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 October 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- .
-----
Exhibit 99.1
[ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
THIRD QUARTER REPORT 2003
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Ashanti improves upon first two quarters' performance
Overview
Ashanti's performance improved during the third quarter after having largely
addressed the operational difficulties encountered during the first half of
2003.
Earnings (before exceptional gains) were US$20.2 million, down US$2.3 million on
the corresponding period last year but up US$12.4 million on the previous
quarter. A 14% increase in gold production, a higher average realised gold price
and a reduction in unit cash operating costs, relative to the second quarter,
helped to improve earnings. Earnings for the quarter, after exceptional gains of
US$4.7 million, amounted to US$24.9 million (2002: US$22.5 million). Earnings
per share before exceptional gains for the quarter were US$0.15 (2002: US$0.18)
and after exceptional items were US$0.19 (2002: US$0.18).
The quarter's gold production of 423,231 ounces was in line with Ashanti's 2003
annual target of approximately 1.6 million ounces and is 4% better than the
407,328 ounces achieved in the same period last year. With the resolution of the
plant expansion difficulties at Iduapriem and the progress achieved at the
Nyankanga pit cut back at Geita, both Iduapriem and Geita achieved record
quarterly production of 68,014 ounces and 176,487 ounces (Ashanti's 50% share:
88,244 ounces) respectively. Obuasi, Bibiani and Siguiri performed broadly in
line with expectation whilst operating difficulties continued to impact on
Freda-Rebecca's gold production.
Cash operating costs for the quarter were US$212 per ounce, US$13 per ounce
above the US$199 achieved last year. However, this represents a US$10 per ounce
decrease on the previous quarter, largely due to higher gold production. The
year-to-date cash operating costs of US$219 per ounce were in line with the
previously announced 10% increase on last year's annual cash operating costs of
US$199 per ounce.
Ashanti took advantage of the sustained high gold price and low lease rate
environment to reduce its floating lease rate exposure whilst adding protection
to its hedgebook. During the quarter, notional lease rate exposure was reduced
from 2.76 million ounces to 1.68 million ounces, 176,063 ounces of protection
was added and 2003 commitments were reduced from 617,886 ounces to 175,822
ounces.
During the quarter, Ashanti reduced its Group net debt by US$12.6 million from
US$206.5 million to US$193.9 million.
o Earnings (before exceptional gains) of US$20.2 million - down US$2.3
million on last year, but up US$12.4 million on the previous quarter
o Quarter's gold production of 423,231 ounces - up 4% upon last year and up
14% upon the previous quarter
o Cash operating costs of US$212 per ounce up US$13 per ounce on last year,
but down US$10 per ounce on previous quarter
o Further reductions achieved in Ashanti's hedgebook commitments and floating
lease rate exposure
o Net debt reduced by US$12.6 million during the quarter
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3 months to 3 months to 9 months to 9 months to
Highlights 30 Sept 03 30 Sept 02 30 Sept 03 30 Sept 02
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Financial (US$m)
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Total turnover 150.1 141.2 407.3 419.3
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Earnings before
exceptional items 20.2 22.5 34.8 58.8
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Earnings after
exceptional items 24.9 22.5 46.5 35.3
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Total operating profit
before exceptional items 24.9 24.4 50.2 76.9
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Group EBITDA before
exceptional items 34.2 37.8 88.9 121.8
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Total EBITDA before
exceptional items 46.4 47.9 110.7 149.5
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Earnings per share before
exceptional items (US$) 0.15 0.18 0.27 0.50
----------------------------------------------------------------------------------------
Earnings per share after
exceptional items (US$) 0.19 0.18 0.36 0.30
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Gold Production (ounces)
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Total 423,231 407,328 1,175,138 1,220,446
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Attributable 403,963 390,410 1,120,099 1,168,153
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Gold Price (US$ per ounce)
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Realised by Ashanti 355 347 347 344
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Spot price 366 315 356 308
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Production Costs (US$ per ounce)
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Cash operating costs 212 199 219 194
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Royalties 12 9 11 9
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Depreciation and amortisation 51 58 51 59
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Total 275 266 281 262
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Operations Review [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Ghana
Obuasi
Obuasi's gold production for the quarter was 137,564 ounces, approximately 1,500
ounces short of its annualised target but 11,313 ounces above the 126,251 ounces
achieved in the third quarter of 2002. The increase in production was due to
increased tonnage throughput and feed grade at the Sulphide Treatment Plant
(STP). At US$207 per ounce, the cash operating cost for the quarter was
marginally above the target of US$205 per ounce and below the US$211 per ounce
achieved in the third quarter last year.
Mining. Underground production of 590,000 tonnes was lower than the 627,000
tonnes reported in the third quarter of 2002 and the shaft head grade at 7.42
g/t is a decrease on the 7.60 g/t reported for the same period last year. The
reduced tonnage resulted from lower availability of the loader fleet.
Underground infrastructure. During the quarter, excavation activities on the 51
level loading pocket, the 26 level skip change out bay and the 24 level
discharge bin at Brown Sub-vertical Shaft (BSVS) were completed, as were civil
works on 51 level loading station. BSVS shaft steelwork procurement was
completed and the sections for equipping the head end of the shaft were
delivered to site. Erection of the shaft steel work surface jigs began during
the quarter and equipping, starting with the installation of the shaft cables
and clamps, is scheduled to begin in November 2003. Commissioning of the shaft
is scheduled to take place at the end of 2004. At Sansu, civil works and
electrical/mechanical installations were completed in preparation for the
sinking and lining of the upper section of the raisebored Sansu waste pass
system.
Surface. A total of 121,000 tonnes grading 2.35 g/t was mined from the Homase
and Kunka open pits during the quarter, compared with 163,000 tonnes at 2.81 g/t
for the corresponding period in 2002.
Processing. Throughput at STP was 619,000 tonnes, 4% above the 593,000 tonnes
achieved for the corresponding period of last year whilst the head grade
increased to 7.16 g/t from 6.80 g/t and metallurgical recovery at 82.7% showed a
slight improvement on the corresponding period last year. The quarter's gold
production at STP was 117,802 ounces as compared to 107,097 ounces in the third
quarter of 2002. Production tonnage was affected by an unscheduled change out of
the ball mill trunion bearing. Despite the increase in throughput from 184,000
tonnes last year to 229,000 tonnes in the third quarter, gold production at the
Oxide Treatment Plant reduced by 1,451 ounces to 7,948 ounces from the 9,399
ounces achieved in the third quarter last year because of the lower grade and
more refractory nature of the ore feed. Over the comparative periods, throughput
and metallurgical recovery at the Tailings Treatment Plant increased from
453,000 tonnes to 521,000 tonnes and from 29.5% to 31.0% respectively, resulting
in an increase in gold production from 9,755 ounces to 11,814 ounces.
Exploration. During the quarter, exploratory drilling activities continued at
50S 173E, 155W, 131W, 42W, 19E, TSAD 5N 32W and 12N 32W crosscuts whilst infill
drilling and development sampling continued within the main mining areas.
Above 50 level, an intersection of 20.0 g/t over 31 metres was made on the 10
level horizon from quartz with visible gold of the Ashanti Spur.
On the '50L Deeps' project, two intercepts were made during the quarter; one
from 50S 131W crosscut which averaged to 18.8 g/t over 2.6 metres on the 55L
horizon. The other intercept was from 50N 19E crosscut, which was the first
intercept from the northern corridor of the 50L Deeps targets, where quartz with
graphitic schist was intercepted at a grade of 16.1 g/t over 3 metres. Within
this zone of intercept, there was a 1 metre zone of 32.1 g/t on the 57 1/2 level
horizon.
Elsewhere, on 38 level 294 crosscut, just to the north of BSVS, the Obuasi
Fissure with quartz and mineralised sulphides was intersected on 40 1/2 level
horizon at a grade of 18.1 g/t over 4.5 metres.
Iduapriem (80% owned)/Teberebie (90% owned)
Third quarter gold production at Iduapriem/Teberebie was a record 68,014 ounces
compared with 51,843 ounces produced in the same period last year. CIL plant
throughput at 973,000 tonnes was 46% above the 668,000 tonnes achieved in the
third quarter of 2002 and the feed grade improved from 2.01 g/t to 2.18 g/t.
Plant recovery at 89.8% was below plan and the 96.0% reported the previous year
as a result of problems with the inter tank screens and under sized agitator
blades in the leach and absorption sections. At the end of the quarter, most of
the remedial engineering work on the CIP plant and crusher and overland conveyor
systems had been completed and during the fourth quarter a steady state
performance capability of the upgrade should be established. Heap leach gold
production for the quarter reduced to 6,648 ounces from 10,399 ounces in the
third quarter of 2002 because of lower recovery from the harder, less porous
ores. The cash operating cost for the quarter was US$232 per ounce compared with
US$209 per ounce for the corresponding period last year. The increase in unit
cash operating costs was due to higher ore handling costs and increases in the
price of power, diesel and reagents.
Bibiani
Bibiani produced 55,519 ounces of gold in the third quarter from processing
721,000 tonnes of ore at 3.26 g/t. Metallurgical recovery was 73.5% and the cash
operating cost was US$204 per ounce. Production for the corresponding period in
2002 was 61,192 ounces from 680,000 tonnes at 3.64 g/t and a metallurgical
recovery of 79.7%, at US$193 per ounce. The increase in unit cash operating
costs resulted from lower gold production, cost increases on the mining
contract, higher than plan diesel costs, greater than plan material movement in
the main pit and increased power costs. Milled tonnage increased as a result of
improvements to the plant's crushing circuit, but as expected, the lower mill
feed grade and metallurgical recovery, owing to the more refractory nature of
the ore types being processed, resulted in the reduced gold
2 Ashanti Goldfields, Third Quarter 2003
Operations Review [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
production. During the quarter, work continued on installing the flotation plant
and the regrind mill relocated from Obuasi in the second quarter. Commissioning
of this plant, which is designed with a view to improving recovery to over 80%,
is now scheduled for the end of the fourth quarter. Good progress was made on
the underground decline to access the old workings below the pit and, by the end
of the third quarter, the face had been advanced from the portal at the +140RL
to the +RL65 elevation, a distance of approximately 900 metres.
Guinea
Siguiri (85% owned)
Siguiri gold production of 60,437 ounces compared with 60,940 ounces achieved in
the third quarter of 2002. Stacked tonnage increased to 2.2 million tonnes from
2.1 million tonnes whilst the feed grade improved to 1.14 g/t from 1.09g/t. Gold
recovery for the quarter reduced to 76.1% from 82.9% as a result of abnormally
high solution dilution in the month of September. The cash operating cost for
the quarter was US$263 per ounce compared with US$226 per ounce for the same
period last year due to an increased rate of cement consumption to cater for a
higher SAP to CAP ore blend and increased fuel, cement and cyanide prices. The
revision of the CIP project feasibility study and the selection of a new
contractor was successfully completed during the quarter. The project is
estimated to cost US$72 million with an anticipated commisioning date by the end
of the fourth quarter 2004/first quarter 2005, assuming that the project is
re-commenced during the next quarter. The country investment climate and the
options for financing the project are being reviewed.
Zimbabwe
Freda-Rebecca
Freda-Rebecca gold production for the quarter was 13,453 ounces compared with
24,765 ounces in the third quarter of 2002. Although an improvement on the 9,560
ounces produced in the previous quarter, the shortage of 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 continued to impact on production. Mill throughput in the third quarter
was 327,000 tonnes at 1.70 g/t compared with 274,000 tonnes at 3.40 g/t for the
corresponding period in 2002. A five-month intensive maintenance programme to
improve availability of the mining fleet, a plan to rationalise the operation
and improve economic performance has been prepared and is being implemented.
However, achievement of the key objectives and the timing thereof will depend to
a large extent on the timely release of proceeds of the mine's bullion revenue
by the country's regulatory authorities.
Tanzania
Geita (50% owned)
Gold production at Geita was 176,487 ounces (Ashanti's share: 88,244 ounces)
compared with 164,673 ounces (Ashanti's share 82,337 ounces) produced in the
third quarter of 2002. Plant feed for the quarter was 1.43 million tonnes at
4.27 g/t compared to 1.28 million at 4.30 g/t for the corresponding period last
year. The improvement in gold production relative to last year was largely due
to the higher plant throughput achieved following the plant upgrade, which was
commissioned in the first quarter of 2003. The improvement relative to the past
three quarters of 2003 was due to full mining access being gained to the higher
grade portion of Nyankanga as a result of the Pit 3 cut back, which was
prioritised over the past nine months, necessitated by the re-engineering and
expansion of the open pit late last year. Cash operating costs rose to US$175
per ounce from US$155 per ounce in the corresponding third quarter of 2002 as a
result of the increase in the depth of the pit and higher diesel and power
costs.
Summary of production and cash operating costs per ounce
Freda- Total/
Obuasi Iduapriem Bibiani Siguiri Rebecca Geita Average
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3 months to 30 September 2003
Production (ounces) 137,564 68,014 55,519 60,437 13,453 88,244 423,231
Cost per ounce (US$) 207 232 204 263 216 175 212
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3 months to 30 September 2002
Production (ounces) 126,251 51,843 61,192 60,940 24,765 82,337 407,328
Cost per ounce (US$) 211 209 193 226 212 155 199
-------------------------------------------------------------------------------------------------------
9 months to 30 September 2003
Production (ounces) 394,929 172,350 159,657 194,578 39,958 213,666 1,175,138
Cost per ounce (US$) 205 237 215 258 248 194 219
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9 months to 30 September 2002
Production (ounces) 386,398 139,456 182,217 209,159 75,065 228,151 1,220,446
Cost per ounce (US$) 201 208 187 211 220 153 194
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Ashanti Goldfields, Third Quarter 2003 3
Operations Review [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Exploration
East Africa
Tanzania
Geita
During the quarter, exploration drilling continued at Nyankanga West and Geita
Hill. At Nyankanga West, infill drilling was completed with some significant
intersections being made. Better results included 11 metres grading 20.73 g/t
from 167.5 metres and 13 metres grading 66.18 g/t from 183.5 metres in hole
NYDD147; and 28 metres of 5.64 g/t from 118 metres in NYDD143. The
mineralisation intersected at Nyankanga West is currently being
resource-modelled.
Downdip drilling at Geita Hill continued to produce positive results. Better
intersections during the quarter included: 10 metres grading 3.0 g/t from 188
metres and 8 metres at 9.7 g/t from 204 metres in hole GHDD122; 9 metres grading
5.28 g/t from 193 metres in hole GHDD125; 7 metres at 7.01 g/t from 316 metres
in hole GHDD127; and 34 metres grading 1.68 g/t from 243 metres in hole GHDD132.
Tanzania Regional
During the quarter, Ashanti finalised a royalty option agreement with Tan Range
on nine prospecting licences covering 1,095 square kilometres southwest of the
Ushirombo belt in the Lake Victoria Goldfields. Exploration will commence once
permitting has been completed.
D.R. Congo
The build up of United Nations troops at Bunia in Ituri Province is considered a
positive step in the bringing of peace and stability to the area covered by
Ashanti's Kilo concession. Ashanti is taking steps to mobilise to Mongbwalu
where there are immediate drill targets.
West Africa
Burkina Faso
On 9 September 2003, Etruscan Resources Inc. signed an agreement with Ashanti
and Echo Bay Mines Limited, now part of Kinross Gold, to purchase the Youga
properties for a total cash consideration of US$6.5 million (Ashanti's share of
consideration: 50%). Completion of the transaction is scheduled for the end of
November 2003.
Guinea
Exploration drilling continued in the SEK area (the general area surrounding the
Bidini, Eureka Hill, Sanu Tinti and Tubani pits) and north of the Kozan pit. At
the Kalamagna prospect, southeast of Bidini, better drilling results included:
21 metres grading 1.54 g/t from 14 metres; 19 metres at 2.51 g/t from 14 metres;
and 16 metres of 2.20 g/t from 28 metres.
Ghana
Shallow reverse circulation drilling on the Subriso concession, 50 kilometres
north of Bibiani, intersected gold mineralisation over a strike length of 700
metres on the Pokukrom prospect. Better drilling results included: 8 metres
grading 4.19 g/t from 15 metres; 7 metres at 3.06 g/t from 7 metres; and 10
metres grading 1.56 g/t from 25 metres. Additional deeper follow up drilling
will be undertaken during the next quarter.
Cote d'Ivoire
The political problems in Cote d'Ivoire remain largely unresolved and start-up
of exploration fieldwork is now not anticipated until at least the first quarter
of 2004. Ashanti will continue to monitor the situation in that country.
Mali
A planned reduction on the amount of fieldwork due to the rainy season meant
that few results were received in the quarter from exploratory work in Mali.
Geochemical sampling in one Authorization de Exploration indicated follow-up
soil sampling and trenching will be required.
Sierra Leone
Infill soil geochemical surveys failed to verify the previously reported
significant gold anomaly on AFCAN's Nimini Hills project. Exploration is now
being focused on other areas of the concessions.
4 Ashanti Goldfields, Third Quarter 2003
Gold Production Summary [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
3 months to 3 months to 9 months to 9 months to
30 Sept 30 Sept 30 Sept 30 Sept
2003 2002 2003 2002
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Obuasi
Underground Mining
Ore production (000 tonnes) 590 627 1,734 1,827
Ore grade (g/t) 7.42 7.60 7.25 7.52
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Surface Mining
Ore production (000 tonnes) 121 163 445 192
Ore grade (g/t) 2.35 2.81 2.37 2.76
Waste mined (000 tonnes) 237 1,063 1,539 1,136
Strip ratio 2.0 6.5 3.5 5.9
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Sulphide Treatment Plant
Ore processed (000 tonnes) 619 593 1,781 1,758
Head grade (g/t) 7.16 6.80 7.03 7.23
Recovery (%) 82.7 82.6 8.35 84.9
Gold produced (ounces) 117,802 107,097 335,747 346,529
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Pompora Treatment Plant
Ore processed (000 tonnes) -- -- -- --
Head grade (g/t) -- -- -- --
Recovery (%) -- -- -- --
Gold produced (ounces) -- -- -- 195
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Oxide Treatment Plant
Ore processed (000 tonnes) 229 184 619 184
Head grade (g/t) 2.19 1.98 1.97 1.98
Recovery (%) 49.3 80.1 65.9 80.1
Gold produced (ounces) 7,948 9,399 25,995 9,399
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Tailings Treatment Plant
Ore processed (000 tonnes) 521 453 1,474 1,326
Head grade (g/t) 2.27 2.27 2.23 2.29
Recovery (%) 31.0 29.5 31.4 31.0
Gold produced (ounces) 11,814 9,755 33,187 30,275
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Obuasi Total Processed
Ore processed (000 tonnes) 1,369 1,230 3,874 3,268
Head grade (g/t) 4.47 4.41 4.29 4.93
Recovery (%) 70.0 72.4 73.9 74.6
Total gold produced (ounces) 137,564 126,251 394,929 386,398
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Obuasi Production Distribution
Obuasi underground (ounces) 117,802 107,097 335,747 346,724
Obuasi surface (ounces) 7,948 9,399 25,995 9,399
Obuasi tailings (ounces) 11,814 9,755 33,187 30,275
Obuasi total (ounces) 137,564 126,251 394,929 368,398
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Iduapriem/Teberebie
Mining
Ore production (000 tonnes) 1,359 1,238 3,202 3,339
Ore grade (g/t) 1.74 1.65 1.78 1.63
Waste mined (000 tonnes) 5,089 3,632 12,557 11,920
Strip ratio 3.7 2.9 3.9 3.6
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CIL Plant
Ore processed (000 tonnes) 973 668 2,728 1,966
Head grade (g/t) 2.18 2.01 1.96 1.96
Recovery (%) 89.8 96.0 90.0 92.5
Gold produced (ounces) 61,366 41,444 154,314 110,945
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Heap Leach
Ore stacked (000 tonnes) 480 496 1,058 1,301
Head grade (g/t) 1.41 1.16 1.37 1.12
Recovery (%) 30.5 56.2 38.7 60.9
Gold produced 6,648 10,399 18,036 28,511
Total (ounces) 68,014 51,843 172,350 139,456
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Ashanti Goldfields, Third Quarter 2003 5
Gold Production Summary [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
3 months to 3 months to 9 months to 9 months to
30 Sept 30 Sept 30 Sept 30 Sept
2003 2002 2003 2002
-----------------------------------------------------------------------------------------
Bibiani
Mining
Ore production (000 tonnes) 1,002 882 2,523 1,873
Ore grade (g/t) 3.02 3.95 3.06 3.29
Waste mined (000 tonnes) 1,207 2,717 4,623 8,721
Strip ratio 1.2 3.3 1.8 4.7
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CIL Plant
Ore processed (000 tonnes) 721 680 1,954 1,891
Head grade (g/t) 3.26 3.64 3.33 3.75
Recovery (%) 73.5 79.7 76.3 81.2
Gold produced (ounces) 55,519 61,192 159,657 182,217
-----------------------------------------------------------------------------------------
Siguiri
Mining
Ore production (000 tonnes) 2,156 2,231 7,015 6,609
Ore grade (g/t) 1.17 1.13 1.16 1.19
Waste mined (000 tonnes) 1,747 2,052 5,415 6,080
Strip ratio 0.8 0.9 0.8 0.9
-----------------------------------------------------------------------------------------
Heap Leach
Ore stacked (000 tonnes) 2,168 2,101 7,198 6,956
Head grade (g/t) 1.14 1.09 1.12 1.14
Recovery (%) 76.1 82.9 75.1 81.7
Gold produced (ounces) 60,437 60,940 194,578 209,159
-----------------------------------------------------------------------------------------
Freda-Rebecca
Underground Mining
Ore production (000 tonnes) 190 286 458 832
Ore grade (g/t) 2.20 2.84 2.42 3.00
-----------------------------------------------------------------------------------------
Surface Mining
Ore production (000 tonnes) 9 -- 52 110
Ore grade (g/t) 2.14 -- 1.95 2.52
Waste mined (000 tonnes) 45 -- 262 81
Strip ratio 5.0 -- 5.0 0.7
-----------------------------------------------------------------------------------------
Processing
Ore processed (000 tonnes) 327 274 975 845
Head grade (g/t) 1.70 3.40 1.70 3.36
Recovery (%) 75.0 82.5 75.2 82.4
Gold produced (ounces) 13,453 24,765 39,958 75,065
-----------------------------------------------------------------------------------------
Geita JV
Surface Mining
Ore mined (000 tonnes) 1,702 1,466 4,055 4,306
Grade (g/t) 3.58 3.80 3.21 3.60
Waste mined (000 tonnes) 14,539 12,269 40,346 27,503
Strip ratio 8.5 8.4 9.9 6.4
-----------------------------------------------------------------------------------------
Processing
CIL Plant
Ore processed (000 tonnes) 1,432 1,280 4,323 3,718
Head grade (g/t) 4.27 4.30 3.39 4.10
Recovery (%) 91.0 93.0 91.0 93.0
Gold produced (ounces) 176,487 164,673 427,331 456,301
Ashanti's 50% share (ounces) 88,244 82,337 213,666 228,151
-----------------------------------------------------------------------------------------
Group Summary
Managed gold production (ounces) 334,987 324,991 961,472 992,295
Geita JV 50% (ounces) 88,244 82,337 213,666 228,151
-----------------------------------------------------------------------------------------
Sub-total 423,231 407,328 1,175,138 1,220,446
Less minority interests (ounces) 19,268 16,918 55,039 52,293
-----------------------------------------------------------------------------------------
Group Attributable Total (ounces) 403,963 390,410 1,120,099 1,168,153
-----------------------------------------------------------------------------------------
6 Ashanti Goldfields, Third Quarter 2003
Financial Review [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Earnings
Earnings (before exceptional gains) for the third quarter were US$20.2 million,
up US$12.4 million on the US$7.8 million recorded during the previous quarter.
The 159% improvement in earnings was due to a 14% increase in gold production, a
higher average realised gold price and a reduction in cash operating costs per
ounce, relative to the second quarter.
The quarter's earnings (before exceptional gains) of US$20.2 million was US$2.3
million lower than the US$22.5 million recorded in 2002, mainly due to higher
cash operating costs.
Earnings for the quarter, after exceptional gains of US$4.7 million (2002: nil),
amounted to US$24.9 million (2002: US$22.5 million).
Earnings per share before exceptional items for the quarter were US$0.15 (2002:
US$0.18) and after exceptional items were US$0.19 (2002: US$0.18).
Earnings before exceptional items for the nine months to 30 September 2003 were
US$34.8 million as compared to US$58.8 million in 2002. Earnings after
exceptional income of US$11.7 million, were US$46.5 million (2002: US$35.3
million).
Revenue
Gold production for the quarter of 423,231 ounces generated spot revenue of
US$154.9 million, equivalent to US$366 per ounce (2002: US$315 per ounce). Total
hedging income for the quarter was negative US$4.8 million, comprising US$3.2
million of deferred hedging income from previously closed out hedge contracts
and US$8.0 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$355 per ounce (2002: US$347 per
ounce). Year to date total revenue of US$407.3 million (2002: US$419.3 million)
was equivalent to US$347 per ounce.
Hedging
Sustained strength in spot gold prices and low lease rate levels, allowed
Ashanti to reduce its lease rate exposure whilst adding protection to its hedge
book.
Notional lease rate exposure has been reduced from 2.76 million ounces as at 30
June 2003 to 1.68 million ounces as at 30 September 2003. The value generated
from these lease rate fixings was used to purchase a total of 176,063 ounces of
put options at an average strike of US$358 per ounce, with maturities ranging
from 2004 to 2012. The strikes of these put options were matched against
existing sold call options to create forward sales. Please refer to the hedging
table on page 12 for a revised lease rate amortisation and protection profile.
At the quarter end, Ashanti had 4.6 million ounces protected at an average price
of US$361 per ounce, with commitments to deliver 5.9 million ounces at an
average price of US$359 per ounce. Ashanti's outstanding commitments for 2003
stood at 175,822 ounces as at 30 September 2003. The mark-to-market valuation of
the Ashanti hedge book moved from negative US$108 million as at 30 June 2003 to
negative US$329.8 million at 30 September 2003, based on a spot price of US$384
per ounce. The movement in mark-to-market was principally owing to the increased
spot price and US interest rates. Ashanti's share of the Geita hedge book was
negative US$61.9 million.
Cash Operating Costs
Total cash operating costs for the quarter were US$212 per ounce, up US$13 per
ounce on last year but represented a US$10 per ounce improvement on the previous
quarter, largely due to higher production. Total cash operating costs for the
year to date amounted to US$219 per ounce (2002: US$194 per ounce).
Profit
Total operating profit for the quarter was US$24.9 million (2002: US$24.4
million). Non-mine site exploration expenditure expensed in the quarter was
US$0.8 million bringing year to date expenditure to US$2.4 million. Corporate
administration expenditure for the quarter was US$5.7 million and year to date
expenditure was US$18.0 million.
Interest charge for the quarter (before exceptional items) was US$4.0 million,
US$0.6 million lower than the previous quarter.
Exceptional Items
During the quarter Ashanti received insurance proceeds of US$3.0 million for the
Company's damaged aircraft, which has since been scrapped. This, resulted in an
exceptional gain of US$2.0 million.
In September, the Company re-negotiated the terms of the Kimin loans. In
consideration for Ashanti extending the terms of the guarantee currently in
place in favour of the lender, it secured a reduction in the amounts owed from
US$7.7 million to US$5.0 million. This reduction of US$2.7 million has been
recognised as an exceptional gain within interest payable.
Cash Flows and Balance Sheet
Cash inflow from operating activities for the quarter was US$29.1 million (2002:
US$13.2 million) and US$61.2 million for the year to date (2002: US$58.2
million). Net interest payments in the quarter were US$2.4 million compared to
US$4.4 million last year.
Capital expenditure for the quarter of US$19.1 million (2002: US$15.5 million)
included US$11.1 million at Obuasi, US$1.8 million at Iduapriem and US$4.1
million at Siguiri.
During the quarter, a further 200,000 warrants were exercised raising US$0.6
million. As at 30 September 2003, stated capital stood at 131.0 million shares
and 2.3 million warrants remained outstanding.
Group debt as at 30 September (excluding the 50% share of the non-recourse Geita
project finance loan) stood at US$239.3 million, down US$6.4 million from 30
June 2003 due principally to the reduction of the Kimin loans of US$2.7 million
and repayment of the aircraft loan from the insurance proceeds. Net debt was
US$12.6 million lower at US$193.9 million (30 June 2003: US$206.5 million).
Proposed Merger Arrangement
On 4 August 2003, Ashanti announced the terms of a recommended merger with
AngloGold Limited ("AngloGold"). As announced on 14 October and reaffirmed on 27
October 2003, the Board of Ashanti (the "Board") has received an improved final
merger offer ("Revised Merger Proposal") from AngloGold at a ratio of 29
AngloGold shares for every 100 Ashanti ordinary shares or global depositary
securities. The Board has resolved to recommend the Revised Merger Proposal to
Ashanti's shareholders. The Revised Merger Proposal is conditional on the
support of the Government of Ghana (the "Government") as shareholder and
regulator of Ashanti, the approval of the scheme of arrangement required to
implement the transaction by Ashanti shareholders and the High Court of Ghana
and certain other regulatory approvals and third party consents as detailed in
the 4 August announcement.
Ashanti welcomes the announcement of the Government on 28 October 2003,
indicating its decision to support the Board's recommendation of the Revised
Merger Proposal. Ashanti and AngloGold have agreed to extend the time limit for
the receipt of formal Government approvals to 14 November 2003, or such later
date as Ashanti and AngloGold may agree.
There can be no assurance that a transaction with AngloGold will be completed.
Consequently, shareholders of Ashanti are advised to exercise caution when
dealing in the relevant securities.
Ashanti Goldfields, Third Quarter 2003 7
Group Profit and Loss Account [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Unaudited
3 months to 3 months to
30 Sept 2003 30 Sept 2002
Before After
exceptional Exceptional exceptional
items items items Group
Note US$m US$m US$m US$m
--------------------------------------------------------------------------------------------------------
Turnover: Group and share of
joint venture 2 150.1 -- 150.1 141.2
Less share of joint venture (29.7) -- (29.7) (24.5)
----------------------------------------------------------------------------------------------------------
Group turnover 120.4 -- 120.4 116.7
Cash operating costs 2 (74.4) -- (74.4) (68.3)
Other costs (8.0) -- (8.0) (7.7)
Royalties (3.8) -- (3.8) (2.9)
Depreciation and amortisation (17.3) -- (17.3) (19.9)
Refinancing and restructuring costs -- -- -- --
Other income -- -- -- 8.8
----------------------------------------------------------------------------------------------------------
Total costs (103.5) -- (103.5) (90.0)
----------------------------------------------------------------------------------------------------------
Operating profit 2 16.9 -- 16.9 26.7
Share of operating profit of joint venture 8.0 -- 8.0 (2.3)
----------------------------------------------------------------------------------------------------------
Total operating profit 24.9 -- 24.9 24.4
Profit on sale of investment -- -- -- --
Profit on sale of fixed assets -- 2.0 2.0 --
----------------------------------------------------------------------------------------------------------
Profit before interest and taxation 24.9 2.0 26.9 24.4
Net interest payable: group (3.0) 2.7 (0.3) (4.0)
joint venture (1.0) -- (1.0) (1.4)
----------------------------------------------------------------------------------------------------------
Profit before taxation 20.9 4.7 25.6 19.0
Tax: group -- -- -- 3.9
joint venture (0.4) -- (0.4) --
----------------------------------------------------------------------------------------------------------
Profit after taxation 20.5 4.7 25.2 22.9
Minority interests (0.3) -- (0.3) (0.4)
----------------------------------------------------------------------------------------------------------
Profit attributable to shareholders 20.2 4.7 24.9 22.5
Dividends -- -- -- --
----------------------------------------------------------------------------------------------------------
Retained profit for the period 20.2 4.7 24.9 22.5
==========================================================================================================
Earnings per share (US$) 0.15 0.04 0.19 0.18
==========================================================================================================
9 months to 9 months to
30 Sept 2003 30 Sept 2002
Before After
exceptional Exceptional exceptional
items items items Group
Note US$m US$m US$m US$m
--------------------------------------------------------------------------------------------------------
Turnover: Group and share of
joint venture 2 407.3 -- 407.3 419.3
Less share of joint venture (68.3) -- (68.3) (67.0)
-----------------------------------------------------------------------------------------------------------
Group turnover 339.0 -- 339.0 352.3
Cash operating costs 2 (216.1) -- (216.1) (201.6)
Other costs (23.5) -- (23.5) (20.2)
Royalties (10.5) -- (10.5) (8.7)
Depreciation and amortisation (51.8) -- (51.8) (62.7)
Refinancing and restructuring costs -- -- -- (23.5)
Other income -- -- -- 8.8
-----------------------------------------------------------------------------------------------------------
Total costs (301.9) -- (301.9) (307.9)
-----------------------------------------------------------------------------------------------------------
Operating profit 2 37.1 -- 37.1 44.4
Share of operating profit of joint venture 13.1 -- 13.1 9.0
-----------------------------------------------------------------------------------------------------------
Total operating profit 50.2 -- 50.2 53.4
Profit on sale of investment -- 7.8 7.8 --
Profit on sale of fixed assets -- 2.0 2.0 --
-----------------------------------------------------------------------------------------------------------
Profit before interest and taxation 50.2 9.8 60.0 53.4
Net interest payable: group (10.0) 2.7 (7.3) (14.1)
joint venture (3.3) -- (3.3) (3.6)
-----------------------------------------------------------------------------------------------------------
Profit before taxation 36.9 12.5 49.4 35.7
Tax: group (0.2) (0.8) (1.0) --
joint venture (1.2) -- (1.2) --
-----------------------------------------------------------------------------------------------------------
Profit after taxation 35.5 11.7 47.2 35.7
Minority interests (0.7) -- (0.7) (0.4)
-----------------------------------------------------------------------------------------------------------
Profit attributable to shareholders 34.8 11.7 46.5 35.3
Dividends -- -- -- --
-----------------------------------------------------------------------------------------------------------
Retained profit for the period 34.8 11.7 46.5 35.3
===========================================================================================================
Earnings per share (US$) 0.27 0.09 0.36 0.30
===========================================================================================================
8 Ashanti Goldfields, Third Quarter 2003
Group Balance Sheet [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Unaudited
As at As at
As at 30 Sept 2003 30 Sept 2002 31 Dec 2002
Interest
in joint
Group venture Total Group Group
US$m US$m US$m US$m US$m
---------------------------------------------------------------------------------------------------------------
Fixed assets
Intangible assets 15.6 52.3 67.9 17.5 17.3
Tangible assets 608.2 109.6 717.8 597.5 602.7
Investments
- Geita joint venture 99.8 (99.8) -- 96.0 91.2
- Loans to joint venture and other investments 31.1 -- 31.1 32.6 32.6
------ ----- ------ ------ ------
754.7 816.8 743.6 743.8
------ ----- ------ ------ ------
Current assets
Stocks 72.6 12.6 85.2 74.8 76.6
Debtors due within one year 16.5 17.4 33.9 11.6 14.0
Debtors due after more than one year 12.7 -- 12.7 8.8 8.8
Cash 45.4 14.1 59.5 35.8 41.3
------ ----- ------ ------ ------
147.2 44.1 191.3 131.0 140.7
------ ----- ------ ------ ------
Creditors: amounts falling due within one year
Creditors (116.6) (16.8) (133.4) (124.0) (131.1)
Borrowings (6.7) (10.8) (17.5) (5.7) (2.7)
------ ----- ------ ------ ------
(123.3) (27.6) (150.9) (129.7) (133.8)
------ ----- ------ ------ ------
Net current assets 23.9 16.5 40.4 1.3 6.9
Total assets less current liabilities 778.6 857.2 744.9 750.7
Creditors: amounts falling due after more than
one year
Creditors (15.0) (39.9) (54.9) (41.9) (24.0)
Borrowings (232.6) (35.2) (267.8) (262.4) (254.2)
Provisions for liabilities and charges (25.5) (3.5) (29.0) (21.6) (25.0)
------ ----- ------ ------ ------
505.5 505.5 419.0 447.5
====== ===== ====== ====== ======
Capital and reserves
Stated capital 599.0 588.2 588.2
Reserves (95.4) (171.6) (141.9)
------ ----- ------ ------ ------
Equity shareholders' funds 503.6 416.6 446.3
Equity minority interests 1.9 2.4 1.2
------ ----- ------ ------ ------
505.5 419.0 447.5
====== ===== ====== ====== ======
Ashanti Goldfields, Third Quarter 2003 9
Group Cash Flow Statement [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Unaudited
3 months to 3 months to 9 months to 9 months to
30 Sept 2003 30 Sept 2002 30 Sept 2003 30 Sept 2002
US$m US$m US$m US$m
-------------------------------------------------------------------------------------------------------------------
Cash inflow from operating activities 29.1 13.2 61.2 58.2
-------------------------------------------------------------------------------------------------------------------
Returns on investments and servicing of finance
Interest received 0.3 0.2 0.6 0.5
Interest paid (2.7) (4.6) (7.6) (18.0)
-------------------------------------------------------------------------------------------------------------------
Net cash outflow from returns on investments and
service of finance (2.4) (4.4) (7.0) (17.5)
-------------------------------------------------------------------------------------------------------------------
Taxation
Corporate tax paid (1.1) -- (1.1) (1.7)
-------------------------------------------------------------------------------------------------------------------
Capital expenditure and financial investments
Purchase of tangible fixed assets (19.1) (15.5) (56.7) (46.1)
Proceeds from sale of fixed assets 3.0 -- 3.0 --
Proceeds from sale of investment -- -- 9.5 --
-------------------------------------------------------------------------------------------------------------------
Net cash outflow from capital expenditure and
financial investment (16.1) (15.5) (44.2) (46.1)
Cash inflow/(outflow) before use of liquid resources
and financing 9.5 (6.7) 8.9 (7.1)
Management of liquid resources (1.9) 1.8 6.6 13.4
-------------------------------------------------------------------------------------------------------------------
Cash inflow/(outflow) before financing 7.6 (4.9) 15.5 6.3
Financing
Loans drawn down -- -- -- 265.0
Loan repayments (3.3) (36.6) (15.6) (317.0)
Issue of shares 0.6 -- 10.8 41.8
-------------------------------------------------------------------------------------------------------------------
Net cash outflow from financing (2.7) (36.6) (4.8) (10.2)
-------------------------------------------------------------------------------------------------------------------
Increase/(decrease) in cash 4.9 (41.5) 10.7 (3.9)
-------------------------------------------------------------------------------------------------------------------
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash 4.9 (41.5) 10.7 (3.9)
Increase/(decrease) in liquid resources 1.9 (1.8) (6.6) (13.4)
-------------------------------------------------------------------------------------------------------------------
6.8 (43.3) 4.1 (17.3)
Cash outflow from financing 3.3 36.6 15.6 52.0
Other 2.5 (0.2) 2.0 3.7
-------------------------------------------------------------------------------------------------------------------
Movement in net debt 12.6 (6.9) 21.7 38.4
Net debt at beginning of period (206.5) (225.4) (215.6) (270.7)
-------------------------------------------------------------------------------------------------------------------
Net debt at end of period (193.9) (232.3) (193.9) (232.3)
-------------------------------------------------------------------------------------------------------------------
10 Ashanti Goldfields, Third Quarter 2003
Notes to the Financial Information [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
1. Basis of Preparation
The unaudited results for the nine months ended 30 September 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
9 months to 30 September 2003
Idua- Freda-
Obuasi priem Bibiani Siguiri Rebecca
-----------------------------------------------------------------------------------
Production ounces 394,929 172,350 159,657 194,578 39,958
-----------------------------------------------------------------------------------
US$ million
Revenue - spot 140.3 61.4 56.7 69.1 14.2
- hedging -- -- -- -- --
-----------------------------------------------------------------------------------
140.3 61.4 56.7 69.1 14.2
Operating costs (80.8) (40.9) (34.3) (50.2) (9.9)
Other costs -- (0.9) (0.2) (2.0) --
Royalties (4.7) (1.8) (1.7) (2.3) --
-----------------------------------------------------------------------------------
EBITDA 54.8 17.8 20.5 14.6 4.3
Depreciation and amortisation (23.9) (4.9) (7.4) (10.4) (4.5)
-----------------------------------------------------------------------------------
Operating profit/(loss) 30.9.2003 30.9 12.9 13.1 4.2 (0.2)
30.9.2002 10.4 9.0 10.8 1.5 5.7
-----------------------------------------------------------------------------------
Hedging Explora- Corp.
income tion Admin Group Geita Total
-----------------------------------------------------------------------------------------------
Production ounces -- -- -- 961,472 213,666 1,175,138
-----------------------------------------------------------------------------------------------
US$ million
Revenue - spot -- -- -- 341.7 76.2 417.9
- hedging (2.7) -- -- (2.7) (7.9) (10.6)
-----------------------------------------------------------------------------------------------
(2.7) -- -- 339.0 68.3 407.3
Operating costs -- -- -- (216.1) (41.5) (257.6)
Other costs -- (2.4) (18.0) (23.5) (2.7) (26.2)
Royalties -- -- -- (10.5) (2.3) (12.8)
-----------------------------------------------------------------------------------------------
EBITDA (2.7) (2.4) (18.0) 88.9 21.8 110.7
Depreciation and amortisation -- -- (0.7) (51.8) (8.7) (60.5)
-----------------------------------------------------------------------------------------------
Operating profit/(loss) 30.9.2003 (2.7) (2.4) (18.7) 37.1 13.1 50.2
30.9.2002 38.6 (3.4) (37.0)* 35.6 17.8 53.4
-----------------------------------------------------------------------------------------------
* Includes refinancing and restructuring costs of US$23.5 million.
3 months to 30 September 2003
Idua- Freda-
Obuasi priem Bibiani Siguiri Rebecca
----------------------------------------------------------------------------------
Production ounces 137,564 68,014 55,519 60,437 13,453
----------------------------------------------------------------------------------
US$ million
Revenue - spot 50.3 25.0 20.1 22.1 5.0
- hedging -- -- -- -- --
----------------------------------------------------------------------------------
50.3 25.0 20.1 22.1 5.0
Operating costs (28.5) (15.8) (11.3) (15.9) (2.9)
Other costs -- (0.3) -- (1.2) --
Royalties (1.7) (0.7) (0.6) (0.8) --
----------------------------------------------------------------------------------
EBITDA 20.1 8.2 8.2 4.2 2.1
Depreciation and amortisation (8.5) (2.0) (2.7) (2.6) (1.4)
----------------------------------------------------------------------------------
Operating profit/(loss) 30.9.2003 11.6 6.2 5.5 1.6 0.7
30.9.2002 2.9 3.7 5.0 (2.3) 2.1
----------------------------------------------------------------------------------
Hedging Explora- Corp.
income tion Admin Group Geita Total
-------------------------------------------------------------------------------------------
Production ounces -- -- -- 334,987 88,244 423,231
-------------------------------------------------------------------------------------------
US$ million
Revenue - spot -- -- -- 122.5 32.4 154.9
- hedging (2.1) -- -- (2.1) (2.7) (4.8)
-------------------------------------------------------------------------------------------
(2.1) -- -- 120.4 29.7 150.1
Operating costs -- -- -- (74.4) (15.4) (89.8)
Other costs -- (0.8) (5.7) (8.0) (1.0) (9.0)
Royalties -- -- -- (3.8) (1.1) (4.9)
-------------------------------------------------------------------------------------------
EBITDA (2.1) (0.8) (5.7) 34.2 12.2 46.4
Depreciation and amortisation -- -- (0.1) (17.3) (4.2) (21.5)
-------------------------------------------------------------------------------------------
Operating profit/(loss) 30.9.2003 (2.1) (0.8) (5.8) 16.9 8.0 24.9
30.9.2002 11.5 (1.1) (3.9) 17.9 6.5 24.4
-------------------------------------------------------------------------------------------
3. Reconciliation of Total Costs
3 months to 3 months to 9 months to 9 months to
30 September 30 September 30 September 30 September
2003 2002 2003 2002
US$m US$m US$m US$m
--------------------------------------------------------------------------------------------
Cash operating costs
Obuasi 28.5 26.6 80.8 77.7
Iduapriem 15.8 10.9 40.9 29.1
Bibiani 11.3 11.8 34.3 34.1
Siguiri 15.9 13.8 50.2 44.2
Freda-Rebecca 2.9 5.2 9.9 16.5
Geita (50%) 15.4 12.8 41.5 34.8
--------------------------------------------------------------------------------------------
Total cash operating costs 89.8 81.1 257.6 236.4
Corporate administration costs 5.7 3.6 18.0 12.5
Exploration costs 0.8 1.1 2.4 3.4
Other costs 2.5 3.8 5.8 6.7
Royalties 4.9 3.7 12.8 10.8
Depreciation and amortisation 21.5 23.5 60.5 72.6
Exceptional costs -- -- -- 23.5
--------------------------------------------------------------------------------------------
Total costs* 125.2 116.8 357.1 365.9
--------------------------------------------------------------------------------------------
* Includes Geita's costs of US$21.7 million (2002: US$26.8 million) for three
months to 30 September 2003 and US$55.2 million (2002: US$58.0 million) for
the nine months to 30 September 2003.
Ashanti Goldfields, Third Quarter 2003 11
Hedging Commitments [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
The table below shows all forward and option positions that Ashanti had as at 30
September 2003:
2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------
Forward Sales
(ounces) 173,058 657,992 677,246 566,250 507,450 400,450
(US$/ounce) 349 355 352 358 360 369
--------------------------------------------------------------------------------------------------------------
Calls:
Sold (ounces) 55,550 496,180 470,478 182,006 173,826 218,410
(US$/ounce) 331 341 350 368 357 365
--------------------------------------------------------------------------------------------------------------
Bought (ounces) 50,550 101,880 134,000 49,432 64,396 --
(US$/ounce) 345 359 352 370 361 --
--------------------------------------------------------------------------------------------------------------
Subtotal (ounces) 5,000 394,300 336,478 132,574 109,430 218,410
--------------------------------------------------------------------------------------------------------------
Lease Rate Swap oz due 2,236
--------------------------------------------------------------------------------------------------------------
Summary:
Protected (ounces) 170,822 657,992 677,246 566,250 507,450 400,450
--------------------------------------------------------------------------------------------------------------
Committed (ounces) 175,822 1,052,292 1,013,724 698,824 616,880 618,860
--------------------------------------------------------------------------------------------------------------
Total commited ounces as a percentage of
total forecast production (excluding
Geita for the period of the project
finance, 2003-2007)
47%
--------------------------------------------------------------------------------------------------------------
Lease Rate Swap (ounces) 546,000 866,000 788,000 1,245,000 1,267,00 1,084,000
--------------------------------------------------------------------------------------------------------------
Deferred Hedging Income (US$m) 3 11
--------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 Totals
-------------------------------------------------------------------------------------------------------
Forward Sales
(ounces) 413,450 383,450 324,250 292,500 214,500 4,610,596
(US$/ounce) 362 366 373 378 369 361
-------------------------------------------------------------------------------------------------------
Calls:
Sold (ounces) 70,970 28,250 28,250 -- -- 1,723,920
(US$/ounce) 368 350 350 -- -- 352
-------------------------------------------------------------------------------------------------------
Bought (ounces) -- -- -- -- -- 400,258
(US$/ounce) -- -- -- -- -- 357
-------------------------------------------------------------------------------------------------------
Subtotal (ounces) 70,970 28,250 28,250 -- -- 1,323,662
-------------------------------------------------------------------------------------------------------
Lease Rate Swap oz due 2,236
-------------------------------------------------------------------------------------------------------
Summary:
Protected (ounces) 413,450 383,450 324,250 292,500 214,500 4,608,360
-------------------------------------------------------------------------------------------------------
Committed (ounces) 484,420 411,700 352,500 292,500 214,500 5,932,022
-------------------------------------------------------------------------------------------------------
Total commited ounces as a percentage of
total forecast production (excluding
Geita for the period of the project
finance, 2003-2007)
47%
-------------------------------------------------------------------------------------------------------
Lease Rate Swap (ounces) 826,000 568,000 310,000 130,000 --
-------------------------------------------------------------------------------------------------------
Deferred Hedging Income 14
-------------------------------------------------------------------------------------------------------
Forward Sales:
A total of 4.61 million ounces have been sold forward at an average price of
US$361 per ounce.
Call Options:
Ashanti has sold 1.72 million ounces of call options at an average strike price
of US$352 per ounce. As a partial offset, Ashanti has bought 0.4 million ounces
of call options at an average strike price of US$357 per ounce.
Gold Lease Rate Swaps:
As at 30 September 2003, a maximum of 1.27 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
--------------------------------------------------------------------------------
1,361,000 1.80% Ashanti pays a quarterly floating rate and receives
a quarterly weighted average fixed rate of 1.80%.
--------------------------------------------------------------------------------
320,000 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 2006.
--------------------------------------------------------------------------------
Total
1,681,000
--------------------------------------------------------------------------------
12 Ashanti Goldfields, Third Quarter 2003
Hedging Commitments [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Mark-to-market valuations
On 30 September 2003, the portfolio had a negative mark-to-market value of
US$329.8 million. This valuation was based on a spot price of US$384 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$5.3 million negative impact (approximate) on the
mark-to-market valuation of the hedge book. Movements in US interest rates, gold
lease rates, volatilities and time will also have a sizeable impact on the
mark-to-market. All these variables can change significantly over short time
periods and can consequently materially affect the mark-to-market valuation.
The approximate breakdown by type of the mark-to-market valuation at 30
September 2003 was as follows:
US$m
-------------------------------------------------------------------------------
Forward contracts (218.2)
European Call options (net sold) (96.4)
Lease rate swaps (15.2)
-------------------------------------------------------------------------------
(329.8)
-------------------------------------------------------------------------------
Geita Hedging
The table below shows Ashanti's portion of hedging commitments for Geita as at
30 September 2003. This represents half of Geita's hedge commitments.
2003 2004 2005 2006 2007 Total
-------------------------------------------------------------------------------------------
Forward Sales (ounces) 50,931 195,558 174,828 94,576 120,938 636,831
(US$/ounce) 264 289 294 296 298 291
-------------------------------------------------------------------------------------------
Puts:
Bought (ounces) 2,674 25,586 24,350 18,115 23,390 94,115
(US$/ounce) 286 291 291 291 292 291
-------------------------------------------------------------------------------------------
Lease Rate Swap oz due (ounces) 258 258
-------------------------------------------------------------------------------------------
Summary:
Protected (ounces) 53,347 221,144 199,178 112,691 144,328 730,688
-------------------------------------------------------------------------------------------
Committed (ounces) 50,673 195,558 174,828 94,576 120,938 636,573
-------------------------------------------------------------------------------------------
Lease Rate Swap 156,301 116,774 76,301 41,420 -- --
-------------------------------------------------------------------------------------------
Marked-to-market valuation:
On 30 September 2003, the Geita portfolio had a negative mark-to-market value of
US$123.8 million (Ashanti's portion: negative US$61.9 million). This valuation
was based on a spot price of US$384 per ounce and the then prevailing US
interest rates, gold forward rates, volatilities and guidelines provided by the
Risk Management Committee of the Board.
Ashanti Goldfields, Third Quarter 2003 13
Forward Looking Statements [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
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.
14 Ashanti Goldfields, Third Quarter 2003
Corporate Information [ASHANTI GOLDFIELDS COMPANY LIMITED LOGO]
Ashanti Goldfields Company Limited
Registered in Ghana No. 7094
Corporate Office
Gold House
Patrice Lumumba Road
PO Box 2665
Accra, Ghana
Telephones: (+233-21) 772190
(+233-21) 772235
(+233-21) 778160
(+233-21) 778167
(+233-21) 761311
Fax: (+233-21) 775947
Satellite Telephone: 874 1562524
Satellite Fax: 874 1562525
Website: www.ashantigold.com
Ernest Abankroh
Company Secretary
Telephone: (+233-21) 774977
Fax: (+233-21) 778155
E-Mail Address ernest.abankroh@ashantigold.com
London Office
3rd Floor, Roman House
Wood Street
London EC2Y 5BA
United Kingdom
Telephone: (+44-20) 7256 9938
Fax: (+44-20) 7256 9939
Corinne Gaisie
UK Representative and European contact
E-Mail Address corinne.gaisie@ashanti.co.uk
--------------------------------------------------------------------------------
Investor Relations
Corporate Office
Kwaku Akosah-Bempah
Acting Managing Director, Public Affairs
Telephones: (+233-21) 778172
Fax: (+233-21) 774981
E-Mail Address
kwaku.akosah-bempah@ashantigold.com
European contact:
Corinne Gaisie
Telephone: (+44-20) 7256 9938
Fax: (+44-20) 7256 9939
E-Mail Address corinne.gaisie@ashanti.co.uk
North American contact:
Allan Jordan
Telephone: (+1-646) 284 9400
Fax: (+1-646) 284 9494
E-Mail Address ajordan@hfgcg.com
--------------------------------------------------------------------------------
Shareholder Enquiries:
International Registrars'
UK Transfer Office
Capita IRG Plc
Bourne House, 34 Beckenham Road
Beckenham, Kent BR3 4TU
Telephone: (+44-20) 8639 2000
Fax: (+44-20) 8639 3430
Ghana Registrars
NTHC Limited
Registrar/Custodial Unit
Martco House
Off Kwame Nkrumah Avenue
PO Box KIA 9563 Airport
Accra, Ghana
Telephone: (+233-21) 235817
Fax: (+233-21) 240243
Zimbabwe Registrars
Syfrets Corporate and Merchant Bank
1st Floor
99 Jason Moyo Avenue
PO Box 2540
Harare, Zimbabwe
Telephone: (+263-4) 736011
Fax: (+263-4) 736022
GDR Holder Enquiries:
The Bank of New York
ADR Department
101 Barclay Street, 22nd Floor
New York, NY 10286
Telephone: (+1-212) 815 2209
Fax: (+1-212) 571 3050
Ashanti Goldfields, Third Quarter 2003 15
A copy of this release is available at http://www.ashantigold.com/release.htm
Exhibit 2
(ASHANTI LOGO)
PRESS RELEASE
FOR IMMEDIATE RELEASE 30 OCTOBER 2003
CORRECTION TO THIRD QUARTER REPORT 2003
Ashanti wishes to correct a typographical error in the Operations Review section
of its Press Release on the Third Quarter Results which was released to the
market earlier today.
The second paragraph of the commentary relating to exploration at Obuasi (page
2): "Above 50 level, an intersection of 20.0g/t over 31 metres was made on the
10 level horizon from quartz with visible gold of Ashanti spur" should instead
read: "ABOVE 50 LEVEL, AN INTERSECTION OF 20.0G/T OVER 3.1 METRES WAS MADE ON
THE 10 LEVEL HORIZON FROM QUARTZ WITH VISIBLE GOLD OF ASHANTI SPUR".
ENDS
ENQUIRIES:
ASHANTI GOLDFIELDS COMPANY LIMITED
T S Schultz - Chief Financial Officer Tel: +44 7798503049
E Abankroh - Company Secretary Tel. +442072569938
K Akosah-Bempah - Acting MD, Public Affairs Tel: +233 21778172
UK CONTACT
Corinne Gaisie - Ashanti London Office Manager Tel: +44 207 256 9938
NORTH AMERICAN CONTACT
Allan Jordan - Golin Harris International Tel: +1 646 284 9400
A copy of this release is available at http://www.ashantigold.com/releases.htm
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: October 31, 2003 ASHANTI GOLDFIELDS COMPANY LIMITED
By: /s/ Ernest Abankroh
------------------------------
Name: Ernest Abankroh
Title: Company Secretary