBECCA INCOME TION ADMIN
Production ounces 26,505 -- -- --
US$ million
Revenue - spot 9.2 -- -- --
Revenue - hedging -- (0.6) -- --
9.2 (0.6) -- --
Operating costs (7.0) -- -- --
Other costs -- -- (1.6) (12.3)
Royalties -- -- -- --
EBITDA 2.2 (0.6) (1.6) (12.3)
Depreciation and amortisation (3.1) -- -- (0.6)
OPERATING PROFIT/(LOSS) 30.6.2003 (0.9) (0.6) (1.6) (12.9)
Operating profit/(loss) 30.6.2002 3.6 27.1 (2.3) (33.1)*
*Includes refinancing and restructuring costs of US$23.5 million.
6 MONTHS TO 30 JUNE 2003
GROUP GEITA TOTAL
Production ounces 626,485 125,422 751,907
US$ million
Revenue - spot 219.2 43.8 263.0
Revenue - hedging (0.6) (5.2) (5.8)
218.6 38.6 257.2
Operating costs (141.7) (26.1) (167.8)
Other costs (15.5) (1.7) (17.2)
Royalties (6.7) (1.2) (7.9)
EBITDA 54.7 9.6 64.3
Depreciation and amortisation (34.5) (4.5) (39.0)
OPERATING PROFIT/(LOSS) 30.6.2003 20.2 5.1 25.3
Operating profit/(loss) 30.6.2002 17.7 11.3 29.0
3 MONTHS TO 30 JUNE 2003 IDUA-
OBUASI PRIEM BIBIANI SIGUIRI
Production ounces 125,447 57,090 52,867 64,130
US$ million
Revenue - spot 43.7 19.9 18.6 22.4
Revenue - hedging -- -- -- --
43.7 19.9 18.6 22.4
Operating costs (25.3) (12.8) (11.0) (17.6)
Other costs -- (0.3) (0.1) (0.5)
Royalties (1.4) (0.6) (0.6) (0.7)
EBITDA 17.0 6.2 6.9 3.6
Depreciation and amortisation (7.5) (1.6) (2.4) (3.8)
OPERATING PROFIT/(LOSS) 30.6.2003 9.5 4.6 4.5 (0.2)
Operating profit/(loss) 30.6.2002 3.0 1.9 3.1 4.7
3 MONTHS TO 30 JUNE 2003 FREDA- HEDGING EXPLORA- CORP.
REBECCA INCOME TION ADMIN
Production ounces 9,560 -- -- --
US$ million
Revenue - spot 3.3 -- -- --
Revenue - hedging -- 1.1 -- --
3.3 1.1 -- --
Operating costs (2.5) -- -- --
Other costs -- -- (0.9) (6.3)
Royalties -- -- -- --
EBITDA 0.8 1.1 (0.9) (6.3)
Depreciation and amortisation (1.6) -- -- (0.3)
OPERATING PROFIT/(LOSS)30.6.2003 (0.8) 1.1 (0.9) (6.6)
Operating profit/(loss)30.6.2002 1.3 13.3 (1.3) (27.2)*
3 MONTHS TO 30 JUNE 2003
GROUP GEITA TOTAL
Production ounces 309,094 61,884 370,978
US$ million
Revenue - spot 107.9 21.5 129.4
Revenue - hedging 1.1 (2.2) (1.1)
109.0 19.3 128.3
Operating costs (69.2) (13.2) (82.4)
Other costs (8.1) (0.9) (9.0)
Royalties (3.3) (0.6) (3.9)
EBITDA 28.4 4.6 33.0
Depreciation and amortisation (17.2) (2.2) (19.4)
OPERATING PROFIT/(LOSS) 30.6.2003 11.2 2.4 13.6
Operating profit/(loss) 30.6.2002 (1.2) 5.9 4.7
3 MONTHS TO 3 months to 6 MONTHS TO 6 months to
30 JUNE 30 June 30 JUNE 30 June
3.RECONCILIATION OF TOTAL COSTS 2003 2002 2003 2002
US$M US$m US$M US$m
CASH OPERATING COSTS
Obuasi 25.3 24.6 52.3 51.1
Iduapriem 12.8 9.0 25.1 18.2
Bibiani 11.0 11.2 23.0 22.3
Siguiri 17.6 14.6 34.3 30.4
Freda-Rebecca 2.5 6.1 7.0 11.3
Geita (50%) 13.2 11.9 26.1 22.0
TOTAL CASH OPERATING COSTS 82.4 77.4 167.8 155.3
Corporate administration costs 6.3 4.3 12.3 8.9
Exploration costs 0.9 1.3 1.6 2.3
Other costs 1.8 1.3 3.3 2.9
Royalties 3.9 3.7 7.9 7.1
Depreciation and amortisation 19.4 26.0 39.0 49.1
Exceptional costs -- 22.5 -- 23.5
TOTAL COSTS 114.7 136.5* 231.9 249.1*
* Includes Geita's costs of US$16.6 million for three months to 30 June 2002
and US$31.2 million for the six months to 30 June 2002.
HEDGING COMMITMENTS
The table below shows all forward and option positions that Ashanti had as at 30
June 2003:
2003 2004 2005 2006
FORWARD SALES
(ounces) 413,636 657,992 648,996 538,000
(US$/ounce) 347 355 352 359
CALLS:
Sold (ounces) 305,350 496,180 498,728 210,256
Sold (US$/ounce) 343 341 350 366
Bought (ounces) 101,100 101,880 134,000 49,432
Bought (US$/ounce) 345 359 352 370
Subtotal (ounces) 204,250 394,300 364,728 160,824
SUMMARY:
Protected (ounces) 413,636 657,992 648,996 538,000
COMMITTED (ounces) 617,886 1,052,292 1,013,724 698,824
Total committed ounces as a percentage of
total forecast production (excluding Geita
production for the period of the
project finance, 2003-2007)
Lease Rate Swap (ounces) 2,367,000 2,587,000 2,251,000 1,915,000
Deferred Hedging Income (US$m) 6 11
2007 2008 2009 2010
FORWARD SALES
(ounces) 451,200 358,325 413,450 383,450
(US$/ounce) 360 370 362 366
CALLS:
Sold (ounces) 291,076 260,535 70,970 28,250
Sold (US$/ounce) 363 365 368 350
Bought (ounces) 125,396 -- -- --
Bought (US$/ounce) 370 -- -- --
Subtotal (ounces) 165,680 260,535 70,970 28,250
SUMMARY:
Protected (ounces) 451,200 358,325 413,450 383,450
COMMITTED (ounces) 616,880 618,860 484,420 411,700
Total committed ounces as a percentage of
total forecast production (excluding Geita production
for the period of the
project finance, 2003-2007)
Lease Rate Swap (ounces) 1,579,000 1,318,000 982,000 646,000
Deferred Hedging Income (US$m)
2011 2012 2013 TOTALS
FORWARD SALES
(ounces) 268,250 215,313 186,500 4,535,112
(US$/ounce) 367 374 365 360
CALLS:
Sold (ounces) 84,250 77,188 28,000 2,350,783
Sold (US$/ounce) 384 387 401 355
Bought (ounces) -- -- -- 511,808
Bought (US$/ounce) -- -- -- 358
Subtotal (ounces) 84,250 77,188 28,000 1,838,975
SUMMARY:
Protected (ounces) 268,250 215,313 186,500 4,535,112
COMMITTED (ounces) 352,500 292,501 214,500 6,374,087
Total committed ounces as a percentage of
total forecast production (excluding
Geita production for the period of the
project finance, 2003-2007) 50%
Lease Rate Swap (ounces) 310,000 130,000 --
Deferred Hedging Income (US$m) 17
FORWARD SALES:
A total of 4.54 million ounces have been sold forward at an average price of
US$360 per ounce.
CALL OPTIONS:
Ashanti has sold 2.35 million ounces of call options at an average strike price
of US$355 per ounce. As a partial offset, Ashanti has bought 0.51 million ounces
of call options at an average strike price of US$358 per ounce.
GOLD LEASE RATE SWAPS:
As of 30 June 2003, a maximum of 2.59 million ounces of Ashanti's hedged
production will be exposed to the floating 3 month lease rate at any one time.
The lease rate swaps can be broken down into the following types (under all of
these contracts Ashanti receives a certain lease rate income, which can be
regarded as compensation for the lease rate exposure that Ashanti takes on).
VOLUME (OZS) FIXED RATE DESCRIPTION
2,402,000 1.80% Ashanti pays a quarterly floating rate and
receives a quarterly weighted average fixed rate
of 1.90%.
360,000 2.00% Ashanti pays a quarterly floating rate and
receives a fixed amount of dollars at maturity.
The quarterly amount is rolled until maturity of
each forward contract. The fixed amount for each
contract is calculated using the formula:
Volume*YearsToMaturity*302*2.00%. The next rate
set is in 2004. TOTAL 2,762,000
MARK-TO-MARKET VALUATIONS
On 30 June 2003, the portfolio had a negative marked-to-market value of US$108.2
million. This valuation was based on a spot price of US$346 and the then
prevailing applicable US interest rates, gold forward rates, volatilities and
guidelines provided by the Risk Management Committee of the Board. The delta at
that time was 5.3 million ounces. This implies that a US$1 increase in the price
of gold would have a US$5.3 million negative impact (approximate) on the
marked-to-market valuation of the hedge book. Movements in US interest rates,
gold lease rates, volatilities and time will also have a sizeable impact on the
marked-to-market. All these variables can change significantly over short time
periods and can consequently materially affect the marked-to-market valuation.
The approximate breakdown by type of the marked-to-market valuation at 30 June
2003 was as follows:
US$M
Forward contracts (53.2)
European Call options (net sold) (65.3)
Lease rate swaps 10.3
(108.2)
GEITA HEDGING
The table below shows Ashanti's portion of hedging commitments for Geita as at
30 June 2003. This represents half of Geita's hedge commitments.
2003 2004 2005
Forward Sales (ounces) 101,625 195,558 174,828
(US$/ounce) 284 289 294
Puts:
Bought (ounces) 10,694 25,586 24,350
(US$/ounce) 292 291 291
Summary:
Protected (ounces) 112,319 221,144 199,178
Committed (ounces) 101,625 195,558 174,828
Lease Rate Swap 156,301 116,774 76,301
2006 2007 TOTAL
Forward Sales (ounces) 94,576 120,938 687,525
(US$/ounce) 296 298 292
Puts:
Bought (ounces) 18,115 23,390 102,135
(US$/ounce) 291 292 291
Summary:
Protected (ounces) 112,691 144,328 789,660
Committed (ounces) 94,576 120,938 687,525
Lease Rate Swap 41,420 -- --
MARKED-TO-MARKET VALUATION:
On 30 June 2003, the Geita portfolio had a negative marked-to-market value of
US$78.8 million (Ashanti's portion: negative US$39.4 million). This valuation
was based on a spot price of US$346 per ounce and the then prevailing US
interest rates, gold forward rates, volatilities and guidelines provided by the
Risk Management Committee of the Board.
FORWARD LOOKING STATEMENTS
This report contains a number of statements relating to plans, forecasts and
future results of Ashanti Goldfields Company Limited ("Ashanti") that are
considered "forward looking statements" as defined in the Private Securities
Litigation Reform Act 1995 of the United States of America including but not
limited to those related to future working capital, future production levels,
operating costs and plans for diversification. Ashanti may also make written or
oral forward-looking statements in its presentations, periodic reports and
filings with the various regulatory authorities, in its annual report to
shareholders, in its offering circulars and prospectuses, in press releases and
other written materials and in oral statements made by its officers, directors
or employees to third parties. These forward looking statements include
statements about our beliefs, hopes, projections and expectations, and may
include statements regarding future plans, objectives or goals, anticipated
production or construction commencement dates, construction completion dates,
working capital, expected costs, production output, the anticipated productive
life of mines, projected cashflows, debt levels, and marked-to-market values of
and cashflows from the hedgebook.
Such statements are based on current plans, information, intentions, estimates
and projections and certain external factors which may be beyond the control of
Ashanti and, therefore, undue reliance should not be placed on them. These
statements are subject to risks and uncertainties that could cause actual
occurrences to differ materially from the forward looking statements, such as
the risks that Ashanti may not be able to achieve the levels of production and
operating costs it has projected. Additional risk factors affecting Ashanti are
set out in Ashanti's filings with the US Securities and Exchange Commission.
Ashanti can give no assurances that such results, including the actual
production or commencement dates, construction completion dates, costs or
production output or anticipated life of the projects and mines, projected
cashflows, debt levels, and marked-to-market values of and cashflows from the
hedgebook, will not differ materially from the forward looking statements
contained in this report. Such forward looking statements are not guarantees of
future performance and involve known and unknown risks, uncertainties and other
factors collectively referred to as "Risk Factors", many of which are beyond the
control of Ashanti, which may cause actual results to differ materially from
those expressed in the statements contained in this report. These Risk Factors
include leverage, gold price volatility, changes in interest rates, hedging
operations, reserves estimates, exploration and development, mining, yearly
output, power supply, Ghanaian political risks, environmental regulation, labour
relations, general political risks, control by principal shareholders, Ghanaian
statutory provisions, dividend flows and litigation. For example, future
revenues from projects or mines described herein will be based in part upon the
market price of gold, which may vary significantly from current levels. Such
variations, if materially adverse, may impact the timing or feasibility of the
developments of a particular project or the expansion of specified mines.
Other factors that may affect the actual construction or production commencement
dates, costs or production output and anticipated lives of mines include the
ability to produce profitably and transport gold extracted therefrom to
applicable markets, the impact of foreign currency exchange rates, the impact of
any increase in the costs of inputs, and activities by governmental authorities
where such projects or mines are being explored or developed, including
increases in taxes, changes in environmental and other regulations and political
uncertainty. Likewise the cashflows from and marked-to-market values of the
hedgebook can be affected by, inter alia, gold price volatility, US interest
rates, gold lease rates and active management of the hedgebook.
Forward looking statements speak only as of the date they are made, and except
as required by law, or unless required to do so by the Listing Rules of the UK
Listing Authority, Ashanti undertakes no obligation to update publicly any of
them in light of new information or future events.
ENQUIRIES
ASHANTI GOLDFIELDS COMPANY LIMITED
KWEKU AWOTWI
MD Responsible for Public Affairs Tel: (+233)21 772331
ERNEST ABANKROH
Company Secretary Tel: (+233)21 774977
CORINNE GAISIE
UK Representative Tel: (+44)20 7256 9938
GOLIN HARRIS
Kevin Kirkeby
Federico Brigatti Tel: (+1-212)697 9191
website: www.ashantigold.com
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 30, 2003 ASHANTI GOLDFIELDS COMPANY LIMITED
By: /s/ Ernest Abankroh
-----------------------
Name: Ernest Abankroh
Title: Company Secretary