March 2018 Market Update Report - www.AngloGoldAshanti.com
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relative to the same quarter last year.
In Tanzania, Geita’s production was 99,000oz at a total cash cost of $892/oz compared to 105,000oz at a total cash cost of $615/oz
for the same quarter in 2017. Production decreased because of a 6% decrease in recovered grade due to mining of lower open-pit
grades compared to the previous period, partly offset by higher underground grades as the transition to the underground operation
continues. Total cash costs increased as a result of the lower production and higher initial underground mining cost.
Production in the Americas region remained flat at 191,000oz at a total cash cost of $657/oz for the quarter ended 31 March 2018
compared to a total cash cost of $631/oz in the first quarter of 2017. AISC for the first quarter of 2018 was $843/oz compared to
$954/oz in the same quarter a year ago.
In Brazil, production was 125,000oz at a total cash cost of $724/oz in the first quarter of 2018 compared to 124,000oz at a total cash
cost of $690/oz for the same quarter in 2017. AISC for the first quarter of 2018 was $924/oz compared to $1,024/oz in the sam e
quarter a year ago. Despite steady production, total cash costs were higher when compared to same period last year, impacted by
inflationary pressures, particularly higher power prices and labour costs, and partially offset by a favourable exchange rate.
Production at AngloGold Ashanti Mineração was 93,000oz at a total cash cost of $709/oz compared to 95,000oz at a total cash cost
of $628/oz in the same quarter last year. Despite increased production from the CdS complex, in line with changes in the mining plan,
production at Mineração was lower due to a decreased contribution from the Cuiabá complex. Total cash costs are higher year-on-
year due to lower grades, higher costs of spares and equipment, inflationary increases on labour and services, partly offset by
favourable exchange rate movements.
Serra Grande’s production was 32,000oz at a total cash cost of $770/oz compared to 29,000oz at a total cash cost of $891/oz in the
same quarter last year. The 10% increase in production for the period was mainly due to higher feed grades and recoveries supported
by the good performance in crushing, milling and leaching areas. Total cash costs were 14% lower compared to the same quarter last
year due to increased production and a weaker exchange rate, partially offset by increased inflation.
In Argentina, Cerro Vanguardia produced 66,000oz at a total cash cost of $543/oz compared to 67,000oz at a total cash cost of
$533/oz in th e same quarter last year. Production was slightly lower mainly because of lower planned grades, while silver production
increased 24% year-on-year due to higher sliver grades and recovery improvements. Total cash costs were higher mainly as a result
of unfavorable stockpile movements due to higher tonnes treated and inflation, reflecting annual salary inc reases following the
completion of the second round of negotiations in October 2017.
The Australia region produced 161,000oz at a total cash cost of $755/oz for the first quarter of 2018, 27% up from 127,000oz at a
total cash cost of $734/oz in the first quarter of 2017. AISC for the first quarter was $1,046/oz, compared to $1,045/oz in t he same
quarter a year ago. Costs in the region were negatively impacted by a 4% stronger Australian dollar to the US dollar.
Production at Sunrise Dam was 88,000oz at a total cash cost of $782/oz compared to 57,000oz at a total cash cost of $885/oz in the
same quarter last year. The 54% increase in gold production reflected successful implementation of the new mining strategy, which
resulted in a significant lift in mined grade, as well as Operational Excellence improvements. Production also benefited from a draw-
down of gold-in-circuit. The higher production contributed to a 12% drop in the total cash costs. Construction of the Recovery
Enhancement Project is on time and on budget.
Tropicana produced 73,000oz at a total cash cost of $661/oz compared to 70,000oz at a total cash cost of $550/oz in the same quarter
last year. Production was boosted mainly by draw-downs in gold-in-circuit which offset the impact of weather-related mining delays.
Despite higher volumes, total cash costs increased due to unfavourable inventory movements and a reduction in the waste mining
costs capitalised.
CORPORATE UPDATE
Update on Company Leadership Change and CEO Search
On 16 April 2018, AngloGold Ashanti announced the resignation of Srinivasan Venkatakrishnan (Venkat), who after 18 years with the
Company, with the last five years as Chief Executive Officer, has accepted an offer to become CEO of Vedanta Resources Plc, t he
diversified resources group. Venkat will remain in his current role until 30 August 2018. A global search for the new CEO is underway,
with a sub-committee of the Board formed to evaluate internal and external candidates. It is the Board’s intention that a successor will
have been identified before Venkat’s departure.
Commenting on the search and AngloGold Ashanti’s strategy, Chairman Sipho Pityana said: “We remain steadfast in our commitment
to building a self-sustaining gold company in a disciplined fashion, with tight capital control, uncompromising focus on the creation of
long-term value and the highest ethical standards. The Board will search globally for a candidate with the requisite experience and
breadth of expertise, who will be committed to maintaining the discipline and value focus that has become a hallmark of this business.”
Legislation changes in Tanzania
In July 2017, AngloGold Ashanti noted the enactment by the Republic of Tanzania’s Parliament and publication in the Country’s official
Government Gazette of three pieces of new legislation that purport to make a number of changes to the operating environment for
Tanzania’s extractive industries, including those in its mining, and oil and gas sectors. For more detail on the legislation, please see
https://thevault.exchange/?get_group_doc=143/1501167539-PR20170713Geita.pdf. On 10 January 2018, the Government of
Tanzania published its new Mining Regulations, 2018, which contain, amongst others, the implementation provisions of the amended
Mining Act. AngloGold Ashanti’s subsidiaries are seeking a constructive dialogue with the Government of Tanzania, to gain