Edgar Filing: ANGLOGOLD ASHANTI LTD

Page 1

UNITED STATES

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

Report on Form 6-K dated March 29, 2018

Commission File Number 1-14846

AngloGold Ashanti Limited

(Name of registrant)

76 Rahima Moosa Street

Newtown, 2001

(P.O. Box 62117, Marshalltown, 2107)

South Africa

(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 if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):

Yes

No X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):

Yes

No X

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

Enclosure: Press release ANGLOGOLD ASHANTI LIMITED – INTEGRATED REPORT FOR THE
YEAR ENDED DECEMBER 31, 2017

HOW TO USE THIS REPORT

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CONTENTS

OVERVIEW

About our reports

Directors’ statement of responsibility

Corporate proﬁle

Chairman’s letter

Highlights of the year

CEO’s review

Quick links

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

2 0 1 7

ABOUT THIS REPORT

OUR PERFORMANCE

CHAIRMAN’S LETTER

HIGHLIGHTS

SECTION 1

OVERVIEW

SECTION 2

BUSINESS CONTEXT

SECTION 3

STRATEGY

SECTION 4

PERFORMANCE REVIEW

SECTION 5

ACCOUNTABILITY

SECTION 6

SHAREHOLDER INFO

Accountability

Shareholder information

OVERVIEW

SECTION 1

We provide an overarching view of our

reports, including the Chairman’s message to

stakeholders, our corporate proﬁle and the year’s

highlights, as well as the CEO’s account of our

delivery on the previous year’s commitments,

and the outlook for the year ahead.

About our reports

Directors’ statement of responsibility

Corporate profile

Chairman’s letter

Highlights of the year

CEO’s review

Picture:

Siguiri, Guinea

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

About this report

This integrated report, covering the year

from 1 January to 31 December 2017,

offers a concise review of our performance

and progress in delivering on our strategic

objectives, while taking into account our

external operating environment (the ensuing

opportunities and material risks identiﬁed),

as well as actions taken in mitigation. We

also report on our regional operational

performance and provide a view on our

growth options for the future and long-term

sustainability of the business.

Underpinning all that we do are our corporate

values, our code of ethics and our governance

framework. These are especially signiﬁcant

given the recent adoption of the King IV

Report on Corporate Governance for South

Africa, 2016 (King IV), to which an integrated

approach to the strategy and operations of a

business, are integral. Integrated reporting is a

natural outcome of this approach. King IV has

been applied throughout this report.

Our integrated report takes into account the

socio-economic context in which we operate,

the factors giving rise to the material risks

and opportunities that may affect our ability

to create value – including the gold industry

landscape – and the various interdependent

stakeholders whose needs, interests and

expectations have an impact on us.

Our reporting also acknowledges our role as

a corporate citizen within this context, and

the consequent rights, responsibilities and

obligations conferred upon us as a result.

The material risks and issues reported are

those considered most likely to affect the

sustainability of our business in the short,

medium and long term. In identifying these, as

well as any opportunities, we have taken into

account our operating context and stakeholder

feedback during the year. Our material issues

are discussed in full in the

<SDR>

The information presented in this report, aimed

primarily at current and potential investors

and ﬁnanciers, we believe should enable them

and other interested stakeholders to assess

the viability of our business and our ability to

create value.

In addition to King IV, this report is aligned

with the International Integrated Reporting

Council’s framework, the South African

Companies Act 71 of 2008 (as amended) and

the JSE Listings Requirements.

Scope and boundary

This integrated report covers the entire

company and its main business units and

functions, including joint ventures and

investments, over which we exercise control

or have signiﬁcant inﬂuence. Performance

is reported regionally, in line with our

corporate structure, and we report fully

on all operations managed by AngloGold

Ashanti. Those operations in which we have

an ownership interest but do not manage

– Kibali and Morila – are partially reported

in terms of their safety, environmental and

socio-economic performance. There were no

signiﬁcant changes to the scope, boundary or

measurement methods used in this report.

Restatements (if any) of comparatives,

are indicated.

As this is a group-level report, operating

targets and performance are discussed

regionally rather than by operation, although

certain detail on operational information is

given if appropriate. Additional information,

including maps of our greenﬁelds and

brownﬁelds exploration activities, is available

on our website, www.anglogoldashanti.com.

Information relating to joint ventures and other

interests is provided for context and elsewhere

if deemed material. Production, costs and

capital expenditure data is attributable,

unless otherwise indicated. Employee data

and average workforce data are reported for

AngloGold Ashanti with joint ventures reported

on an attributable basis. Employee data

includes both permanent employees

and contractors.

While this report covers the 2017 ﬁnancial

year, any signiﬁcant, material event that occurs

between the end of the year and the date on

which this report is approved is included.

ABOUT OUR REPORTS

USEFUL LINKS

Visit our reports website:
www.aga-reports.com

Visit our corporate website:
www.anglogoldashanti.com

Download the full suite of reports

Picture:

Moab Khotsong, South Africa

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

OUR 2017
SUITE OF REPORTS

Click on any of the links below to download the relevant PDF

<IR>

Integrated Report

<SDR>

Sustainable Development Report

<AFS>

Annual Financial
Statements

<NOM>

Notice of Annual General
Meeting and Summarised
Financial Information
(Notice of Meeting)

<R&R>

Mineral Resource and
Ore Reserve Report

<WWW>

www.aga-reports.com

ABOUT OUR REPORTS CONTINUED

Integrated Report

<IR>

is the primary

document in our suite of reports and

provides a concise overview and

explanation of our performance in terms

of our strategic objectives, how we create

value and the outlook for the company.

Both ﬁnancial and non-ﬁnancial

performance are reviewed.

Notice of Annual General Meeting and

Summarised Financial Information

(Notice of Meeting)

<NOM>

is produced

and posted to shareholders in line with

the JSE Listings Requirements and

the requirements of the South African

Companies Act, 71 of 2008,

as amended (Companies Act).

Sustainable Development Report

<SDR>

compiled in line with the Global Reporting

Initiatives’ (GRI’s) latest G4 guidelines, is

published together with the accompanying

GRI scorecard and supplementary data.

Mineral Resource and Ore Reserve

Report

<R&R>

, presented in line with the

SAMREC and JORC codes, provides

detailed information on all our operations

and projects.

Annual Financial Statements

<AFS>

are prepared in accordance with the

International Financial Reporting

Standards (IFRS).

Operation proﬁles are compiled

for each of our mining operations

and provide a summary overview of

operating performance.

A dedicated annual reporting website,

www.aga-reports.com, hosts PDFs of the

full suite of these reports to facilitate ease

of access by, and communication with,

our stakeholders.

AngloGold Ashanti Limited’s 2017 suite of reports is made up

as follows:

MINE

RAL

RESOURCE

AND

ORE

RESERVE

AND

ORE

RESERVE

REPO

RT 2017

NOTICE OF

ANNU

AL GENER

MEET

ING

2017

ANNUAL

FINANCIAL

STATEMENTS 2017

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

ABOUT OUR REPORTS CONTINUED

Directors’ statement of responsibility

The board of AngloGold Ashanti Limited (AngloGold Ashanti) and the Company’s executive

management consider the matters discussed in this report to be those that most inﬂuence

our ability to successfully achieve our strategic objectives, create value and manage the risks

we face, and believe that this report fairly records our performance in the past year.

The board, assisted by the Audit and Risk Committee and the Social, Ethics and

Sustainability Committee, is ultimately responsible for overseeing and conﬁrming the integrity

and completeness of this

<IR>

and the entire suite of 2017 reports. The board, having

reviewed and applied its collective mind to the preparation, information and presentation

of this report, declared that this

<IR>

addresses all material issues and presents a fair and

balanced view of our integrated performance for the year ended 31 December 2017.

On the recommendation of the Audit and Risk Committee, the board approved this

<IR>

19 March 2018.

Sipho M Pityana

Rhidwaan Gasant

Chairman

Chairman: Audit and Risk Committee

Srinivasan Venkatakrishnan

Christine Ramon

Chief Executive Ofﬁcer

Chief Financial Ofﬁcer

Approvals and assurance

Several internal processes, including, among others, management assurance and internal audit

reviews of the information and data published in our reports, are conducted regularly. In addition,

our operations are subjected to risk-based, integrated, combined assurance reviews focusing on

commercial, safety and sustainability aspects of the business. The outcomes of these reviews and

external assurances, as well as of any independent technical reviews, provide reasonable assurance

to allow the board, on the recommendation of the Audit and Risk Committee, to determine the

effectiveness of the group’s internal control systems and procedures.

Picture:

Quebradona, Colombia

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CORPORATE PROFILE

AngloGold Ashanti,an international gold mining company with a

globally diverse, high-quality portfolio of operations and projects,

is headquartered in Johannesburg, South Africa. Measured by

production, AngloGold Ashanti is the third-largest gold mining

company in the world.

Our business

Our business activities span the full spectrum of

the mining value chain. Such activities include

mitigating our impact on the communities and

environments in which we operate. To maintain

and strengthen our social capital, we aim to

create sustainable value for shareholders,

employees, and social and business partners

through safe and responsible mining and

discipline in the allocation of capital.

Over the past ﬁve years, AngloGold Ashanti

has transformed itself by increasing efﬁciencies

and competitiveness, focusing on safety

and sustainability performance, improving

margins, containing operating and overhead

costs, and generating positive cash ﬂows.

Given the current market environment and

the scrutiny of ﬁnancial capital allocation, we

ensure responsible capital distribution, in line

with business requirements. We do this while

optimising internal expertise to aggressively

identify and implement operational efﬁciencies,

reducing overhead costs, improving capital

discipline and pursuing other business

improvement initiatives without compromising

safety. We continue our focus on debt

reduction to further strengthen our balance

sheet and on improving the quality of our

portfolio. This we aim to do by unlocking value

from existing operations, and developing

brownﬁelds opportunities, the redevelopment

of the Obuasi mine, and other long-term

growth projects, including Colombia.

Our organisational and management

structure aligns with global best practice in

corporate governance. By using our human

capital efﬁciently, group support functions

cover planning and technical, strategy,

sustainability, ﬁnance, human resources, legal

and stakeholder relations. The planning and

technical functions focus on identifying and

managing opportunities, maintaining long-term

optionality, and ensuring the optimal use of our

intellectual capital through a range of activities

that include brownﬁelds and greenﬁelds

exploration as well as innovative research

focused on mining excellence.

Corporate status 2017

•

South Africa region restructured to

ensure sustainability of the business, as

a consequence of which, TauTona and

Savuka were placed into orderly closure,

while Moab Khotsong and Kopanang have

been sold, together with our interests in

the Nuclear Fuel Corporation (Nufcor)

and the Margaret Water Company. These

transactions were successfully concluded

on 28 February 2018

•

The feasibility study at the Obuasi Gold Mine

was completed. Agreements have been

reached with the government of Ghana for

the redevelopment of Obuasi, subject to

ratiﬁcation by Ghana’s parliament

•

At Yatela, closure remains on track with

completion scheduled for 2021

•

All other assets remained fully operational

•

Disclosure refers to continuing operations

Picture:

Siguiri, Guinea

I N T E G R AT E D R E P O RT

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Safety is our

ﬁrst value.

We treat each

other with dignity

and respect.

We are accountable

for our actions
and undertake

to deliver on our

commitments.

We want the

communities and

societies in which we

operate to be better

off for AngloGold

Ashanti having

been there.

We value
diversity.

We respect the

environment.

OUR

VALUES

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

AMERICAS

1 Argentina
Cerro Vanguardia (92.5%)

2 Brazil
Serra Grande
AGA Mineração

3 Colombia
   Gramalote (51%)
   La Colosa
   Quebradona (93.5%)

SOUTH AFRICA

9 South Africa

Vaal River

Kopanang

Moab Khotsong

West Wits

Mponeng

TauTona

(3)

Surface Operations

(4)

Argentina

Colombia

DRC

Tanzania

Australia

Ghana

Guinea

Mali

South Africa

Brazil

AUSTRALASIA

10 Australia

Sunrise Dam

Tropicana (70%)

LEGEND

Operations Greenfields projects

CONTINENTAL AFRICA

4 Guinea

Siguiri (85%)

5 Mali

Morila (40%)

(1)

Sadiola (41%)

6 Ghana
Iduapriem
Obuasi

(2)

7 DRC

Kibali (45%)

(1)

8 Tanzania
Geita

LOCATION OF ANGLOGOLD ASHANTI’S

OPERATIONS

AND PROJECTS

CORPORATE PROFILE CONTINUED

OUR PORTFOLIO OF ASSETS

As at 31 December 2017, our portfolio of 17

operations and three projects in ten countries

included long-life, relatively low-cost operating

assets with differing orebody types, located in

key gold-producing regions. These operating

assets were supported by greenﬁelds projects

and a focused exploration programme.

Our operations and projects are grouped

as follows:

South Africa

Vaal River, West Wits and
Surface Operations

International Operations

Continental Africa

Democratic Republic of the Congo (DRC),
Ghana, Guinea, Mali and Tanzania

Americas

Argentina, Brazil and Colombia

Australasia

Australia

Percentages indicate the ownership interest held by AngloGold Ashanti. All operations
are 100%-owned unless otherwise indicated.

(1)

Morila and Kibali are managed and operated by Randgold Resources Limited

(2)

Obuasi remained on care and maintenance in 2017. The feasibility study was
completed and redevelopment of the mine is imminent

(3)

TauTona had its ﬁnal blast on 15 September 2017, and has now been placed into
orderly closure

(4)

Surface Operations includes First Uranium SA, which owns Mine Waste Solutions
(MWS). MWS is managed and operated as a separate cash-generating unit

Picture:

Mponeng, South Africa

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CORPORATE PROFILE CONTINUED

Geographic distribution of shareholders

(as at 31 December 2017)

•

United States

•

South Africa

•

United Kingdom

•

Rest of Europe

•

Asia

• Ghana

•

Rest of world

3 1 4

Exploration

Our exploration programme aims to establish

an organic growth pipeline to enable us to

generate signiﬁcant value over time.

We undertake greenﬁelds and brownﬁelds

exploration in both established and new

gold-producing regions through managed and

non-managed joint ventures, strategic alliances

and wholly-owned ground holdings. Our world-

class greenﬁelds discoveries include La Colosa,

Gramalote and Quebradona (Nuevo Chaquiro)

in Colombia.

Our product

Once mined, gold ore is processed into doré

(unreﬁned gold bars) on site and dispatched

to precious metals reﬁneries for reﬁning to a

purity of at least 99.5%, in accordance with the

London Bullion Market Association’s standards

of ‘good delivery’. The reﬁned gold bars are

then sold directly to bullion banks.

While gold is our principal product, several

by-products also make up a small proportion of

our manufactured capital output. By-products

are silver in Argentina, uranium in South Africa

and sulphuric acid in Brazil. In compliance with

all applicable legislation, great care is taken to

ensure the safe production, transportation and

storage of uranium and sulphuric acid, which

are hazardous materials. AngloGold Ashanti

complies with the International Atomic Energy

Agency’s (IAEA) safeguards regarding all its

uranium sales contracts and shipments. For

more information on uranium and its handling

process, see the South Africa regional review.

As of 1 March 2018, following the sale of the

Vaal River operations, which included the

uranium producing unit, AngloGold Ashanti will

no longer produce uranium.

Shareholders

AngloGold Ashanti is an independent gold

producer, with a diverse spread of shareholders

that includes some of the world’s largest ﬁnancial

institutions – see

Shareholder Information

The government of Ghana also holds a 1.55%

stake in the company with the respective

national governments holding direct interests

in our operating subsidiary in Guinea and joint

ventures in the DRC and Mali. In Argentina,

Fomicruz, a state company in the province of

Santa Cruz, has an interest in Cerro Vanguardia.

The primary listing of the company’s ordinary

shares is on the JSE in South Africa. Its shares

(or depository receipts) are also listed on

the New York, Australian and Ghana stock

exchanges. More detailed information on our

listings on various stock exchanges is provided

in Shareholder Information on page 196.

At 31 December 2017, AngloGold Ashanti

had 410,054,615 ordinary shares in issue

and a market capitalisation of $4.18bn

(2016: $4.29bn). Post year-end, at 19 March

2018, the date on which this report was

approved by the board, the company’s market

capitalisation was $3.71bn.

Picture:

Serra Grande, Brazil

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

It was a year in which the executive team,

once again oversaw the making good on its

commitments and continued execution of

the company’s strategy to deliver sustainable

improvements to cash ﬂow and returns. This

consistency in delivery is a hallmark of a

strong leadership team and a deep bench of

management and functional talent. This has

allowed AngloGold Ashanti to meet each of its

operating and cost guidance metrics for the

past ﬁve years, whilst extending its trajectory

of long-term improvements in sustainability

metrics, namely environmental stewardship,

safety and the all-important engagement with

our stakeholders. The improvements were

AngloGold Ashanti Stakeholders,

It is my pleasure t oreflect on

2017, another eventful year in

our emerging-market gold-mining

universe and beyond.

made despite an increasingly volatile operating

and market environment.

Global context

It was a year in which the world grew used to

a steady ﬂow of breaking news from the White

House in the US as President Donald J. Trump

settled into his new role. Across the Paciﬁc,

North Korea proved up to the task of matching

the drumbeat of aggressive political rhetoric

emanating from Washington DC, while in

Europe, Brexit talks lurched from one impasse

to another, with little more certainty now than

a year ago on how the UK will leave the EU.

In Italy, Germany and Hungary, right-wing

populists made signiﬁcant gains at the ballot

box, an ominous portent for political discourse

in the ‘developed world’.

Emerging markets were only marginally

less volatile. In the Middle East, a clutch of

Arab states, led by Saudi Arabia, severed

diplomatic ties with Qatar as part of broader,

regional hostilities against its one-time

ally Iran. This Cold War theme continued

elsewhere in the region as the multi-player

war in Syria, which has now drawn in Russia

and the US, raged on.

Brazil continued to reform its political arena

by going after corrupt elites, helping speed

its emergence from a brutal recession. In

Argentina, President Mauricio Macri pressed

ahead with unpopular, but necessary reforms.

In South Africa, in the days before Christmas,

Cyril Ramaphosa wrested control of the

governing African National Congress (ANC)

from Jacob Zuma and his loyalists. Only weeks

into the new year, Zuma was forced by the

ANC to resign as president of the country,

ushering in a new era of hope and economic

recovery, after a decade of wanton corruption

and mismanagement which took the country

to the brink of ﬁnancial ruin. This was a victory

for the country’s independent media and

civil society, which had exposed so-called

State Capture and called for his resignation.

Importantly, it was also a vindication of

the strength and robust structure of its

constitutional democracy.

Meanwhile, most major asset classes –

equities, bonds, commodities, property,

among others – continued to rise to dizzying

heights, fuelled by low interest rates. The

consensus emerging from the World Economic

Forum meeting in Davos in January of this

year, was that the world is primed for a period

of synchronised growth, turbo-charged by

sweeping tax cuts in the US and long-awaited

market reforms in France.

The US Federal Reserve continued its efforts

to normalise monetary policy, raising interest

rates in three 25 basis point increments to

1.50%. This did little to dampen market

enthusiasm, as many traditional ways of

pricing risk appear to have been abandoned

CHAIRMAN’S LETTER

Sipho Pityana

Chairman

Consistency
in delivery

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CHAIRMAN’S LETTER CONTINUED

– or at least forgotten – by investors engaged

in an insatiable search for yield. For evidence,

look no further than Argentina, a country with

a history of defaults over the past century,

which managed to issue a 100-year bond.

In June, a month after a soldiers’ mutiny in

the Ivory Coast, and only six years after the

West African country’s previous default, the

country completed a spectacularly successful

debt issue that was almost ten times

oversubscribed. It ﬁnally issued $1.25 billion

of 16-year bonds with a 6.25 percent rate and

625 million euros of eight-year notes yielding

5.125 percent. These are historically low

borrowing costs that demonstrate the market

appetite for yield above all else.

Volatile times

All of this is to say that we live in volatile times,

with unprecedented economic and market

conditions that are likely to create additional

political and market volatility when these

trends start to revert to the long-term mean.

As countries and economies buffeted by these

forces try to adjust, we should be prepared for

unforeseen repercussions.

As they most often do, threats to the bullish

outlook on world markets have already

started to emerge. The US has announced

punitive tariffs on steel and aluminium imports,

the ﬁrst salvo in a trade war that will have

repercussions far and wide. Inﬂation has

started to raise its head as price increases

start to nose upward toward the US target

range, after ﬂatlining for years.

Staying the course on strategy

Gold is responding well to these external

factors, shrugging off the panic of rising

interest rates that have kept a lid on prices for

the past four or ﬁve years. It seems – for now

at least – that among gold investors the need

for protection from rising inﬂation is beating out

the fear of higher US rates, with the gold price

on average ﬂat through 2017, ﬁnishing the year

strongly. It has continued that trend through

the ﬁrst quarter of 2018.

Notwithstanding this helpful tailwind from the

gold price, the board is clear that it will not

relax the imperative for vigilance with respect

to the executives’ prudent management of

the business, which has been exemplary

since the severe downturn in the gold market

in 2013. You will read in the CEO letter, and

elsewhere in this report, that the management

of the company is more focused than ever on

ensuring continued pursuit of our strategic

objectives. This means intensifying scrutiny of

costs, exploring ways to make our operations

more productive and efﬁcient, strengthening

our balance sheet where possible, and making

further improvements to our portfolio.

As the board, we are in full support of the

executive’s view that the best way to manage

market risk in the long-term is to be ruthless in

our allocation of capital – ceaselessly searching

out ways to improve our portfolio and extend

the life of our existing assets, at reasonable

cost, through the development of project

options that generate returns above our hurdle

rates. Following this strategic path to long-term

self-sufﬁciency has not always been easy. We

have not issued new equity to the market for

the past eight years, relying instead on ‘self-

help’ to effect structural improvements to our

portfolio and to strengthen our balance sheet

through the reduction of our net debt by almost

a third. Only by effectively utilising our capital

and producing superior project returns can we

hope to remain a sustainable gold producer

than can offer acceptable returns to investors

and strong leverage to the gold price.

We are proud to have achieved this through a

combination of cash generation, cost savings

and asset sales. Operating cash generation

from the business remains strong and long-

term optionality continues to improve.

We made the difﬁcult call during 2017 to

restructure our South African portfolio, selling the

unproﬁtable Kopanang mine, and our prized –

but relatively short-life – Moab Khotsong asset,

and put the unproﬁtable TauTona mine into

orderly closure. This was a difﬁcult decision for

the company given the job losses we faced at

the start of the restructuring process, which were

subsequently saved through the asset sales.

This will reduce our South African business to

less than 15% of production, but allowed us

to shed loss-making ounces, whilst creating

additional ﬂexibility in our balance sheet. We

have also decided to move ahead to redevelop

our Obuasi Gold Mine in Ghana, with a plan that

we believe is robust, practical and appropriately

conservative in arriving at the attractive returns

that we anticipate from the project.

Local risk

On a more region-speciﬁc basis, we continue

to see the normal ebb and ﬂow of jurisdictional

risk across our portfolio. Australia’s gold

industry showed solidarity in helping rebuff

repeated attempts by the state government in

Western Australia to hike royalties and levy a

super-proﬁts tax, ultimately triumphing with the

argument that punitive taxes and constantly

changing legislation are severely detrimental to

the long-term sustainability of capital-hungry

mine investment.

We have seen encouraging improvements in

Ghana, where a new administration elected

on an anti-corruption ticket in late 2016, has

created an environment more conducive to

inward investment. Our decision to press

ahead on the Obuasi redevelopment is on

one hand based on a sound technical study,

and on the other, the strong support from the

government and local authorities in providing

a welcoming environment for job-creating

investment with several positive effects for that

economy – a true win-win situation.

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Overview

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Strategy

Performance review

Accountability

Shareholder information

CHAIRMAN’S LETTER CONTINUED

South Africa, too, has made decisive moves

in the right direction to attract investment by

promising to root out public mismanagement

and corruption, and to reduce the legal and

regulatory uncertainty that in recent years has

caused massive damage to its economy.

In Tanzania, President John P. Magafuli

has, since his election in 2016, made some

important steps toward introducing greater

accountability in the public service, rooting

out mismanagement and corruption, and

prioritising the progress of the country to

middle-income status by 2025. As one of the

largest taxpayers in the country, we are in

strong support of this overarching objective,

given the obvious beneﬁts that growth and

added stability bring to all investors active

in the country. The release in July of a suite

of new laws governing the extractive sector

has however created some uncertainty for

investors, who in turn have penalised the

valuation of assets in the country. The implied

value in the market of our Geita mine has

suffered as a result. We have reached out to

the government of Tanzania with the hope of

initiating a discussion that will help clarify the

co-existence of the new laws and regulations

with our pre-existing Mine Development

Agreement, which guaranteed us certain

ﬁscal stability when we ﬁrst committed billions

of dollars of capital investment to Tanzania.

It is important that such dialogue happens

and, we trust it will afford us the means to

provide certainty to our shareholders, funders

and employees; and to ensure the ongoing

investment in the future of that business, an

outcome that will beneﬁt all stakeholders.

Likewise, in the neighbouring Democratic

Republic of the Congo, the new Mining Code

has also created uncertainty with respect to

how the new law will be harmonised with the

guarantee of stability which was contained in

the previous Mining Code. We are, with our

joint venture partner and operator, and our

industry peers seeking an engagement with

the government, ahead of the publication

of the Regulations that will govern the

implementation of the new law.

The biggest requirements for the large, long-term

capital commitments that mining needs, is good

governance, regulatory certainty and the timeous

refund of corporate and indirect tax refunds,

which are important to ongoing reinvestment.

Equally, though, we are mindful that there

must be a quid pro quo, with lasting beneﬁt

provided to the countries which allow us to

extract their mineral wealth. We are working

hard to ensure improved linkages from our

operations to the broader economy through

speciﬁc focus on localisation of skills and a

commitment for an increasing proportion of

our total expenditure towards procurement

from local businesses.

Our Remuneration Report provides a wealth

of detail on the strides made in these areas,

particularly in our Continental Africa business

which, notwithstanding its growth in recent

years, has more than halved its complement

of expatriate staff. We have also placed added

emphasis on economic development initiatives

that will help incubate the very businesses that

over the long term can supply our needs and

those of the broader business community in

our host countries.

Dividend

In line with the approved dividend policy, the

board has applied its discretion in adjusting

the 2017 free cash ﬂow, pre-growth capital

expenditure metric for the $49m abnormal

South African retrenchment costs paid and

had approved a dividend of ZAR 70 cents per

share (approximately 6 US cents) per share.

Looking forward

As we look ahead to 2018, we will work

to ensure continued follow-through on our

strategic objectives and our ongoing work

to release latent value in this company. That

requires, among others, continued diligence

in extracting – in a safe, sustainable way –

as much beneﬁt from the natural resources

we mine as possible, while demonstrating

the equitable sharing of these beneﬁts with

all stakeholders. As ever, we also keep a

close eye on a range of strategic initiatives

that can complement those ongoing,

fundamental improvements.

Board and management

In 2017, the board bid a fond farewell to

Professor Wiseman Nkuhlu, who has made

an invaluable contribution and provided wise

counsel to the company over the years. I thank

him on behalf of the board and the company

for his support throughout the years. In April,

we then welcomed Sindiswa Zilwa, as a non-

executive director. Sindi is well regarded in the

areas of accounting, auditing and business

management, with extensive board and audit

committee experience in the public and private

sectors, traits that will beneﬁt us.

In closing, I’d like to thank our CEO, Venkat,

his executive management team, and

everyone throughout the organisation, for

their close adherence to AngloGold Ashanti’s

Values, which remain non-negotiable.

This absolute commitment to the ethical

prosecution of our overall strategy and

business plans, makes the job of chairing the

board of this company, one that I relish. I also

thank my board colleagues for their diligence

and commitment in overseeing the business.

Sipho M Pityana

Chairman

19 March 2018

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

HIGHLIGHTS OF THE YEAR

Fatalities

2013

2014

2015

2016

2017

Safety is a journey, rather than a destination,

as we continue on the path to eliminating all

injuries from our mines while intensifying and

continually improving safety practices.

New safety benchmarks were set in 2017

– three consecutive, fatality-free were

achieved quarters for the ﬁrst time; posting

349 days passed in South Africa without

a fatality. International Operations set a

record of 495 days without a fatality on

28 January 2018. Mponeng – the world’s

deepest mine – passed 2 million shifts

without a fatality; and TauTona marked

more than a year without a fatality.

The South Africa region received the

MineSAFE award recognising AngloGold

Ashanti for the most improved safety

performance year-on-year. Regrettably, this

performance was followed by a series of

seismic-related incidents in the second

half of the year when we lost seven of

our colleagues.

For the second consecutive year, Geita was

declared the overall winner in the mining

sector by the Tanzanian Occupational Safety

and Health Authority (OHSA). Iduapriem was

recognised as one of Ghana’s safest mines at

an awards ceremony in Accra in November.

In improving our capability to respond

to safety risks, our focus remains on

embedding and integrating safety into our

business processes.

All-injury frequency rate

(per million hours worked)

7.36*

7.18

7.49

7.71

7.48

2013

2014

2015

2016

2017

* 7.15 if adjusted for the impact of the earthquake,
that occured in August 2014

Safety is our
ﬁrst value!

Picture:

Sunrise Dam, Australia

I N T E G R AT E D R E P O RT

2 0 1 7

Safety

Production

Employees

Free cash ﬂow

Costs

Capital expenditure

Environment

Community

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CEO’S REVIEW

Srinivasan Venkatakrishnan:

Chief Executive Ofﬁcer

This is a pursuit that is as rewarding as it is

challenging, particularly in a market as volatile

as the one in which we operate. The successes

that we have enjoyed would not have been

possible without the excellent team we have

assembled here at AngloGold Ashanti.

Consistency, reliability, capital
discipline and delivery

For those who are not familiar with our

company, it’s worth taking a quick step back

to tell you a little about ourselves. We are the

world’s largest and most diverse emerging-

market gold producer, with operations in nine

countries, spanning South America, South

Africa, Continental Africa and Australia. We

have a strong project pipeline in the short,

medium and long term, which is kept stocked

by a world-class exploration programme

around our mine sites and Colombia, the tenth

country in which we have a presence. We are

focused on returns – with investment expected

to deliver returns at least in the mid- to high-

teens through the cycle. Strict capital discipline

is our mantra, and we have not diluted our

shareholders by issuing new equity since

2010, when we extinguished a large, legacy

hedge position.

We have worked hard to make consistency

and reliable delivery on our commitments, the

hallmark of AngloGold Ashanti over the past

ﬁve years. To that end, production, costs and

capital have either been met, or improved on

our market guidance every year. This record

demonstrates our ability to effectively manage

the headwinds and volatility that come with a

single-commodity, emerging market portfolio.

I believe that this predictability is the absolute

minimum requirement to achieve the rerating

of our equity, and we will continue to

ensure that we set challenging targets and

then provide the right environment for our

operators to meet them.

We continue to place a premium on capital

discipline. Notwithstanding a muted gold price

over the past ﬁve years, we have worked

on our efﬁciencies and margins to generate

healthy cash ﬂows from the business, which

we’ve supplemented with some asset sales

as we’ve actively managed our balance

sheet and our portfolio. This combination has

allowed us not only to pay taxes and royalties

of $1.5bn over the past ﬁve years alone, but

to reinvest inward to improve the portfolio,

notably through $4.8bn in ongoing sustaining

capital as well as self-ﬁnancing the $1.8bn

development of two new, tier one assets in

Tropicana and Kibali.

In looking at the funding of the business,

we’ve favoured self-ﬁnancing our obligations.

Our legacy debt position, which we’ve

brought down by more than a third over

the past ﬁve years, has consumed about

$1 billion in interest payments and other

costs, while total dividends have accounted

for about a ﬁfth of that. Importantly, we’ve

done all of that without going to shareholders

to give us an equity top up at any time in the

past eight years, putting us in an increasingly

exclusive club.

Going forward – and obviously depending

on the gold price – we see the potential to

further improve returns to shareholders as

our operating cash ﬂows improve, while still

maintaining the integrity of the balance sheet.

Strategy – steady as she goes

Our strategy has remained steady over the

past ﬁve years, with our focus on safety,

active portfolio management and tightly

managing cost and capital to keep our

It is my pleasure to reflect on

another year of delivery on our

commitments, as we continue to

pursue our strategy of building a

sustainable, self-financing gold

producer that can create value for

stakeholders over the long term.

Consistency,
reliability,
discipline
and delivery

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

balance sheet robust enough to handle any

market environment. We have continued to

invest in the long-term health and sustainability

of this business, through sustaining capital

expenditure, exploration, life-extension and

margin improvement projects and some

modest production growth.

All of these business pillars support our central

objective of improving cash ﬂow and returns,

on a sustainable basis.

Safety remains our ﬁrst priority. It was one of

the true highlights that, in the ﬁrst half of the

year, we managed to record 349 days without

an operating fatality at any of our mines. That

includes the ultra-deep operations here in

South Africa.

We have shown what is possible, with

Mponeng – the world’s deepest mine –

passing 2 million shifts without a fatality.

TauTona marked more than a year without a

workplace death, which I’m happy to say is

a feat that a number of our operations can

now claim. In fact, our entire International

Operations passed 495 days with no fatalities

– a truly remarkable achievement. We also

ended the year with another improvement in

our all injury frequency rate.

Similarly, I cannot articulate the disappointment

that we didn’t extend that further, after a series

of seismic events ended that run in the second

half of the year in South Africa. In the end,

we lost seven of our colleagues to workplace

accidents during 2017. My sincere and

heartfelt condolences go out to the families

and loved ones of those who passed on.

While we can celebrate the progress in many

areas, our safety performance fell short of our

own goals and we continue to search for ways

to improve. Safety is a journey, rather than a

destination. It’s a point we never forget, as

we continue on the path to eliminating injuries

from our mines.

Our teams have also been exceptionally busy

integrating our values into the execution of

our strategy, with an enormous amount of

work done on the environmental and social

elements of our business that are crucial to

our ability to maintain our social licences to

operate. This work includes the community

engagement that is so important in ensuring

we understand the needs of our employees,

our host governments and communities. It

also includes the design of investments in

areas that not only mitigate the impacts of

mining, but also make a lasting improvement

in the lives of the people in the towns, regions

and countries in which we operate. There are

initiatives underway in public health, economic

development, education, and water and

sanitation, to name a few. The detail of this

work, and also our overarching strategy in this

regard, is contained in a separate

<SDR>

which I encourage you to read.

CEO’S REVIEW CONTINUED

Production

(Moz)

4,6

4,4

4,2

4,0

3,8

3,6

3,4

Actual result

2013

2014

2015

2016

2017

Original financial year guidance range

All-in sustaining cost

($/oz)

1,150

1,100

1,050

1,000

950

900

850

Original financial year guidance range

Actual result

2013

2014

2015

2016

2017

Capital expenditure

($m)

2,200

1,800

1,400

1,000

600

2013

2014

2015

2016

2017

Actual result

Original financial year guidance range

Five years meeting or beating output guidance while restructuring the portfolio

Five years meeting or beating guidance on costs and capital despite inﬂation
and volatile local currencies

Performance against guidance

I N T E G R AT E D R E P O RT

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Overview

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Strategy

Performance review

Accountability

Shareholder information

Highlights and lowlights

Looking back at 2017, there are several

highlights, and some lowlights.

Legislative and regulatory uncertainty continue

to be one of the most pressing concerns

facing this industry. In Tanzania, the ongoing

lack of clarity over how a suite of new laws

and regulations will impact the mining sector

– including those companies operating with

clear mine development agreements. The

lingering uncertainty has penalised the value

of investments in the extractive sector, as

equity investors have voted with their feet.

In the Democratic Republic of the Congo,

the promulgation of a new mining code has

caused signiﬁcant destruction of value as

investors weigh up the attractiveness of

deploying new capital, against the risk of

shifting legislative goalposts. And in South

Africa, the reviewed Mining Charter – replete

with its contradictory legal provisions,

lack of sufﬁcient engagement and litany of

punitive prescripts – has thankfully been

suspended, pending a negotiation with the

new government leadership, though not before

causing signiﬁcant damage to investment in

the country.

We will continue to engage with governments

across our portfolio, to explain the need

for consistency and certainty, and also to

communicate the value proposition of having

a reputable, modern extractive industry that

can leverage real beneﬁt to host communities

and countries.

There were several highpoints during the year.

We saw our investments across the portfolio

helping to deliver production growth at 4%.

Cash ﬂows were also strong. We managed

to more or less break even on this basis,

notwithstanding the previously ﬂagged higher

capital expenditure during the year, as we put

money to work internally, extending the life of

our best assets and improving margins across

the portfolio where possible. Our suite of high-

return brownﬁelds projects all stayed well on

track and within our budget projections. We

also funded the restructuring in South Africa.

A look at our Mineral Resource and Ore

Reserve statement this year will show that we

managed to offset almost all depletion through

production, with an Ore Reserve of 49.5Moz,

despite the strong production performance.

Importantly, we have kept a conservative

$1,100/oz price at which we calculate our

Ore Reserve. Notable, too, is our maiden Ore

Reserve of 1.8Moz in Colombia, which we

believe will be the ﬁrst of many more over time,

as we start to bring this important jurisdiction

to account.

CEO’S REVIEW CONTINUED

Delivering on our commitments

Significant progress has been made as we restructure the South African

operations and move forward with the redevelopment of Obuasi

Further

improved
safety

and

sustainability
performance

Advance
low capital,

high return

brownﬁelds
opportunities

Continue
investment
to

enhance

margins

and

cash ﬂow

Extend

asset

lives

through

focused
exploration

Maintain

balance
sheet
ﬂexibility

Advance
South Africa’s
operational

turnaround
and
restructuring

Revisit

Obuasi

feasibility
study

; assess

all options

Move

Colombia
projects

up value
curve; reduce
holding cost

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CEO’S REVIEW CONTINUED

The strong overall operating and ﬁnancial

performance in 2017 – which is unpacked in

detail in this report and in Christine’s CFO’s

review, in particular – helped us declare a

dividend again since resuming payments

in 2016, answering some of the questions

around our ability to reinvest and offer a direct

return, albeit a modest one. Just to repeat

what I said last year, the dividend really is

a way of instilling capital discipline into the

business, giving back the ﬁrst slice of free

cash to shareholders before reinvestment for

growth. It is akin to a shareholder’s royalty.

We hope to improve this over time, as we

pursue our strategy and focus closely on

improving efﬁciencies, cost management and

appropriate investment in the enhancement of

the portfolio.

Scorecard

At the beginning of 2017, we shared an

ambitious list of priorities, and we covered

good ground in fulﬁlling those commitments.

While we saw improvement in our key

safety indicators, it is important that we

keep continued focus on the workplace

fatalities that remain a feature in our business,

particularly in South Africa. And while we take

encouragement from the new benchmarks we

set, we are more committed now than ever in

applying every tool at our disposal to eliminate

injuries – and especially fatalities – from our

work sites.

We saw improved adjusted EBITDA margins

and the exploration success mentioned above,

which helped offset most of our depletion.

Colombia is edging up the value curve at a

lower cost, as promised a year ago.

We made strong progress in restructuring

our business in South Africa, agreeing the

sale of the Moab Khotsong and Kopanang

mines, and associated infrastructure, and

taking the tough decision to place TauTona

into orderly closure to curb unsustainable

losses. The decision to part with these assets

was difﬁcult, given the job losses we faced

at the start of the restructuring process, but

the majority of these jobs were subsequently

saved in fulﬁlment of the terms of the asset

sales. We also saw Moab Khotsong’s

future being best served under different

ownership, given that our own competing

capital requirements would probably mean

that Moab’s Zaaiplaats life extension project

would be less likely to be approved within

an appropriate time, as part of AngloGold

Ashanti’s global portfolio.

The sale of Moab Khotsong to Harmony

Gold Mining Company Limited for $300m

was agreed in October and concluded post

year-end at the end of February. The sale

of Kopanang to Heaven-Sent SA Sunshine

Investment Company Limited for R100m,

which agreed to purchase the mine and

the accompanying plant, rescued the site

from closure and helped save as many as

3,000 jobs. TauTona, where shaft-sinking

commenced in the late 1950s, was placed into

orderly closure at the end of 2017.

All of the costs of these restructurings, including

the ﬁrst tranche of retrenchment costs paid

to employees, were self-funded. Gross sale

proceeds of R3.8bn have already been put to

work in reducing our borrowings in South Africa

and so further improving our ﬁnancial ﬂexibility.

But perhaps the most notable point to be

made is our decision to move ahead on the

redevelopment of Obuasi in Ghana. This is

a fundamentally re-engineered project that

we believe is one of the more attractive new

developments, from a return and capital

intensity perspective.

Obuasi

It bears taking a moment to explain our

decision to move ahead on Obuasi, which

has had a checkered operating history since

we took control of it in 2004, following the

business combination with Ashanti Goldﬁelds.

I’ve always said that you can’t change the tyre

of a car while it’s in motion. We learned this

lesson after years of trying to operate the old,

labour intensive and inefﬁcient Obuasi, while

simultaneously trying to make a fundamental

change to its mode of operation.

Instead of trying to transform a labour-intensive

operating asset into a modern, mechanised

operation while it was on the go, we decided

to take it down to limited operating mode

Picture:

Obuasi, Ghana

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CEO’S REVIEW CONTINUED

in 2014, retrench the entire workforce and

start from scratch. We’ve now done that,

and with the beneﬁt of three years, we’ve

studied every aspect of the project – from

the geology to the labour model, and from

mining and environmental management to

social responsibility. We now have strong

government support, evidenced by a suite of

agreements covering the redevelopment and

ongoing operations, and we believe now is the

right time to push ahead.

So, let’s look at the fundamentals. Obuasi is a

tier one asset with a 20-year-plus life that we

expect to have in production by the end of next

year. It has best-in-class capital intensity, with

approximately $450m to $500m in initial project

capital (excluding pre-production capital of

$64m) needed to give us an annual production

rate over life of 400,000oz – 450,000oz. Margins

are good, too, with all-in sustaining costs

estimated to average around $800/oz over the

mine life.

It has high grades, an elusive quality in short

supply these days. The orebody averages 8.1g/t

of gold, which is impressive by any standard.

It’s also big, with about 5.9Moz of Ore Reserve.

The Mineral Resource is 34.1Moz, giving us

scalability in production or life, over the project

life. Total production is expected to be 8.6Moz

over 21 years, with scope for optimisation and

life extension during that period.

The project capital will be phased, with 25% of it

spent this year, 55% next year and the remainder

in 2020. Of course, the early production – ﬁrst

gold is expected at the end of 2019 – will help

lower the cash call on the company over that

time. And ﬁnally, the returns are good. We expect

payback in less than 6.5 years, and to be cash

positive from year four. At gold prices ranging

from $1,100 to $1,240/oz, the internal rate of

return ranges from 16% to 23%.

Pipeline

A pipeline of real options is critical if you don’t

want to run out of road in two or three years,

and be forced to turn to expensive mergers

or acquisitions to stay in the game. While

Obuasi is the largest and most visible part of

our current pipeline, we are fortunate to have

a wealth of other options that we continue to

replenish and develop, as the case may be.

In the short term, the Siguiri hard rock project,

Mponeng Phase 1 and the Kibali ramp-up

are delivering both production and margin

growth, together with mine life extension.

In the medium term, Obuasi sits alongside the

Tropicana Long Island open-pit expansion, which

will deliver the next phase of improvements for

our cornerstone Australian operation.

A little further out, the Gramalote project

and the high grade copper/gold project at

Quebradona, will deliver value from Colombia,

while the Sadiola Sulphides project in Mali and

Phase 2 of Mponeng in South Africa remain

USEFUL LINKS

See also Regional reviews for more details

2018

DELIVERABLES

New quality ounces

Lower costs proﬁle

Extended LOM

Siguiri hard rock project

•

Extends LOM, enhances net asset value

2018-2020E Average:

c.355k oz @ AISC $910/oz

Mponeng Phase 1

•

Access higher grades

2018-2020E Average:

c.268k oz @ AISC $1,105/oz

Kibali underground development

•

Extends LOM, improves cost

2018-2020E Average:

c.340k oz* @ AISC $700/oz

2019

DELIVERABLES

New production

Enhanced margins

Ore Reserve additions

Obuasi start redevelopment

•

20+ year LOM, attractive returns

2020-2022E Average:

c.350koz @ AISC $800/oz

Tropicana – Long Island

•

Enhance margins, extend LOM

2018-2020E Average:

c.330k oz @ AISC $950/oz

Gramalote development

•

Attractive returns in a new area

•

Feasibility study underway

OPTIONS BEYOND

2020

Expansion opportunities

Potential for new development

Value-creating exploration

Sadiola sulphides project

•

High return, LOM extension

•

Certain government agreements required

Quebradona development

•

Prefeasibility study by early 2019

•

Maiden Ore Reserve declaration

Mponeng Phase ll

•

Mine life extension

* Attributable

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

CEO’S REVIEW CONTINUED

options for us in the longer term. The projects

are all detailed in the Regional review section

elsewhere in this report.

Outlook: 2018 commitments

The CFO’s review will also take a detailed

look at our guidance, but allow me to provide

a high-level overview. We expect modest

improvements in production (from our new

base) and also in all-in sustaining costs, driven

by improving efﬁciencies and lower sustaining

capital expenditure as some of our brownﬁelds

investments near completion and begin to

deliver. Our International Operations team

is hard at work on an intervention to further

improve efﬁciencies and reduce costs, notably

by benchmarking each of their key operating

elements at every site, to global best practice.

By doing that, we will better understand the

potential of each orebody and each plant, from

a production and cost perspective. I urge you

to watch our performance in the next year and

beyond, to see how much more we can deliver

from the business for the beneﬁt of

all stakeholders.

We have a clear set of priorities ahead of

us. We will work to ensure the optimisation

of the remaining surface and support

businesses in South Africa, to ensure they

match our smaller production base.

We will continue our engagement with

our hosts in Tanzania, to ﬁnd the requisite

clarity around the legislative and regulatory

environment. We will, to be clear, be looking

for a pathway that ensures the long-term

viability of an asset that is important not only to

us, but to Tanzania as a whole.

In the DRC, we believe that the recently

promulgated Mining Code will disincentivise

new investment. We are working with our

joint venture partner and peers in the industry,

in engaging with the government to ensure

issues in the current agreement and other

relevant matters are appropriately catered

for in the regulations that will govern the

implementation of the Code.

We will, as always, continue to look for ways

to unlock latent value from within our portfolio,

while advancing our exciting set of projects to

completion – on budget and on schedule.

And ﬁnally, we will ensure that we do justice

to the spectacular high-grade orebody at

Obuasi which, for decades, has been waiting

to be modernised and capitalised in the

way that we’re now proposing – to ensure

a proﬁtable, long-life, high-margin gold

mining operation.

We’ll report back next year – as we always do

– on progress against each of these tasks.

Conclusion

In closing, I’d like to thank the shareholders

and lenders who own and ﬁnance the activities

of this business, for their continued loyalty

and support. We are committed to prudently

managing this business in order to create

long-term value. To our host governments and

communities – as well as their representatives

in civil society – we are mindful that you

provide our licence to operate. We renew our

commitment to working closely with you to

realise value and to ensure that we will endure

beyond the lives of our operations and to do

what we can to elevate that pledge beyond

simple corporate platitude into a tangible beneﬁt

that can be spread as widely as possible.

To the AngloGold Ashanti team – from

our Chairman Sipho Pityana, the Board

of Directors, the executive team, to each

and every employee and contractor in the

business – I thank you for your guidance and

support and doing so much more than just

simply showing up to work each day; your

commitment and initiative are truly humbling

and I remain grateful for your unstinting effort.

Srinivasan Venkatakrishnan

Chief Executive Ofﬁcer

19 March 2018

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

BUSINESS
CONTEXT

SECTION 2

We explain our business in context and how

we use our resource inputs to deliver desired

outcomes, while managing the impacts

and related material issues to achieve our

intended outputs.

Business model – creating value

Material concerns and our external environment

Stakeholder engagement and material issues

People are the business

Picture:

Cerro Vanguardia, Argentina

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

BUSINESS MODEL – CREATING VALUE

We do not conduct our business in isolation. We operate within the

global environment where external factors, can impact our ability to

create and deliver sustained value. These factors include:

Rigorous, risk management

involves identifying and

managing the risks and

mitigating their effects.

Exploration

Finding, identifying and

evaluating, economically

viable gold deposits

Mine development

Establishing the necessary

infrastructure to access

deposits via vertical shafts

and decline ramps

(in underground mining)

or material stripping

(in open-pit mining)

Mining

Extracting the gold-bearing

ore – either from deep-level

underground mines or from

shallow, open-pits –

and transporting it to the

gold plants

Processing

Processing the ore mined

to extract the gold, which

is smelted to produce doré

(unreﬁned gold bars),

and any by-products that

may occur

Reﬁning

Reﬁning the doré to a

speciﬁed level of purity of

at least 99.5% to produce

gold bullion that is sold to

international bullion banks

Rehabilitation and closure

Rehabilitating and restoring

the land for alternative

sustainable economic

uses. This is part of the

closure process that begins

once all the gold-bearing

ore in a deposit has been

economically mined or

is depleted

AngloGold Ashanti’s core business, the production of gold, involves a pipeline of activities:

OPERATING CONTEXT AND RISK MANAGEMENT

To create value for our shareholders, employees and society (communities, governments) by safely, responsibly and profitably exploring
for, mining and marketing our products. Our primary focus is gold, but we will pursue value-creating opportunities in other minerals
where we can use our existing assets, skills and experience to deliver value.

OUR

MISSION

See Material concerns and our external environment

See Managing and mitigating risks

•

Supply-demand dynamics in the gold market

•

Global economies and capital markets, especially US interest rates

•

Exchange rates

•

Regulatory changes and political environment

•

Availability of natural resources

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BUSINESS MODEL – CREATING VALUE CONTINUED

INPUTS

… use various capital inputs, such as

people, to develop and implement the

technology necessary to discover gold-

bearing ore bodies, to evaluate their

economic viability. These people have the

necessary skills and equipment to develop

and operate our mines.

OUTPUTS

… produce gold and other by-products

(silver, uranium and sulphuric acid) which we

sell to generate income. We also generate

waste which is responsibly stored and/or

disposed of.

IMPACTS

… manage the impact of our business

activities and maximise efﬁciencies in the

use of inputs to reduce and mitigate the

effects on the environment, communities, or

on the people with whom we work.

OUTCOMES

… deliver on our strategic objectives

to operate as efﬁciently as possible, to

generate sustainable cash ﬂow and returns,

and to distribute the value created to

our stakeholders.

In conducting our business, we...

In line with our strategic objectives, we optimise the use of various types of capital to enhance the outcomes achieved by our activities.

Picture:

Geita, Tanzania

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BUSINESS MODEL

– CREATING VALUE

CONTINUED

THE CAPITALS
EMPLOYED TO

CREATE VALUE

Optimising our use of
various forms of capital,
enhancing outcomes and
managing trade-offs

Picture:

Mponeng, South Africa

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NATURAL
CAPITAL

FINANCIAL
CAPITAL

MANUFACTURED
CAPITAL

HUMAN AND
INTELLECTUAL
CAPITAL

SOCIAL
CAPITAL

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

BUSINESS

MODEL

CONTINUED

OUTPUTS

2017

CONTINUED

INPUTS

OUTPUTS

OUTCOMES

IMPACTS

Milled and treated 83.8Mt of gold-bearing ore, yielding total attributable production of:

… and in the process:

GOLD

SILVER

URANIUM

3.8Moz

6.2Moz

SULPHURIC ACID

0.8Mlb

203t

GENERATED

102,964t

of waste (hazardous and non-hazardous,

excludes hydrocarbons) (2016: 100,549t)

DEPOSITED

89.8Mt

of tailings (2016: 85.5Mt)

PLACED

191.6Mt

of overburden and waste rock

(2016: 162.6Mt)

(2016: 3.6Moz)

(2016: 4.9Moz)

(2016: 0.8Mlb)

(2016: 195t)

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Performance review

Accountability

Shareholder information

In this section, we consider external

issues that have, or could have, an

impact on our ability to create value

in the short, medium or long term;

that may prevent us from delivering

on our strategic objectives; and/or

which may influence our economic

viability and the sustainability of

our business.

Gold market

Investors added more gold to their

portfolios during the year as political and

macroeconomic uncertainty increased

and inﬂation expectations started to rise.

Positive momentum held for much of the

year, helping to offset the potentially negative

impact of expectations for further interest

rate increases in the US. The gold price

averaged $1,258/oz over the 12 months

compared with $1,249/oz in 2016. It

touched a low of $1,152/oz on 1 February

2017 and reached a high of $1,347/oz for

the year. The gold price closed off the year

MATERIAL CONCERNS

AND OUR EXTERNAL ENVIRONMENT

Jan 2017

Dec 2017

Average monthly gold price

January 2017 to December 2017 ($/oz)

1,000

1,100

1,200

1,300

1,400

Source: Bloomberg

Jan-Jun 2017

Average gold price

$1,238/oz

$1,276/oz

Jul-Dec 2017

Average gold price

at $1,306/oz. Continued gold investments

into portfolios, with inﬂows into gold-backed

exchange-traded funds totalled $8.2bn or

6.72Moz, compared with 14.18Moz in 2016.

Speculators increased their net long gold

position by 7.36Moz year-on-year on the Comex

commodity exchange, further underpinning the

positive sentiment in the gold market.

Global stock markets ended the year at or

near record highs. The MSCI All-Country World

Index gained 22% or $9 trillion, during 2017,

a new high, as global growth accelerated and

investors bet on continued improvements to

corporate earnings. Additionally, US president

Donald Trump’s tax reform policies and the

US Federal Reserve’s gradual approach to

normalising monetary policy further buoyed

equity markets. These record valuations

coincided with continued strength in most

other asset classes in developed markets,

including property, bonds and alternatives

like collectibles and cryptocurrencies, though

some of the enthusiasm over the latter has

waned in the new year.

Monetary policy tightening across the globe

pushed up global short-term bond yields while

long-term yields remained relatively ﬂat. The

US Federal Reserve increased interest rates

three times during the year, by 25bps each

time, setting the target range between 1.25%

and 1.50%, while the Bank of England lifted its

benchmark rate during November for the ﬁrst

time in a decade to 0.50% (from 0.25%). The

European Central Bank claimed victory over

deﬂation and signalled that its monetary policy

would become gradually less expansionary.

Bond markets remained strong as investors

from developed countries offering historically

low yields on government debt, sought to

bolster returns by investing in asset classes

with traditionally higher risk levels, including

emerging market sovereign debt. As a result,

emerging market currencies strengthened and

borrowing rates from these countries remain at

or near multi-year lows.

Even geopolitical concerns about a US-

led nuclear war with North Korea, political

upheaval in Europe with the Catalan separatist

movement in Spain, a continued swing to

the right in several EU Member states and

an inconclusive German election, failed to

dampen sentiment. Surprisingly, the global

volatility index is trading at historically low

levels, despite being impacted by all the

aforementioned political events.

The US dollar price of gold rose 13% from

the ﬁrst to the last trading day of the year, its

biggest annual gain since 2010, outperforming

most major asset classes, other than stocks.

Aside from the tailwinds from geopolitical

uncertainty, gold received some support from

a weakening US dollar and elevated equity

valuations created concern over a potential

market correction. Debt investors were also

concerned about a record bull market that

was threatened by increasing prospect of

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Performance review

Accountability

Shareholder information

MATERIAL CONCERNS

AND OUR EXTERNAL ENVIRONMENT

CONTINUED

a normalisation in rates. The geopolitical

instability further heightened investor

uncertainty and fuelled ﬂows into gold, which

remains a hedge against these risks.

Central banks were also very active in the

gold market, with Russia increasing its

holdings, particularly in the last two months

of the year. The central banks remained an

important source of demand for gold and net

purchases by central banks recorded a gain

of 48% for 2017, up 123t to 381t compared

to 258t in 2016.

Jewellery demand

Jewellery consumption for 2017 was also

up 13% compared to 2016, with all major

regions recording year-on-year gains. India’s

jewellery consumption increased by 8% in the

last quarter of the year, helped by a surge in

sales during Dhanteras (the ﬁrst day of Diwali)

and lower prices toward year end. Jewellery

fabrication also increased 5.5% in 2017 from

2016. Chinese demand slipped 2% year-on-

year, with ongoing losses in the pure gold

segment as consumer preferences continued

to shift towards more fashionable pieces with

lower gold content. It is worth adding that after

posting double-digit percentage declines on

average since its 2013 peak, China’s jewellery

offtake appeared to have ﬁnally stabilised in

2017. Total physical demand increased on an

annual basis, with physical demand up 10.6%

from 3,555.9t in 2016 to 3,931.6t in 2017.

Gold supply was broadly unchanged and

mine production rose fractionally to 3,268.7t

in 2017 (2016: 3,236.0t), while there was

net dehedging of 30.4t. Recycling levels

declined by 10% year-on-year to 1,160t

in 2017. Scrap volumes remained ﬂat

year-on-year.

Capital markets

We entered 2017 in a subdued gold-

price environment and with higher capital

expenditure expected for the year as we

committed to investing in brownﬁelds

projects to extend mine life and/or improve

margins from key assets. The South African

operations performed poorly during the ﬁrst

quarter of the year, but recovered over the

remaining nine months. The International

Operations showed strong results

throughout the year, with good cost control

and projects that continue on schedule and

on budget.

Political uncertainty continued to spread

across many mining jurisdictions, particularly

with respect to ﬁscal and regulatory

uncertainty, with countries including the

Philippines, Ivory Coast, South Africa, Tanzania

and the DRC affected. Investors remained

wary of companies with signiﬁcant exposure in

these jurisdictions and gravitated toward those

with production from countries perceived as

more stable.

Picture:

AGA Mineração, Brazil

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MATERIAL CONCERNS

AND OUR EXTERNAL ENVIRONMENT

CONTINUED

During the year, we focused on clarifying

the long-term beneﬁt from our strict capital

allocation philosophy, which prioritises

self-sufﬁciency over the long term. We

also outlined the reinvestment programme,

prospects for growth from key assets

in coming years, details of Obuasi’s

redevelopment, and the beneﬁts from

the restructured South African portfolio.

However, we believe that growing political

and regulatory uncertainty in the DRC and

Tanzania, as well as the impact of sluggish

VAT remittances on cash ﬂows, remained a

signiﬁcant drag on the valuation.

The group was able to deliver a strong

production result, robust cash generation from

operations, disciplined capital allocation, clear

delivery on our strategic objectives and the

payment of a second consecutive dividend,

after resuming dividend payments in 2016.

In South Africa, the operating environment

has improved. Two asset sales announced

in 2017 were ﬁnalised at the end of February

2018, and the prospect for greater regulatory

certainty improved with a change of guard

in both the Presidency and the Ministry

of Mineral Resources. In Ghana, the new

administration elected in late 2016 continued

to deliver on its anti-corruption and investor-

friendly promises made during the election.

Legacy issues: silicosis

Settlement negotiations between the

Occupational Lung Disease (OLD)

Working Group and the class action’s legal

representatives have reached an advanced

stage. The OLD Working Group represents

African Rainbow Minerals, Anglo American

South Africa, AngloGold Ashanti, Gold Fields,

Harmony and Sibanye-Stillwater. The class

action members are represented by Richard

Spoor Inc, Abrahams Kiewietz Inc and the

Legal Resources Centre.

Given progress made by the OLD Working

Group since 31 December 2016, AngloGold

Ashanti management has estimated, within

an acceptable range, AngloGold Ashanti’s

share of a possible settlement of the class

action claims and related costs. AngloGold

Ashanti has provided for this obligation and

recorded an expense of $63m for the year

ended 31 December 2017. The ultimate

outcome of these negotiations and the court

sanction of the agreement remains uncertain

and, accordingly, the provision is subject

to adjustment in the future. In view of this

progress, on 10 January 2018, in response

to a request from all parties involved in the

appeal to the Supreme Court of Appeal (SCA)

in respect of the silicosis and tuberculosis

class action litigation, the Registrar of the

SCA postponed the hearing date of the

appeal until further notice. For more detail

and history on the silicosis class action see

notes to the

<AFS>

The OLD Working Group remains of the view

that achieving a comprehensive settlement

that is both fair to past, present and future

employees and sustainable for the sector, is

preferable to protracted litigation. To this end,

the companies have been holding settlement

talks with the lawyers acting for the workers

who ﬁled the legal proceedings and are

conﬁdent that they could reach a settlement.

The OLD Working Group will continue with

its efforts to ﬁnd common ground with all

stakeholders, including government, labour

and the claimants’ legal representatives. The

Group continues to assist the Medical Bureau

for Occupational Diseases (MBOD) and

Compensation Commissioner for Occupational

Diseases (CCOD), which are government

departments responsible for certiﬁcation

and compensation of mineworkers with

OLD, to ensure effective administration of its

responsibilities in terms of the Occupational

Diseases in Mines and Works Act (ODMWA).

Regulatory environment

Regulatory changes and uncertainty

The sector is facing various legislative reforms,

some of which have resulted in increased

resource rents in certain of the jurisdictions

in which we operate. Some of the current

and/or proposed changes have come with

uncertainties which impact market perceptions

of the sector and the company.

Regulatory uncertainty was most pronounced in

South Africa, where a reviewed Mining Charter

was tabled (and subsequently withdrawn by

the new Ramaphosa administration for a further

consultative process); in Tanzania, where a new

suite of laws and regulations were gazetted;

and in the DRC, where an amended mining

code was enacted in March 2018. In Australia,

two attempts to hike royalties and apply a

windfall tax were rebuffed by the Western

Australian state legislature.

For details on

these see the Regional sections.

Elections are planned in the next 12-18 months

in certain of AngloGold Ashanti’s operating

jurisdictions, including Colombia, Mali, South

Africa and the DRC. The period before and

immediately after elections is often one of

heightened uncertainty as politicians campaign

to change key legislation and policy.

USEFUL LINKS

See Australasia in the Performance review

See Regional reviews

I N T E G R AT E D R E P O RT

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MATERIAL CONCERNS

AND OUR EXTERNAL ENVIRONMENT

CONTINUED

Brazil began emerging from a painful

recession. Despite the country’s poor

economic growth and some public unrest,

AngloGold Ashanti’s operations continued to

operate normally. The company will continue

to lobby for policy beneﬁcial to investment

in the industry, through the Brazilian

Mining Association.

In Colombia, the peace accord reached by

the government and the Fuerzas Armadas

Revolucionarias de Colombia (FARC) in late

2016, was implemented in 2017 though its

progress was slowed down later in the year by

a Colombian Constitutional Court ruling to end

the ‘fast track’ mechanism for passing various

of its provisions.

Social licence to operate: competing for
resources and infrastructure

Mining often creates competition for

resources, such as land, water and electricity.

The challenge for mining companies is to

strike the right balance between successfully

conducting their operations while limiting,

mitigating or offsetting the negative impact on

the communities and societies in which they

operate. AngloGold Ashanti’s work towards

sustainable mining, including environmental

stewardship, is covered in the stakeholder

engagement section, under communities, and

is detailed in the

<SDR>

Water

Water remains a scarce resource and is an

increasingly critical social, environmental

and economic issue which demands careful

attention given that the company has

operations in areas that are water scarce

and others which are prone to torrential

rainfall during parts of the year. Efforts are

underway to proactively reduce consumption

by recycling water and using groundwater

draining into underground operations that

would otherwise be discharged. “Clean-

dirty” water separation principles are applied

and rainwater is diverted from operations to

the greatest extent possible. In 2017, Mali,

Tanzania, Ghana and Guinea experienced

regional droughts, although our operations

were not affected.

In addition to harvesting rainwater for our

operational needs, we also draw on three sources

of raw water: groundwater from boreﬁelds, or

water collecting in underground operations from

ﬁssures and cracks; water purchased from utilities;

and, where permitted, limited water drawn (under

licence) from surface sources, such as rivers or

lakes. We continually work to optimise the use of

raw water in our operations, and ensure the safe

discharge of excess water. We recognise water

recycling as a key feature of water stewardship,

and we track water recycling efﬁciency. The

company’s raw water imports have increased by

3% year-on-year, mainly due to lower rainfall in

several of our operations which necessitated more

water imports. For water usage statistics see the

Five-year statistics in the Regional Performance

section

In Tanzania, an additional pipeline built to supply

water from Lake Victoria also provided access

to water for irrigation for many communities

and farmers alongside the pipeline’s path. In

Ghana, Iduapriem experienced abnormally low

rainfall, which required increased water transfer

from the Block 7 pit lake. Siguiri Mine in Guinea

required increased water from the Tinkisso River

due to poor rainfall.

In South Africa, management of extraneous

water from neighbouring mines is a key focus

area to protect AngloGold Ashanti’s own

operations downstream. In 2017, AngloGold

Ashanti adjusted the pH of acidic water

draining from the abandoned Blyvooruitzicht

mine, which allowed it to be used in mining

and gold processing circuits and offsetting

fresh water imports to the operation.

Electricity

Most of AngloGold Ashanti’s energy

requirements are generated from fossil fuels,

either purchased from utilities or generated

by its operations. A minor percentage of the

energy used is sourced from hydropower, with

Brazil and the DRC most notable in this regard.

AngloGold Ashanti’s energy consumption is

8.9% lower since 2013, as a result of cost

savings, energy efﬁciency initiatives and

reduced number of operations. More than

95% of the company’s greenhouse gas (GHG)

emissions arise from energy consumption.

Approximately 70% of 2017 GHG emissions

arose from the South African operations

due to use of emission-intensive coal-based

electricity, purchased from the national utility.

Energy efﬁciency is a key element in the

South Africa region’s strategy. Some of the

energy reduction efforts include energy

management and reporting processes,

together with various efﬁciency projects across

all operations. Additionally, in South Africa,

back-up generators for disaster recovery are

in place to ensure employee safety in case of

an emergency and to prevent infrastructural

damage during outages. Over the years,

annual energy intensity has improved

consistently in terms of GJ per tonne of ore

treated. It is expected that in the coming

year, the reduced number of operations in the

region, following the sale of assets, will reﬂect

a reduction in the overall usage of electricity.

USEFUL LINKS

See: www.aga-reports.com

As detailed in the Five-year statistics in
Performance Review.

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MATERIAL CONCERNS

AND OUR EXTERNAL ENVIRONMENT

CONTINUED

Australian operations achieved full conversion

from oil- to gas-powered generation. A small

number of diesel units remain at each site to

provide peak-load capability and emergency

back-up power for critical systems should

there be any interruptions in gas supply. In

Australia, Tropicana applied to the Clean Energy

Regulator for a calculated baseline under

the Federal Government’s Carbon Emission

Safeguard Mechanism. This legislation is aimed

at limiting future growth in GHG emissions.

After setting baseline emission thresholds,

the Safeguard Mechanism will require that

companies submit carbon credits or pay

penalties for excess emissions.

In the Continental Africa region, each site now

has an energy management plan and a KPI

dashboard that monitors improvements while

further identifying energy saving opportunities.

These enable the identiﬁcation of incremental

energy-saving opportunities. Actions across

the region include renegotiation of utility

tariffs, replication of best practices from other

mines in the AngloGold Ashanti portfolio,

and the increased use of solar power for

roadway lighting and other applications. In

Tanzania, work was well advanced by year

end to replace the existing power station with

a new, more efﬁcient facility. The new power

station is scheduled to be commissioned in

mid-2018. For data on our energy usage, see

Five-year statistics by operation

and for more

information see Responsible environmental

stewardship in the

<SDR>

Climate change – carbon emissions

Climate change is a global challenge posing

risk to society and the environment. AngloGold

Ashanti endeavours to contribute to climate

change mitigation by reducing emissions and

improving our efﬁciency of fossil energy use. In

2007, AngloGold Ashanti set a greenhouse gas

emission target of 30% improvement in carbon

intensity. This target has since been revised.

Since 2013 the company has adopted a per

tonne of ore processed denominator, replacing

gold ounces produced. The initial target

was framed using ounces of gold produced,

however, the effect of reducing gold grades in

ore mined has undermined this. This is because

the primary drivers of energy consumption (and

concomitant GHG emissions) in AngloGold

Ashanti operations are the volume of rock

mined, trammed and hoisted, distances trucked

and tonnages milled in processing plants. In

addition, our underground mines commonly

use signiﬁcant amounts of energy to ventilate

and cool the underground workings.

Land use and rehabilitation

As part of securing the ongoing licence

to operate, AngloGold Ashanti tries to

ensure that land resettlement standards

and procedures are implemented at all our

operations, before or during mining activities.

The company’s process involves an initial

assessment of land requirements, including

the environmental, social and health impacts,

followed by a resettlement management

plan, in line with global best practice as set

out in the International Finance Corporation’s

Performance Standard 5. For resettlements that

took place in 2017, see the

<SDR>

Further, AngloGold Ashanti is committed to

ensuring that our tailings are non-polluting,

stable and contained. In South Africa, at the

Kareerand facility, we experienced an intense

storm early in the year where more than 50mm

of rain fell in less than three hours. This deluge

overwhelmed the facility’s already-full process

water management system and caused a

reportable environmental incident. The facility

itself remained stable and freeboard of the

dam was safely maintained. In response to the

incident, the water-management system was

upgraded to improve its capability.

The land rehabilitation processes undertaken

by AngloGold Ashanti are guided by the

company’s Closure Planning Standard, among

others, to set a consistent benchmark across

all our operations. At Yatela in Mali, where the

closure process has commenced, we made

good progress in the implementation of mine

closure activities in 2017. The processing of

tailings continued in 2017 as part of closure

activities, including rinsing and rehabilitation

of the heap leach pads and will continue

until the end of 2021, with the completion of

mine closure expected at the end of 2022.

In Brazil, at Córrego do Sítio I, rehabilitation

activities have been implemented concurrently

with mining operations since 1992. The site

is in various stages of regeneration, including

the planted indigenous vegetation. Various

rehabilitation and conservation strategies are

used. Also see the

<SDR>

for more work

done regarding land use and rehabilitation.

Picture:

Surface Operations, South Africa

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Our stakeholder engagement process involves:

•

direct and indirect interactions

•

addressing the material issues identiﬁed

•

understanding stakeholders’ needs and

managing expectations

•

sharing our objectives, policies and

standards

•

articulating our performance as a

responsible corporate citizen

The engagement process is aimed at not

only establishing but maintaining mutually-

beneﬁcial relationships with all stakeholders,

driven primarily by the material issues

identiﬁed through our interaction with them.

It is an inclusive, continuous two-way

process between AngloGold Ashanti and the

people or organisations that are impacted

by our business and who in turn, impact

our business. Our stakeholder engagement

process continues throughout the lifecycle

of an operation, from exploration through to

closure, and encompasses a range of activities

and approaches. We view our stakeholders as

important partners and we continuously strive

to interact with them directly. In line with the

King IV principles, our approach is to mindfully

partner with our stakeholders to assess,

manage and mitigate ethical and regulatory risk.

In the everchanging environment in which we

operate, the board is responsible for ethical

and effective leadership which is fundamental

to a successful stakeholder engagement for

AngloGold Ashanti. Stakeholder engagement

is discussed at board level through the

board committees. We conduct stakeholder

engagement at various levels within the

company, including executive management,

operational management and community and

government outreach. The board maintains

oversight of material issues concerning

stakeholders. Our consistent engagement with

stakeholders, including our host governments

and communities, is also backed by actions

on the ground, where we demonstrate our

adherence to our value set.

Given the diverse footprint of our business,

there is a correspondingly diverse set of

stakeholders, each operating within a unique

social, economic, political and regulatory

context. Engagement takes place at various

levels. Either at group level, with stakeholders

whose interests require them to have an

overview of the business as a whole, or at an

operating level, where each site is responsible

for its stakeholders, for understanding the

impact the operation may have, and the

potential that stakeholders have to inﬂuence

the business.

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

Our approach

Our stakeholder

engagement is informed

by the stakeholders that

we have identified, our

operating environment,

and our business risks and

opportunities.

We prioritise and respond by reviewing

the material issues for our business

and those of our key stakeholders, as

well as comments from the Executive

Committee and board. Building

and nurturing relationships with all

stakeholders is an integral part to our

ability to secure and protect our licence

to operate, to address our material

issues, and to enhance shareholder

value as we execute our strategy.

Picture:

Mponeng, South Africa

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Strategy

Performance review

Accountability

Shareholder information

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

We strive to conduct all stakeholder

engagements in dynamic, honest, transparent

and inclusive ways. Given the wide range

of stakeholders, we adopt a multi-pronged

approach, including among others:

•

Visiting communities and government

bodies in and around the areas/countries in

which we operate

•

Meeting providers of capital and ﬁnanciers

•

Co-ordinating community focus groups in

the regions where we have operations

•

Undertaking community grievance

procedures and mechanisms

•

Seeking employee views by means of our

group-wide engagement survey and “town

hall” meetings

Guided by the International Integrated

Reporting Council and its related framework,

King IV, the GRI’s G4 guidelines and

the Accountability AA1000 Stakeholder

Engagement Standard to identify major issues

of material concern that affected the company,

our internal review process involved:

•

A review of the previous year’s

material issues

•

Identiﬁcation of emerging issues

•

Prioritising material issues, based on,

among others, their relation to our strategy,

operations and their potential impact on our

social licence to operate.

Engaging with governments
and regulators

Mitigating regulatory and political risk

We focus on maintaining good working relations

with governmental authorities, keeping them

appraised of any new developments at our

operations and projects and raising any key

concerns within each jurisdiction where we

operate. Our aim is to also establish regulatory

certainty and create an environment conducive

to mining sector investment and development,

for the long-term growth of the business and

the respective countries, while we maintain law-

abiding citizenship. Our responses in navigating

political and regulatory uncertainty are informed

by our code of ethics, and applied within the

country’s regulatory framework. In engaging

with governments and regulators, our actions

generally fall into one of three categories:

•

Engaging proactively in policy

development, regulatory proposals and

conﬂict resolution, seeking mutually

beneﬁcial and sustainable outcomes

•

Enhancing our internal systems and

activities to meet the requirements of any

regulatory changes

•

Disputing and seeking recourse where we

believe that we have been treated unfairly and/

or outside of accepted regulatory prescripts.

Who are our

stakeholders?

Those who are affected, either

directly or indirectly, by our

business activities and those who

can affect the outcomes of our

operations and projects.

Communities, NGOs, NPOs, etc

Shar

eholders, investors
and financiers

Media

Government and regulators

Suppliers and industry partners

Employees

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

Governments engage with us in all the

jurisdictions in which we operate, to ensure

that the beneﬁts of mining ﬂow through to the

state at national, local and community levels.

In addition to job creation, taxes, royalties, and

investment, the beneﬁts of mining at a local

level include employment, skills development,

local procurement and infrastructure and service

development. Governments also engage with us

to ensure and monitor regulatory compliance.

Engagements with governments and

regulators included those in:

•

South Africa – regarding the reviewed

Mining Charter, and as part of the Working

Occupational Lung Disease (OLD). The OLD

Working Group continues to engage the

Medical Bureau for Occupational Diseases

(MBOD) and Compensation Commissioner

for Occupational Diseases (CCOD),

which are the government departments

responsible for the certiﬁcation and

compensation of mineworkers with OLD, to

assist in ensuring effective administration in

terms of the Occupational Diseases in Mines

and Works Act (ODMWA).

We also engaged with regulators on the

restructuring of the South African operations

which included the sale of our mines in the Vaal

River region. These engagements were held

with local, provincial and national governments;

trade union representatives; host communities

and civil society organisations; and small,

medium and micro enterprises.

•

Ghana – AngloGold Ashanti was in

discussions with the government of

Ghana throughout 2017 to secure the

necessary agreements and permits for the

redevelopment of Obuasi. The relevant ﬁscal

and development agreements have been

signed by the government, and are now

subject to ratiﬁcation by Ghana’s parliament.

•

Tanzania – following changes in legislation,

we are seeking engagement with the

government to obtain clarity regarding the

new laws and regulations that impact the

mining sector. These changes apply to

those companies that have long-standing

mine development agreements.

•

DRC – we are working with our joint

venture partner and operator – Randgold

Resources – and peers in the industry,

seeking engagement with the government

of the DRC, ahead of the publication of the

regulation that will govern implementation

of the new law. We aim to ensure issues

in the current agreement and other

relevant matters are appropriately catered

for in the regulations that will govern the

implementation of the code.

See our website for updates on this.

•

Australia – extensive engagement between

the newly-elected Western Australian

government and gold industry in the region

took place as the industry lobbied against

proposed changes in tax legislation that

speciﬁcally targeted mining companies.

•

Brazil – various stakeholders, including the

government were involved in our Expanded

Dialogue initiative that is dedicated to open

and transparent discussions on AngloGold

Ashanti’s performance and impact on

host communities. These sessions were

held in the municipality of Sabará (with

representatives from the municipalities within

the State of Minas Gerais participating), as

well as in the municipality of Crixás.

Engaging industry partners
and suppliers

Promoting partnership towards the long-term

sustainability of the industry and our company

We collaborate with our peers in the sector

and industry bodies, to engage governments,

labour and other key stakeholders on new

developments to promote the future of the

industry. These industry partners include

the World Gold Council, the International

Council on Mining and Metals (ICMM),

other companies within the industry and the

Chamber of Mines.

USEFUL LINKS

For the latest work on OLD, see the
External Environment on page 26

Details of which are available on:
www.qhubekatrust.co.za

For more information on the Working
Group, see the External environment on
page 26

Our engagements included:

•

Interactions and work throughout the year

with the OLD Working Group. The focus

is to develop, in conjunction with key

stakeholders, a comprehensive solution

to silicosis litigation and related statutory

compensation. AngloGold Ashanti,

together with Anglo American South Africa,

established a trust – the Q(h)ubeka Trust – to

provide compensation to qualifying claimants

and dependants of ex-mineworkers in a legal

settlement that covers about 4,365 named

ex-mineworkers. Much progress was made

by the Trust during the year.

2,3

•

Industry partners – we engage regularly

with the local Chamber of Mines in the

various regions in which we operate. During

the year, in Australia, this was to lobby the

government of Western Australia on the

proposed increase in the gold tax. In South

Africa, we focused primarily on negotiations

related to the reviewed Mining Charter.

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Performance review

Accountability

Shareholder information

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

•

Suppliers – AngloGold Ashanti always

endeavours to have suppliers apply our

business ethics and values. Our supplier

code of conduct encourages all our

suppliers, including contractors, to align

their businesses with our internal policies

and codes of ethical behaviour, particularly

on human rights practices, labour relations

and employment practices, the environment,

our anti-corruption policies, and safety

procedures, policies and standards.

Suppliers are assessed on their governance

conduct, as well as to their socio-economic

behaviour. Furthermore, we work closely

with suppliers to promote local procurement,

transformation and capacity building.

Engaging with communities

Managing expectations, upholding human rights and

ensuring security (of assets and the community)

Our community engagement aims to establish

partnerships with host communities for shared

value creation. We are also driven by the

need to maintain our socio-political licence to

operate, which is core to how we work with

our host communities and conduct business.

We are guided by our global Engagement

Management Standard that requires each

operation to prepare and implement an

engagement strategy that is, among others,

forward-looking and identiﬁes potential areas

of concern to stakeholders. We have local

economic development programmes that

run in partnership with local governments

and host communities. These contribute

to economic growth, stimulate income

generating opportunities, create employment,

and aim to nurture sustainable livelihoods

beyond the life of mine. For more information

see the

<SDR>

on contributing to self-

sustaining communities.

During the year we engaged with

communities in:

•

South Africa – the restructuring of our

South African operations led to the sale

of some of our mines. As this change

is bound to affect host communities,

among others, we engaged with the

Department of Mineral Resources (DMR)

at a national and regional level, local

communities (NPOs, NGOs and youth),

small, medium and micro enterprises, as

well as the local municipalities in affected

host communities and major labour-

sending areas. Engagements were aimed

at informing relevant stakeholders of

recent developments and our plans, and

to address the transfer of the TauTona

and Kopanang Social and Labour

Plan obligations, their environmental

programmes and mining rights as well as

some employees to the new owners of the

Kopanang mine.

•

Ghana – at Obuasi, together with the

Environmental Protection Agency, we

hosted a public meeting in 2017 to engage

communities and regulatory bodies on the

potential redevelopment of the mine. These

engagements also included the paramount,

divisional and local Chiefs, local NGOs

and other stakeholders. The purpose was

to create an opportunity for all relevant

stakeholders to express their perspectives

on the proposed mine redevelopment plans,

as well as proposals for environmental

management initiatives, such as tailings

facilities and water infrastructure projects.

•

Brazil – we hosted an annual meeting,

the Expanded Dialogue, dedicated to

open and transparent discussions on the

company’s performance and impact on host

communities. This event was attended by

representatives of key stakeholder groups,

including host communities, local government,

media, civil society and suppliers.

Our community engagements also include

instances where we require access to land

for mining activities. These may lead to the

subsequent resettlement of people, a complex

and emotive matter with long-term implications

for the relationship with our host communities.

We therefore, manage these with sensitivity

while engaging the related communities.

In areas where we require land access

within communities, we begin with an initial

assessment that is followed by a resettlement

management plan developed in consultation

with local authorities, as well as with the

affected community, in line with global best

practice as set out in the International Finance

Corporation’s Performance Standard 5. Should

the displacement be unavoidable, affected

communities are fully, fairly and promptly

compensated for any loss of assets.

Resettlements that took place during the year

are discussed in the

<SDR>

Engaging with employees

Mitigating safety risk, employee wellness and

ensuring stable labour relations

AngloGold Ashanti’s approach to employee

engagement is driven by an understanding

that this is a two-way interaction and is aimed

at promoting good labour relations, increasing

productivity and maintaining a focus on our

strategic objectives. The wellbeing of all our

employees and their safety is the foundation of

who we are and how we conduct ourselves.

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STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

Our company value – Safety is our ﬁrst value –

captures the importance of safety, which remains

our top priority.

It is vital that engagement be not only

professional and respectful but also in line with

the laws and regulations that govern the mining

sector in our various operational jurisdictions.

Furthermore, good labour relations encourage

a collaborative approach to problem-solving

in the workplace. Our engagement, using a

variety of approaches and forms, emphasises

and reinforces the importance of being safe

in the workplace, of complying with safety

procedures and standards, while also covering

wellness, indebtedness, employee security, and

performance against our strategic objectives, as

we work to create value for our stakeholders.

AngloGold Ashanti employees have a right

to freedom of association and to collective

bargaining at all operations, where the

country’s regulations allow.

The following include some of the year’s key

employee engagements:

•

South Africa – a forum is in place at which

management and employees’ organised

labour representatives meet regularly

to discuss issues and take action on

employee-related matters, including the

employee transition framework related to

the restructuring in 2017. Using this forum,

we engaged with employees on the various

restructuring processes undertaken during

the year, including the sale of some mines.

After extensive engagement with unions

and regulators, all parties agreed to reduce

the impact of job losses – by including

voluntary severance packages and transfers.

This resulted in only 21, out of an initial

estimated 849, employees being dismissed

for operational requirements. Additionally,

following a review of various options to

safely turn around the performance of

the loss-making operations, AngloGold

Ashanti made the difﬁcult decision to

restructure certain South African business

units. Consequently, further engagements

were held with employees, their labour

representatives – the unions and the DMR

at national and regional level. Through

these engagements, more job losses were

mitigated. For more details, see

Regional

Reviews

– South Africa. In addition, the

Chief Operating Ofﬁcer and the head of

human resources in South Africa briefed

all management employees regularly, and

engaged with the leadership of organised

labour as necessary, throughout the year.

Picture:

Iduapriem, Ghana

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Shareholder information

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

•

Continental Africa – labour relations

remained stable across the region and,

despite labour disputes on salaries at our

Malian operations and protracted wage

negotiations at Siguiri, there were no

production interruptions. We view this as

a reﬂection of the good relations between

management and employees. There were no

unresolved labour issues in 2017.

•

Employee survey – we conduct a survey

every two years to understand employees’

perceptions and views of the company.

Engaging with the
investment community

Managing expectations, particularly against targets

and strategic objectives

We conduct our engagement with the

investment community regularly, in person

and by email, at our interim and annual results

presentations, market updates, via conference

calls, site visits, investor conferences and

at one-on-one meetings. We engage in a

transparent manner, in compliance with JSE

Listings Requirements, the stock exchange on

which AngloGold Ashanti has its primary listing,

and with the regulations of the various other

exchanges on which we are listed.

Our investment community is geographically

diverse and includes ﬁnanciers and bond

holders, and the providers of capital – our

shareholders and prospective investors.

We always report on our performance, both

operational and ﬁnancial, and on progress

made in delivering on our strategic objectives,

as well as on material matters that may

have an impact on our performance, such

as regulatory and political risk, corporate

activity by way of acquisitions or sales, other

corporate transactions, labour unrest, and

community matters, amongst others.

We believe that open and transparent

engagement can enhance the valuation and

credit rating of our company, thereby improving

our access capital. These engagements

are necessarily proactive, to inform of any

developments in the company, and become

even more important during periods when

investor sentiment is negative. Some of the

points we engaged the investment community

on, in addition to performance against our

strategic objectives, in 2017 are:

•

Safety – improved safety performance

•

Changes in remuneration – resolution

supported at the AGM with the remuneration

report receiving 97% shareholder approval

•

Restructuring of the South Africa region –

ﬁnalisation of asset sales and operational

turnaround

•

Communities – Siguiri resettlement in line

with company processes on community

engagement and human rights

•

Tanzania – surprise legislation changes on

additional royalties and clearance levy

•

Obuasi – redevelopment into a modern,

mechanised mine to extract value

•

Balance sheet – improved liquidity position,

thereby maintaining ﬁnancial ﬂexibility

•

Low-capital, high-return project

opportunities – self-funded Siguiri

expansion, Tropicana optimisation and

Long Island study

•

South Africa – reviewed Mining Charter,

the activities of the OLD Working Group and

the overall political uncertainty in the country

•

Exploration – particularly progress made

in Australia

Engaging with the media

Complements engagement with many

other stakeholders

Our media engagement is transparent, covers

a range of matters, facilitates understanding

of AngloGold Ashanti’s activities, and

promotes accurate reporting and constructive

relationships with other stakeholders.

Engagement with the media augments

and underpins communication with other

stakeholders such as communities, investors

and government, and other interested entities.

Successful media engagement is fundamental

to ensuring accurate representation and

understanding of the company, management

USEFUL LINKS

For more detail on this survey see People
are the Business on page 36

of our reputation and our credibility, and

maintenance of our social licence to operate.

It can be used to address speculation and

misinformation in the public domain.

We engage with the media through holding

roundtable sessions to provide deeper

insight into our business, interviews

granted during the company’s results

announcements and as necessary to

provide reporters with company updates

developments, including:

•

Political and regulatory engagements: in

Tanzania for the export ban, mandatory

listing, and the legislative changes. In

South Africa for the MPRDA & the reviewed

Mining Charter, and in the DRC on the new

mining code

•

Social Licence to Operate: in Colombia on

the La Colosa plebiscite outcomes; in Guinea

on the Area 1 Resettlements; and in South

Africa on the community demands for jobs,

particularly with restructuring in South Africa

•

Others matters: included fatalities in

the mines in South Africa; the OLD

working group relating to the class action

certiﬁcation by the High Court; and the

settlement negotiations

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Shareholder information

STAKEHOLDER ENGAGEMENT

AND MATERIAL ISSUES

CONTINUED

In engaging with stakeholders, various material issues are highlighted. The major material

issues identified as a result of this engagement are the following:

Detailed information on our approach in addressing these issues is described in the

<SDR>

Contributing to
self-sustaining

communities

Artisanal and small

scale mining (legal

and illegal)

Responsible

environmental

stewardship

Employee and

community health

Employee,

community and

asset security

Talent

management and

skills development

Employee safety

Respecting

human rights

Integrated closure

management

Navigating

regulatory

and political

uncertainty

and risk

Picture:

Serra Grande, Brazil

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Strategy

Performance review

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Shareholder information

PEOPLE

ARE THE BUSINESS

In the South Africa region, the human

resource challenge is framed by

signiﬁcant structural rationalisation of

the portfolio, with reduced employee

numbers and a need to retain talented

individuals, particularly staff with critical

and scarce skills. This needs to be done

while the retained employees transition

to their new roles. The focus of our

human resource strategy has enabled

us to respond to the primary challenges

we face, namely ensuring organisational

effectiveness while rationalising part of

the portfolio, as well as operating and

growing others.

The regions within our International

Operations’ portfolio continue on

their strategic trajectories to become

world-class operations that are safe

and proﬁtable in all circumstances.

The business has leveraged the

operational excellence initiative, aided

by employing people with the right

skills and behaviours and creating

an organisational culture conducive

to operating at a high level and

continuously improving performance.

The need to deliver on our business strategy, coupled with the challenging

business environment, places an increased focus on our people as we strive to

ensure that the company remains competitive, and consistent in the deliver y of

excellence. In view of this, our human resource strategy has remained resolute

in ensuring that the company has created the environment for staff to thrive and

add value to the business.

Picture:

Serra Grande, Brazil

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Shareholder information

PEOPLE

ARE THE BUSINESS

CONTINUED

Our People strategy is underpinned by our values and enables business strategy execution

AngloGold Ashanti’s people philosophy

Given the importance of having the right people doing the right work well, our business context is relevant to how our people work

People Strategic Pillars

Goal

Organisational design

and operating model

aligned to business

strategy

Health of Discipline

framework to enable

Operational Excellence

Develop capable

ethical leaders across

the organisation

Focus on employee

engagement and

commitment

Integrated talent

management and

succession planning

Simpliﬁed and

integrated global

human resource

systems

Intent

Optimal organisational

design and structure

which gives effect to

the company strategy

in a way that is globally

consistent, yet locally

relevant.

Ensure that we have

deﬁned the right

competencies and

capabilities required per

functional area to enable

operational excellence

and strategy execution.

The best leaders are

in place, with a global

mindset, and who

use a requisite set

of competencies to

shape and drive a high-

performance culture.

Employees are fully

engaged so that they

thrive and give their best

in achieving their own

and company objectives.

Integrated cross

functional talent

management with the

requisite capabilities in

place, enabling us to

navigate the business

landscape and achieve

strategic objectives.

Human resources

data is effectively

managed in order to

enable more effective

decision making,

optimise internal and

external reporting, and

drive superior business

performance.

Key Enabler:

Values Based Ethical Leadership and Management Practices - “How We Work”

People strategy

Engaged

talent

Business

results

Social

sustainability

Shareholder

value

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Shareholder information

Our business context drives the
following six human resources
strategic priorities:

•

Develop integrated talent management

systems and succession planning

•

Build capable global leaders across

the organisation to ensure a high-

performance culture

•

Develop and drive a Health of Discipline*

framework that ensures that the various

disciplines have effective organisational

structures, staffed by competent people and

with appropriate work processes, to achieve

our business objectives

•

Focus on employee engagement

and commitment

•

Shape AngloGold Ashanti’s culture with a clear

organisational design and operating model

•

Develop simpliﬁed and integrated human

resource information systems

The Health of Discipline refers to our framework
to ensure that we have the right people, with the
appropriate competencies, in the right positions.

Our actions in 2017

Given the challenges in our operating

environment, the company’s human resources

discipline increased its emphasis on building

capacity and capability, to position itself as

an effective strategic partner to the business.

Our focus was on delivering productive,

innovative people management initiatives and

accelerating delivery of our strategic priorities.

In the following sections, we reﬂect on our

performance regarding the strategic priorities

of integrated talent management, health

of discipline, organisational leadership and

employee engagement.

Integrated talent management

In advancing our talent management

capability, 2016 and 2017 were devoted to

building on the foundation of existing talent

management practices and strengthening the

operationalisation and maturity of our talent

management process. This was supported

by the development of a talent management

toolkit and system to ensure an integrated

and consistent approach across our

operating base.

PEOPLE

ARE THE BUSINESS

CONTINUED

Integrated talent management approach

Opt

ise overhead, costs and

cap

ital expend

iture

i
nta

i
n long-term opt

i
onal

i
ty

Focus on people, safety and sustainability

Ensure f

i
nanc

i
al flex

i
b

i
lity

Improve portfol

io qual

ity

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

RATEGIC FOCU

S A

Business strategy

Human resources

strategy

Engaged talent

Leadership

competency

framework

Business results

Identify

Develop

Deploy

Integrated

talent

management

Assess

Retain

Talent and succession planning

During the year, the Chief Executive Ofﬁcer’s

talent pool, comprising Stratum IV (Vice

President level and above), was reviewed and

presented to the board. Critical leadership

and technical positions were identiﬁed, and

potential successors in the short, medium

and long term, were identiﬁed for all these

positions. In so doing, talent was reviewed

cross-functionally across AngloGold Ashanti.

Cross-functional talent reviews assist with the

management of speciﬁc talent management

risks, including unﬁlled vacancies in critical

leadership and specialist positions. To

ensure that these potential risks are avoided,

we have development plans for potential

successors through a blended-learning

approach, covering both formal and informal

training. Additionally, while focusing on

strengthening leadership talent, we are

mindful of gender diversity and continue to

work towards gender parity.

We continued to make progress with internal

succession placements – about 80% of

key positions were ﬁlled internally. At our

Continental Africa operations, where the

company largely employed expatriate staff

in the past, employment of expatriates has

been reduced. This change has had no

adverse impact and operations continue to

excel with greater localised employment.

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Strategy

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Shareholder information

PEOPLE

ARE THE BUSINESS

CONTINUED

In the South Africa region, we implemented the

Advanced Leadership Development (ALDP)

and Managerial Leadership Development

(MLDP) programmes for key personnel in

partnership with the University of Cape

Town Graduate School of Business. These

programmes aim to provide managers with

the requisite skills, knowledge and required

behaviours to be effective leaders by facilitating

exposure to classroom training, as well as

on-the-job coaching and mentoring. This

is evidence of AngloGold Ashanti’s steadily

maturing approach towards integrated talent

management, with real application in a fast-

paced, real world business environment:

•

The cover ratio for Executive Committee

members and other key leadership roles shows

strong bench strength across the group

•

A strong focus on appointing candidates

from within the company to key positions,

with around 80% of positions having been

ﬁlled internally

•

Good leadership talent retention (senior and

executive management) positions with a 3%

turnover rate

•

A strong talent pipeline with most of the

workforce being between 26 and 45 years

of age

•

7% year-on-year improvement in identifying

women successors for inclusion into the

talent pool – this remains a focus area

•

Representation by historically disadvantaged

South Africans in the CEO’s talent pool was

14% higher year-on-year

•

Retention risks being managed proactively

with expanded retention strategies, including

a structured focus on both formal and

informal development interventions

•

Talent management governance structures

streamlined across the organisation with

clear guidelines for talent pool identiﬁcation

Talent development: Chairman’s Young
Leadership Development Programme

In strengthening employee development and

expanding the leadership pipeline internally,

AngloGold Ashanti continued its focus on

nurturing and developing young talent from

lower levels through the Chairman’s Young

Leaders Programme. The programme,

focuses mainly on emerging young talent,

is well established and in its third year. It is

yielding positive results in developing, and

nurturing future leadership and/or critical skills

talent pipeline across AngloGold Ashanti.

From the 2015 and 2016 intakes, (out of

17 participants), 76% have either been

promoted or have had their roles expanded

to assume greater responsibility. Nine young

leaders joined the 2017 programme and

received global exposure through three cross-

functional job rotations across the business

during the year. All nine delegates completed

the programme successfully.

Picture:

Iduapriem, Ghana

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Strategy

Performance review

Accountability

Shareholder information

Now that those on the programme have

completed it, the next intake of young leaders

into the programme will be in 2019. In the

interim, the following key interventions will

be undertaken:

•

Launching of a mentorship programme

•

Ensuring visibility of talent through ongoing

engagements with the senior leadership team

•

Focusing on implementation of development

plans and continuing with career guidance

Localisation and expatriate
management

Localisation is a key driver for talent and

succession management across our

operations. In Continental Africa, our

deliberate approach to reducing the number

of expatriate employees and creating

opportunities for local employees, has

resulted in 41% less expatriates in the region

since 2013. This was a result of both the

appointment of local successors and the

redundancy of some expatriate roles given

local skills development. Between January

2016 and December 2017, 62.5% of

expatriate roles were localised. Our managers

continue to focus on local skills development,

including skills transfer programmes.

Organisational leadership

Leadership is an integral part of AngloGold

Ashanti’s How We Work people management

philosophy. In 2017, we developed a

leadership competency framework, aimed

at clearly outlining the competencies and

behaviours required by AngloGold Ashanti

leaders across the business. This framework

is in line with the principle of values-based

ethical leadership for all leaders and thus

demonstrates the AngloGold Ashanti values of

being socially responsible, having integrity and

embracing multicultural diversity.

Implementation of this framework will be

supported by an upskilling toolkit and allow for

regional interpretation and integration into our

“How We Work” people management practices.

PEOPLE

ARE THE BUSINESS

CONTINUED

Picture:

Sunrise Dam, Australia

Number of expatriates in Continental
Africa Region

211

183

142

166

240

2013

2014

2015

2016

2017

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

PEOPLE ARE THE BUSINESS CONTINUED

Strategic and

commercial acumen

Operational

excellence

Clear vision and

direction setting

Drive

performance

Safety

mindset

Adaptability

and resilience

Business leadership

People leadership

Self leadership

Stakeholder

management

Innovation

Leading and building

diverse teams

Ensure

accountability

Teamwork and

collaboration

Emotional

intelligence

Supporting our strategy for sustainable cash ﬂow improvements and returns

•

Optimise overhead costs and capital expenditure

•

Improve portfolio quality

•

Maintain long-term optionality

•

Focus on people, safety and sustainability

•

Ensure financial flexibility

Optimise
overhead,
costs and
capital
expenditure

Maintain
long-term
optionality

Focus on people, safety and sustainability

Ensure
financal
flexiblity

Improve
portfolio
quality

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

OUR CORE STRATEGIC FOCUS AREAS

Values based ethical leadership

AngloGold Ashanti’s values

Safety

Dignity and respect

Diversity

Accountability

Communities

Environment

Communication and capability building

Integration into talent practices, including Recruitment, On-boarding, Development, Health of Discipline and Performance, Career and Succession Management

Technical and functional competencies

Our business
strategy

Our leadership
competency
framework

How we
enable this

The AngloGold Ashanti leadership competency framework

I N T E G R AT E D R E P O RT

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Shareholder information

Skills development

As part of skills development, AngloGold

Ashanti Training and Development Services

(ATDS) in South Africa, which has eight major

training centres (including two underground),

provided comprehensive technical, leadership

and behavioural training and development

to staff in 2017. ATDS trained approximately

27,000 learners and is fully accredited by the

South African Mining Qualiﬁcations Authority

(MQA) and is ISO 9001 and OHSAS 18001

accredited. Learners are primarily employees

from our South Africa and Continental Africa

regions, but also include learners from external

organisations such as the South African

National Defence Force and the national power

utility, Eskom.

Health of Discipline

The Health of Discipline framework was

positioned as a company-wide consistent

approach to achieve the following objectives:

•

Continuous supply of functional, technical

and leadership competence in critical roles;

•

Execution of succession planning for

critical skills

•

Career management through clear and

relevant processes to design career paths for

all key employees and key talent segments

In 2017, implementation of the initial phase

of the Health of Discipline framework and

toolkit were accelerated to ensure that the

various disciplines have effective organisational

structures, staffed by competent people

with appropriate work processes to achieve

our business objectives. Signiﬁcant traction

in implementing the Health of Discipline

practice has been noted at the International

Operations, particularly relating to metallurgy,

mining, geotechnical, and greenﬁelds and

brownﬁelds exploration. The next phase will

cover all other disciplines across the regions

and the group – drawing from the successes

and learnings of the ﬁrst phase.

Employee engagement

AngloGold Ashanti initiated a global engagement

survey in August 2014. In early 2017, a second

engagement survey was conducted to assess

progress made in the intervening period and

to identify further work to be done to promote

levels of employee engagement. The survey was

conducted by an external provider, Talent Map.

Customised questions on the global

engagement survey, pertinent to AngloGold

Ashanti, were included with speciﬁc focus

on safety, company values and ethics. A

representative sample of employees was

surveyed across all levels, including age,

gender, race and tenure. The following was

the key dimensions covered:

•

Company values

•

Organisational vision

•

Senior leadership practices

•

Innovation

•

Ethics

In the 2014 survey, three areas came

up as areas requiring improvement:

senior leadership practices; managerial

effectiveness; and ethics. These were

determined as the most signiﬁcant areas

as they are strong drivers of employee

engagement. A range of interventions were

undertaken, underpinned by the roll-out of

the How we Work people practices which

aims to build supervisor and manager

capability in managing and engaging

employees in the workplace.

In the 2017 global engagement survey,

the results showed an improvement of the

overall engagement score compared to the

2014 survey: from 69% in 2014, increasing

to 76% in 2017 as depicted below:

PEOPLE

ARE THE BUSINESS

CONTINUED

Engagement scores

Unfavourable

Overall engagement

I am proud to tell others

I work for my company

I am optimistic about

the future of my company

My company inspires me

to do my best work

Data is rounded to the nearest number

* Number indicates % favourable score

Neutral

Favourable

Frequency (%)

100

AGA

2014*

AGA

2017

Large

organisation
benchmark*

Industry

benchmark*

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Strategy

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The employee engagement survey also

indicated that working on entrenching and

ensuring demonstrable and visible company

values and principles by employees and

managers across the group, is a key

positive engagement driver for AngloGold

Ashanti. Notwithstanding the improved 2017

performance, we continue to do more work to

drive employee engagement.

There will be speciﬁc focus on enhancing and

ensuring awareness of our company values,

as a key leverage area to improve employee

engagement. How We Work will continue

as a global management system to enable

accountable leadership and implementation

of the requisite people management practices

within AngloGold Ashanti. Having taken heed

of the results of the previous surveys, a follow-

up survey will be conducted in 2019.

Diversity and inclusion

As a global company, AngloGold Ashanti

embraces and recognises employees

from diverse backgrounds. This includes

cultural, geographical and gender diversity,

along with the need to address localisation

requirements and the many forms of

discrimination arising from diversity. All our

policies linked to diversity and inclusion are

underpinned by our value that we must

treat each other with respect, regardless

of race, religion, gender, disability, size,

age, or country of origin. In all its aspects,

embracing diversity is a source of value

rather than a challenge which needs to be

managed. The company has continued

to work actively in strengthening women

representation at board, executive and

senior leadership levels, and compares

favourably with peers in the mining industry.

Our focus remains the identiﬁcation and

appointment of women leaders into

technical roles. The challenge we face can

be attributed to the competition for talent,

particularly for women at senior level as

well as the small pool of senior women with

technical skills, a barrier generally faced

by the mining and industrial sectors. We

continue to work with Women in Mining

and tertiary institutions to address this.

Throughout the year we participated in, or

continued to subscribe to various bodies

and interest groups focusing on gender

diversity, enabling us to help inﬂuence a

progressive diversity agenda. Through

the 30% Club Boardwalk, 25 women at

management level have participated in this

development initiative to nurture aspiring

leaders in senior management positions.

The company also joined the South African

and Australian chapters of Women in

Mining, an organisation which, among other

things, supports development initiatives

including coaching and mentoring and

enabling suitable work environments.

Through its focus on women’s development

in South Africa, the company received a

number of accolades at the 2017 Gender

Mainstreaming awards. Among companies

listed on the Johannesburg Stock Exchange,

AngloGold Ashanti was placed ﬁrst in the

category of Economic Empowerment of

Women; second in Women on Boards;

and third in the three categories of

Empowerment of Women in the Community,

Women on Executive Committees in

Multinationals and Gender Reporting.

PEOPLE

ARE THE BUSINESS

CONTINUED

2017 Performance scores by main survey attributes

Unfavourable

Professional growth/Personal development

Safety

Organisational vision

Innovation

Work environment

Values

Teamwork

Immediate management

Performance feedback

Ethics

Company information on communication

Work/life balance

Stakeholder focus

Senior leadership practices

Managerial effectiveness

Remuneration/reward

Data is rounded to the nearest number

* Number indicates % favourable score for AngloGold Ashanti

Neutral

Favourable

Frequency (%) 0

100

AGA 2014*

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Labour relations

AngloGold Ashanti employees have a right

to freedom of association and to collective

bargaining. This is embraced and viewed by

management as central to effective labour

relations at all our operations where the

country’s regulations allow. For labour relations

activities and engagements that took place

during the year, see the regional reviews

sections in

Performance review

Safety strategy

The safety strategy is aimed at systematically

identifying and eliminating workplace

hazards and risks, particularly in the ultra-

deep gold mining environment with many

geological challenges, where missteps can

have disastrous consequences. There was

a signiﬁcant improvement in the various

components of the strategy given the strong

focus on safe production.

Our South African operations have recently

reviewed the strategy in order to align it

with current trends. And, following the fatal

accidents that occurred in South Africa in the

latter half of the year, mitigation measures

were put in place to avoid a recurrence. These

measures include, among others:

•

Compilation and review of guidelines on

changes to mining conﬁguration

•

Investigating the use of technology to

assess rock mass competency, ground

penetrating radar is currently being tested

•

Improving cycle mining compliance

•

all supervisors attended refresher sessions

on cycle mining requirements

•

the booking system was reviewed to

align with activities rather than volumes

mined (m

)

•

the second wave crew training to begin,

starting with supervision accountabilities

•

Reviewing stope proﬁles to improve rock

stress redistribution ahead of the stope by

determining the optimal lead/lags for varying

panel lengths and taking into account the

principles of cycle mining

•

Reviewing start-up risk assessment formats

and processes to incorporate learnings

and trigger action response plan principles

(similar to ledging risk assessment)

•

Awareness training on the reviewed/

updated procedures

Our four-pillar safety strategy (i.e. knowledge

and skills, behaviour and attitude, planning

work, and removing people from risk) is aimed

at creating a culture of “planning for safe work”

while integrating safety principles into work.

Signiﬁcant progress was made during the year

in terms of safety leadership training, employee

capability and risk propensity as well as hazard

and risk management training for supervisors.

PEOPLE

ARE THE BUSINESS

CONTINUED

Gender representation on the board: 2014 - 2017

(%)

2014

2015

2016

Male 7

Female 2

% Female 22%

27%

36%

2017

40%

30%

20%

10%

27%

36%

2014

2015

2016

Male 6

Female 3

% Female 33%

33%

2017

35%

30%

25%

20%

15%

10%

Gender representation in executive management: 2014 - 2017

(%)

33%

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STRATEGY

SECTION 3

This section sets out how we create value for

our stakeholders in the short, medium and long

term, and how we have performed in terms of

our strategic objectives, while managing the

related risks and opportunities.

Our strategy

Performance against strategic objectives

Managing and mitigating risks, identifying opportunities

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

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OUR

STRATEGY

Focusing on the strategic areas of the company

ANGLOGOLD ASHANTI’S INVESTMENT CASE:

Optimise overhead, costs and

capital expenditure

Maintain long-term optionality

Focus on people, safety and sustainability

Ensure financial flexibility

Improve portfolio quality

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

OUR CORE STRATEGIC FOCUS AREAS

People are the foundation of our business. Our business must operate according to our values if
it is to remain sustainable in the long term.

We must ensure our balance sheet always remains able to meet our core funding needs.

All spending decisions must be thoroughly scrutinised to ensure they are optimally structured
and necessary to fulﬁl our core business objective.

We have a portfolio of assets that must be actively managed to improve the overall mix of our
production base as we strive for a competitive valuation as a business.

While we are focused on ensuring the most efﬁcient day-to-day operation of our business, we
must keep a close eye on creating a competitive pipeline of long-term opportunities.

These focus areas drive our plans for inward investment, to deliver better quality

production aimed at increasing margins, extending mine lives and shaping the portfolio in the

longer term.

AngloGold Ashanti's core strategic focus is to generate sustainable

cash flow improvements and returns by focusing on five key areas,

namely: people, safety and sustainability; ensuring financial flexibility;

actively managing all expenditures; improving the quality of our

portfolio; and maintaining long-term optionality.

HIGH-QUALITY portfolio

of long-life, pure gold

assets with strong leverage

to energy and currencies

Transparent, DECISIVE,

DISCIPLINED

management team,

focused on delivery, long-

term shareholder value

PRIORITISING MARGINS

over volume – focus on

cost and capital discipline

Decisive STRATEGIC RESPONSE

to the gold price – business plans

adjusted, and exploration and

development projects curtailed or

advanced, as appropriate

Balance sheet

FLEXIBILITY, with

appropriate liquidity,

and within covenant

threshold

WELL-DEVELOPED

ENGAGEMENT model

ensures strong stakeholder

relationships and maintains

licence to operate

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‘Our people’ include our employees, the host

communities and all other stakeholders as

discussed under the

Stakeholder engagement

section in this report. During the 2017 year,

the focus on the employees included ensuring

an integrated talent management process,

employee development, and succession

planning to ensure that we have the right

people, with appropriate competencies,

in the right positions. This is the key

aspect in ensuring creation of the right

working environment, encouraging a high-

performance culture, to enable delivery on our

strategic objectives.

Our drive to maintain sustainable cash

ﬂows, is not only dependent on our capable

employees, but is also inﬂuenced by our

ability to operate safely, in line with our

ﬁrst value and zero harm goal, and to

conduct our business ethically. To keep

an uncompromised license to operate, we

maintain full engagement with our host

communities and governments, and remain

responsible stewards of the environment,

notwithstanding the invasive nature of mining.

Safety remains our highest priority as we

continue on the path to eliminating all injuries

from our mines. In achieving this strategic

pillar, we create value, sustainably, while

investing back to the communities.

PERFORMANCE

AGAINST STRATEGIC OBJECTIVES

AngloGold Ashanti's performance against its strategy is set out below for each strategic pillar. These were

achieved by delivering better quality ounces, improved margins, self-funded investments into the portfolio for

the long term sustainability of the business, while generating and returning cash to investors.

Our core strategic focus areas remain:

Focus on people, safety,

and sustainability

Number of employees

58,057

52,266

51,480

52,649

66,434

2013

2014

2015

2016

2017

Community investment

(by region 2017)

•

South Africa

•

Continental Africa

•

Australasia

•

Americas

Productivity*

(oz/TEC)

9.30

9.50

9.66

8.97

7.77

2013

2014

2015

2016

2017

* Continuing operations

Picture:

Sunrise Dam, Australia

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Shareholder information

Despite higher capital expenditure increasing

our net debt slightly from $1.9bn to $2.0bn,

net debt to adjusted EBITDA ratio (1.35

times) remained well below our covenant

threshold (3.5 times). The capital expenditure

increase was planned to pursue high-return

opportunities – these are stated under strategic

pillar 4 on the following page. We have

maintained ﬁnancial ﬂexibility in the current

volatile environment, our balance sheet is robust

with strong liquidity, sufﬁcient undrawn facilities

and no near-term maturities.

Continued positive cash generation helped

us return cash to shareholders, enabling us

to declare a dividend at ZAR 0.70 cents,

equivalent to ~6 US cents (2016: 10 US cents)

a share. The proceeds from the sale of the two

mines in South Africa were applied to reduce

debt, further improving ﬁnancial ﬂexibility.

Total cash costs of $792/oz were 6%

higher than the previous year, impacted by

inﬂation, stronger local currencies and the

expensing of certain capital costs at the

South African operations as they went into

orderly closure. Corporate costs, however,

were up 5%, negatively impacted by inﬂation

and currency effects.

Cost management initiatives continue under

the Operational Excellence programme. This

programme drives improved behaviours within

the workplaces for enhanced operational

efﬁciencies, to reduce cost structures and

improve margins.

All-in sustaining costs were higher compared

to 2016 due to the higher planned sustaining

capital expenditure as we self-funded our

portfolio development, reinvesting in high return

options within our existing portfolio. In 2018,

capital expenditure is expected to be lower

at between $800m and $920m (inclusive of

growth projects at $200m-$250m).

PERFORMANCE

AGAINST STRATEGIC OBJECTIVES

CONTINUED

Ensure ﬁnancial

ﬂexibility

Optimise overhead, costs

and capital expenditure

Group annual capital expenditure*

($m)

1,209

857

953

811

1,993

2013

2014

2015

2016

2017

* Includes equity-accounted investments and
discontinued operations

Corporate and overhead costs

($/oz)

2013

2014

2015

2016

2017

Net debt

($m)

3,133

2,190

2,001

1,916

3,105

2013

2014

2015

2016

2017

Net debt to adjusted EBITDA ratio

(times)

1.94

1.49

1.35

1.24

2.04

2013

2014

2015

2016

2017

USEFUL LINKS

For further detail on the relationship
between net debt and adjusted EBITDA,
see the CFOs review on page 62

For detailed Outlook see page 66

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PERFORMANCE

AGAINST STRATEGIC OBJECTIVES

CONTINUED

Improve the quality

of the portfolio

Maintain long-term

optionality

We continue to look for ways of unlocking

value and improving our portfolio for the

long-term sustainability of the business, a

fundamental element of our strategy. We are

mindful that mining is a long-term business,

and so we continue to invest in world-

class exploration talent and high-potential

brownﬁelds and greenﬁelds programmes.

During the year, we continued work on the

Below 120 Level life extension project of the

Mponeng mine in South Africa which aims

to access deeper, higher-grade ore (Also see

detail in South Africa in the

Regional reviews

We also progressed mine expansion with

Siguiri’s hard rock project. At Obuasi, following

positive interactions with government, it is

anticipated that redevelopment of the mine

will commence as soon as the ﬁscal and

development agreements have been ratiﬁed

by the Ghana parliament during 2018. In

Colombia, the Gramalote project, a joint

venture with B2Gold, declared its maiden Ore

Reserve and is expected to undertake a full

feasibility study.

2018 DELIVERABLES

New quality ounces; lower cost proﬁles;

and extended life of mine (LOM)

Siguiri hard rock project

•

Extends LOM; enhances NAV

•

2018-2020E

• Production: c.355,000oz

• all-in sustaining cost: $910/oz

Mponeng Phase 1 – accessing higher grades

•

Extends LOM; access higher grades

•

2018-2020E

• Production: c.268,000oz

• all-in sustaining cost: $1,105/oz

Kibali underground development

•

Extends LOM; improve cost

•

2018-2020E

• Production: c.340,000oz*

• all-in sustaining cost: $700/oz

* Attributable

Exploration within AngloGold Ashanti is

focused on creating signiﬁcant value for the

business. In building the long-term prospects

during the year, greenﬁelds exploration was

undertaken in Australia, Brazil, Colombia and

the USA. We also pursued our good, high-

return brownﬁelds opportunities that will not

only improve the quality of production, but

will extend mine lives in quite a few of our

assets, shaping our long-term optionality. The

brownﬁelds exploration programme is based

on innovation in geological modelling and

mine planning, and continual optimisation of

our asset portfolio. In line with a good capital

discipline, exploration and evaluation costs

were down by a signiﬁcant 14% for the year.

In 2017, we managed to offset almost all

depletion through production, ending the

year with Ore Reserve of 49.5Moz, at a

conservative gold price of $1,100/oz at which

we calculate our Ore Reserve. Also see the

Mineral Resource and Ore Reserve summary

section in this report or the full statement

<R&R>

Exploration and evaluation costs

($m)

142

132

114

133

250

2013

2014

2015

2016

2017

Picture:

Siguiri, Guinea

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Shareholder information

Risks have been identified

and quantified with input from

senior management to ensure

accountability. The relevant

risk owners were consulted to

confirm risk ratings, both in

terms of severity and likelihood,

to ensure correct alignment

with independent assessments

conducted from time to time

A three-year time horizon has

been applied to the top group

risks, together with the latest

business planning data, to reflect

a more dynamic heat map.

GROUP TOP RISKS

The risks tabulated alongside are the group’s

top ten risks as at the end of 2017, ranked

from highest to lowest, in order of magnitude.

The corresponding ranking in 2016 is given

in parentheses.

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES

Summary of top ten group risks

Ranking

(Previous)

POTENTIAL RISK

1 (2)

Elevated political and country risk proﬁle in core production areas

2 (3)

Operational underperformance negatively impacting improved track record

3 –

Cost competitiveness

4 (1)

Adverse gold and commodity prices, and currency movements

5 (6)

Growth projects delaying

6 (5)

Labour-related stoppages

7 (4)

Inability to develop projects to bring the Ore Reserve to account

8 (9)

South African net debt and increasing debt servicing levels

9 (8)

Critical skills and talent retention

10 (10)

Legacy occupational and community health compensation claims/litigation

SEVERITY

LIKELIHOOD

Principal risks identified

Operational

External

Strategic

Political

Operational
underperformance

Growth projects

Critical
skills

Health

Labour

Ore
Reserve

Debt

Cost competitiveness

Commodity prices and currencies

Top group risks heat map

Picture:

Serra Grande, Brazil

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Shareholder information

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

Risk

Potential consequences

Mitigation action plan

1. Elevated political
and country risk
proﬁle in core
production areas

•

Regulatory uncertainty

•

Increased tax and royalties

•

Adverse impact on our business plans

•

Adverse impact of market capitalisation

•

Increased operational costs

•

Reduced cash ﬂow

•

Reputational damage – continued scrutiny from governments,

international NGOs and communities

•

Political instability

•

Compromised employee safety and security

Tanzania

•

In July 2017, the government of Tanzania passed into law a new legal

framework for the country’s extractive industries

•

Working capital locked up as VAT is not being refunded

South Africa

•

Restructuring in the South Africa region

•

The reviewed Mining Charter

•

Targeted stakeholder mapping and engagement with greater focus on government

structures, local community and non-governmental organisations

•

Use of joint venture alliances in line with host country regulatory requirements

•

Exploring opportunities for inclusive engagement and broader collaboration with NGOs

(activists)

•

Constant monitoring of legislative/political landscape conducted in anticipation of any

negative impact on business

Tanzania

•

Arbitration proceedings under the rules of the United Nations Commission on International

Trade Law – a precautionary measure to safeguard AngloGold Ashanti assets in Tanzania

•

Continued engagement with key stakeholders on our position, including government,

business, media and communities

•

Mine plans amended to ensure break even cash ﬂow and capital expenditure is being

redirected to other parts of our portfolio

South Africa

•

Maintain engagement with all key stakeholders, including through the Chamber

of Mines with the Minister of Mineral Resources, who has committed to an open and

stakeholder inclusive renegotiation towards ﬁnalisation of the Mining Charter

•

Full compliance with the Labour Relations Act and the MPRDA

•

Security/operational readiness for any potential labour/community unrest

Mitigation of top ten group risks 2017-2018

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Strategy

Performance review

Accountability

Shareholder information

Risk

Potential consequences

Mitigation action plan

1. Elevated political
and country risk
proﬁle in core
production areas
(continued)

Colombia

•

The use of the constitutional right to engage in popular consultations

to circumvent an array of public and private projects/ programmes

continues to challenge investment security

•

Failure to implement the peace process with Fuerzas Armadas

Revolucionarias de Colombia (FARC) and successfully conclude

negotiations with ELN (the National Liberation Army) remain as risks

to political stability in the country

Brazil

•

Widespread public unrest, sweeping corruption scandals and

deepening social polarisation are maintaining the country’s elevated

political risk, which is weighing on investor sentiment and contributing

to uncertainty in terms of policy direction

•

The issue of land invasions, spurred by populist sentiment, and

associated community unrest, remains a threat which could escalate

and disrupt operations

Colombia

•

Stakeholder engagement continues to strengthen our relations with civil society and

government and to build broad consensus around the future development of our

project portfolio

•

Establish future optionality from legislative and social licence to operate processes, in

response to positive/negative scenarios

•

Security/operational readiness for any potential community unrest

Brazil

•

Stakeholder engagement and constant monitoring of the legislative/political landscape are to

be conducted in anticipation of and to mitigate any negative impact on the business

•

A strategy to address ongoing land invasions that involves multi-stakeholders is being

implemented

2. Operational
underperformance
negatively impacting
improved track
record

•

Unsustainable loss-making operations resulting in reduced cash ﬂow

and decreased liquidity

•

Reduced earnings, uncertain delivery on targets and disproportionate

penalty on share price

•

Decline in investor conﬁdence

•

Credit ratings affected

•

Restricted ability to invest in strategic growth and development

projects

•

In terms of safety underperformance, Section 54 stoppages would

threaten the long-term viability of the South African mines

South Africa

•

Proceeds from the sales of Kopanang and Moab Khotsong mines used to reduce debt to

improve liquidity

•

TauTona and Savuka have been placed into orderly closure. A business transition process is

planned to reduce Mponeng’s overhead costs

•

New shift arrangements are being negotiated for Mponeng – these would be expected to

improve face time and associated productivity

•

AngloGold Ashanti is currently working through the observations and recommendations

made by the Institute of Mine Seismology (IMS) to improve seismicity related risks

Brazil

•

Increase mine development rate to provide mine ﬂexibility

•

Focused exploration and drilling in priority areas

•

Drive operational excellence to improve productivity and efﬁciency

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Risk

Potential consequences

Mitigation action plan

3. Cost
competitiveness

•

Reduced proﬁt margins owing to high cost of production

•

Operational underperformance leading to failure to achieve

business plans

•

Our aging portfolio demands increased mining depth and distances

to the mining face, which increases sustaining capital required

•

Higher than inﬂation increases in wages and power costs

•

Stronger local currencies, speciﬁcally the South African rand and

Brazilian real, increase our costs relative to our peer group

•

Inﬂation of mining consumables, such as steel, steel-bearing

products and support products; chemicals, abrasives and explosives,

has been increasing in tandem with the increased gold price

•

New mining taxes and/or increasing royalty rates in key

operating areas

•

Organisational design that is equipped for larger business portfolio

South Africa

•

Maintain the discipline required to continue with self-help measures and efﬁciency improvements

•

Maintain focus on cost and capital discipline to deliver competitive all-in sustaining costs

•

The sales and closure of certain South African operations will help address the loss-

making TauTona and Kopanang mines, and ultimately lead to lower operating costs for the

remaining business

•

Ongoing reviews of the off-mine cost structure and business model for the South Africa

region are underway to further address a return to proﬁtability

International operations

•

More rigorous 2018 targets for operations in Continental Africa, Americas and Australasia

regions – with options for growth

•

The targets, based on desk-top studies, indicate that they are achievable, by a combination

of Operational Excellence initiatives, improved grades, lower operating costs and

streamlined systems and structures

•

Continued aggressive cost management focus on regional, general and administrative

expenses with external support sought to review corporate costs in line with the

reduced portfolio

4. Adverse gold
and commodity
prices, and currency
movements

•

Inadequate free cash ﬂow/liquidity, impacting our credit ratings

•

Inability to develop strategic growth and development projects to

bring the Ore Reserve to account

•

Lower market capitalisation

•

Need to recapitalise the company at distressed equity prices and in

poor market conditions

•

Potential to breach ﬁnancial covenant

•

A sustained period of signiﬁcant gold price volatility may adversely

affect the company’s ability to evaluate the feasibility of undertaking

new capital projects; the continuity of existing operations and their

ability to meet operational targets; or to make other long-term

strategic decisions.

•

Maintain the discipline required to continue with self-help measures and efﬁciency improvements

•

Maintain focus on cost and capital discipline to deliver competitive all-in sustaining costs

•

Maintain long-term sustainability and optionality by ensuring our pipeline of opportunities is

continuously replenished

•

Further reduce our annual interest bill

•

Further deleverage the balance sheet

•

Manage input oil costs, to extent possible

•

Focus on executing the Operational Excellence initiatives

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

Risk

Potential consequences

Mitigation action plan

5. Failure to deliver
on growth projects

Ghana – Obuasi

•

Continued cash drain on the group

•

Inability to bring the Ore Reserve to account

•

Adverse socio-economic stakeholder impact and reputational

damage

•

Litigation with the government of Ghana

•

Litigation/penalties/ﬁnes

•

Inability to redevelop the mine triggers signiﬁcant closure liabilities

Mali – Sadiola

•

Agreement delays will negatively impact the project and may result in

a production gap in early 2019

Colombia – Projects

•

Projects not positioned to best achieve value, leading to decision – to

advance or sell

•

Government taxes are high by international measures and may

impact project outcome

•

The use of the constitutional right to engage in popular consultations

to circumvent an array of public and private projects/programmes is

creating investment insecurity

•

Failure by the government to implement the peace process with

FARC and complete negotiations with ELN, threaten the stability of

the country’s political environment, and mining sector discussions

and perceptions

South Africa – Mponeng

•

Mponeng Phase 2 advancement not executed

Ghana – Obuasi

•

The investment development agreement (stability agreement), reclamation security
agreement and security agreement, which maintains law and order, are in principle agreed
and signed. Ratiﬁcation by the Ghana parliament is imminent

•

Settlement agreement for arbitration has been ﬁnalised

•

Redevelopment of this project provides a potential tier one asset that has an all-in sustaining
cost that is lower than the average for the group. Will be essential to execute the project on
time and budget, and to manage social and community expectations

Mali – Sadiola

•

Due to protracted negotiations with the government of Mali, management is currently
planning to place Sadiola mine on care and maintenance. Options to dispose of pre-ordered
mining equipment are being reviewed

•

A steering committee and technical committee have been reconstituted. The project
organisation has been redesigned to support and direct the project

Colombia – Gramalote

•

A prefeasibility study has been completed on how to best achieve value and to declare the
Ore Reserve

Colombia – La Colosa

•

Force majeure declared at La Colosa or, depending on legal advice and assessment of
scope, consequences and costs of each option

•

Duration of care and maintenance or force majeure to be assessed – estimated to be
probably at least three years

•

Following the outcome of a popular consultation vote, all voluntary social spend is to
be terminated

South Africa

•

Feasibility study is being updated on Mponeng LOM extension project

•

A business transition process is planned to reduce Mponeng’s overhead cost

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Risk

Potential consequences

Mitigation action plan

6. Labour-related
stoppages

•

May adversely impact investor conﬁdence which in turn would impact

our market capitalisation and could result in a decline in credit ratings

•

Production stoppages and losses would adversely impact the

company’s liquidity and, if protracted, may result in a liquidity crisis

•

Deteriorating operational and safety conditions would impact

employee safety and asset security

•

Potential violence and intimidation may lead to wide-spread chaos

and lawlessness

•

Accelerated organisational restructuring and mine closure

•

Negative impact on community stability

•

Adverse regulatory response

South Africa

•

Stakeholder engagement strategy involving executive management implemented

•

Ongoing communication and regular updates, in line with strategy, across various

statutory platforms

•

Full dialogue with union structures and leadership, employing existing union-employee

structures and consultation processes

•

Security strategies and operational framework in place, based on strategic working relations

with various security institutions and agencies (SAPS, NATJOC and Public Order Units)

•

Collaboration with gold sector peers to manage and contain the contagion effect of labour

risks spreading across the industry

•

Legal strategies and action plans in place

•

Recourse to exercise obligations as contained in recognition agreements with labour unions

•

Strike prevention and management strategies and authority protocols in place and tested

•

SASRIA insurance

•

A high-level operational framework in place to deal with a myriad of eventualities emanating

from restructuring, labour conﬂict, legal disputes and wage negotiations, which may result in

strike action

•

Have in place a labour exit strategy as a subset of the all-inclusive multi-disciplinary mine

closure action plan

Continental Africa

•

Ongoing engagement and consultative meetings with relevant labour unions

•

Established grievance procedures and disciplinary processes at all mine sites

•

Dedicated regional human resource team supporting operations

•

Capacity building with newly-elected union committee members (branch committees)

•

Strike contingency and management plans in place

•

Regular reporting and updates on labour relations to monitor trends and the industrial

relations climate at each operation

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Risk

Potential consequences

Mitigation action plan

7. Inability to develop
projects to bring
the Ore Reserve to
account

•

Ore Reserve write-down and possible decline in market capitalisation

•

Impairments and lower future earnings per share

•

Reduced production proﬁle and business plan

•

Loss of tenements

•

Premature mine closure or mothballing of operations

•

Identify suitable joint venture partnerships and alternative sources of funding

•

Revised tenements strategy with focused exploration funding for critical operations

•

Robust business planning, portfolio optimisation and considered feasibility studies to

withstand potential risks

•

Focused project management to deliver projects on budget and schedule

8. South African net
debt and increasing
debt servicing levels

•

Increased debt has the potential to lower revenues as more money

is spent servicing that debt, which could affect return on equity and

return on assets

•

Additional interest burden will put pressure on the remaining South

African asset’s margins and ability to generate cash

•

Decline in investor conﬁdence

•

Restricted ability to invest in strategic growth projects

South Africa

•

The proceeds from the sales of the Kopanang and Moab Khotsong mines used to reduce debt

•

Accelerate the restructuring process in the South Africa region, considering all relevant off-

mine and restructuring costs and aligning with reduced production base in that region

MANAGING

AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES

CONTINUED

Picture:

Kopanang, South Africa

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Risk

Potential consequences

Mitigation action plan

9. Critical skills and
talent retention

•

Insufﬁcient talent and succession planning pools

•

Failure to execute and deliver on strategic objectives

•

Increased labour costs

•

Potential impact on productivity and safety levels

•

Depending on the skills or talent lost – potential impact on

market conﬁdence

•

Localisation pressures, resulting in loss of depth of skill and experience

•

Owing to localisation pressures, staff deployed to gain relevant work

experience but given more challenging regulatory environment, there

are difﬁculties in obtaining permits

•

Higher cost of retention

•

Pay competitive market-related salaries and beneﬁts

•

Further broaden short and long-term incentive schemes to provide ﬁnancial and

non-ﬁnancial beneﬁts

•

Roll-out global performance management system, aligning roles with strategic plans

•

Implementation of an integrated talent management and succession planning process

across the business, with an increased coverage ratio for critical skills

•

Continue Chairman’s Young Leaders Programme (emerging talent pool) to aid development

of a healthy talent pipeline for future leadership positions

•

Update the CEO’s talent pool and succession/development plans

•

Implement talent development interventions

•

Increase training capacity for scarce artisan skills

•

In South Africa, the employee transition framework includes a retention strategy that involves

a tailored approach to ensure critical skills are available when needed

•

Develop rotation guidelines

•

Deﬁne the global leadership framework, the Health of Discipline framework, and develop a

global talent management system as set out in the People are our Business section

10. Legacy
occupational and
community health
compensation
claims/ litigation

•

Negative ﬁnancial impact

•

Reduced market capitalisation

•

Reputational damage, if not well managed

•

Employee well-being affected

South Africa

•

Defend all claims on their merits (both individual and class action)

•

Participate in industry working group on occupational lung diseases (OLD) to contribute to a

comprehensive and sustainable compensation solution for OLD

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

USEFUL LINKS

Refer to page 42 for additional details

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

MANAGING AND MITIGATING RISKS, IDENTIFYING OPPORTUNITIES CONTINUED

Type

Opportunity

Strategy

Strategic

Obuasi

•

Deliver revised feasibility study to ensure optimal

returns from high-margin, mechanised operation

•

Ensure buy-in for redevelopment from all

stakeholders, including government

•

Find optimal funding structure

Disciplined

approach to growth

•

Continue with disciplined investment to ensure

pipeline of brownﬁelds and greenﬁelds expansions

•

Maintain diversiﬁed portfolio capable of

withstanding “single jurisdiction / operation” shocks

Renewed optimism

and potential for

mining regulatory

certainty in

South Africa

•

Negotiate fair and sustainable wage agreement and

shift arrangements (South Africa)

•

Participate and inﬂuence Mining Charter and related

mining legislation

•

Advance Mponeng Phase 2 feasibility study

Stakeholder

relations

•

Enhanced engagement model to build strong

stakeholder relationships

Colombia

•

Revise tenements strategy with focused

exploration funding

•

Progress Quebradona and Gramalote projects up

the value curve

•

Advance engagements at La Colosa and lift

force majeure

Type

Opportunity

Strategy

Business planning

and portfolio

optimisation

processes

•

Sound business planning with top-down goals

•

Portfolio optimisation and revise ﬁt for

purposes structures

Asset sale or joint

venture for full value

•

Potential to realise full value of operating asset in

cash for sale or joint venture to enhance value

and optionality

•

Increased ability to deleverage in a value-enhancing

manner

Operational

Improving

production mix

•

Improved efﬁciencies and mine plan changes driven

through operational excellence initiatives

•

Inward investment into high-return projects

Beneﬁts from

increase in gold

price enhanced by

cost reduction

•

Actively improve the quality of the portfolio

•

Focus on margins through initiatives to improve

all-in sustaining costs and all-in costs, through

Operational Excellence initiatives

•

Improve leverage to the gold price

Pursuing key growth

opportunities for our

asset portfolio

•

Focused brownﬁelds exploration activities

•

Prefeasibility studies for life-of-mine extensions and

improved recoveries

Technology

step-change in

South Africa

•

Continue work with AngloGold Ashanti Technology

and Innovation Consortium

•

Continue to evaluate thermal spalling and ultra high-

strength backﬁll at Mponeng

Top group opportunities

Top group opportunities

We recognise that identifying and managing opportunities is an important component of risk management. The company identiﬁes suitable opportunities – endeavouring to exploit,

harness or maximise them – with the aim of creating value by mitigating our risks. This table lists our key opportunities along with the strategy for each.

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

PERFORMANCE
REVIEW

SECTION 4

We provide an overview of our ﬁnancial, operational and

sustainable development performance over the past ﬁnancial

year, as well as a summary of our Mineral Resource and

Ore Reserve portfolio and initiatives to extend this portfolio to

ensure long-term optionality.

CFO’s review

The year ahead – outlook

Financial review

Economic value-added statement

Regional reviews

Five-year statistics by operation

118

Mineral Resource and Ore Reserve – summary

138

Planning for the future

145

Picture:

Cuiabá, Brazil

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CFO’S

REVIEW

Christine Ramon:

Chief Financial Ofﬁcer

The company advanced the restructuring of

its South African portfolio, including some

signiﬁcant asset sales; executed, according

to plan, the key self-funded brownﬁelds

projects to sustainably improve mine lives

and margins; and achieved its annual cost,

production and capital guidance for the ﬁfth

consecutive year.

AngloGold Ashanti continues to make

progress on its strategic objectives and has

delivered a strong ﬁnancial and operating

performance. The ﬁnancial results for the

year have been impacted by some signiﬁcant

once-off charges and impairments, but cash

ﬂows and the balance sheet remain robust.

Total cash costs for the full year of $792/oz

were 6% higher than the previous year’s

$744/oz, and within the guidance range of

$750/oz to $800/oz. Costs were negatively

impacted by inﬂation, stronger local currencies

and the expensing of certain capital costs

at the South African operations as those

operations underwent orderly closure. All-in

sustaining costs came in at the bottom end of

the guidance range at $1,054/oz, 7% higher

than the previous year’s all-in sustaining cost

of $986/oz, due to higher planned sustaining

capital expenditure levels and the stronger

local currencies.

Cash ﬂow from operating activities for the

year ended 31 December 2017 declined

by 16% when compared to 2016, reﬂecting

tighter margins, working capital lockups, and

payments in respect of retrenchment costs

in South Africa, offsetting a 1% increase in

the gold price received and a 5% increase in

gold sales. Free cash ﬂow of $1m for the year,

compared to $278m in 2016, was supported

by a strong second half performance which

delivered free cash ﬂow of $162m. This

was, however, impacted by the increase in

the lockup of VAT receivables at Kibali and

Geita, which was approximately $20m and

$50m for the year respectively, and the higher

planned capital expenditure. In line with the

reinvestment strategy of AngloGold Ashanti,

total self-funded capital expenditure of $953m

increased by $142m from the previous year

(2016: $811m).

Production rises 4% year-on-year to

3.755Moz

, above top end of guidance

Total cash costs of

$792/oz

, in line with full

year guidance of between $750 to $800/oz

All-in sustaining costs of

$1,054/oz

, at

lower end of the guidance range

Free cash ﬂow of

$125m

, before growth

capital; impacted by South Africa

restructuring costs and VAT lockups in

Continental Africa

Dividend of

ZAR 70

cents per share

(approximately 6 US cents per share)

declared, given strong cash ﬂow performance

Adjusted headline earnings of

$9m

, after

retrenchment costs ($71m) and silicosis

provision ($46m)

Brownﬁelds projects

to improve life and

margins, all remain on schedule

New safety benchmarks set:

three,

fatality-free quarters for ﬁrst time

Obuasi redevelopment

approved on strong

return metrics and good government support

SA restructuring progressing well:

Moab

Khotsong and Kopanang sales closed on 28

February 2018 and TauTona in orderly closure

Strong Ore Reserve-replacement

performance

, declaration of maiden Ore

Reserve in Colombia

AngloGold Ashanti continued to

make considerable enhancements

to the quality of its portfolio

during the year ended

31 December 2017.

Enhancing
our portfolio

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CFO’S

REVIEW

CONTINUED

Free cash ﬂow for the year, before taking

growth capital into account, was $125m

versus $394m a year earlier, impacted by 19%

higher planned sustaining capital expenditure

of $829m compared to the previous year of

$695m, South African retrenchment costs paid

of $49m and higher cash costs.

The balance sheet reﬂects strong liquidity

comprising $965m available on the $1bn US

dollar syndicated RCF at the end of December

2017, $85m undrawn on the $100m US dollar

RCFs, A$290m undrawn on the A$500m

Australian dollar RCF, approximately R2.95bn

available from the South African RCFs and

other facilities and cash and cash equivalents

of $205m as at the end of December 2017.

We continue to focus our efforts on reducing

our taxation exposures, speciﬁcally indirect

taxes, in all jurisdictions that we operate in.

Our transparent group tax policy continues to

support a low risk approach in dealing with

tax matters across the various jurisdictions in

which we operate.

Other pertinent matters include:

•

At the end of June 2017, AngloGold Ashanti

announced that it would restructure its

South African operations to safely return the

business to proﬁtability, while mitigating job

losses. This included placing TauTona and

Savuka into care and maintenance, followed

by orderly closure. In October 2017, we

announced the sale of the Kopanang mine

and related infrastructure to Heaven-Sent

SA Sunshine Investment Company Limited,

with one of the conditions being that the

majority of existing workers continue to

work at the operations. Simultaneously,

we announced the conclusion of the sale

agreement for the disposal of the Moab

Khotsong and Great Noligwa mines and

related infrastructure to Harmony Gold

Mining Company Limited. All the conditions

precedent to these sale contracts were

met subsequent to year end and the

transactions closed on 28 February 2018.

•

Agreement has been reached with the

government of Ghana for the redevelopment

of Obuasi, subject to ratiﬁcation by

Ghana’s parliament of the relevant ﬁscal

and development agreements. These

agreements have been signed by the

government and ratiﬁcation is scheduled

during the current parliamentary sitting. The

redevelopment will establish Obuasi as a

long-life, modern, mechanised underground

mining operation, which is a fundamental

departure from the previous operating

method used at the mine.

•

The DRC has recently promulgated a new

mining code that makes a number of changes

to the operating environment for the DRC’s

extractive industries, including those in its

mining, and oil and gas sectors. On 8 March

2018, AngloGold Ashanti announced that a

meeting had been held between the DRC

president and mining industry representatives

to discuss the new mining code prior to

its promulgation. The DRC government

has agreed to continue discussions with

the mining industry representatives, post

the promulgation of the new mining code,

regarding issues existing in the current

agreement and the implementation of the new

mining code. AngloGold Ashanti is in full

support of Randgold Resources, our partner

and the operator in the Kibali joint venture,

in its continued engagement with the

DRC government.

•

The settlement negotiations between the

Occupational Lung Disease (OLD) Working

Group and class action legal representatives

have reached an advanced stage. The

OLD Working Group represents African

Rainbow Minerals, Anglo American SA,

AngloGold Ashanti, Gold Fields, Harmony

and Sibanye-Stillwater. The class members

are represented by Richard Spoor Inc,

Abrahams Kiewietz Inc and the Legal

Resources Centre. On 10 January 2018,

in response to a request from all parties

involved in the appeal to the Supreme Court

of Appeal (SCA) in respect of the silicosis

and tuberculosis class action litigation, the

Registrar of the SCA postponed the hearing

date of the appeal until further notice.

Focusing on margins

We continue to focus our efforts on driving

operational excellence and cost efﬁciency

across our business, regardless of the gold

price environment in which we operate and

over which we have no control.

Despite stronger currencies and inﬂationary

pressures, our continued focus on meeting

production targets, strong cost management

and stringent capital discipline, have resulted

in the all-in sustaining cost margin increasing

from 17% in the second half of 2016, to

19% in the last six months of 2017. This is

especially encouraging given the ﬂat gold price

and is illustrated in the graph that follows.

For the full year, the all-in sustaining cost

margin decreased from 21% to 16%, mainly

the result of currency and inﬂation pressure on

cash costs. We, however, continue to pursue

efﬁciencies and productivity and attempt to

improve margins on a sustainable basis and

will be working hard to ensure that these

efforts are reﬂected in the all-in sustaining cost

margin in the coming year.

We will continue to work towards

widening these margins, by focusing on

the controllable factors, including:

•

stringent cost management

•

reinvestment in low capital, high return

opportunities within our business

•

continuing to drive our Operational

Excellence Programme, which considers

innovative ways to improve efﬁciencies

and productivity at our operations

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Continued ﬁnancial ﬂexibility

We saw a slight rise in net debt from $1.9bn

to $2.0bn, mainly as a result of higher capital

expenditure, the funding of the South African

retrenchment costs and VAT lockups in

Continental Africa, all of which were partially

offset by a reduction in interest paid of $34m.

The net debt to adjusted EBITDA is 1.35

times, slightly up from 1.24 times at the end

of 2016, however, reﬂecting an improvement

from 1.56 times at the end of June 2017. The

ratio shows ample headroom compared to our

covenant levels of 3.5 times.

Our liquidity position has improved from $1.58bn

at the end of December 2016 to $1.72bn at the

end of December 2017, reﬂecting the additional

facilities put in place to assist with our South

African funding requirements. Proceeds from

the Moab Khotsong sale transaction that closed

on 28 February 2018, have been applied to

reduce our South African debt ($218m as at

31 December 2017), which will beneﬁt our

South African interest bill going forward by

~$20m per annum.

Our balance sheet remains robust with strong

liquidity, sufﬁcient undrawn facilities and no

near-term maturities, giving us ﬂexibility in what

remains a volatile market environment. We

have demonstrated our ability to self-fund our

high-return reinvestment opportunities, while

sustaining our cash dividend, reﬂecting our

commitment to disciplined capital application.

CFO’S

REVIEW

CONTINUED

All-in sustaining costs, all-in costs and average gold price

All-in sustaining costs*

Average gold price

All-in costs*

H1 2012

H1 2013

H1 2014

H1 2015

H1 2016

H2 2016

H1 2017

H2 2017

1,154

1,326

1,022

924

911

1,058

17%

19%

1,071

All-in sustaining cost margin

1,038

1,800

1,400

1,000

800

400

$/oz

* World Gold Council standard adjusted to exclude stockpile write-offs.

Last-12-months net debt to adjusted EBITDA ratio

Net debt and net debt to adjusted EBITDA

Net debt to adjusted EBITDA

Net debt

3.5

2.5

1.5

0.5

3,500

3,000

2,500

2,000

1,500

Net debt to adjusted EBITDA

Net debt ($m)

2014

2015

2016

2017

1.81

1.70

1.94 2.02 1.95

1.54 1.49 1.47 1.44

1.26

1.24

1.38

1.56 1.49

1.35

Undrawn facilities

(at 31 December 2017)

•

A$290m AUD RCF

•

R2.95bn ZAR RCF

•

US$1,050m USD RCF

•

US$205m Cash

$1.720bn

Total calculated with ZAR facilities at R12.3574/$
(excluding DMTNP), AUD facility at 0.78009$ to A$

Picture:

AGA Mineração, Brazil

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Continued positive cash ﬂow momentum

We continue to follow a balanced approach, i.e. positive free cash ﬂow generation while

reinvesting in our portfolio:

CFO’S

REVIEW

CONTINUED

2014 Adjusted for Obuasi redundancy costs of $210m and Rand Reﬁnery loan of $44m

** 2015 Adjusted for bond redemption premium of $61m on part settlement of $1.25bn high-yield bonds
*** 2016 Adjusted for bond redemption premium of $30m on settlement of the remainder of the $1.25bn bonds
**** 2017 adjusted for the South African retrenchment costs paid of $49m

Free cash flow generation (adjusted free cash flow)

($m)

Growth capex

Adjusted FCF generation

Adjusted FCF pre-growth

2013

2012

2014

2015

2016

2017

155

391

371

424

174

(361)

821

703

249

169

116

124

142*

202**

308***

50****

(1,064)

(666)

We indicated a year ago that our new

dividend policy is to return 10% of free cash

ﬂow, before growth capital, to shareholders,

subject to the board’s discretion. Volatility is

to be expected in the dividend payout, given

the basis used for the calculation, coupled

with our variable reinvestment needs, as

demonstrated with the ﬂagged 19% increase

to $829m in sustaining capital expenditure

for 2017.

Free cash ﬂow before growth capital was

$125m (2016: $394m). The board has

exercised its discretion by adjusting the metric

of free cash ﬂow before growth capital to

take into account the abnormal South African

retrenchment payments of $49m, and has

approved a dividend of ZAR 70 cents or

approximately 6 US cents per share.

The continuation of the dividend is a reﬂection

of our capital discipline and commitment to

improving shareholder returns on the back

of sustainable free cash ﬂow generation.

Importantly, we will maintain adequate balance

sheet ﬂexibility and utilise our cash ﬂows and

available facilities to fund our ongoing capital

and operational requirements.

Delivery against 2017
ﬁnancial objectives

1. Maintain our focus on cost and capital discipline

to deliver competitive all-in sustaining costs and

all-in costs

The group continues to focus on sustainably

reducing the costs associated with producing

gold. These initiatives have covered a broad

spectrum of activities, including a greater

focus on capital allocation and project

delivery, as well as enhanced recoveries,

while internal cost reduction efforts continued

simultaneously.

All-in sustaining costs for the year ended at

$1,054/oz, a 7% increase from 2016 at $986/

oz. All-in sustaining costs came in at the

bottom end of the guidance range, reﬂecting

the effect of planned higher sustaining capital

expenditure for 2017 (~$26/oz) and stronger

local currencies.

The South African rand averaged 9% stronger

versus the dollar in 2017 compared with 2016,

and the Brazilian real and Australian dollar

averaged 8% and 3% stronger, respectively.

We continued to roll-out our wider-focused

Operational Excellence Programme across all

our operations, with our restructuring efforts

in South Africa assisting us to improve the

proﬁtability and sustainability of our remaining

assets in South Africa.

2. Continue to enhance margins and cash ﬂow

through continuing focus on operational efﬁciencies

and productivity

Our margins on total cash costs (37%), all-in

sustaining costs (16%), and all-in costs (10%)

came under pressure in 2017 because of

stronger local currencies and higher planned

sustaining capital expenditure. This increased

expenditure was required to ensure that we

continue to maintain and improve our margins

and cash generation ability in future years.

We remain committed to keeping our margins

at acceptable levels and our performance in

the second half of the year reﬂects margins on

total cash costs (38%), all-in sustaining costs

(19%), and all-in costs (13%) returning to full

year 2016 levels and higher levels than those

achieved for second half of 2016.

Cash ﬂows remain positive despite funding

once-off items such as the South African

retrenchment costs.

The strengthening of the South African rand

and Brazilian real was detrimental to us, given

that most of our cost base in those countries

is denominated in the local currencies, while

our gold is sold in US dollars, contributing to

the 21% year-on-year increase in total cash

costs in South Africa and 10% increase in the

Americas region. In contrast, although the

Australian dollar strengthened by 3%, total

cash costs declined by 6% in that region.

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CONTINUED

3. Dividend underpinned by sustainable

cash generation

Despite the signiﬁcant headwinds experienced

in free cash ﬂow generation, AngloGold

Ashanti declared a dividend of ZAR 70 cents

per share (~6 US cents per share) for the year

under review. Free cash ﬂow before growth

capital, remained sufﬁcient to maintain the

declaration of a dividend since the introduction

of the new dividend policy last year.

Our focus with the substantial restructuring

of the South African operations, combined

with the South African asset sales, as

well as the signiﬁcant planned sustaining

capital expenditure in 2017, has been to

be appropriately positioned to maintain the

dividend in future years underpinned by

sustainable cash generation.

4. Move to a sustainable resolution at Obuasi

During 2017, signiﬁcant positive developments

at Obuasi resulted in AngloGold Ashanti

announcing in February 2018 the

advancement of the redevelopment of the

Obuasi project. Some of the beneﬁcial

developments in 2017 included the improved

security situation with the last enclave of illegal

miners being evicted from site in April; the

lifting of the force majeure; the extension of the

Amended Mining Programme entered into with

the government of Ghana to April 2018; and

the suspension of the international arbitration

initiated with the International Centre for

Settlement of Investment Disputes (ICSID).

All the above developments paved the way

for successful negotiations with the Ghanaian

government relating to the Reclamation

Security Agreement; a Tax Concession

Agreement; a Development Agreement;

a Security Agreement; and a Settlement

Agreement. These agreements have been

signed by the government, with the Tax

Concession Agreement and the Development

Agreement subject to ratiﬁcation by Ghana’s

parliament, which is scheduled to occur during

the current parliamentary sitting.

Mine production for the ﬁrst 10 years will

be focused on the upper ore bodies and is

expected to average 350,000oz to 400,000oz

at an average head grade of 8.1g/t. Total cash

costs are expected to average between

$590/oz to $680/oz, while all-in sustaining cost

is expected to be between $795/oz to

$850/oz. Mine production for the second 10

years increases to 400,000oz to 450,000oz per

annum, as the mine deepens into higher grade

ore. All-in sustaining cost is then expected to

improve to between $750/oz to $800/oz. The

project delivers internal real rates of return of

between 16% and 23% at real gold prices of

between $1,100/oz and $1,240/oz, and is highly

leveraged to the gold price. Initial project capital

expenditure anticipated over the ﬁrst 2.5 years

is expected to be between $450m to $500m,

excluding pre-production capital of $64m.

The redevelopment will establish Obuasi

as a long-life, modern, highly mechanised

underground mining operation, replacing

the labour-intensive, hand-held operating

systems previously used at the mine. The

redevelopment will deliver a mine that makes

use of automation and controls for better

safety, improved operational efﬁciencies and

consistent performance. It envisages a smaller,

but more skilled workforce that can operate in

a mechanised/automated environment with a

strong sense of accountability.

5. Execute on low capital, high return brownﬁelds

projects, while continuing to move long term

projects up the value curve

AngloGold Ashanti’s approach to growth

investments and project approvals is based

upon a multi-factor model that takes into

account how the investment or project will

improve our portfolio, ﬁnancial ﬂexibility,

sustainability and long-term optionality. Such

investments or projects must generate returns

meeting our required hurdle rate of 15% in real

US dollar terms.

We continue to execute on our robust

brownﬁelds exploration programme at most of

our operations in the group as described earlier.

There are a number of capital projects that we

continued to focus on during the year, including

the Obuasi redevelopment project discussed in

the previous section.

At Kibali, the underground materials handling

system and ore hoisting via the shaft were

commissioned with ramp up progressing.

The paving on the central haulage level was

completed during the year, allowing haulage

from the ore passes into the underground

crushers to the shaft system. In addition,

development of declines is continuing. The

construction of the third hydropower station at

Azambi and the next phase of tailings storage

facility is scheduled for completion in 2018.

The Mponeng mine life will be extended

through access to deeper, higher-grade ore

via the development of a decline below the

current secondary shaft, with completion

expected around mid-2018. Additional

ventilation and water management, and ore

handling infrastructure are in the process

of being constructed. A feasibility study is

being undertaken into the deepening of the

secondary shaft to further extend the mine’s

life beyond 2026.

The Sadiola sulphides project, which will add

sulphide-ore processing capability to the

plant, continued to be evaluated. Discussions

with the government of Mali continue

regarding the project.

At Siguiri, we are investing about $115m over

approximately two years to add a hard-rock

plant to the current processing infrastructure,

providing the ability to develop the signiﬁcant

sulphide-ore potential that exists on the

current concession. The company is also

building a new power plant at a cost of $43m,

I N T E G R AT E D R E P O RT

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CFO’S

REVIEW

CONTINUED

to provide electricity to the new facility. During

2017, $67m was spent on the project and a

total of $145m has been committed to date.

The project remains largely on schedule for

completion and the ﬁnal costs are currently

being reviewed as all major commitments have

now been concluded.

Finally, we announced the declaration of

the maiden Ore Reserve for the Gramalote

project in Colombia of 63.7Mt @ 0.86 g/t

gold comprising contained metal content of

1.8Moz, on an attributable basis. Gramalote

represents a long-term option for AngloGold

Ashanti, and all avenues to realise value from

this important asset remain open. AngloGold

Ashanti’s management is currently in

discussions with the joint venture partner,

B2Gold (49%) on how to further progress

the project.

6. Maintain ﬁnancial ﬂexibility and further reduction

in ﬁnance costs

Our net debt to adjusted EBITDA ratio of 1.35

times reﬂects a marginal increase to 2016

at 1.24 times. This remains well within our

debt covenant level of 3.5 times. Coupled

with the successful completion of the South

African sales transactions of Moab Khotsong

and Kopanang at the end of February 2018

where the proceeds have been utilised to

further reduce our South African debt, we have

successfully maintained ﬁnancial ﬂexibility and

anticipate a further reduction in our ﬁnance

costs in 2018.

Looking ahead to 2018, the key
ﬁnancial and other objectives
are to:

•

Maintain our focus on cost and capital

discipline to deliver competitive all-in

sustaining costs and all-in costs

•

Continue to enhance margins and

cash ﬂows with a focus on operational

efﬁciencies and productivity through

Operational Excellence

•

Maintain the dividend underpinned by

sustainable cash generation

•

Seek resolutions for the Tanzanian and

DRC regulatory uncertainty

•

Progress implementation of the Obuasi

redevelopment

•

Execute on low-capital, high-return

brownﬁelds projects, while continuing

to progress long-term projects up the

value curve

•

Maintain ﬁnancial ﬂexibility and further

reduce ﬁnance costs

Acknowledgement

I would like to express my appreciation to

our committed and diligent ﬁnance team

across the group who have been proactive

in supporting the business to manage costs

and capital as well as dealing with working

capital and other business challenges

associated with the developing market nature

of the jurisdictions that we operate in. In

addition, we continue to maintain a high

standard of governance and compliance to

internal controls across the organisation. The

quality ﬁnancial information prepared for our

stakeholders is testament to our high calibre

ﬁnancial team whom I applaud. Finally, I look

forward to the year ahead with enthusiasm

and absolute focus on our strategic objectives

with the aim of improving shareholder returns,

on a sustainable basis.

Christine Ramon

Chief Financial Ofﬁcer

19 March 2018

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THE YEAR AHEAD

– OUTLOOK

Both production and cost estimates assume neither operational or labour interruptions or power disruptions, nor further changes to asset portfolio and/or operating mines and have not been reviewed

by our external auditors. Other unknown or unpredictable factors could also have material adverse effects on our future results and no assurance can be given that any expectations expressed by

AngloGold Ashanti will prove to have been correct. Please refer to the Risk Factors section in AngloGold Ashanti’s annual report on Form 20-F for the year ended 31 December 2017, ﬁled with the

United States Securities and Exchange Commission.

Guidance 2018

Guidance

Notes

Production

(000oz)

3,325 – 3,450

Includes monthly production of ±30,000oz from Moab Khotsong and

Kopanang for a period of three months

Costs

All-in sustaining costs ($/oz)

990 – 1,060

Assumptions: R12.79/$, $/A$0.78, BRL3.20/$, ARS19.61/$; Brent $62/bl

Total cash costs ($/oz)

770 – 830

Overheads

Corporate costs ($m)

70 – 80

Expensed exploration and study costs ($m)

115 – 125

Including equity-accounted joint ventures

Capital expenditure

Total ($m)

800 – 920

Sustaining ($m)

600 – 670

Non-sustaining ($m)

200 – 250

Obuasi, Kibali, Siguiri hard-rock project, Mponeng

Depreciation and amortisation

($m)

775

Depreciation and amortisation

– included in equity-accounted earnings

($m)

150

Earnings of associates and joint ventures

Interest and ﬁnance costs

($m)

140

Other operating expenses

($m)

Related primarily to the costs of care and maintenance

I N T E G R AT E D R E P O RT

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FINANCIAL

REVIEW

Five-year summaries

Summarised group ﬁnancial results – income statement

US dollar million

2017

2016

2015

2014

2013

Gold income

4,356

4,085

4,015

4,952

5,172

Cost of sales

(3,582)

(3,263)

(3,294)

(3,972)

(3,947)

Gain (loss) on non-hedge derivatives and other commodity contracts

(7)

Gross proﬁt

784

841

714

993

1,319

Corporate administration, marketing and other expenses

(64)

(61)

(78)

(92)

(201)

Exploration and evaluation costs

(114)

(133)

(132)

(142)

(250)

Other operating expenses

(88)

(110)

(96)

(28)

(19)

Special items

(438)

(42)

(71)

(260)

(2,951)

Operating proﬁt (loss)

495

337

471

(2,102)

Dividends received

–

Interest received

Exchange (loss) gain

(11)

(88)

(17)

(7)

Finance costs and unwinding of obligations

(169)

(180)

(245)

(276)

(293)

Fair value adjustments on convertible bonds

–

(17)

307

Share of equity-accounted investments’ proﬁt (loss)

(25)

(162)

Loss (proﬁt) before taxation

(63)

269

257

170

(2,192)

Taxation

(108)

(189)

(211)

(225)

237

(Loss) proﬁt after taxation from continuing operations

(171)

(55)

(1,955)

Discontinued operations

(Loss) proﬁt from discontinued operations

–

(116)

(245)

(Loss) proﬁt for the year

(171)

(70)

(39)

(2,200)

Allocated as follows:

Equity shareholders

– Continuing operations

(191)

(74)

(1,985)

– Discontinued operations

–

(116)

(245)

Non-controlling interests

(171)

(70)

(39)

(2,200)

7% increase

in gold income
in 2017 reﬂects
higher gold price
received year-on-
year on higher
production levels

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FINANCIAL

REVIEW

CONTINUED

Summarised group ﬁnancial results – statement of ﬁnancial position

US dollar million

2017

2016

2015

2014

2013

Assets

Tangible and intangible assets

3,880

4,256

4,219

5,088

5,082

Investments

1,645

1,578

1,557

1,553

1,459

Inventories

783

756

736

1,524

1,639

Cash and cash equivalents

205

215

484

468

648

Other assets

706

348

288

501

846

Total assets

7,219

7,153

7,284

9,134

9,674

Equity and liabilities

Total equity

2,704

2,754

2,467

2,871

3,107

Borrowings

2,268

2,178

2,737

3,721

3,891

Provisions

1,064

995

954

1,199

1,115

Deferred taxation

363

496

514

567

579

Other liabilities

820

730

612

776

982

Total equity and liabilities

7,219

7,153

7,284

9,134

9,674

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FINANCIAL

REVIEW

CONTINUED

Summarised group ﬁnancial results – statement of cash ﬂows

US dollar million

2017

2016

2015

2014

2013

Cash ﬂows from operating activities

Cash generated from operations

1,151

1,302

1,250

1,343

1,307

Dividends received from joint ventures

–

Net taxation paid

(160)

(153)

(163)

(153)

(164)

Net cash inﬂow from operating activities from continuing operations

997

1,186

1,144

1,190

1,161

Net cash (outﬂow) inﬂow from discontinued operations

–

(5)

Net cash inﬂow from operating activities

997

1,186

1,139

1,220

1,246

Cash ﬂows from investing activities

Capital expenditure

(830)

(711)

(667)

(849)

(1,431)

Net (payments) proceeds from acquisition and disposal of subsidiaries, associates and joint ventures

(27)

(1)

(12)

(466)

Net (payments) proceeds from disposal and acquisition of investments, associate loans, and
acquisition and disposal of tangible assets

(12)

810

(11)

(8)

Interest received

Decrease (increase) in cash restricted for use

(8)

(17)

(20)

Net cash (outﬂow) inﬂow from investing activities from continuing operations

(862)

(702)

139

(773)

(1,902)

Cash outﬂows from discontinued operations

–

(59)

(170)

(138)

Net cash (outﬂow) inﬂow from investing activities

(862)

(702)

(943)

(2,040)

Cash ﬂows from ﬁnancing activities

Net (repayments) proceeds from borrowings

(546)

(867)

(144)

864

Finance costs paid

(138)

(172)

(251)

(246)

(200)

Dividends paid

(58)

(15)

(5)

(17)

(62)

Other

–

(30)

(61)

(9)

(36)

Net cash (outﬂow) inﬂow from ﬁnancing activities from continuing operations

(148)

(763)

(1,184)

(416)

566

Cash outﬂows from discontinued operations

–

(2)

(5)

(6)

Net (outﬂow) inﬂow from ﬁnancing activities

(148)

(763)

(1,186)

(421)

560

Net (decrease) increase in cash and cash equivalents

(13)

(279)

(144)

(234)

Translation

(17)

(16)

(30)

Cash and cash equivalents at beginning of year

215

484

468

628

892

Cash and cash equivalents at end of year

(1)

205

215

484

468

628

(1)

The cash and cash equivalent balance at 31 December 2013 includes a bank overdraft included in the statement of ﬁnancial position as part of other liabilities of $20m.

20% drop

in ﬁnance costs
mainly from fully
retiring the $1.25bn
high yield bonds in
August 2016

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FINANCIAL

REVIEW

CONTINUED

Ratios and statistics

Units

2017

2016

2015

2014

2013

Operating review – gold

Production from continuing operations

000oz

3,755

3,628

3,830

4,225

3,874

Production from continuing and discontinued operations

000oz

3,755

3,628

3,947

4,436

4,105

Gold sold from continuing operations

000oz

3,772

3,590

3,850

4,248

3,862

Gold sold from continuing and discontinued operations

000oz

3,772

3,590

3,965

4,458

4,093

Continuing operations

Closing spot price at year-end

$/oz

1,258

1,247

1,160

1,266

1,411

Average gold price received

$/oz

1,258

1,249

1,158

1,264

1,401

Total cash costs

$/oz

792

744

712

785

836

All-in sustaining costs

(1)

$/oz

1,054

986

910

1,020

1,195

All-in costs

(1)

$/oz

1,126

1,071

1,001

1,114

1,466

Earnings

Gross proﬁt

784

841

714

993

1,319

Gross margin

Adjusted EBITDA

(2)

1,483

1,548

1,472

1,616

1,525

Adjusted EBITDA margin

Interest cover

times

Asset and debt management

Net debt to adjusted EBITDA

(2)

times

1.3

1.2

1.5

1.9

2.0

Continuing and discontinued operations

Proﬁt (loss) attributable to equity shareholders

(191)

(85)

(58)

(2,230)

Proﬁt (loss) attributable to equity shareholders

US cents

(46)

(21)

(14)

(568)

Headline earnings (loss)

111

(73)

(79)

Headline earnings (loss)

US cents

(18)

(19)

Adjusted headline earnings (loss)

143

(1)

599

Adjusted headline earnings (loss)

US cents

(0)

153

Capital expenditure

(3)

953

811

857

1,209

1,993

Net cash inﬂow from operating activities

997

1,186

1,139

1,220

1,246

Free cash inﬂow (outﬂow)

278

141

(112)

(1,064)

See footnotes overleaf

Production

ended above top
end of guidance
provided

Positive

free cash ﬂow
maintained,
however, current
year affected by
South African
retrenchment cost
paid of $49m

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FINANCIAL

REVIEW

CONTINUED

Units

2017

2016

2015

2014

2013

Asset and debt management

Equity

2,704

2,754

2,467

2,871

3,107

Net capital employed

5,031

5,101

5,190

6,640

5,519

Net debt

2,001

1,916

2,190

3,133

3,105

Net asset value – per share

US cents

659

675

609

711

770

Market capitalisation

4,178

4,290

2,877

3,515

4,727

Return on net capital employed

Net debt to equity

109

100

Other

Weighted average number of shares

million

415

413

410

408

393

Issued shares at year-end

million

410

408

405

404

403

Exchange rates

Rand/dollar average

13.30

14.68

12.77

10.83

9.62

Rand/dollar closing

12.36

13.73

15.46

11.57

10.45

Australian dollar/dollar average

1.30

1.35

1.33

1.11

1.03

Australian dollar/dollar closing

1.28

1.39

1.37

1.22

1.12

Brazilian real/dollar average

3.19

3.48

3.33

2.35

2.16

Brazilian real/dollar closing

3.31

3.26

3.90

2.66

2.34

Argentinean peso/dollar average

16.57

14.78

9.26

8.12

5.48

Argentinean peso/dollar closing

18.65

15.89

12.96

8.55

6.52

(1)

World Gold Council standard, excludes stockpile write-offs.

(2)

The adjusted EBITDA calculation is based on the formula included in the revolving credit facility agreements for compliance with the debt covenant formula.

(3)

Includes attributable share of equity-accounted investments.

Ratios and statistics

(continued)

Stronger
currencies

in South Africa and
Brazil negatively
impacted costs

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ECONOMIC

VALUE-ADDED STATEMENT

For the year ended 31 December

Gold revenue by region – 2017

•

South Africa

•

Continental Africa

•

Australasia

•

Americas

1,101

1,895

709

1,104

Value retained per year

(%)

2013

2014

2015

2016

2017

Breakdown of distribution – 2017

•

Employees

•

Government

•

Community

•

Suppliers

•

Capital providers

ECONOMIC

VALUE-ADDED STATEMENT

For the year ended 31 December

Economic value distributed (82%)

(1)

Supporting business objectives and material issues

Economic value generated (100%)

2017

2016

Total distribution

3,735

3,408

Employees

1,002

858

Salaries and wages

966

823

Training and development

Government

659

656

Current tax

(5)

176

234

Royalties

(3)

114

101

Employee taxes

(3)

268

237

Production, property

and other taxes

(3)

101

Community

(4)

Social licence to operate

Region speciﬁc economic

development programmes

Suppliers and services

1,839

1,691

Production costs

Corporate expenditure and

other overheads

Rehabilitation expenditure

Exploration and evaluation

Audit, governance and

assurance

Providers of capital

208

180

Finance cost and unwinding

of obligations

169

180

Dividends

–

2017

2016

Total income

4,558

4,263

Gold sales and by-products

(2)

4,510

4,223

Interest received

Royalties received

Proﬁt from sale of assets

Income from investments

2017

2016

Tax per country

(5)

South Africa

(2)

Argentina

Australia

Brazil

Ghana

Guinea

United States of America

(16)

(7)

Tanzania

Other

(2)

Economic value retained (18%)

Value retained ($m)

Focus on people,

safety, and

sustainability

Navigating

regulatory and

political risk

Managing

community

expectations and

demonstrating

contribution

Optimise overhead,

costs and capital

expenditure

823

855

INPUTS

OUTPUT

(1)

Economic distribution providing
human, ﬁnancial, social, natural
and manufactured capital, guided
by business objectives and
material issues identiﬁed through
the operating process to ensure
sustainable long-term value retention
for stakeholders, underpinned by
our key behavioural programme
operational excellence, implemented
at every step of the business from
exploration through the entire chain
to divestment/disposal.

(2)

Gold income increased by 7% as a
result of a 1% increase in the gold
price received and 5% increase in
gold sales.

(3)

Employee, production, property and
other taxes and royalties reported on
a cash basis.

(4)

Community and social investments
exclude expenditure by equity-
accounted joint ventures.

(5)

Current taxation includes normal

taxation and witholding taxation on
dividends paid per jurisdiction in
which the group operates.

Across the group, we are due

refunds for input tax and fuel duties

totalling $252m (2016: $199m;

2015: $195m), including attributable

amounts for equity-accounted joint

ventures, which have remained

outstanding for periods longer

than those provided for in the

respective statutes

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

REGIONAL

REVIEWS

SOUTH AFRICA

Our South Africa region has undergone

extensive restructuring to ensure its

long - term sustainability

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

REGIONAL

REVIEWS

CONTINUED

South Africa

Anglo Gold Ashanti’s three South

African de e p - l e v e l m i n e s a n d

s u r f a c e p r o d u c t i o n f a c i l i t i e s

a r e d i v i d e d i n t o t h r e e m i n i n g

e n t i t i e s – Va a l R i v e r, We s t W i t s

a n d S u r f a c e O p e r a t i o n s – w h i c h

c o m p r i s e t h e f o l l o w i n g :

Vaal River

The two Vaal River mining operations, which

share a milling and treatment circuit and are

located around 180km from Johannesburg,

near the Vaal River, on the Free State-North

West Province border, are:

•

Kopanang

, which is bound to the south by

the Jersey Fault, has a single shaft system to

a depth of 2,334m. It exploits the Vaal Reef

almost exclusively, producing gold as its primary

output and uranium oxide as a by-product.

•

Moab Khotsong

, AngloGold Ashanti’s newest

South African mine, is located in the Free

State and has a single shaft system mining

to a depth of 3,100m. Given the geological

complexity of the Vaal Reef, the mine’s

principal reef, scattered mining is employed.

Great Noligwa’s operating infrastructure and

employees have been incorporated into Moab

Khotsong since 2015.

West Wits

The West Wits mining district’s operation, situated

south-west of Johannesburg, on the border
between Gauteng and North West Province, is:

•

Mponeng

, the world’s deepest gold mine

and our ﬂagship South African operation,

exploits the Ventersdorp Contact Reef (VCR)

via a twin-shaft system at depths of between

2,800m and 3,400m below surface. Ore is

treated and smelted at the mine’s gold plant.

•

TauTona

, with a three-shaft system, exploits

the Carbon Leader Reef (CLR) predominantly

and the VCR on a small scale through

technology, with secondary and tertiary

shafts sinking to depths of between 2,700m

and 3,300m below surface. Following the

full integration of Savuka into TauTona’s

infrastructure in 2015 and to further improve

efﬁciencies and beneﬁt from economies of

scale, ore mined at TauTona is processed at

Mponeng’s gold plant. TauTona’s ﬁnal blast took

place on 15 September 2017, and the mine

has since been placed into orderly closure.

Surface Operations

Surface Operations encompasses those facilities

at the Vaal River and West Wits operations which

process and extract gold from:

•

marginal ore dumps on surface

•

tailings storage facilities on surface

Surface Operations also includes Mine

Waste Solutions (MWS), which operates

independently, processing slurry material

reclaimed hydraulically from various tailings

storage facilities. Uranium is produced as a

by-product, as is backﬁll for use as mining

support in underground mined out areas.

Restructuring of the South Africa region

AngloGold Ashanti decided during the
year that TauTona (including its Savuka
section) was to be placed on care
and maintenance, followed by orderly
closure. In addition, on 19 October
2017, the company announced the
proposed sale of Kopanang and Moab
Khotsong in two separate transactions.
These sales were concluded on
28 February 2018.

URANIUM*

The uranium by-product is produced as

oxide concentrates (U

) in the form of a

powder extracted from gold-bearing ore.

It is then processed into a ‘yellow cake’

material that is transported in special-

purpose secure road tankers from the mine

to the Nuclear Fuels Corporation of South

Africa (Nufcor) for further ﬁltration and

calcining, resulting in uranium diuranate (in

slurry form). The ﬁnal product is shipped

to Nufcor’s major customers: nuclear

electricity generating utilities around the

world. Nufcor is a wholly-owned subsidiary

of AngloGold Ashanti and is arguably the

world’s longest continuous producer and

marketer of uranium.

Contribution to regional production

(excluding technology)

•

West Wits

•

Vaal River

•

Surface operations

Contribution to group production

•

South Africa

•

Rest of AngloGold

Ashanti

Click on the map below to enlarge

* As of 1 March 2018, AngloGold Ashanti will not

produce uranium. Details of the sales are available on
www.anglogoldashanti.com/investors/announcements

USEFUL LINKS

Refer to Corporate developments on
page 77

I N T E G R AT E D R E P O RT

2 0 1 7

SOUTH

AFRICA

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

REGIONAL

REVIEWS

CONTINUED

South Africa

Key statistics

Units

2017

2016

2015

Operational performance

Tonnes treated/milled

38.9

39.6

36.8

Pay limit

(1)

oz/t

0.43

0.37

0.39

g/t

15.97

13.81

14.38

Recovered grade

(1)

oz/t

0.202

0.219

0.225

g/t

6.93

7.51

7.70

Gold production

000oz

903

967

1,004

Total cash costs

$/oz

1,085

896

881

Total production costs

$/oz

1,247

1,089

1,091

All-in sustaining costs

(2)

$/oz

1,245

1,081

1,088

Capital expenditure

150

182

206

Productivity

oz/TEC

3.57

3.56

3.74

Safety

Number of fatalities

AIFR

per million hours worked

12.68

12.02

10.81

People

Average no. of employees: total

26,245

28,507

28,325

– Permanent employees

22,738

25,205

25,274

– Contractors

3,507

3,302

3,051

Training and development expenditure

See footnotes overleaf

Production

(000oz)

1,223

1,004

903

967

1,302

2013

2014

2015

2016

2017

Productivity

(oz/TEC)

4.40

3.74

3.57

3.56

4.47

2013

2014

2015

2016

2017

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

REGIONAL

REVIEWS

CONTINUED

South Africa

Units

2017

2016

2015

Environment

Total water consumption

20,503

23,161

25,182

Total water use per tonne treated

kL/t

0.527

0.586

0.685

Total energy usage

10.05

10.54

10.65

Total energy usage per tonne treated

GJ/t

0.26

0.27

0.29

Total GHG emissions

000t CO

2,733

2,864

2,756

Total GHG emissions per tonne treated

t CO

e/t

0.070

0.073

0.075

Cyanide used

10,122

9,672

9,573

No. of reportable environmental incidents

Total rehabilitation liabilities:

119

– restoration

– decommissioning

101

Community and government

Community expenditure

(3)

Payments to government

118

106

105

– Taxation

–

– Withholding tax (royalties, etc.)

– Employee taxes and other contributions

105

– Property tax

– Other (includes skills development)

(1)

Refers to underground operations only.

(2)

Excludes stockpile write-offs.

(3)

Includes corporate social investment expenditure.

Key statistics

(continued)

AIFR

(per million hours worked)

11.85

10.81

12.68

12.02

12.63

2013

2014

2015

2016

2017

Total cash costs and all-in sustaining costs

($/oz)

1,120

849

1,064

1,085

1,245

881

1,088

896

1,081

850

2013

2014

2015

2016

2017

Total cash costs

All-in sustaining costs

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Corporate developments

Earlier in the year, AngloGold Ashanti signalled

to stakeholders that it would review its South

African mining operations in light of the heavy,

and ultimately unsustainable losses being

incurred. In June 2017, the company took

a decision to restructure the South African

assets, to focus on returning the South African

business to proﬁtability while mitigating job

losses. Some of our older mines in the South

Africa region have reached the end of their

economic lives, several decades after they

started production. These mines face systemic

challenges, including the near depletion of their

Ore Reserve, increasing mining depths and

distance from central infrastructure, declining

production proﬁles, and cost escalations that

have continued to outpace both inﬂation and

a subdued gold price. The affected mines

are TauTona and Kopanang. Costs at these

operations were making it uneconomical to

continue mining, with the all-in sustaining costs

incurred far exceeding the average gold price.

To safeguard the long-term sustainability of

our South African business, after a complex

and careful consultation process with all the

relevant stakeholders

, AngloGold Ashanti

decided to:

•

place on care and maintenance the

Kopanang mine, a Vaal River operation, and

both TauTona and the Savuka section of

the TauTona mine, in the West Wits district.

TauTona started mining operations in 1962,

with the main shaft sunk in 1957. Savuka

had been in operation since 1958, with its

operating life already extended 10 years

beyond what was originally envisaged.

Kopanang produced its ﬁrst gold 36 years ago

•

evaluate the feasibility of integrating

elements of TauTona into the neighbouring

Mponeng mine.

After the announcement was made outlining

our intention to restructure the South African

business, unsolicited expressions of interest

were received from several parties which

ultimately led to the decision to sell Kopanang,

the nearby West Gold Plant and related

infrastructure to Heaven-Sent SA Sunshine

Investment Company Limited (HSC), a Chinese

capital management company headquartered

in Hong Kong. HSC currently holds a 74%

interest in Village Main Reef Limited which owns

and operates the Tau Lekoa mine, also located

in the Vaal River region. The sale transaction

was concluded on 28 February 2018, having

fulﬁlled all conditions precedent.

It was, however, eventually decided in the

latter half of the year to place TauTona and

Savuka on orderly closure.

Additionally, on 19 October 2017, AngloGold

Ashanti announced that it had agreed to the

disposal of the Moab Khotsong and Great

Noligwa mines and related infrastructure,

including the Great Noligwa processing

complex, the Vaal River villages and AngloGold

Ashanti’s interest in the Margaret Water

Company to Harmony Gold Mining Company

Limited (Harmony). This transaction was also

subject to a number of conditions precedent,

all of which were achieved in early 2018.

Consequently, the Moab Khotsong and Great

Noligwa sale transaction was concluded on

28 February 2018.

Resultantly, as of 1 March 2018, AngloGold

Ashanti ceased to have underground mining

operations in the Vaal River area. We will

retain the long-life MWS tailings retreatment

operation, as well as the surface rock-dump

reclamation operations that will continue to

be treated through the Kopanang gold plant

which was also retained by AngloGold Ashanti.

These two operations in the Vaal River region

together with the long-life Mponeng mine

in the West Wits region will form AngloGold

Ashanti’s operating base in South Africa, and

are expected to account for about 13% of

production in 2018.

Operational performance

Production

The South African operations produced

903,000oz, a 7% decrease year-on-year as

tonnes mined were affected by a poor start up

to the year at all operations. Underground yield

dropped 8% to 6.93g/t, a result of lower feed

grades as well as higher dilution year-on-year.

This was mainly due to an increase in waste

tonnes at Moab Khotsong, moving away

from higher grade areas at Mponeng, and the

reclamation of the tailing storage facilities at

the West Wits Surface Sources.

The decision to stop the loss-making

operations in the third quarter further

impacted full-year production. The ﬁnal blast

at TauTona took place on 15 September 2017

and the Section 189 consultation process

with employees and their organised labour

representatives, continued. At Kopanang, the

Section 189 process happened in parallel

with the pending disposal of the mine as was

announced in October 2017.

REGIONAL

REVIEWS

CONTINUED

South Africa

USEFUL LINKS

Refer to Employee engagement on page 81

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

The work ahead for the region will be mainly

to drive productivity and other efﬁciency

improvements in the mining cycle, work

routines, compliance and face length generation

and recoveries. The South Africa regional

management team will also be focused on

ensuring all support structures are properly

aligned to the new, smaller production base, as

they aim to return the region to proﬁtability and

positive cash generation.

At West Wits, production was lower than in the

previous year at 315,000oz, mainly due to the

slow start-up to the year following safety-related

stoppages late the previous year. Production

at Mponeng decreased year-on-year, mainly

as a result of the planned mining of lower-

grade areas, face-time constraints with mining

occurring further away from shaft stations,

as well as three separate seismicity-induced

fatal accidents in the second half of the year.

The mine’s performance improved towards

the end of the second quarter through to the

third quarter, due to improved efﬁciencies.

Production highlights were a 4% increase in

the mineable face length which allowed for

more face-length ﬂexibility. During the year,

the average monthly face advance increased

from less than 4.9m to more than 5.0m in

June, which was maintained for the rest of

the year. Mponeng’s yield improved in the last

quarter of the year, to an average of 8.54g/t.

Unfortunately, safety-related work stoppages

following the fatal accidents in late October and

early November contributed to a disappointing

decline in production in the last quarter.

At TauTona, severe production challenges, in

addition to a depleted Ore Reserve and limited

mining ﬂexibility, compounded operational

inefﬁciencies and low productivity, and led

to the decision to place the mine into orderly

closure. As mining areas moved further away

from the main infrastructure towards the

lower-grade eastern boundary of the mining

lease, and areas with more complex geological

structures and greater seismic risks, this

resulted in greater inefﬁciencies and the natural

decline in grades.

At the Vaal River operations, production

improved by 4% year-on-year to 385,000oz.

The main contribution was from Moab

Khotsong where efﬁciencies improved and

there were fewer safety-related disruptions,

despite dilution and a lower mine call factor.

At Kopanang, production remained ﬂat

year-on-year, impacted by safety-related

interruptions following the fall-of-ground fatal

incidents in the fourth quarter. However,

volumes mined improved and implementation

of the cycle mining strategy showed early

signs of success.

Surface Operations’ production was up 3%

at 192,000oz for the year. At Mine Waste

Solutions, production was 18% higher at

REGIONAL REVIEWS CONTINUED

South Africa

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

109,000oz compared with the same period

in 2016, given the improvement in feed

grades from the Sulphur Paydam and East

tailing storage facilities (TSF), coupled with

improved recoveries. The yield increase

was as expected as the Sulphur Paydam

is normally associated with higher reef

values. Production was also boosted by

higher volumes of ﬂoor cleaning material

reclaimed. Gold recovery efforts improved

in the last quarter of the year to around 7%,

aided by reagent suite optimisation and

improved carbon management. Operations

at the ﬂotation and uranium circuit remain

suspended as investigations into improved

water reticulation continue.

Production from hard rock dumps was lower

owing to a drop in tonnage throughput, and

lower recoveries due to the increased amount of

clean-up material which is refractory in nature.

The sticky nature of the material processed

through the Surface Operations’ plants

negatively impacted metallurgical efﬁciencies.

Surface Operations’ production was also

affected by the suspension of the Kopanang

marginal ore dumps and reduced availability of

the mill at the Kopanang gold plant.

Costs

All-in sustaining costs were 15% higher than

2016 at $1,245/oz. Total cash costs for the

region increased to $1,085/oz compared

with 2016, due to lower production volumes,

inflationary pressures and a 9% stronger

rand on average against the dollar. In line

with the company’s continued focus on

improving efﬁciencies, a cost savings plan

was adopted towards the end of 2016

to realise synergies from shared services

among business units. This entailed, among

others, the review of all commodity and

service contracts to optimise agreements

where possible and align related costs.

Growth and improvement

Mponeng Phases 1 and 2 Project

Mponeng’s mine life extension is initially

executed through the Below 120 Level, Phase

1 project. Phase 1 aims to access deeper,

higher-grade ore with the development of a

decline access below the current secondary

shaft. Phase 2, the next stage of the mine life

extension, currently under evaluation, involves

deepening the secondary shaft to further

extend the life of mine.

Completion and full commissioning of Phase

1 is expected during 2018. An additional

ventilation hole is being created from decline

3 to 116 level to create more ventilation

capacity, along with an ore pass down to 126

level to ease ore handling logistics on 123

level. Completion of the water management

infrastructure on 127 level was delayed

during the last quarter of the year following

ﬂooding of the emergency pump station

and pump station panels. The emergency

pump station is still under construction at

the bottom of the decline system, with full

commissioning expected in the second half

of 2018. Construction and commissioning of

the ore handling infrastructure to 126 level is

expected to be completed by the end of the

ﬁrst half of 2018. The ramp-up to steady state

Ore Reserve development is continuing. The

revised geological resource model associated

with the Ventersdorp Contact Reef is currently

under review.

The Phase 2 feasibility study for the Mponeng

LOM project has resumed, having been

interrupted at the end of May 2017 to allow

the geotechnical study to be completed to

determine the most appropriate location of

the infrastructure relative to tolerable levels of

rock stress.

Zaaiplaats

This project has now been sold together

with Moab Khotsong mine, with effect from 1

March 2018.

Update on technology and innovation
project

The technology project – which aims to

safely mine all the gold, only the gold,

all the time – continued to investigate all

known rock fragmentation methods, with

thermal spalling and other fast rock-breaking

alternatives, were tested. Of these, thermal

spalling yielded the most promising results

for our rock types.

The thermal spalling – or rock-breaking –

process consists of four activities – drilling,

spalling, cleaning and backﬁlling. These

activities are conducted in parallel, with each

activity overlapping.

All aspects of the technology work being

conducted have been suspended with the

exception of thermal spalling, and test work

on high-strength backﬁll at Mponeng. Thermal

spalling trials will continue in 2018.

In support of the Mining Phakisa industry

initiative, AngloGold Ashanti will make available

any technologies developed, as agreed,

for future redeployment and continued

development by interested parties associated

with the Phakisa process.

Capital expenditure

Sustaining capital was spent across all sites.

Growth capital investment was focused

mainly on the Mponeng Phase 1 project, as

construction and commissioning of the ore

handling infrastructure to 126 level continued.

However, total capital expenditure for the

region decreased 18% year-on-year as a result

of cost curtailments in line with the suspension

of operations and restructuring of the South

African asset base, which included the

expensing of certain capital costs at TauTona

and Kopanang, and a delay in starting the

Mponeng Phase 2 LOM extension project.

REGIONAL REVIEWS CONTINUED

South Africa

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Sustainability performance

Safety

Safety – our ﬁrst value – focuses on the well-

being of our employees and their protection

from hazardous exposure deﬁne who we are

and how we conduct our business.

AngloGold Ashanti had recorded three

consecutive fatality-free quarters for the ﬁrst

time in its history, prior to the ﬁrst fatality of

the year in July 2017. During the course of

2017, the South African ultra-deep mines

posted a record 349 fatality-free days. In the

West Wits, TauTona achieved a year without a

fatality, while Mponeng, for the ﬁrst time in its

history, recorded 2 million fatality-free shifts.

In the Vaal River, Moab Khotsong recorded

500,000 fatality-free shifts during November

2017, while Kopanang and Surface Operations

achieved one, and two million fatality-free

shifts respectively.

The South Africa region received the

MineSAFE’s highest award in 2017 for

the most improved safety performance.

MineSAFE, an industry body, is a collaboration

between mining companies, employee bodies

and the South African DMR.

This improved safety performance was a

result of the progressive implementation of the

safety strategy. The main areas of focus of this

strategy is to reduce the risk of fatalities by

ensuring that every employee understands and

continuously manages hazards and associated

REGIONAL REVIEWS CONTINUED

South Africa

Regrettably, the good start to the year

was marred by seven fatalities in the

second half.

•

Three of these fatalities occurred at the

Vaal River operations:

Moab Khotsong – Mr Elias Quive was

injured in a tramming incident in March

and regrettably passed away almost

four months after the incident.

Kopanang – Messrs Nkolisi Sibeko and

Peter Ngobeni lost their lives in a fall-of-

ground incident in October.

•

Four seismicity-related fall-of-ground

fatal accidents occurred at the West Wits

operations in the last quarter of the year,

two in October and two in November:

Mponeng – Messrs. Ramabele

Sebophe and Tseko Ramokobo

succumbed to injuries sustained during

two separate incidents while Messrs.

Mapheelle Tauoa and Zwelinjane

Khubone succumbed to injuries

sustained in another working area.

We extend our deepest condolences

to the families, friends and colleagues of

the departed.

risks and that they comply with set work

routines, that critical controls are in place,

and that high potential incidents are diligently

reported and addressed, while making optimal

use of technology to reduce risk proﬁles.

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

The all-injury frequency rate (AIFR), the

broadest measure of workplace safety, was

12.68 for 2017 (2016: 12.02) per million hours

worked. Efforts are continuously underway to

improve our safety performance in line with the

company’s values and safety strategy.

Further mitigation measures were identiﬁed

post the fatal incidents. In relation to the

tramming incident, further engineering

controls have been identiﬁed, including

remote signalling devices for drivers to signal

while outside the cabin and also to detect

whenever the driver trips and/or stops the

locomotive. Following the fall-of-ground

incidents, additional controls were identiﬁed

around the layout and design of excavations in

relation to structures as well as an increased

focus on, and additional skills at start-up risk

assessments. Mitigation measures are in

place to avoid any recurrences of these fatal

accidents. These are set out in the section

People are the Business

Employee engagement

Employee transition framework

Our employee engagement process in South

Africa has mainly made use of the Plenary

– a forum at which management and our

employees’ organised labour representatives

meet to discuss actions to give effect to

the employee transition framework. This

framework integrates policies, procedures and

principles to guide the optimal application of

human resources management in a rapidly

evolving business and social environment.

Given the South Africa region’s restructuring,

explained above, discussions with respect to

employees affected by transfers, contracting

of certain non-core functions, or by

redundancy, are held and managed through

these forums. In line with our regulatory

obligations in terms of our Social and

Labour Plans, we also make use of the joint

management and organised labour Future

Forum for discussion. Each operating unit has

a labour management committee in place to

implement the decisions taken at Plenary or

in Future Forum sessions.

Restructuring and labour relations

The South Africa region faced restructuring

and downscaling of operations for the better

part of the year.

Despite a complex and a sensitive operating

environment, the labour relations climate

remained stable throughout the year. The

participation of all unions in the intensive

restructuring process which was undertaken

without any strike action, is an indication

of the nature of the working relationship

between management and unions, as

supported by the company’s relationship-

based labour relations model.

The initial restructuring process began early

in 2017 when a section 189(3) notice was

issued in terms of the Labour Relations Act 66

of 1995 (LRA) to terminate the employment

of 849 employees, as informed by the 2017

budgetary requirements. The process was

facilitated by the Commission of Conciliation

Mediation and Arbitration (CCMA). This

followed intensive engagement with unions

and regulators, in terms of section 52 of

the Mineral and Petroleum Resources

Development Act (MPRDA). All parties agreed

to reduce the impact of job losses – by means

of including voluntary severance packages

and transfers – resulting in only 21 employees

being dismissed for operational requirements,

in accordance with the LRA.

Following the announcement on 28 June

2017 to restructure some of the South African

mines, to put some operations on care and

maintenance, further engagement was held

with employees’ labour representatives, the

DMR at national and regional level, local

communities (NPOs, NGOs and youth), small,

medium and micro enterprises (SMMEs)

as well as the local municipalities in host

communities and major labour-sending areas.

The main purpose of this engagement was to

inform stakeholders of developments at our

mines and to address matters relating to the

transfer of TauTona and Kopanang’s Social

and Labour Plan (SLP) obligations, their

environmental programmes and mining rights

as well as the transfer of some employees to

the new owners of the mine.

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Subsequently, a section 189 process began

with notices given to affected employees.

This restructuring process was also facilitated

by the CCMA, and involved an in-depth

consultative process and adherence to all

applicable legislation.

One of the conditions precedent in the sale

agreement for Kopanang was for the new

owners to conclude an agreement with

AngloGold Ashanti and employees’ labour

representatives to determine the number of

existing employees who would continue to

work at the operation after the change in

ownership comes into effect. This agreement

was concluded on 16 November 2017, and

resulted in 3,054 employees, of the total

workforce of 3,638, or 84% being transferred

to the buyer, HSC. AngloGold Ashanti

honoured its undertaking to pay accrued

severance packages to all affected employees

at Kopanang immediately following the

conclusion of the sale transaction.

Extensive engagement, discussions and

negotiations were held during the year around

the planned restructuring. The outcomes of

and/or commitments resulting from these

engagements are set out alongside:

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South Africa

Stakeholder

Engagement/response

Regulator

Engagements were held with local, provincial and national government; trade union representatives; host communities

and civil society organisations; and small, medium and micro enterprises (SMMEs). The issues covered ranged from the

repositioning of AngloGold Ashanti’s South African operations, to the status of our compliance with our mining rights, in

particular our mine works, environmental, and SLPs, and the impact of the restructuring on employment in communities.

•

A detailed presentation was given during an MPRDA Section 52 investigative process following announcement of the

proposed downscaling

•

AngloGold Ashanti is committed to meet all relevant SLP commitments

•

Planned actions were provided to the regulator with regards to the downscaling and subsequent impacts

•

Detailed audit was conducted and site visits held for the top 100 suppliers to assess BEE compliance

•

Workshops were conducted with top suppliers to address regulatory requirements for transformation, and punitive

measures applied by the BEE Commission.

Community

•

Given the deteriorating employment climate and the downscaling of operations in the region, enterprise development

centers (EDCs) are being established to provide opportunities for youth and SMMEs

•

Youth were invited to attend SMME and senior management brieﬁngs to aid in understanding the company’s

processes and of the opportunities available

•

Training and development provided for SMMEs on business plans, market research, statutory business compliance

relating to tax regulations and company registration through the EDCs

•

Information on how to use the on-line portal were provided through the EDCs

•

Feedback given on community portable skills training, as well as the bursary and internship programmes that run

annually, including qualifying criteria

•

Community engagements were attended by representatives from the DMR, local municipality and the operations to

gain an understanding of issues related to the sale of the operations. Key issues discussed were how environmental

liabilities would be managed and the model/entity to be developed for the beneﬁt of the communities. These

discussions are still underway

•

Social and Institutional development proposals from the community were considered, in terms of funding guidelines

for NGOs and NPOs, and were presented at community brieﬁngs during the year

•

Workshops and training provided to NGOs to ensure compliance with the regulations of the Department of Social

Development, South African Revenue Services (SARS) and other agencies were also conducted

•

Detailed presentations given on company’s progress on how to access procurement opportunities

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Shareholder information

Stakeholder

Engagement/response

Local municipalities

AngloGold Ashanti has assured stakeholders and the community that all commitments made in its SLPs will be met.

Projects relating to educational programmes, infrastructure, enterprise development, community human resource

programmes and income-generating projects were delivered to the two new mine owners of the Vaal River operations

for implementation

Following the Constitutional Court decision on 1 November 2016, that a dispute regarding the water surcharge levied by

Merafong Municipality should be remitted to the High Court, the valuation appeal board ruling in favour of the appeal on

the matter by the three mining companies (AngloGold Ashanti, Harmony and Sibanye-Stillwater), referred the matter to

the High Court. The court is yet to set the hearing date. In view of the delays in hearing the matter in 2017, it is expected

that the matter will be heard in 2018

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South Africa

Health

Employee wellness

Given the nature of ultra-deep, hard-rock,

labour-intensive gold mining, the industry

faces a variety of health challenges and

workplace risks that are compounded by

certain diseases prevalent in Southern Africa,

including occupational lung disease and HIV/

AIDS. A high-level assessment (covering

contributory causes, consequences and

critical controls) of health risks in the South

Africa region has been incorporated into the

company’s ‘health risk architecture’. Also see

<SDR>

for more information.

The all occupational diseases frequency rate

(AODFR) for 2017 was 12.39 per million hours

worked (2016: 11.8). The increase is attributed

mainly to gradually rising rates of dysbarism/

barotrauma. This is a spectrum pressure-

related injury to the middle ear following rapid

descent or ascent in deep level mines.

The AODFR also includes silicosis,

occupational tuberculosis (TB), noise-

induced hearing loss (NIHL) and all heat-

related illnesses. A total of 778 (2016: 823)

cases of occupational disease were reported

during 2017, of which 54 cases were NIHL;

255 occupational TB; 105 heat illness; 257

barotraumas; and 107 silicosis. New TB

and HIV rates remain at their lowest levels in

more than a decade. Sick leave rates remain

stubbornly high in a working population with

a high incidence of chronic diseases. While

NIHL rates increased in the past two years,

they have now stabilised.

Early NIHL trends are, however, improving

due to the use of personalised hearing

protection devices, which provide increased

protection for employees exposed to

high-risk areas in the workplaces. These

devices help dampen or eliminate harmful

frequencies. Employees are tested regularly

and as a result are aware of their hearing

status and causes of hearing loss, if any,

through ongoing coaching sessions.

By 2017, new cases of HIV and TB had

declined by some 70% over the past

decade. New cases of HIV (laboratory

conﬁrmed cases) declined from 4.7% in

2005 to 1.3% in 2017, and new TB cases

have declined from 3.02% in 2005 to 1.1%

in 2017. Much of this sustained success

in both TB and HIV can be attributed to

integrated health programmes across the

business, including effective screening,

diagnosis and treatment programmes,

improved dust suppression on the mines,

effective housing and accommodation

HIV cases declined from

4.7%

1.3%

2005

2017

New TB cases declined from

3.02%

1.1%

2005

2017

Picture:

Mponeng, South Africa

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strategies in the region, with a drive to

provide family accommodation and private

rooms instead of shared accommodation,

along with a declining dependency on

migrant labour.

Incidence rates for these two diseases,

which are inextricably linked, have

shown sustained and very encouraging

improvements over the past 12 years, and

rates are now approaching national averages

in the country. For more information on

the work done to eradicate TB through the

Masoyise iTB campaign, see the

<SDR>

Early silicosis cases remain at historically low

levels. Dust control measures continued to

be effective and our operations exceeded the

South African Mine Health and Safety Council’s

milestones for dust control. Further details on

this are available in the

<SDR>

Total health expenditure

In 2017, about R864 million was spent on

health and wellness programmes in the region,

of which almost 50% was spent on clinics

and hospitals through AngloGold Ashanti

Health. The balance was spent on various

medical insurance and compensation costs

for occupational and non-occupational injuries

and illnesses affecting our employees.

Going forward, AngloGold Ashanti has

adopted a high-level strategy to outsource

health services in a phased approach. The

proposed approach has been presented

to organised labour at various employee

engagement forums.

In line with restructuring at the South African

operations, the planned closure of in-patient

services at Western Deep Levels (WDL)

hospital – including theatres, intensive

care unit and high-care, three wards, and

hospital kitchen – was completed by 31

August 2017, with a simultaneous reduction

in support services. A total of 184 positions

were affected, and all elected to take

voluntary severance packages, avoiding

the need for forced retrenchments. Iterileng

Medical Station in Vaal River was closed.

Some patients were transferred to a new,

high quality care facility in Welkom for the

requisite healthcare. The closures of the

Savuka and TauTona medical stations were

successfully completed.

Preliminary plans are in place for an integrated

health clinic at Mponeng that will include

occupational health, primary health, and

emergency response services.

Working group on silicosis

Settlement negotiations between the

Occupational Lung Disease Working Group

and the class action’s legal representatives

have reached an advanced stage. More

detail on the OLD Working Group is provided

Our material concerns and external

environment section

Environment

Environmental risks are fully incorporated

in our business risk management process,

operational environmental management

systems and regulatory obligations around

environmental impact. Principal environmental

risks in the region relate to groundwater

pollution from tailings storage facilities and

the risk of mine ﬂooding from abandoned

neighbouring mines. The long-term risk of

groundwater pollution is largely mitigated by

the ongoing reclamation of tailings storage

facilities and waste rock dumps and the

subsequent rehabilitation of footprints.

In addition to the physical risk of ﬂooding

of current operations, there is the ﬁnancial

burden of pumping water from underground

and the potential future liabilities. The risk of

mine ﬂooding has been mitigated by ongoing

pumping of underground water, directly or

indirectly at Margaret Shaft and Great Noligwa

in the Vaal River and at Covalent and Savuka

in West Wits. As disclosed above, our interest

in the Margaret Water Company was sold

with effect from 28 February 2018. The bulk

of the water evacuated in the Vaal River area

is used for tailings reclamation by Mine Waste

Solutions, which will continue, while the water

at Covalent is discharged into a local water

catchment to water quality standards, in line

with the Department of Water and Sanitation’s

directive. AngloGold Ashanti has developed

conceptual post-mining water management

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USEFUL LINKS

Refer to Our material concerns and
external environment, on page 26.

plans and we remain conﬁdent that

underground water could form an important

part of the local water supply resource

when mining in the area has ceased. We

continuously engage with regulators through

the Government Task Team (GTT) for Mine

Closure and Water Management to ensure

that all mining companies collaborate and take

accountability for mine ﬂooding and regional

mine water management obligations.

The pending regulations on provisions

for ﬁnancial closure, expected to come

into effect in February 2019, continued

to dominate the focus of mine closure

planning in the region. The mining industry,

in collaboration with the Chamber of Mines

Environmental Policy Committee, continued

its efforts to inﬂuence development of the

regulations and most recent drafts

published by the regulator are signiﬁcantly

more amenable to the industry than the

initial revision. See

Planning for closure

Operationally, we continued with concurrent

rehabilitation efforts on reclaimed tailings

footprints, as well as the demolition of redundant

infrastructure. For example, demolition work on

the East Gold, Acid and Flotation plants in the

Vaal River region was near completion by the

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end of 2017. Initiatives to explore alternative

land use and to optimise current land use

are ongoing. The region continues to explore

commercial agriculture projects for a broad-

based livelihood in the area.

Further, as part of the rehabilitation efforts,

a prefeasibility study is underway to test

the use of reclaimed tailings footprints and

impacted land for biofuel production. One

of the tailings footprints in the Vaal River has

been successfully planted with speciﬁcally

selected vegetation suitable for biofuel.

More than 400ha of previously established

phytoremediation projects (Woodlands) in the

Vaal River and West Wits areas also continue

to be maintained in collaboration with Wits

University Enterprise.

Climate change

In South Africa, the second draft of the

proposed Carbon Tax Bill was released in

December 2017, and is expected to come into

effect from 1 January 2019. It is anticipated that

the main exposure to carbon tax will be through

the increased cost of electricity purchased from

the national utility provider, Eskom. Carbon

tax on liquid fossil fuels used in the region will

be imposed at source, in addition to current

fuel taxes. Although the initial carbon tax rate

proposed is approximately $10/t CO

-e during

the ﬁrst phase, which ends on 31 December

2022, a series of allowances will reduce the

effective rate to between $0.50/t and $4/t.

Employee and community
development work

Employee development, training and
succession planning

In accordance with the employee transition

framework, and as part of the region’s

integrated human resources strategy to achieve

its business goals during 2017, great emphasis

was placed on the training and development

of employees and community learners. The

region’s technical training centres have all been

upgraded with new technology and a more

consolidated approach to training adopted

for safe and efﬁcient production. All technical

training centres underwent external audits in

the third quarter, and all received ISO 9001,

ISO 14001 and OHSAS 18001 re-accreditation,

with zero non-conformances.

The supervisory and managerial leadership

training programmes have been revised

with programmes such as the Advanced

Managerial Leadership Development

Programme, now linked to our integrated

talent management and succession planning

framework, ensuring that the correct people

receive appropriate training, as required. Each

general manager manages a business unit

talent pool and succession plan. The South

Africa region’s Chief Operating Ofﬁcer has a

regional plan aligned with the Chief Executive

Ofﬁcer’s global talent pool. The focus is now

on employee retention and development of the

skills required for the restructured South Africa

region to function optimally.

Home ownership and properties

As an expression of our commitment to create a

conducive living environment for employees and

communities in the areas in which we operate,

and in line with our obligations under the Mining

Charter 2014, AngloGold Ashanti continues to

roll-out the employee home-ownership scheme

in the South Africa region. Employees have

demonstrated high levels of interest in owning

houses, and some employees have already

purchased previously company-owned houses.

Given the restructuring of operations underway

in the region, some concessions were made to

enhance affordability.

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Picture:

Vaal River, South Africa

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In addition, the local municipality has

expressed support for our project to develop

vacant land for a housing project that will

beneﬁt employees and members of the

community in the area. The project is to be

developed in partnership with the Merafong

City Local Municipality, Gauteng Human

Settlements Department and the National

Housing Development Agency. AngloGold

Ashanti and the Housing Development Agency

are currently undertaking administrative and

legal processes to initiate the project.

The restructuring of operations in the region

also enabled the company to make donations

to the National Department of Public Works in

support of the community. These include land

donated for the satellite Wedela Police Station,

with an estimated market value of R385,000, as

well as The Orkney Golf Club, with a municipal

valuation of R3 million, which was successfully

registered as a Section 21 company on behalf

of the Orkney Golf Players Association for the

beneﬁt of the community and its members.

Enterprise development

During the year, AngloGold Ashanti established

enterprise development centres (EDC) in

Merafong and Matlosana. These EDCs

aim to incubate existing and new SMMEs,

thereby creating and sustaining employment

opportunities. The centres assist in introducing

new enterprises into the area, while also

identifying, developing, enabling and mentoring

established and upcoming entrepreneurs. The

Matlosana EDC was opened in March 2017,

and the Merafong EDC in June 2017. Details

on the work done in these centres; as well as

efforts undertaken by AngloGold Ashanti to

create shared value through socio-economic

development in the Eastern Cape labour-

sending area are available in the

<SDR>

Regulatory update

Regulatory matters in 2017 focused primarily

on negotiations through the Chamber of

Mines, related to the reviewed Mining Charter.

The hearing of the Chamber of Mine’s court

application on the reviewed Mining Charter,

which was set for 19-21 February 2018 was

postponed. The reviewed Mining Charter,

which became effective in June 2017, only to

be suspended by mutual consent between

the industry and government pending

judicial review, was subsequently withdrawn.

Stakeholders agreed to negotiate a new

document, with the hopes of addressing

signiﬁcant concerns expressed by the

industry, through the Chamber of Mines,

organised labour groups, and an array of

mining-affected communities.

The court application was postponed on

the basis of the Presidency’s commitment

to resolving and to facilitate a process of

developing a new Mining Charter by way

of negotiations, inclusive of all stakeholders

such as government, business, labour and

communities in the interests of the industry

and the country as a whole.

The newly appointed Minister of Mineral

Resources, Gwede Mantashe, has committed

to more inclusive engagements to resolve

the impasse that followed the Charter’s initial

publication. Regarding compliance with the

2010-2014 Charter, AngloGold Ashanti has

met and even exceeded certain targets.

The overarching legislation governing the

mining industry in South Africa is the Mineral

and Petroleum Resources Development

Act 28 of 2002. The Minerals Petroleum

and Resources Development Amendment

(MPRDA) Bill was ﬁrst published in 2012 and

an amended Bill was subsequently published

in 2013 (“the 2013 Bill”). There are continuing

differences of opinion on the constitutionality

of some of the Bill’s provisions, a matter

that the Chamber of Mines raised during the

consultation process. The 2013 Bill

was passed by the National Assembly on

12 March 2014, passed by the National

Council of Provinces (NCOP) on 27 March

2014, and then sent to the President of the

Republic of South Africa (President) for assent.

On 16 January 2015, the President referred

the 2013 Bill back to the National Assembly

to accommodate his reservations around the

constitutionality of the 2013 Bill.

On the overall content of the Bill, we had

engagements with the DMR focused on

crafting legislation that would promote all

aspects of the mining industry, bring as much

certainty as is practicable and ultimately

bolster investor conﬁdence. On 5 October

2017, the President issued a statement noting

that he was still waiting for Parliament to

ﬁnalise the 2013 Bill. On 21 November 2017,

the Chairman of the NCOP select committee

on land and mineral resources announced

that the NCOP was aiming to conclude its

processes on the 2013 Bill in January or

February 2018. With the recent changes in

government, this process has been delayed.

The South African mining industry remains

fully committed to transformation undertaken

in a manner that sustains and supports the

industry, and does not undermine the laudable

goals of the MPRDA 2013 Bill, and in order to

meet the vision of the government’s National

Development Plan.

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sustainability/reports/

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Continental Africa

CONTINENTAL AFRICA

Improved production in the Continental Africa

region enhanced its overall contribution to

group performance

Picture:

Iduapriem, Ghana

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AngloGold Ashanti has seven

mines in its Continental Africa

region, six of which are currently

in operation. Of these six,

AngloGold Ashanti manages

four. Obuasi in Ghana was not

operational in 2017 having been

placed on care and maintenance

in 2016. Closure is underway at

Yatela in Mali.

Democratic Republic
of the Congo

Kibali

, one of the largest mines of its kind in

Africa, is situated adjacent to the town of Doko

and 210km from Arua on the Ugandan border.

Kibali is co-owned by AngloGold Ashanti

(45%), Randgold Resources Limited (45%) and

Société Minière de Kilo-Moto (SOKIMO) (10%),

a state-owned gold mining company. Randgold

Resources manages the mine. Underground

mining began in November 2017.

Ghana

Iduapriem

, which comprises the Iduapriem and

Teberebie properties in a 110km

concession, is

located in the western region of Ghana, some

70km north of the coastal city of Takoradi and

about 10km south-west of the Tarkwa mine.

Iduapriem is an open-pit mine and during the

year its processing facilities were converted

from a carbon-in-pulp (CIP) to a carbon-in-leach

(CIL) plant with a gravity circuit. The gravity

feed recovers about 30% of the gold with the

remainder recovered by the CIL plant. The CIL

plant has a capacity of 418ktpm.

Obuasi

, which has been primarily an

underground operation, mining to a

depth of 1,500m, is in the Ashanti region,

approximately 60km south of Kumasi. The

mine was placed on limited operations

towards the end of 2014, and has been on

care and maintenance since 2016, pending

commencement of the redevelopment

project. A study into the redevelopment of

the mine has been completed. It is envisaged

that the planned redevelopment will deliver

a modern, mechanised underground

mining operation. Redevelopment work is

imminent as agreement has been reached

with the government of Ghana for the mine’s

redevelopment, subject to ratiﬁcation by

Ghana’s parliament of the relevant ﬁscal and

development agreements. These agreements

have been signed by the government.

Republic of Guinea

Siguiri

is a multiple open-pit oxide gold mine

in the relatively remote district of Siguiri,

around 850km north-east of the country’s

capital, Conakry. The gold processing plant

treats about 981ktpm. A combination plant

conversion project, begun during the year, is

expected to enable treatment of harder ore

and add substantial economic resources to

the mine. Commissioning is planned for the

second half of 2018. AngloGold Ashanti holds

an 85% interest in Siguiri, with the remaining

15% held in trust for the nation by the

government of Guinea. Siguiri is contractor-

mined using conventional open-pit techniques.

The area has signiﬁcant gold mining potential.

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Picture:

Kibali, DRC

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Mali

Morila

is a joint venture between AngloGold

Ashanti and Randgold Resources, in which

each has a 40% interest. The remaining 20%

is held by the government of Mali. Randgold

Resources manages the mine. Morila is

situated 280km south-east of Bamako, the

country’s capital. The mine had completed

mining in 2009 and transitioned to a tailings

storage treatment operation at the end of

2016. Although the mine has been a tailings

treatment operation, after the discovery more

recently of additional economic ore, limited

mining operations have resumed. The higher-

grade ore being mined will partly replace

the tailings storage treatment. The plant,

which incorporates a conventional carbon-

in-leach (CIL) process with an upfront gravity

section to extract the free gold, has an annual

throughput capacity of 5.5Mt.

Sadiola

is a joint venture between AngloGold

Ashanti (41%) and IAMGOLD (41%). The

government of Mali owns the remaining

18%. The Sadiola mine is situated in south-

western Mali, 77km south-southwest of

the regional capital Kayes. On-site surface

infrastructure includes a 4.9Mt per annum

CIL gold plant, where the ore is eluted and

smelted. The mine, which began operating

in 1996, has multiple open-pits and the

mining operation is nearing the end of its

economic life on the oxide Mineral Resource.

Discussions continue with the government of

Mali regarding the Sadiola sulphides project,

which is expected to enable the plant to

process sulphide ore.

Tanzania

Geita

, one of our ﬂagship mines, is located

in northwestern Tanzania, in the Lake Victoria

goldﬁelds of the Mwanza region, about 120km

from Mwanza and 4km west of the town of

Geita. The Geita gold deposit is mined as a

multiple open-pit and underground operation,

with the underground operation having begun

in 2016. The mine will continue to operate as

a mixed open-pit and underground operation

until the entire economic open-pit Mineral

Resource is exhausted. The mine is currently

serviced by a CIL processing plant with an

annual capacity of 5.1Mt.

REGIONAL REVIEWS CONTINUED

Continental Africa

Contribution to regional production

•

Tanzania

•

Ghana

•

Guinea

•

DRC

•

Mali

Contribution to group production

•

Continental Africa

•

Rest of AngloGold

Ashanti

Click on the map below to enlarge

Picture:

Geita, Tanzania

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CONTINENTAL

AFRICA

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

REGIONAL REVIEWS CONTINUED

Continental Africa

Key statistics

Units

2017

2016

2015

Operational performance

Tonnes treated/milled

28.0

27.6

27.2

Pay limit

oz/t

0.040

0.035

0.036

g/t

1.367

1.199

1.233

Recovered grade

oz/t

0.047

0.043

0.053

g/t

1.61

1.49

1.64

Gold production (attributable)

000oz

1,453

1,321

1,435

Total cash costs

$/oz

720

717

678

Total production costs

$/oz

1,012

1,005

900

All-in sustaining costs

(1)

$/oz

953

904

815

Capital expenditure

(2)

409

291

315

Productivity

oz/TEC

23.01

20.70

20.61

Safety

Number of fatalities

AIFR

per million hours worked

0.39

0.51

0.50

People

Average no. of employees: total

13,593

12,691

11,942

– Permanent employees

5,467

5,331

5,061

– Contractors

8,126

7,360

6,881

Training and development expenditure

See footnotes overleaf

Production

(000oz)

1,597

1,435

1,453

1,321

1,460

2013

2014

2015

2016

2017

Productivity

(oz/TEC)

14.36

20.61

23.01

20.70

9.97

2013

2014

2015

2016

2017

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Continental Africa

Units

2017

2016

2015

Environment

Total water consumption

16,651

11,911

16,931

Total water use per tonne treated

kL/t

0.614

0.428

0.603

Total energy usage

9.16

8.46

8.41

Total energy usage per tonne treated

GJ/t

0.34

0.30

Total GHG emissions

000t CO

666

682

694

Total GHG emissions per tonne treated

t CO

e/t

0.025

0.024

Cyanide used

7,274

7,693

8,405

No. of reportable environmental incidents

Total rehabilitation liabilities:

431

430

425

– restoration

253

262

261

– decommissioning

178

168

164

Community and government

Community expenditure

Payments to government

331

260

291

– Dividends

– Taxation

114

– Withholding tax (royalties, etc.)

– Other indirect taxes and duties

– Employee taxes and other contributions

– Property tax

– Other (includes skills development)

(1)

Excludes stockpile write-offs.

(2)

Includes attributable share of equity-accounted investments.

Key statistics

(continued)

AIFR

(per million hours worked)

1.56

0.50

0.39

0.51

1.97

2013

2014

2015

2016

2017

Total cash costs and all-in sustaining costs

($/oz)

1,202

783

968

720

953

678

815

717

904

869

2013

2014

2015

2016

2017

Total cash costs

All-in sustaining costs

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Operational performance

Production

The Continental Africa region delivered a

sterling performance during 2017 with a

10% increase in production compared to

the previous year. Exceptional production

performances recorded at Siguiri, Iduapriem

and Geita offset lower output from Sadiola,

which has limited operational ﬂexibility, mining

its last remaining oxide Mineral Resource.

At Kibali, tonnage throughput increased

by 4% in 2017 to record levels. Gold

production at 268,000oz in 2017 reﬂected

the signiﬁcantly improved performance in the

second half of the year. This was boosted by

an increase in both open-pit and underground

ore tonnes mined following the successful

commissioning of the underground materials

handling system and optimal use of the shaft,

facilitating the increase in higher grade ore

from underground. Improved plant availability

and recovery rates also contributed to

increased throughput and were boosted

by additional ultra-ﬁne grind and Pumpcell

capacity. Using the Pumpcell amongst other

things, helped facilitate the treatment of

100% sulphide ore at the processing plant

where it was processed solely for extended

periods, achieving design recovery and

above-design throughput. This resulted in

higher volumes of ore being treated and 2%

increase in production. In the underground

mine, operational challenges compounded

by underutilisation of the ore pass system,

continued during the year and resulted in the

treatment of lower grade ore at the expense

of the high-grade underground ore.

Geita’s production increased by 10%

compared to 2016, driven by a 14% increase

in recovered grade, a result of the higher-

grade ore mined at Nyankanga Cut 7 and

Cut 8. Underground ore sources were

in line with the mine plan while maiden

underground operations were ramping

up toward commercial volumes. Plant

throughput achieved was above plan owing

to the increase in the oxide feed and ﬁner

fragmentation resulting from the increased

running time of the secondary and tertiary

crusher circuits. The transition to underground

operations continued with four areas

being mined during the year, resulting in a

248% increase year-on-year to 493,000t in

underground volumes treated.

Production at Siguiri increased by 25% year-

on-year, following a solid performance with

improved productivities and greater access

to higher grade ore in the new Seguelen

pit in Area 1. Production in 2017, the third

highest in the mine’s history, was boosted by

favourable grade variances and optimised

treatment of full-grade ore laterite cap rock

(duricrust) stockpiles. This improvement

offset treatment of lower-grade stockpiles

from other pits and the lower volumes

treated. During the year, work began on

the Siguiri combination plant project, with

commissioning planned for late 2018.

At Iduapriem, production increased by 7%

year-on-year. Mining during the year focused

on deeper, higher-grade areas, resulting in an

8% increase in recovered grade. Total tonnes

mined increased 27% year-on-year to 35Mt,

owing to greater mining-ﬂeet productivity, as

the mine continued with its extensive waste

stripping programme to access the ore sources

in the Block 7 and 8 pit that will provide the

foundation for sustainable production over the

future life-of-mine.

At Sadiola, production declined as the

recovered grade decreased. This was a result

of reduced mining ﬂexibility as the remaining

oxide ore mining sources are depleted. Plant

operations were efﬁcient and consistently

achieved exceeded planned throughput. This

helped to partly offset the lower feed grade

and provided ﬂexibility to maintain a steady

production and revenue proﬁle. Tonnage

throughput was made up of a combination

of the limited, newly mined oxide ore and

full-grade ore stockpiles, as well as periodic

drawdowns from the lower-grade marginal

ore stockpiles.

Morila resumed mining in the latter part of the

year, accessing and treating higher grade ore

from the Domba pit, contributing to year-on-

year increase in production. The increased

tonnage throughput during the year was further

boosted by consistent plant availability and

treatment of softer ore, offsetting the decrease

in recovered grade. The mine is expected to

continue treatment of mineralised waste ore,

augmented by higher grade ore from targeted

mining areas, for the next three years, after

which the mine will transition to full closure.

Costs

All-in sustaining costs for the region increased

to $953/oz, mainly a result of increased

sustaining capital expenditure as planned,

partly offset by higher production. Total cash

costs increased marginally year-on-year, due to

the negative impact of higher initial costs from

underground mining at Geita and operating

costs at Kibali. This was partially offset by

higher production and recovered grades.

Total cash costs at Siguiri, Iduapriem, Sadiola

and Morila decreased year-on-year. At

Siguiri, costs decreased by 8% as a result

of increased production. At Iduapriem, total

cash costs decreased by 9% due to higher

production and lower costs as operational

efﬁciencies and cost management initiatives

continued to bear fruit during the year and

higher recovered grades.

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I N T E G R AT E D R E P O RT

2 0 1 7

Overview

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Strategy

Performance review

Accountability

Shareholder information

Capital expenditure

Capital expenditure for the region increased

in line with company plans as we invested

in growth projects at Siguiri and Kibali, and

increased sustaining capital investment at

Geita and Iduapriem. These projects are

expected to realise future beneﬁts as higher

grade ore is accessed at Iduapriem and Ore

Reserve development work in the underground

operation at Geita continues to ramp up. The

balance of sustaining capital expenditure was

earmarked to improve asset reliability and

consistent operations across the Continental

Africa region.

All-in sustaining costs for Kibali increased

year-on-year, a result of increased sustaining

capital expenditure on waste stripping in

the Pakaka and Kombokolo pits, increased

underground capital expenditure, and higher

plant engineering and process operating

costs, in particular power costs. Open-pit

mining costs were higher mainly due to lower

equipment availability.

During the year, the region continued to

drive continuous improvement through

the Operational Excellence programme, a

system that is now well entrenched across all

sites and disciplines. The focus remains on

delivering systemic and sustainable operational

improvements, aimed at each operation

rapidly progressing towards targeted lower

all-in sustaining costs that reﬂect the inherent

opportunity that exists within each operation.

Growth and improvement

Geita made good progress with the

construction of the new 40MW power plant,

which is expected to be commissioned in the

ﬁrst half of 2018. The plant will provide the

required levels of reliable power to the mine

and reduce the overall cost of power. The mine

successfully transitioned to and expanded

underground mining at Star & Comet, while

developing two new underground mines in

the Nyankanga mining area. Open-pit mining

is anticipated to continue at Nyankanga Cut

8 until the second half of 2019 while Geita Hill

East Cut 1 is expected to ﬁnish in the ﬁrst half of

2018. Exploration work is being conducted at

Selous, 2.4km from Star & Comet, for a satellite

pit to supplement underground operations.

Siguiri’s combination plant is well advanced

and scheduled to be fully commissioned

in the second half of 2018. The associated

30MW power plant will also be commissioned

in the second half of the year. Construction

of the combination plant began with the

early works in the ﬁrst half of the year carried

out by a local contractor. The main civil

construction commenced in the second

half of the year with the ﬁrst major concrete

poured in December 2017. The mill shells

arrived on site in September, and off-site

fabrication and sourcing of electrical and

instrumentation equipment and cabling,

continued during the last quarter of the year.

Major contractors mobilised on site and a

new mining contractor was on track to begin

mining in ﬁrst half of 2018.

Siguiri has commenced drilling Block 2,

after which it is expected that drilling can

begin at Saraya and Foulata to support a

prefeasibility study. Some of the farms being

compensated will be for the infrastructure

required for the development of the project.

It is expected that Block 2 will both improve

the ounce proﬁle from 2020 and potentially

extend the life.

At Iduapriem, the deferred stripping carried

out during the year at Teberebie Cut 3 was

completed and waste stripping at the larger

Cut 1 exceeded planned targets. The project

delivered an additional 4.1Mt of marginal and

waste material as a result of improved efﬁciencies

in mining unit rates. This work will now provide

access to the orebody to extend the mine life

by about a decade. The plant recovery project

was successfully completed and is expected to

contribute to higher plant recoveries in 2018.

The main pit dewatering project at Sadiola

was substantially completed at year end,

with all equipment and materials delivered

to site. Construction of the sulphide project

awaits approval by the government of Mali,

though no agreement has yet been reached in

this regard. Despite our efforts and the clear

beneﬁts the project would generate locally and

to the government of Mali, there has been no

resolution around the terms critical to moving

the project forward. AngloGold Ashanti and

joint-venture partner IAMGOLD Corporation

continue to evaluate the project which will add

sulphide-ore processing capability to the plant.

Although we remain committed to the project,

if no agreement is reached, the operation will

enter a restricted exploitation phase and then,

when stockpiles are exhausted, it will enter a

phase of suspended exploitation (care

and maintenance).

At Kibali, capital expenditure of $110m for

the year (attributable), was spent mostly

on underground development, the vertical

shaft and the second hydropower plant.

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I N T E G R AT E D R E P O RT

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Shareholder information

Underground paving at the central haulage

level was completed, allowing haulage

from the ore passes into the underground

crushers. The materials handling system was

also commissioned during the last quarter

of the year, and 118kt of ore hoisted from

the shaft, with total underground ore tonnes

of 1,110kt mined for the year. Underground

ore production from the declines totalled

505,000t in the last quarter of the year.

Once the ramp up has been completed, a

signiﬁcant increase in production is expected.

Ambarau, the second hydropower station

was completed and commissioned during

the ﬁrst half of the year, taking Kibali’s total

hydro generation capacity to 32MW. At

the plant, the ultra-ﬁne grind and Pumpcell

capacity was increased at the start of the

year, enabling the processing of substantially

increased ﬂotation concentrate volumes,

improving grind and recovery as well

as providing ﬂexibility in ore treatment.

Furthermore, waste stripping at both

Kombokolo and Pakaka satellite pits were

undertaken during the course of the year.

The only major capital project remaining is the

third hydropower station at Azambi, which

is being constructed and is expected to be

commissioned in the second half of 2018.

Update on Obuasi redevelopment

Obuasi, which was placed on care and

maintenance in 2016, remained so

throughout 2017. The cost of Obuasi’s care

and maintenance programme was $62m in

2017 (2016: $70m).

The invasion of a part of the mine by illegal

miners in 2016, as reported on extensively

in our Integrated Report 2016, has been

resolved and the mine’s operational area has

been cleared of illegal miners. Public security

agencies provided security at the mine

throughout 2017, and continue to do so.

AngloGold Ashanti was in discussions with

the government of Ghana throughout 2017

to secure the necessary agreements and

permits for the possible redevelopment of the

mine. The boards of AngloGold Ashanti (and

its relevant subsidiaries) have approved the

redevelopment of Obuasi, now expected to

commence subject to ratiﬁcation by Ghana’s

parliament of the relevant ﬁscal, development

and security agreements. These agreements

have been signed by the government of

Ghana. The board therefore approved interim

funding of $31m to cover the ﬁrst six months

to enable the project team to be established

and to set-up the front-end engineering and

design, so as not to delay the project.

The study into Obuasi’s redevelopment was

completed with improvements in returns and

payback period. This was achieved with an

improved geological model, phased capital

expenditure and the supportive agreements

signed with the government of Ghana.

The redevelopment will establish Obuasi as a

long-life, modern, mechanised underground

mining operation. This is a fundamental

departure from the mine’s previous operating

model. The redevelopment will deliver a mine

that makes use of automation and controls

for improved operational efﬁciencies and

consistency in performance. It envisages a

smaller, but more skilled workforce that can

operate in the planned mechanised and

automated environment.

The detailed feasibility study covers every

aspect of the mine, including operating

methods, systems and processes,

environmental management and mine

rehabilitation, organisational design, human

resource strategy and social responsibility,

among others.

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Picture:

Obuasi, Ghana

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

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Performance review

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Shareholder information

Project implementation will be undertaken in

two distinct phases:

•

Phase 1 includes project establishment,

mine rehabilitation and development, plant

and infrastructure refurbishment to enable

production at a rate of 2,000 tonnes per

day (tpd) for the ﬁrst operating year. The

preparatory work to reach the start of

Phase1 is expected to take approximately

18 months from the start of the project,

with the ﬁrst gold pour expected in the

third quarter of 2019.

•

Phase 2 includes refurbishing the

underground materials handling system,

shafts and ventilation, construction of a

primary crusher, a SAG/ball circuit, carbon

regeneration facility and a new gold room

and tailings storage facility. This will take a

further 12 months following Phase 1 and

enable the operation to increase processing

capacity to 4,000tpd within three to four

years. The operation will then ramp up to

5,000tpd from the ﬁfth year onward.

Mine production for the ﬁrst 10 years will

be focused on the upper ore bodies and is

expected to average 350,000oz to 400,000oz

annually at an average head grade of 8.1g/t.

Total cash costs are expected to average

between $590/oz and $680/oz, while the all-in

sustaining cost is expected to be between

$795/oz and $850/oz. Annual mine production

for the second 10 years is planned to increase

to between 400,000oz and 450,000oz, as

the mine deepens into higher grade ore. The

all-in sustaining cost is expected to improve

thereafter to between $750/oz -$800/oz.

It is estimated that the project, which is highly

leveraged to the gold price, will deliver an

internal real rate of return of between 16% and

23% at real gold prices of between $1,100/oz

and $1,240/oz.

Initial project capital expenditure anticipated

over the ﬁrst 30 months is expected to be

between $450m and $500m, excluding pre-

production capital of $64m. On completion

of phase 2, extended project capital

expenditure of $94m will continue through

to year six, covering the development of the

Obuasi Deeps Decline to the lower level of

the mine, refurbishment of the KMS shaft,

installation of new underground pump

stations and construction of the ﬂotation

tailings storage facility.

The project has a current life of more than 20

years. Opportunities exist to further optimise

the plan and to extend its life by targeting

the mine’s signiﬁcant additional mineral

endowment, particularly with down-plunge

extensions of the orebody into the Adansi

Deeps area below 50 level.

REGIONAL REVIEWS CONTINUED

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Update on Obuasi redevelopment (continued)

Obuasi project: key metrics

Gold produced (economic footprint)

Moz

8.59 over

21 years

Annual gold production (steady state – ﬁrst 10 years)

000oz

350 – 400

Annual gold production (second 10 years)

000oz

400 – 450

Average annual tonnage treated (steady state)

1.6 – 1.8

Average head grade

g/t

8.8

Gold price assumption (Real)

$/oz

1,240

Cash cost per ounce (money terms at approval)

$/oz

590 – 680

All-in-sustaining cost (money terms at approval)

$/oz

750 – 850

Initial project capital expenditure (three years)

450 – 500

2018

2019

2020

Extended Project capital expenditure over six years

(includes initial project capital)

540 – 590

Capitalised operating cost

Internal rate of return ($1,100 – $1,240/oz)

16 – 23

Payback period

years

6.5

All-in sustaining cost margin

I N T E G R AT E D R E P O RT

2 0 1 7

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Sustainability performance

Safety

The region reported an excellent safety

performance in 2017, with a 24% year-on-

year improvement in the AIFR to a low rate

of 0.39 per million hours worked. There

were no fatalities during the year, and the

region achieved a record 801 days since the

last fatality in October 2015. In May 2017,

Geita was declared the overall winner, for

the second consecutive year, in the mining

sector by the Tanzanian Occupational Safety

and Health Authority (OHSA). This award

acknowledges Geita’s high level of safety and

health in the workplace.

Siguiri maintained its record performance

achieved in 2015 and 2016, having recorded

only one workplace incident. This is a

commendable performance, considering the

increasing safety risk proﬁle at the operation

given the large construction project currently

underway at the mine, as well as the

change of mining contractor. Siguiri’s safety

performance is attributed primarily to its focus

on closely managing on-site contractors.

Iduapriem has remained fatality-free for four

consecutive years, through its sustained

focus on the management of contractors and

ensuring that contractor activities conform

to mine and group safety requirements.

Iduapriem remains one of the top safety

performers in Ghana and the operation was

recognised for this at an awards ceremony

held in Accra in November.

Sadiola’s all injury frequency rate improved by

20% to 1.25 injuries per million hours worked

compared to the previous year. Various safety

campaigns and initiatives aimed at improving

driving skills and improving safety engagement in

the workplace were credited for the improvement.

Obuasi recorded an injury-free year during

2017 and on 26 December 2017 achieved 2.5

million injury-free hours worked. Although the

operation remains on care and maintenance,

the team on site continued focus on the

company’s safety initiatives.

Health

The region continued with efforts to improve

systems on the entire healthcare continuum,

including health issues in the workplace,

general wellness, as well as community-related

diseases. In respect of employees, focus was

placed on the prevention of diseases, effective

disease management and rehabilitation to

facilitate an early return to ﬁtness and work.

The operations embarked on comprehensive

healthcare programmes, taking into account

the capacity of local health systems to

support mine needs; as well as local

regulatory requirements. Speciﬁc health issues

included noise-induced hearing loss (NIHL),

dust management, malaria prevention and

surveillance, and management of emerging

infectious diseases, like Ebola, which have the

potential for outbreaks.

AngloGold Ashanti has developed practical

plans and activities to undertake to achieve

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Picture:

Malaria spraying control programme, Obuasi, Ghana

I N T E G R AT E D R E P O RT

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Shareholder information

the company’s long-term aspirational goal of

“healthy employees and healthy communities

by 2030.” As part of the company’s health

strategy, these plans are aligned with the

company’s Sustainability Strategy, as well

as the United Nations’ (UN) Sustainable

Development Goals (SDGs).

The Continental Africa operations focused on,

among other things, the malaria programme,

promotion of health and wellness among our

employees, contractors and dependants.

Our malaria programme in the region

covers, among other things, awareness and

education; indoor residual spraying; provision

of prophylaxis; early detection and treatment of

cases; and personal protective equipment (the

PPE) and clothing.

Geita had the lowest incidence of malaria

across the region in 2017, at about 0.2% of

the workforce. This can be attributed to the

extensive malaria control programme that

extends beyond the mine’s boundaries into

the communities of Geita Town. Like our ﬁrst

malaria programme, which started at Obuasi in

2010, Geita has a community-based initiative,

undertaken in partnership with government

and NGOs. In Ghana, malaria control activities

continued under the public-private partnership

programme based at Obuasi and run by

AngloGold Ashanti’s non-proﬁt organisation,

AGA-Mal. This programme continues to

be supported ﬁnancially and technically

by our Ghana operations and the Global

Fund. In addition to the Obuasi districts, the

programme covers 12 other districts in the

Upper West and Upper East regions of Ghana.

Iduapriem also continues to provide and

sustain malaria control efforts in this region,

which has a high incidence of the illness. In

2017, Iduapriem launched a malaria control

programme themed “End Malaria for Good

in our Communities”. The malaria control

programme, covering employees, contractors

and host communities, involved the distribution

of 12,500 insecticide-treated nets (ITNs) during

the year. An estimated 5,850 people in 16 host

communities within the municipality, beneﬁtted

from this programme.

Sadiola also provides malaria control to site, as

well as to surrounding communities with good

malaria control and maintenance of gains over

the years. Siguiri faced the most signiﬁcant

malaria-related challenges in the Continental

Africa region. With a notable increase in the

number of malaria cases, the mine undertook

investigations and prompt action to reverse

this trend. The programme’s roll-out to include

Siguiri town is expected to be completed

by the end of 2018. This is in addition to

the extension to communities immediately

surrounding the mine. The mine has already

seen a reduction in the number of malaria

cases, achieving an incidence rate in 2017 of

6.8% (2016: 11.5%) cases in the workforce.

Other healthcare work included Geita’s $135m

contribution to build a surgical theatre unit in

Chato hospital, which is situated about 100km

from the mine. This was in addition to support

provided to the Geita municipal facility for HIV

and AIDS management, and to the local Geita

government hospital. More disclosure on the

region’s health programmes is available in

the

<SDR>

There were no cases of noise-induced hearing

loss in the region during 2017.

Employee relations

In line with the continued implementation

of the Operational Excellence efﬁciency

programme, key people-focused initiatives

were undertaken and completed in the region

during the 2017. These are not limited to but

included the following:

•

The ‘How We Work’

programme was

launched which included capacity-building

training of the human resources and senior

management teams and nominated line

managers at our sites. Implementation will

be further intensiﬁed and introduced to

employees at all levels across the region

•

Focus remained on localisation initiatives,

talent management and succession planning

interventions across the region

•

Successfully completed annual wage

negotiations for the period at all sites

There were no production interruptions and

the labour relations climate remained relatively

stable across the region.

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USEFUL LINKS

See People are our business

In Siguiri, during the year, annual wage

negotiations included the unions, management

as well as the Ministry of Employment and

the General Labour Inspection for mediation

intervention between the parties. The

negotiations led to the conclusion of a one-

year wage agreement.

In Ghana, following the postponement of the

proposed unitary negotiations by the Ghana

Chamber of Mines, early in 2017, Iduapriem

successfully concluded a two-year wage

agreement with the Ghana Mineworkers Union

in respect of 2016 and 2017. As part of the

agreement, management and the union further

committed to the development of a salary

adjustment framework which would be a guide

for future negotiations.

In Tanzania, key focus areas at Geita during

the year included the initial preparatory work

to support and guide the mine as it becomes

an underground mining operation in addition

to open-pit mining activities. Management

and the majority union reached agreement

on a compressed working-week shift roster,

effective from December 2017, and a one-year

wage agreement effective January 2017.

I N T E G R AT E D R E P O RT

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Performance review

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Shareholder information

In Mali, the mine labour relations climate was

inﬂuenced by the uncertainty relating to the

Sadiola sulphides project and a potential

decision that would place the mine in limited

operations, and then care and maintenance

phase. The annual wage negotiations were

successfully concluded and implemented

effective January 2017. The wage agreement

concluded between management and

two recognised unions focused mainly

on improving the social and employment

conditions of employees.

At Yatela, the mine closure and retrenchment

process received approval from the labour

inspector.

Environment

There were two reportable environmental

incidents in the region in 2017, both at

Obuasi. One occurred on 6 October 2017,

when there was a loss of process water after

intruders cut off the bolt heads and nuts

holding ﬂanges on a process water pipeline

between the South Processing Plant and the

South Tailings Storage Facility. The process

water pipeline was repaired and security

visibility increased to avoid any recurrence.

On 26 June 2017, a very large volume of

rain water (estimated at 22,708m

) collected

because of rainfall overnight of 85mm,

overwhelmed the impoundment control valve

boundary containment of the Kokoteasua

dam, and eventually washed off the boundary

containment. This resulted in an uncontrolled

release of water into the Kokoteasua stream,

leading to ﬂooding of a school and some

houses within the Abompe community

of Obuasi. All the affected have been

compensated and the boundary containment

has been ﬁxed and improved.

The Environmental Management Plan (EMP)

for the Obuasi care-and-maintenance phase

(May 2017 – April 2018) was submitted to the

Ghanaian Environmental Protection Agency

(EPA). A new reclamation security agreement

for Obuasi was signed on 21 July 2017 and

will come into effect once the EPA issues

the requisite environmental permits for the

redevelopment project. Iduapriem obtained

approval from the national Inspectorate

Division of Minerals Commission to resume

mining of the Block 3 West Pit.

Geita was granted an environmental permit

for the Nyankanga underground project

from the Tanzanian National Environmental

Management Commission, as well as approval

for the change of mining method from the

Ministry of Energy and Minerals. The mine also

received approval from the Lake Victoria Basin

Water Board to dewater the Matandani pit into

the Kukuluma pit to allow exploration work for

the refractory ore project to begin. Approval

for the removal of a causeway separating

the Nyankanga dam into two basins was

also granted. After two years of consecutive

drought in the East Africa region, the mine

received a permit for construction of a second

water pipeline from Lake Victoria to Geita

town, which will supply water directly to Geita

town, leaving the Nyankanga Dam to serve the

mine only.

Environmental authorisation for the Siguiri

combination plant project was renewed by the

Guinean National Environment Regulator (known

as the BGEEE) following a site inspection in

December. Authorisation certiﬁcates were also

received for four exploration permits. The Sadiola

sulphide project’s environmental permit was

granted by the Malian Minister of Environment in

March 2017.

All operating mines in the Continental

Africa region retained their ISO 14001 and

International Cyanide Management Code

certiﬁcation in 2017. At Obuasi, the ISO 14001

certiﬁcation remained suspended for the year,

as the mine is on care and maintenance. ISO

14001 is the international standard for an

effective environmental management system.

Communities

The ﬁve-year Geita Economic Development

Programme (GEDP), which began in

September 2015, is a collaboration between

the mine and the Geita local authority and is

aimed at improving community livelihoods

and employment creation, particularly for

the youth and women. This programme

provides support to farming, small and

medium enterprises and projects such as

tailoring, shoemaking, embroidery, hydra-foam

brickmaking, welding and fabrication, which

have successfully changed the lives of youths

and women. Details on this work are available

in the

<SDR>

Additionally, we provide training on best-

farming practices, which has beneﬁtted

about 980 farmers. Geita also completed

construction of a modern, long-term storage

facility in 2017 to assist farmers. By expanding

the scope of paddy farming, this sub-sector is

expected to attract more youths to farming.

Geita mine also assists with the provision of

potable water to the residents of the Geita

town. Potable water is distributed to residents

by way of domestic connections and public

access kiosks. When the project began in

2012, only 3% of residents had access to

REGIONAL REVIEWS CONTINUED

Continental Africa

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clean and safe tap water, now, after the

limited distribution network was completed

and the project launched in January 2016,

that ﬁgure has risen to 36% although the

percentage is constantly challenged by the

growing rate of rural-urban immigration.

The mine has spent over $5.2m to fund the

project to its present stage.

In Guinea, AngloGold Ashanti’s subsidiary,

Société AngloGold Ashanti de Guinée

S.A. (SAG), through the Siguiri Economic

Development Programme (SEDP), promotes

local economic development. SEDP projects

include agricultural, aquaculture, skills and

enterprise development projects aimed at

developing small businesses and employment

opportunities for local communities. Currently

these include horticulture, cashew plantation,

rice/paddy farming and ﬁsh farming. SAG also

implemented a commercial-scale aquaculture

project (tilapia farming). Fish cultivation began

in the second half of 2017 and the ﬁrst harvest

was in December 2017. Details on this work

are available in the

<SDR>

Further, as part of SAG’s commitment to

facilitate access to secondary education

by the communities in the nearby village of

Bouré and to establish a pipeline of educated

youth to drive the local Siguiri economy, the

company has provided free daily transportation

to school children in Bouré to attend school

at Siguiri (about 30km away) since 2002.

To ensure the sustainability of this work for

the beneﬁt of communities, SAG expanded

education facilities, constructed and equipped

ﬁve libraries and computer rooms, constructed

39 teachers’ accommodation units, and

completed nine fresh water boreholes.

Since the establishment of the Iduapriem

Gold Mine Community Trust Fund in 2012, its

focus has been on providing infrastructural

development in the mine’s host communities

to advance the company’s participation and

contribution to their sustainable long-term

development. In 2017, the Trust Fund built

a state-of-the-art multi-purpose hall for the

Bankyim community, as well as a community

health facility at Wangarakrom. The hall, which

serves as a community centre, also hosts

other functions for the community, including

youth, and skills development programmes.

The health facility has clinical equipment

and the requisite furniture, is expected to be

commissioned in 2018.

Additionally, a community market is under

construction in Teberebie at Iduapriem and

expected to be completed in the ﬁrst half of

2018. The market is aimed at encouraging

economic activity within the community, and

the market building will accommodate about

40 traders.

In Mali, when we began mining, the water

supply to the relocated villages at Sadiola

and Farabakouta was linked to the mine’s

water supply. To provide independent and

sustainable water to these villages, the mine

embarked on a community water project

which commenced in 2015. Construction

of the water system comprises a 150m

water reservoir, a solar-powered pump, a

secured pumping station, as well as the

piping distribution network to four villages

has been successfully completed and

the system tested. Related training and

social intermediation is provided to enable

beneﬁciaries to take over and independently

manage the water supply system once it has

been completed. Handover to beneﬁciaries is

planned for the ﬁrst half of 2018.

At Obuasi, an apprenticeship programme

which was started 10 years ago following

focused group engagements with the youth in

Obuasi, as well as with the local municipality.

The programme focuses on strengthening the

socio-economic fabric of the area. More than

300 apprentices have been trained in the past

decade. This programme was also an attempt

to mitigate the effects of the downsizing of

the Obuasi mine with youth being trained in

skills that are required beyond mining and the

borders of the town.

Twenty youths from ﬁve communities were

selected for the pilot programme in mid-2016,

and all successfully graduated in 2017, with

certiﬁcates in auto-electrical engineering,

welding and fabrication. The apprenticeship

training programme is a partnership with local

traditional authorities and HR World Company

Limited, which provides training.

REGIONAL REVIEWS CONTINUED

Continental Africa

Security and human rights

During 2017, security efforts continued to

focus on an integrated approach for effective

management of the various challenges faced

by the operations. The ﬁve-point security

plan, implemented in collaboration with

communities, focuses on regenerating and

sustaining relationships with communities,

public security, pertinent governmental

agencies and security at sites, with the aim

of removing people from risk. The Voluntary

Principles on Security and Human Rights

(VPSHR), to which AngloGold Ashanti is a

signatory, remain a key driver for our security

management practices.

AngloGold Ashanti approved and adopted

a human rights standard in 2016

, and

began its implementation during 2017.

Human rights due diligence self-assessments

were completed by each operation in the

Continental Africa portfolio, and served as

gap analyses for understanding areas which

have the potential to intersect or infringe upon

human rights and to direct our interventions

where most required. All operations within the

region are scheduled to be assessed during

2018, which will assist further in promoting

awareness of human rights concerns among

relevant role-players.

USEFUL LINKS

Download the approved and adopted
a human rights standard

https://thevault.

exchange/?get_group_doc=143/1502453846-
HRDueDiligenceStandard.pdf

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We also rolled-out human rights training to

further embed awareness and understanding

of the UN Guiding Principles on Human

Rights, which is included in induction and

refresher training and is offered either in the

classroom or online. As at December 2017,

a total of 7,479 employees and contract

employees had undertaken human rights

training across the region.

Regulatory changes

At the end of June 2017, the government of

Tanzania (GoT), enacted the Natural Wealth

and Resources (Permanent Sovereignty)

Act, No 5 of 2017, the Natural Wealth and

Resources Contract (Review and Re-

Negotiation of Unconscionable Terms) Act, No

6 of 2017 and the Written Laws (Miscellaneous

Amendments) Act, No 7 of 2017.

The three pieces of new legislation in question

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. These

changes include, among others: the right

of the GoT to renegotiate existing Mine

Development Agreements at its discretion;

the provision that the GoT is entitled to a

non-dilutable, free-carried interest of no less

than 16% in all mining projects; the right for

the GoT to acquire up to 50% of any mining

asset commensurate with the value of tax

beneﬁts provided to the owner of that asset

by the GoT; removal of the refund of input VAT

incurred on the production of raw materials

for export; an increase in the rate of revenue

royalties from 4% to 6%; requirements for

local beneﬁciation and procurement; and

constraints on the operation of off-shore bank

accounts. For a more detailed reading of

the legislative provisions included in the new

laws, please see the Tanzanian parliamentary

website.

1,2

AngloGold Ashanti’s subsidiaries continue

to seek a constructive dialogue with the

GoT, and its agencies, to gain assurances

that Geita Mine will not be affected by these

legal and ﬁscal changes. On 13 July 2017,

AngloGold Ashanti announced that its

subsidiaries in Tanzania had made a decision

to take the precautionary step of safeguarding

their interests under the Mine Development

Agreement (MDA), by commencing arbitration

proceedings under the rules of the United

Nations Commission on International Trade

Law, as provided for in the MDA. Despite

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Continental Africa

USEFUL LINKS

See: www.parliament.go.tz/bills-list

See: www.anglogoldashanti.com/
investors/announcements/

Picture:

Obuasi, Ghana

the dispute over the legal basis for the

increased royalty rate, from 4% to 6%, and the

imposition of a 1% clearing fee for the export

of gold, Tanzanian ofﬁcials have insisted upon

receipt of such payments as a condition of the

release of exports. While our subsidiaries in

Tanzania do not accept that they are bound

to pay either the new levy or the increased

royalties, these royalties and fees are being

paid under protest to ensure continued

processing of export shipments. The impact of

these additional royalties and levies currently is

approximately $20m on an annualised basis.

The lack of input VAT refunds has resulted

in an approximate $50m increase in working

capital for the year. The company continues to

engage with the revenue authorities to secure

the refunds due.

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REGIONAL REVIEWS CONTINUED

Australasia

AUSTRALASIA

The Australasia region delivered a strong

performance with both mines in the region having

solid plans in place to improve the quality and

long-term optionality of their assets

Picture:

Sunrise Dam, Australia

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Australasia

AngloGold Ashanti's operations in

the Australasian region, Sunrise

Dam and Tropicana, are located in

the north-eastern goldfields of the

state of Western Australia.

Sunrise Dam

, wholly-owned by AngloGold

Ashanti, is situated 220km north-east of

Kalgoorlie and 55km south of Laverton. Gold

production commenced at Sunrise Dam in

1997. Underground mining, carried out by a

contract mining company, is now the primary

source of ore for the operation, following

the completion of mining the Crown Pillar at

the base of the 490m deep pit in 2014. The

processing plant, comprising conventional

gravity and carbon-in-leach (CIL) circuits, is

owner-managed.

Tropicana

, a joint venture between

AngloGold Ashanti (70% and manager) and

Independence Group NL (30%), is located

200km east of Sunrise Dam and 330km

east-northeast of Kalgoorlie. The operation

began gold production in September 2013

following development approval in November

2010. The open-pit operation features a large-

scale, modern processing plant which uses

conventional CIL technology and includes

higher-pressure grinding rolls for energy-

efﬁcient comminution. Mining is carried out by

a contract mining company and the plant is

owner-managed.

Contribution to regional production

•

Sunrise Dam

•

Tropicana

Contribution to group production

•

Australasia

•

Rest of AngloGold

Ashanti

Click on the map below to enlarge

Picture:

Tropicana, Australia

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AUSTRALASIA

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Key statistics

Units

2017

2016

2015

Operational performance

Tonnes treated/milled

9.4

8.9

8.2

Pay limit

oz/t

0.06

g/t

1.84

1.86

1.85

Recovered grade

oz/t

0.061

0.058

0.068

g/t

1.89

1.82

2.12

Gold production (attributable)

000oz

559

520

560

Total cash costs

$/oz

743

793

702

Total production costs

$/oz

991

1,056

919

All-in sustaining costs

(1)

$/oz

1,062

1,067

875

Capital expenditure (attributable)

153

109

Productivity

oz/TEC

47.87

46.81

55.84

Safety

Number of fatalities

AIFR

per million hours worked

8.53

9.49

8.56

People

Average no. of employees: total

974

925

836

– Permanent employees

226

211

195

– Contractors

748

714

641

Training and development expenditure

REGIONAL REVIEWS CONTINUED

Australasia

Production

(000oz)

620

560

559

520

342

2013

2014

2015

2016

2017

Productivity

(oz/TEC)

62.00

55.84

47.87

46.81

49.64

2013

2014

2015

2016

2017

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REGIONAL REVIEWS CONTINUED

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Units

2017

2016

2015

Environment

Total water consumption

6,783

7,577

6,648

Total water use per tonne treated

kL/t

0.581

0.691

0.662

Total energy usage

6.32

5.62

5.14

Total energy usage per tonne treated

GJ/t

0.54

0.51

Total GHG emissions

000t CO

372

336

Total GHG emissions per tonne treated

t CO

e/t

0.032

0.031

0.034

Cyanide used

4,011

4,696

4,130

No. of reportable environmental incidents

Total rehabilitation liabilities:

– restoration

– decommissioning

Community and government

Community expenditure

0.7

0.6

0.3

Payments to government

– Taxation

– Withholding tax (royalties, etc.)

– Employee taxes and other contributions

(1)

Excludes stockpile write-offs.

Key statistics

(continued)

AIFR

(per million hours worked)

10.73

8.56

8.53

9.49

7.91

2013

2014

2015

2016

2017

Total cash costs and all-in sustaining costs

($/oz)

1,376

804

986

743

1,062

702

875

793

1,067

1,047

2013

2014

2015

2016

2017

Total cash costs

All-in sustaining costs

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Operational performance

Production

The region delivered a strong performance in

2017, producing 559,000oz driven by higher

mill throughput rates and feed grades and

increased metallurgical recoveries.

Sunrise Dam celebrated its 20th anniversary

in March 2017. A strategy, to lift the mined

grade while maintaining the underground ore

production rate at 3Mtpa, was successfully

implemented during the year, resulting in

a 5% lift in yield to 1.83g/t. The mine’s

production increased by 4%, compared

with 2016. Underground ore is the primary

source of mill feed and is blended with

intermediate grade (1.26 g/t) stockpiled ore

that was accumulated during open-pit mining

to meet the processing plant capacity of

approximately 3.6Mtpa. The higher-grade

Cosmo and Vogue ore bodies were the focus

of development in 2017, with Vogue targeted

to be the key ore source in 2018.

At Tropicana, optimisation and expansion of

the processing plant lifted processing capacity

to 7.7 Mtpa (100%), resulting in a 10%

increase in mill throughput, which delivered a

10% increase in attributable gold production.

A ﬁnes pulping circuit was commissioned in

November 2017, further improving efﬁciency

by minimising downtime during maintenance

shutdowns. This is expected to increase

annual mill run times by approximately 2% to

more than 98%.

Following the introduction of a 600t face

shovel to the mining ﬂeet, mining rates

increased to more than 90Mtpa in 2017,

enabling the resumption of grade streaming –

the preferential treatment of higher grade ore

while low-to-medium grade ore was stockpiled

– during the second half of the year. Mining in

2017 focused on the Havana 3 and Tropicana

2 pits.

Costs

All-in sustaining costs for the region were in

line with 2016 at $1,062/oz. The decreased

mining unit costs at Tropicana were offset by a

stronger Australian dollar against the US dollar

and increased sustaining capital expenditure

at Sunrise Dam, which included $20m for the

Recovery Enhancement Project (REP).

Growth and improvement

At Tropicana, the focus for 2018 and beyond

will be on implementation of the Long Island

strategy, which is expected to add 2.1Moz to

Tropicana’s business plan, extending mine life

by approximately seven years to 2027.

In December 2017, the Tropicana joint venture

partners announced a commitment to the

Long Island mining strategy and approval for

an additional ball mill in the processing plant,

to further lift plant throughput to 8.1Mtpa

which is expected to increase gold recovery.

The Long Island strategy has been driven

by ﬁnding a more cost-efﬁcient way to mine

waste in pit cutbacks. It involves using a strip-

mining approach that minimises waste haulage

distances by using in-pit backﬁll, essentially

optimising haulage distances over the life of

mine. The approach comprises eight stages

with three major decision points providing

ﬂexibility to tailor the approach at each

decision point, depending on market and other

prevailing conditions.

Phase one comprises mining of the Havana

South pit and a cutback of the Boston Shaker

pit, using the completed Tropicana pit as the

ﬁrst backﬁll location.

The Long Island development is expected

to increase mining rates to between 95Mtpa

and 107Mtpa over the next two years, to

peak in 2019 and to continue at that rate for

about four years. The project was enhanced

by the decision to install a 6MW ball mill in

the processing plant, enabling throughput to

be lifted to 8.1Mtpa to match the increased

mining rate. Through a reduction in grind size,

baseline metallurgical gold recovery is expected

to improve by up to 3% to approximately 92%.

Production (at 100%) is forecast to be between

478,000oz and 492,000oz in 2018 and

between 530,000oz and 548,000oz in 2019.

This does not include potential underground

production from mineralisation at the Boston

Shaker orebody, which remains open at

depth. A prefeasibility study incorporating inﬁll

drilling and underground mining options will be

undertaken in 2018. The target is to delineate

the underground Ore Reserve at more than

3g/t to replace stockpiled mill feed after 2021.

The Long Island strategy was underpinned by

an increase in the Ore Reserve to 66.59Mt,

grading 1.91g/t gold, for a total of 4.08Moz.

Including gold produced to date, Tropicana

has delivered a 72% increase in its Ore

Reserve since the project was approved in

November 2010.

REGIONAL REVIEWS CONTINUED

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In 2018, Sunrise Dam will continue to focus

on embedding a more selective mining

approach to target higher grade sections in

the underground stopes, while maintaining the

underground production rate at approximately

250,000t a month. This approach is designed

to lift the grade of ore delivered to the mill

and reduce cash operating costs. In line with

this plan, work is focused on improving the

productivity of the underground operation to lift

sustainable ore production rates above 3Mtpa.

Several capital projects, including ventilation

upgrades and installation of an underground

workshop, are aimed at improving the effective

use of mining equipment and the reliability of

the mine.

The Vogue orebody will be the key ore source

in 2018 and remains open along strike and

at depth. Two diamond drill rigs will continue

to focus on drilling the Indicated and Inferred

Mineral Resource at Vogue. Drilling of the

deeper areas along the strike of the orebody

will be facilitated by the Western Exploration

Incline in 2018.

Delineation drilling targeting down dip

extensions to Cosmo East and Cosmo has

conﬁrmed a down dip extension ore bodies.

The performance of the 4Mtpa processing

plant also set the standard globally within

AngloGold Ashanti, ranking at number one

for overall equipment efﬁciency, with the

potential for further, incremental improvements

expected in 2018.

The REP at Sunrise Dam is scheduled for

commissioning in the second half of 2018

and is expected to lift the recovery rate

by an average of 8%, through the installation

of ﬂotation and ultra-ﬁne grinding circuits.

Work will continue in 2018 on the underground

mine management system (UMMS), which

will enable real-time analysis of the mobile

ﬂeet and services such as ventilation, power

and dewatering. Over the longer term,

overall equipment efﬁciency will be analysed

to identify speciﬁc Operational Excellence

projects that improve the effective time, mining

rate and quality performance metrics of the

mining equipment. The UMMS will be a critical

tool to enable an improved production rate at

the underground mine.

Encouraging results were reported during the

year from drilling on the Butcher Well/Lake

Carey exploration joint venture tenements

where there is potential for the discovery of

an additional Ore Reserve for processing at

Sunrise Dam, possibly replacing low-grade

stockpiles currently being processed.

AngloGold Ashanti Australia has the right

to earn up to 70% interest from Saracen

Mineral Holdings Ltd in the tenements,

which are located approximately 22km from

Sunrise Dam, by spending up to A$25m on

exploration. These tenements are part of the

Butcher Well- Lake Carey exploration

joint venture.

Around 20,000m of diamond drilling was

undertaken during 2017 within the Butcher

Well/Lake Carey exploration joint venture,

along with aircore drilling to the north and

metallurgical testing. A 30-person camp

was established, together with a core

processing facility.

Capital expenditure

Capital expenditure at Tropicana related

to Long Island will be primarily for the

expansion of the accommodation camp,

heavy vehicle workshop infrastructure and

for a second ball mill. The installation of a

second ball mill in the Tropicana processing

plant grinding circuit was approved in 2017

with commissioning scheduled for the fourth

quarter of 2018.

At Sunrise Dam, an EPC (engineering,

procurement and construction) contract

was awarded to GR Engineering Services

to undertake the design and construction

of a brownﬁelds upgrade to processing

facilities as part of the REP. The project

also requires additional power generation

capacity. To this end, it is planned that two

4MW gas generator sets will be added to the

existing power station to increase capacity

to 43MW. Work commenced in 2017 on an

expansion to the tailings storage facility at

Sunrise Dam, which will add approximately

eight years to the life of the facility. This work

is expected to be completed by the fourth

quarter of 2018.

REGIONAL REVIEWS CONTINUED

Australasia

Picture:

Tropicana, Australia

USEFUL LINKS

See announcement made during the year
on www.anglogoldashanti.com

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Shareholder information

Sustainability performance

Safety

The safety performance in the Australasia

region remained strong with an all injury

frequency rate of 8.53 per million hours

worked, a 10% improvement on the previous

year. There were no fatalities in the region for

another year.

The company’s safety programmes, including

safety leadership, hazard and risk management

and incident investigation continued to be

held for managers and supervisors, with

these competencies being embedded into

day-to-day leadership and supervision.

There was continued focus on major safety

hazard management in the region with all risk

assessments completed and the process of

critical control monitoring being maintained by

the operations. Engineering and other design

improvements continued, aimed at reducing

reliance on administrative controls. This

included signiﬁcant ventilation improvements

at Sunrise Dam and continued geotechnical

systems improvements at Tropicana.

Health

The region completed a health Bowtie Risk

Assessment aligned with group-wide health

risks. The hygiene monitoring programme,

covering noise, dust, fumes and diesel

particulate matter continued at the operations.

Sunrise Dam volunteered and was selected

as the research site for the Western Australian

regulator and mining industry-funded study on

nano-diesel particulates to better understand

the potential health impact, as well as the

potential impact of deeper underground

mining. The research reports are expected to

be released in mid-2018.

Two electric shotcrete rigs replaced diesel-

powered models throughout the year. This was

to reduce exposure (to diesel fumes, noise and

heat) by operators at the development heading

during the ground support cycle.

Tropicana has introduced technology to assist

with fatigue management and ﬁtness for work

practices, including a mining truck cabin alert

system and personal wrist band technology

to provide a baseline on fatigue levels. A

health survey was completed and will assist

with developing targeted health plans and

programmes for the region.

Health and wellbeing projects include the

ongoing Earbus programme, which has resulted

in a 70% reduction in middle ear disease in

children in the goldﬁelds since it began in 2014.

Employees and labour relations

The Australasia region’s tailored Fairness@

AGAA programme, which uses the company’s

values as a guide to leadership behaviour,

continued to be rolled out for new employees

and employees of major contractors. This

programme incorporates hands-on exercises

and real-life case studies to help participants

understand unlawful discrimination, harassment

and workplace bullying. These concepts are

explained in terms of current legislation as

well as the Australasia region’s fairness in

employment policy and grievance process.

The programme is aligned with best practice

in relation to Australian equal employment

opportunity legislation.

Complementing this training is the three-day

human resources management programme for

new managers. These programmes form part

of a comprehensive framework focused on

leadership and accountability.

We continue to support the Women in

Mining of Western Australia mentoring

programme, with employees participating

both as mentors and mentees.

Communities

We are actively involved in communities

across the Western Australian goldﬁelds, from

Laverton to Kalgoorlie-Boulder and beyond,

including remote Aboriginal communities

such as Tjuntjuntjara. The company supports

education, youth, community development

and health programmes and local training,

along with offering employment and business

participation opportunities.

Youth education and employment initiatives are

delivered through long-term partnerships with

indigenous academies such as the Goldﬁelds

Clontarf Academy and the Kalgoorlie Girls

Academy, as well as Eastern Goldﬁelds

College and Kalgoorlie-Boulder Community

High School.

Along with annual funding support for these

organisations, we offer mine site tours,

exposure to a wide variety of careers in

the mining industry and a transition-to-

work programme. During the year, the

company also partnered with local schools

to provide pre-university educational support

programmes, and reading, writing and

numeracy support programmes.

In 2017, we supported the Tjuntjuntjara

Seed Collection Women’s Project, which

seeks to train and support community

women to collect, store and sell seeds for

mining rehabilitation.

REGIONAL REVIEWS CONTINUED

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Performance review

Accountability

Shareholder information

Regulatory changes

During 2017, the newly-elected Western

Australian government announced its intention

to increase the state gold royalty rate from 2.5%

to 3.75% from January 2018. Following a public

campaign by the Western Australian gold industry,

the proposal was ofﬁcially rebutted in the Upper

House in November with Liberal MPs joining

national and crossbench members to disallow the

controversial revenue measure by 17 votes to 16.

A second attempt by the state government to

increase the royalty under a revised plan was

ofﬁcially rebutted in November 2017. Under

the revised plan, the royalty rate would have

increased from 2.5% to 3.75% when the gold

price was above A$1,400/oz instead of the

previous hurdle of A$1,200/oz.

Environment

Environmental management and compliance

Following the change in state government early

in 2017, the new Western Australia Premier

announced departmental amalgamations,

affecting the state government’s administration

of environmental planning, water and

biodiversity laws with a view to streamlining

government services and reducing costs.

Signiﬁcant changes included a reform of

the Mining Act with amendments designed

to reduce red-tape and facilitate the high-

level vision of a step-change in approach to

streamlining approvals in the Department of

Water and Environmental Regulation (DWER).

It also included direct engagement with the

mining industry and a complete review of

licencing under Part V of the Environmental

Protection Act.

Both mines have maintained certiﬁcation

following combined ISO 14001:2004 and

OHSAS 18001:2007 surveillance audits by

Bureau Veritas in June 2017.

In 2017, Sunrise Dam received certiﬁcation

under the International Cyanide Management

Code following an audit. The Australasia

region completed 2017 with no reportable

environmental incidents and only two

moderate environmental incidents. The

Department of Mines conducted an

environmental compliance inspection at

Tropicana in 2017 and only minor non-

compliances were identiﬁed, with positive

feedback provided on the performance of

the site.

Several Operational Excellence initiatives at

both operations required approval relating to

infrastructure such as tailing storage facilities,

accommodation requirements in the village,

mining services and waste water

treatment infrastructure.

Sunrise Dam successfully consolidated

21 mining leases and eight miscellaneous

licences into a new consolidated single

mining lease, which has reduced rental and

administration costs in 2017.

Climate change

Sunrise Dam and Tropicana fulﬁlled the

2017 reporting obligations under the annual

National Greenhouse and Energy Reporting

scheme (NGER), which forms part of a

single national framework for reporting

and disseminating company information

about greenhouse gas emissions, energy

production, energy consumption and other

information speciﬁed under NGER legislation.

During 2017, Sunrise Dam accepted the

regulators’ reported baseline based on NGER

scheme data reported between 2009-10 and

2013-14.

Tropicana applied for a calculated emissions

baseline in 2017, as per the regulations, and has

provided additional information to the regulator.

An outcome is expected in early 2018.

Emissions baselines represent the reference

point against which future emissions

performance will be measured under the

safeguard mechanism.

Water

In early 2017, Sunrise Dam experienced above

average rainfall, which included a 72 hours of

rainfall (152.8mm) in late March and resulted

in localised ﬂooding. A ﬂood study was

commissioned to compliment the previous

ﬂood study conducted in 2010. These

studies are important because Lake Carey is

the primary receiving environment for water

discharge from mine dewatering operations.

See the

<SDR>

for more on these studies.

At Tropicana, the risk caused by hypersaline

water mounding below the TSF continues to

be monitored and during 2017, there was a

general rise in water levels across the majority

of the TSF monitoring bores, despite extraction

from recovery bores. Immediate plans to

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Strategy

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Shareholder information

mitigate this risk included equipping some

of the recovery bores with larger pumps that

could draw down the water more efﬁciently

and restore a downward trend in monitored

bore water levels.

Biodiversity

The Great Victoria Desert Biodiversity Trust

(GVDBT) continued to make progress with

the adaptive management partnership (AMP),

which represents a co-ordinated approach

to implementing adaptive management in

the Great Victoria Desert, combining the

philosophies and tools of landscape-scale

management and collective action. The

AMP will provide an ‘umbrella’ to

co-ordinate activities, integrate science

and action, and provide a monitoring and

evaluation framework.

A number of funded projects in the Great

Victoria Desert commenced in 2017.

The independent GVDBT was created by

the Tropicana joint venture as part of its

offset strategy for the mine under the Federal

Environmental Protection and Conservation

Act 1999.

Integrated closure planning

The Australian government’s Senate inquiry, to

investigate whether resource companies are

retaining adequate funds for mine rehabilitation

and whether the process is being adequately

monitored, continued in 2017. This is aimed

at ensuring that companies undertake their

rehabilitation responsibilities. The inquiry was

granted an extension of time to report at the

end of the ﬁrst quarter of 2018.

As a spin-off from the Senate inquiry, the

Council of Australian Governments (COAG)

Energy Council was examining concerns that

accounting standards and provisions of the

Corporations Act were impeding efforts to

ensure mining companies did not evade their

rehabilitation responsibilities.

The Tropicana mine closure plan was updated

and submitted to the regulator for approval

in 2017 and Sunrise Dam is preparing an

update of its closure plan for submission in

2018. Work includes open-pit geotechnical

stability and closure criteria for waste dumps,

an update on waste dump geochemistry and a

revised stakeholder engagement plan.

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Picture:

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AMERICAS

Overall production increased, helping to deliver good performance,

despite local currency strength in Brazil. A maiden Ore Reserve was

declared for Gramalote in Colombia

Picture:

Serra Grande, Brazil

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AngloGold Ashanti has three

mining operations – featuring

open-pit and underground mining

– i n i t s Americas region. I n

addition, an active greenfields

exploration programme is

underway in Colombia.

Argentina

Cerro Vanguardia

, in which AngloGold

Ashanti has a 92.5% stake, is the company’s

sole operation in Argentina. Fomicruz, a state

company, owns the remaining 7.5%. Located

to the northwest of Puerto San Julián, in the

province of Santa Cruz, Cerro Vanguardia

operates multiple small open-pits with high

stripping ratios and multiple narrow vein

underground mines. The metallurgical plant

has a daily capacity of 3,000t and includes a

cyanide recovery facility.

Brazil

AngloGold Ashanti Córrego do Sítio

Mineração

(AGA Mineração), which is wholly

owned, comprises two operational units

located in the state of Minas Gerais, close to

the city of Belo Horizonte:

•

The Cuiabá complex includes the

Cuiabá and Lamego mines and the Cuiabá

and Queiroz plants. Cuiabá has been in

operation for over 30 years while Lamego,

also an underground mine, has been in

operation for eight years. The Cuiabá mine

has changed from cut-and-ﬁll to sub-level

stoping, increasing the contribution from

narrow-vein ore bodies from 15% to 40%

of the mine’s total production and improving

rock engineering controls (support, design

and monitoring). Ore from the Cuiabá and

Lamego mines is processed at the Cuiabá

gold plant. The concentrate produced is

transported 15km by aerial ropeway to the

Queiroz plant for processing and reﬁning.

Total annual capacity of the complete

Cuiabá circuit is 1.75Mt. The Queiroz

hydrometallurgical plant also produces

around 200,000t of sulphuric acid as a by-

product, which is sold commercially in local

Brazilian markets.

•

Córrego do Sítio, in operation since

1989, consists of one oxide open-pit mine

and one underground sulphide mine. The

oxide ore is treated by heap leach and a

pressure leaching plant treats the sulphide

ore. The sub-level stoping mining method

is used underground. The distance from

the main underground mine (Mina I) to the

metallurgical plant is around 15km. Annual

plant capacity is 1.1Mt. Gold produced at

both operations is reﬁned at the Queiroz

plant (141km away).

Serra Grande

, wholly-owned by AngloGold

Ashanti, is located in central Brazil in the

state of Goiás, about 5km from the city

of Crixás. It comprises three mechanised

underground mines – Mina III, Mina Nova and

Mina Palmeiras – as well as an open-pit. One

dedicated metallurgical plant treats all ore

mined. Annual plant capacity is 1.5Mt.

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Americas

Contribution to regional production

•

Argentina

•

Brazil

Contribution to group production

•

Americas

•

Rest of AngloGold

Ashanti

Click on the map below to enlarge

Picture:

Cerro Vanguardia, Argentina

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Key statistics

Units

2017

2016

2015

Operational performance

(1)

Tonnes treated/milled

7.5

7.0

Pay limit

oz/t

0.104

0.100

0.098

g/t

3.576

3.421

3.351

Recovered grade

oz/t

0.102

0.106

0.108

g/t

3.49

3.64

3.71

Gold production (attributable)

000oz

840

820

948

– Continuing operations

000oz

840

820

831

– Discontinued operations

000oz

–

117

Silver (attributable)

Moz

6.2

4.9

4.4

Total cash costs

$/oz

638

578

576

Total production costs

$/oz

973

909

845

All-in sustaining costs

(2)

$/oz

943

875

792

Capital expenditure (100% basis)

234

225

196

Productivity

oz/TEC

13.34

13.98

15.05

Safety

Number of fatalities

AIFR

per million hours worked

3.29

3.96

5.61

People

Average no. of employees: total

(3)

8,511

8,126

7,679

– Permanent employees

5,888

5,653

5,492

– Contractors

2,623

2,473

2,187

Training and development expenditure (excluding Colombia)

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Production from continuing
and discontinued operations

(000oz)

996

948

840

820

1,001

2013

2014

2015

2016

2017

Productivity

(oz/TEC)

14.38

15.05

13.34

13.98

14.25

2013

2014

2015

2016

2017

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Units

2017

2016

2015

Environment (excludes Colombia)

Total water consumption

8,283

8,067

10,839

Total water use per tonne treated

kL/t

1.071

1.115

0.588

Energy usage

4.23

3.94

4.86

Total energy usage per tonne treated

GJ/t

0.55

0.54

0.26

Total greenhouse gas (GHG) emissions

000t CO

182

180

375

Total GHG emissions per tonne treated

t CO

e/t

0.024

0.025

0.020

Cyanide used

2,704

2,333

5,044

No. of reportable environmental incidents

Total rehabilitation liabilities (includes Colombia):

147

149

138

– restoration

106

108

100

– decommissioning

Community and government (includes Colombia)

Community expenditure

Payments to government

297

237

235

– Dividends

– Taxation

116

– Withholding tax (royalties, etc.)

– Other indirect taxes and duties

– Employee taxes and other contributions

– Property tax

– Other

(1)

Operational performance data for the Americas region is for the continuing operations (excludes CC&V which was sold effective 3 August 2015), unless otherwise stated.

(2)

Excludes stockpile write-offs.

(3)

100% basis and excluding Colombia and Denver regional ofﬁce.

Key statistics

(continued)

AIFR

(per million hours worked)

3.79

5.61

3.29

3.96

4.74

2013

2014

2015

2016

2017

Total cash costs and all-in sustaining costs

($/oz)

1,011

676

974

638

943

576

792

578

875

653

2013

2014

2015

2016

2017

Total cash costs

All-in sustaining costs

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Operational performance

Production

Production from the Americas region increased

by 2%to 840,000oz in 2017, reﬂecting higher

output from the Brazilian and Argentinian

operations driven by operational improvements

and an increase in tonnes treated.

In Brazil, at AGA Mineração, production

increased 4% year-on-year, boosted by

Córrego do Sítio’s strong performance, a result

of improved geological modelling that assisted

the recovery from the geotechnical challenges

faced at the start of the year at the Córrego do

Sítio complex. After a challenging start to 2017,

various initiatives were implemented at the

Cuiabá complex to improve future performance.

These initiatives included the appointment of

a new management team and adoption of

an integrated planning system. The operation

saw a 7% increase year-on-year in ore treated,

an improvement which we believe to be

sustainable. The challenges at Cuiabá were due

to delays in development of infrastructure that

hindered access to high-grade areas.

At Serra Grande, the production increase

came despite lower feed grades and was

driven by higher tonnes treated, supported

by improved crushing and milling efﬁciencies

and more efﬁcient leaching, following the

implementation of the carbon-in-leach

project. These efﬁciencies were a result of

Operational Excellence initiatives which led to

improved levels of ore mined, offsetting lower

open-pit production.

The Operational Excellence initiatives focused

on increasing open-pit mine production,

new mine sequencing, development, HME

availability, drilled Ore Reserve increment,

debottlenecking the sulphide mine, improving

plant performance and planning for the

ﬂotation tailings leaching project.

In Argentina, at Cerro Vanguardia, production

increased to 283,000oz compared to the

previous year, the highest level of production in

18 years. This achievement was driven mainly

by the increase in tonnes treated at the plant

together with operational and metallurgical

improvements. In addition, the grades were

higher year-on-year, a result of variability in the

mining model.

Costs

Despite the continued focus on cost

management and production improvements,

total cash costs for the Americas region were

higher in 2017, due mainly to inﬂationary

pressures, particularly salary adjustments,

and also the stronger Brazilian Real compared

with the previous year. In Brazil, costs were

impacted by the lower grade feed, inﬂation

and the 9% appreciation in the local currency

against the US dollar. However, the cash

costs increase in the region was partially offset

by the 7% drop in total cash costs at Cerro

Vanguardia, mainly due to record production,

higher by-product contribution and favourable

stockpile movements.

At Cerro Vanguardia, various cost savings

initiatives focused on improving efﬁciencies

and production from the underground

mine expansion, increasing mill throughput

and silver recovery, and capital savings,

among others. These cost saving initiatives

are expected to continue to offset the

combination of higher mining costs and the

local currency impacts. Costs were also

assisted by improved ﬂeet availability and cost

management initiatives implemented during

the year, that resulted in price reductions

being negotiated for key consumables such

as fuel, ammonium nitrate, cyanide and

crushing media. These positive factors were

offset by inﬂationary pressures, particularly

salary increases in Argentina that were agreed

in October, as well as the elimination of the

Patagonia ports rebates at the end of 2016,

ending a 10% reimbursement from which

Cerro Vanguardia had beneﬁtted previously.

Capital expenditure

Regional capital expenditure increased by

4%, mainly a result of the high level of planned

sustaining capital investment in Brazil, owing to

inﬂation and the stronger local currency. Most

of the capital expenditure in Brazil was on Ore

Reserve Development to improve mine ﬂexibility

and access to ore stopes. At Cerro Vanguardia,

capital expenditure was lower compared to

2016, owing mainly to a depreciating Argentinian

peso against the US dollar. A more aggressive

capital management approach was implemented

across the region with all discretionary capital

items being under strict review.

Growth and improvement

Application of the Operational Excellence

principles to exploration, Ore Reserve

development, mining and metallurgy is

expected to yield improvements in productivity,

with the region beneﬁtting from ongoing asset

optimisation work.

At AGA Mineração’s Cuiabá complex, a fourth

working shift is to be introduced during 2018,

which will assist in driving productivity gains.

Plans are also underway to increase the annual

tonnage of ore treated and to expand mill/plant

throughput to 1.9Mt, followed by a further

ramp-up towards 2.1Mtpa. An increased Ore

Reserve conversion programme is expected to

improve the mine plan’s reliability.

At Córrego do Sítio, work is underway to

further improve development productivity

levels. The rates at which the Mineral Resource

is converted to Ore Reserve are increasing

and work is underway to improve recovery

rates to 94%, from 31.03% currently, in the

coming years. Drilling campaigns continue to

conﬁrm the Ore Reserve that will extend the

life of mine, including work on a new open-pit

(Córrego do Sítio III) and the new underground

mines at Mina II and São Bento Deep.

Production increases will also be evaluated.

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At Serra Grande, the Ingá orebody began

production during the year, while the potential

of the ore bodies at Mangaba and Corpo IV

remain under evaluation. The mine delivered

an 8% increase in ore treated year-on-year, a

result of the plant’s CIL leaching conversion

and continuous efﬁciency improvement

initiatives. The Palmeiras South negotiations,

aimed at reaching agreement on possible

accelerated exploration to conﬁrm the area’s

potential, are at an advanced stage.

At Cerro Vanguardia, the mine plan was

executed on schedule, following the initiative

launched in 2015 to accelerate open-pit and

underground operations to optimise economic

performance over the remaining life of mine,

and to potentially increase production. New

projects and alternatives to extend life of mine

will be assessed during 2018.

In Colombia, the greenﬁelds exploration

programmes were realigned and focused

on minimising cost while maintaining future

optionality. Force majeure was declared

at the La Colosa project, stopping all

activities, after a local referendum that was

held on 26 March 2017. At Quebradona,

following completion of a conceptual study

in 2016, the focus in 2017 as the ﬁrst

phase progressed was on evaluating the

alternatives to be considered during the

prefeasibility phase, which is expected to

be concluded in 2018. The alternatives

included mining methods, mine access

and project layout.

The Gramalote project, a joint venture

between AngloGold Ashanti (51% and

manager) and B2Gold (49%), declared its

maiden Ore Reserve of 63.7Mt @ 0.86 g/t

gold, at an attributable contained metal

content of 1.8Moz. Gramalote represents a

long-term option for AngloGold Ashanti, and

all avenues to realise value from this important

asset remain open. Work will continue to

optimise all aspects of the project during its

feasibility phase, which is currently under way.

AngloGold Ashanti is currently in discussions

with the joint venture partner, B2Gold, on how

to further progress the project, which lies on

the eastern ﬂank of the Cordillera Central,

near the towns of Providencia and San Jose

del Nus in the municipality of San Roque, in

the northwest of the Antioquia Department. It

is approximately 230km north-west of Bogota

and 124km north-east of Medellin. For details

on this project, see our full year results report

on www.anglogoldashanti.com.

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Picture:

Serra Grande, Brazil

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Sustainability performance

Safety

In an effort to further instill AngloGold Ashanti’s

safety culture and promote proactive safe

behaviour on site at Cerro Vanguardia, an

external consultant was hired to conduct a

training programme. Safety leadership training

as well as accident investigation training, based

on the AngloGold Ashanti methodology, were

also conducted during the year. Meetings were

also held with managers and their teams on

monthly and bi-monthly basis to proactively

detect unsafe activities and sub-standard

conditions, and to analyse work planning and

processes, in line with the group safety strategy.

In Brazil, safety and health projects were

executed as planned in 2017. A highlight

was the four-layered approach to safety risk

management that was fully implemented at

our operations in Brazil. This ﬁrst layer is the

baseline risk assessment of all operational

production processes using the workplace

risk assessment and control (WRAC) tool.

High-risk events identiﬁed are then subject

to a Bow-Tie analysis to identify potential

outcomes, prevention measures and recovery

controls. These initiatives have allowed the

Brazilian operations to record zero fatalities in

2017 and to achieve a 14% improvement in

the all injuries frequency rate to 3.98.

Health

AngloGold Ashanti’s health policy includes a

focus on employee wellness programmes.

At Cerro Vanguardia, various activities were

undertaken to promote awareness of healthy

living, including periodic medical examinations

for all employees. In Brazil, a new occupational

hygiene manual was issued to provide better

information and an emphasis on preventing

occupational diseases and promoting a

healthy workplace. Several initiatives started in

the year will continue in 2018, such as studies

on noise and dust and on heavy equipment

operator fatigue.

Environment

There were no reportable environmental

incidents in the region during 2017.

In Brazil, at Córrego do Sítio, critical operational

licences were obtained during the year,

including the permit for exploration at Córrego

do Sítio I and at Santa Quitéria, and the permit

for the Rosalino pit expansion.

Cerro Vanguardia is in the process of

updating its environmental impact and

mine closure reports to present to the

environmental authority. External consulting

ﬁrms have been hired who, together with

our staff, have developed workshops to

review and if needed, deﬁne mine-closure

methodologies. Additionally, a project is

underway to obtain certiﬁcation for the

updated environmental management

standard, ISO 14001: 2015.

Other environmental projects such as ﬁsh

farming in the El Carbon and El Cututo

lagoons in the proximity of Cerro Vanguardia

continued during 2017, as did the revegetation

project at the Cascote pit dump, where new

methodologies for the planting of indigenous

vegetable species are being developed.

All operations in the Americas region are ISO

14001 compliant and are certiﬁed compliant in

terms of the cyanide code.

At Gramalote, our commitments regarding

the use of water, waste management, fauna

and ﬂora management, and archaeology

complied with our legal obligations in

respect of the environmental licence.

Following modiﬁcation to the Gramalote

project design, adjustments to the approved

environmental licence will be sought in 2018.

This will be to update the new locations of

the infrastructure and adjust the anticipated

social and environmental impacts.

The force majeure has been declared for

one year. Consequently, ﬁeld activities and

all environmental commitments have been

suspended. The project will be maintained

in good standing until the matter is resolved.

It is expected that the force majeure will be

renewed in October 2018.

Communities

In Brazil, social investment in communities

prioritise projects focused on culture, social

development, health, income generation and

environmentally sustainable solutions. Major

projects implemented include:

•

Sustainable Partnerships Programme

(Public call for projects): Social projects

supported by the company are selected

by a committee comprising AngloGold

Ashanti, specialists in social projects and

community representatives, in line with the

open and transparent management of social

investments. In 2017, more than $400,000

was invested in 25 projects.

•

Tax incentives: In Brazil, speciﬁc laws

allow the company to invest part of its

income tax due, in projects approved by

the federal government in areas such as

culture, sport, children and youth, elderly

and disabled people, as well as health

(particularly oncology). In 2017, AngloGold

Ashanti invested around $2m in initiatives

implemented for the beneﬁt of cities

surrounding its operations.

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•

Volunteerism: The Holding Hands

Programme, established in 2004, has

beneﬁted more than 30,000 people through

more than 140 activities (3,600 voluntary

participants) over the years. The programme

aims to encourage employees to become

involved in and to contribute to social

causes within local municipalities where the

company operates.

•

Tailing dams management: Since

2015, the tailings dam management

programme has been reinforced. Activities

in 2017 included registration of the

residents who live in areas nearest to

the dams (the Sabará, Nova Lima and

Santa Barbara municipalities) meetings

and operational visits arranged through

the Good Neighbourhood programme.

The Good Neighbourhood programme

aims to strengthen relations and facilitate

dialogue with communities. Highlights in

2017 were the ﬁrst community training and

simulated emergency test, conducted with

the community of Pompeu (close to the

Cuiabá plant). All activities were conducted

in partnership with the Civil Defence from

Sabará and from the State of Minas Gerais.

Representatives from local authorities and

public organisations were also involved.

In Argentina, Cerro Vanguardia has engaged

with the community of San Julián since

the start of operations more than 20 years

ago. In 2004, a development agency was

established in collaboration with the mine,

local and provincial authorities, the university,

the rural association and the Chamber of

Commerce. The work of this agency has

been ﬁnanced by the mine since its inception.

In 2017, an agreement signed in 2010 was

renewed. Through this contract, working

with the development agency and the city of

San Julian, Cerro Vanguardia ﬁnanced the

following, amongst other projects:

•

remediation of the existing landﬁll of

San Julian

•

acquisition of two fuel depots for the San

Julian Airport so that commercial ﬂights to

the area may resume

•

contributions to the local municipality to

acquire an old wool barrack to be used as

a “Centre for the Production of Regional

Articles and Events”

•

contributing to projects approved by the

development agency, such as supplying

equipment for the manufacture and design

of furniture, farming, a carwash, a carpentry

workshop, a multi-purpose sports centre and

the acquisition of machine and raw materials

for the production of loom garments.

In Colombia, at Gramalote, work advanced

on planning for and determining the baseline

of the social and economic resettlement, as

well as on the artisanal mining co-existence

project (for which no ﬁrm commitments

have yet been made). Both programmes

were adjusted in line with the project update

and the prefeasibility study (adjustments

were mainly associated with the location

of infrastructure). The plan in 2018 is to

continue to develop the implementation plan,

and to ﬁnalise the baseline for the economic

and physical resettlement plan to ensure

it is ready to implement should the project

advance to the construction phase.

At La Colosa, at a consultation held in

March 2017 in Cajamarca (the municipality

where the deposits are located), the

community voted to forbid mining activities

within their territory.

Following the outcome of the referendum,

AngloGold Ashanti took the decision to

pause much of the current ﬁeldwork around

the project while studying the impact on

any future investment. In the meantime,

we continue the necessary engagements

with all stakeholders as we try to build

consensus around the creation of a modern,

environmentally responsible gold-mining

industry in Colombia. This will, however,

result in lower project expenditure, and a

reduction in our investment around the town

of Cajamarca, while this process is underway.

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FIVE-YEAR STATISTICS BY OPERATION

Operational, ﬁnancial and sustainability statistics

Production metrics

Attributable tonnes treated/milled (Mt)

2017

2016

2015

2014

2013

South Africa

38.9

39.6

36.8

38.4

39.2

Vaal River

Great Noligwa

(1)

0.4

Kopanang

0.6

0.7

0.8

1.0

Moab Khotsong

1.1

1.0

0.9

0.7

West Wits

Mponeng

1.0

1.1

0.8

1.1

1.6

TauTona (including Savuka)

0.4

0.6

0.8

0.9

1.0

Surface Operations

Surface Operations

(2)

35.8

36.4

33.6

34.5

Continental Africa

28.0

27.6

27.2

29.9

26.9

DRC

Kibali (45%)

(3)

3.4

3.3

3.1

2.5

0.4

Ghana

Iduapriem

5.1

4.7

4.9

4.8

Obuasi

(4)

–

1.0

2.2

1.7

Guinea

Siguiri (85%)

9.9

10.3

10.0

10.1

10.2

Mali

Morila (40%)

2.2

1.5

1.2

1.3

1.4

Sadiola (41%)

2.1

2.0

2.1

2.0

Yatela (40%)

(5)

0.9

1.0

Namibia

Navachab

(6)

0.7

1.4

Tanzania

Geita

5.4

5.2

4.0

See footnotes overleaf

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Attributable tonnes treated/milled (Mt)

2017

2016

2015

2014

2013

Australasia

9.4

8.9

8.2

7.8

4.3

Australia

Sunrise Dam

4.0

3.9

3.8

3.4

Tropicana (70%)

(3)

5.4

4.8

4.3

4.0

0.9

Americas

7.5

7.0

6.8

5.9

Argentina

Cerro Vanguardia (92.5%)

3.1

2.9

3.1

3.0

2.3

Brazil

AGA Mineração

3.0

2.8

2.6

2.5

2.3

Serra Grande

1.4

1.3

CONTINUING OPERATIONS

83.8

83.1

79.1

82.9

76.3

Discontinued operations

Cripple Creek & Victor

(7)

11.3

19.3

20.8

Total

83.8

83.1

90.4

102.2

97.1

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Yatela mine in closure from 2015

(6)

Sold effective 30 June 2014

(7)

Sold effective 3 August 2015

Production metrics

(continued)

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Production metrics

(continued)

Average grade recovered (g/t)

Attributable gold production (000oz)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

South Africa

903

967

1,004

1,223

1,302

Vaal River

Great Noligwa

(1)

6.44

6.15

Kopanang

4.68

5.09

5.43

5.55

5.23

117

140

178

Moab Khotsong

8.15

9.05

8.50

11.04

9.47

294

280

254

234

212

West Wits

Mponeng

7.33

7.90

8.44

8.99

7.10

224

254

219

313

354

TauTona (including Savuka)

6.56

7.59

8.46

8.21

7.34

146

209

232

235

Surface Operations

Surface Operations

(2)

0.17

0.16

0.18

0.20

0.22

192

186

193

223

240

Technology

Technology

Continental Africa

1,453

1,321

1,435

1,597

1,460

DRC

Kibali (45%)

(3)

2.44

2.49

2.93

2.95

3.41

268

264

289

237

Ghana

Iduapriem

1.40

1.30

1.27

1.13

1.43

228

214

193

177

221

Obuasi

(4)

–

1.47

4.67

4.94

243

239

Guinea

Siguiri (85%)

1.01

0.79

0.80

0.89

0.82

324

259

255

290

268

Mali

Morila (40%)

0.40

0.45

1.24

1.06

1.23

Sadiola (41%)

0.96

1.09

1.04

1.28

1.34

Yatela (40%)

(5)

0.59

0.93

Namibia

Navachab

(6)

1.44

1.39

Tanzania

Geita

3.13

2.74

3.18

2.86

3.54

539

489

527

477

459

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Average grade recovered (g/t)

Attributable gold production (000oz)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

Australasia

559

520

560

620

342

Australia

Sunrise Dam

2.02

1.98

1.97

2.13

2.46

238

228

216

262

276

Tropicana (70%)

(3)

1.87

2.48

2.78

2.40

321

292

344

358

Americas

840

820

831

785

770

Argentina

Cerro Vanguardia (92.5%)

7.50

7.45

6.88

6.08

6.58

283

281

278

246

241

Brazil

AGA Mineração

4.97

5.31

5.63

5.65

5.70

424

407

421

403

391

Serra Grande

2.95

3.17

3.27

3.28

3.42

133

132

136

138

CONTINUING OPERATIONS

3,755

3,628

3,830

4,225

3,874

Discontinued operations

Cripple Creek & Victor

(7)

0.35

0.32

0.34

117

211

231

Total

3,755

3,628

3,947

4,436

4,105

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Yatela mine in closure from 2015

(6)

Sold effective 30 June 2014

(7)

Sold effective 3 August 2015

Production metrics

(continued)

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Productivity (oz/TEC)

2017

2016

2015

2014

2013

South Africa

3.57

3.56

3.74

4.40

4.47

Vaal River

Great Noligwa

(1)

2.69

2.51

Kopanang

1.97

1.82

2.41

2.68

3.11

Moab Khotsong

4.22

3.82

3.44

4.74

4.22

West Wits

Mponeng

3.66

4.02

3.48

4.74

5.33

TauTona (including Savuka)

1.92

2.49

3.70

4.17

4.01

Surface Operations

Surface Operations

(2)

7.60

7.82

8.12

8.95

9.35

Continental Africa

23.01

20.70

20.61

14.36

9.97

DRC

Kibali (45%)

(3)

56.49

63.86

72.34

68.50

83.56

Ghana

Iduapriem

18.34

17.36

16.32

20.14

18.41

Obuasi

(4)

–

5.76

6.10

4.10

Guinea

Siguiri (85%)

21.69

15.40

14.59

15.64

12.88

Mali

Morila (40%)

15.76

10.19

15.98

10.13

17.88

Sadiola (41%)

12.62

13.97

13.46

14.23

10.56

Yatela (40%)

(5)

10.73

10.21

Namibia

Navachab

(6)

6.97

5.63

Tanzania

Geita

22.65

20.94

27.78

19.50

15.55

See footnotes overleaf

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

2017

2016

2015

2014

2013

Australasia

47.87

46.81

55.84

62.00

49.64

Australia

Sunrise Dam

40.58

44.96

45.09

58.29

50.22

Tropicana (70%)

(3)

55.20

48.36

65.69

65.03

47.37

Americas

13.34

13.98

15.05

14.38

14.25

Argentina

Cerro Vanguardia (92.5%)

20.97

22.05

22.82

21.14

20.89

Brazil

AGA Mineração

11.66

12.36

13.58

13.03

12.97

Serra Grande

10.13

10.97

11.32

11.19

CONTINUING OPERATIONS

9.66

8.97

9.50

9.30

7.77

Discontinued operations

Cripple Creek & Victor

(7)

29.63

33.33

37.45

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Yatela mine in closure from 2015

(6)

Sold effective 30 June 2014

(7)

Sold effective 3 August 2015

Productivity (oz/TEC)

(continued)

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Costs

Total cash costs

($/oz produced)

All-in sustaining costs

(8)

($/oz sold)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

South Africa

1,085

896

881

849

850

1,245

1,081

1,088

1,064

1,120

Vaal River

Great Noligwa

(1)

1,074

1,100

1,185

1,305

Kopanang

1,534

1,324

1,014

1,023

918

1,593

1,555

1,226

1,256

1,255

Moab Khotsong

779

729

798

685

797

938

884

1,018

903

1,223

West Wits

Mponeng

1,014

779

874

746

719

1,259

1,011

1,170

981

1,016

TauTona (including Savuka)

2,044

1,148

883

882

920

2,242

1,345

1,044

1,059

1,149

Surface Operations

Surface Operations

(2)

969

899

912

941

883

1,045

1,004

1,006

1,153

969

Continental Africa

720

717

678

783

869

953

904

815

968

1,202

DRC

Kibali (45%)

(3)

784

740

609

578

471

1,090

893

642

588

529

Ghana

Iduapriem

823

908

995

865

861

1,033

950

1,020

1,025

Obuasi

(4)

167

966

1,086

1,406

440

1,185

1,374

2,214

Guinea

Siguiri (85%)

725

784

827

799

918

796

915

965

917

1,085

Mali

Morila (40%)

974

1,123

698

1,162

773

1,218

1,337

815

1,298

1,051

Sadiola (41%)

900

991

818

1,028

1,334

1,019

1,066

886

1,133

1,510

Yatela (40%)

(5)

1,438

1,530

1,795

1,653

Namibia

Navachab

(6)

752

691

719

781

Tanzania

Geita

608

530

480

599

515

941

844

717

890

833

See footnotes overleaf

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Total cash costs

($/oz produced)

All-in sustaining costs

(8)

($/oz sold)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

Australasia

743

793

702

804

1,047

1,062

1,067

875

986

1,376

Australia

Sunrise Dam

919

926

970

1,105

1,110

1,203

1,080

1,110

1,214

1,321

Tropicana (70%)

(3)

564

630

492

545

568

885

970

671

752

1,113

Americas

638

578

576

676

653

943

875

792

974

1,011

Argentina

Cerro Vanguardia (92.5%)

522

563

625

692

622

772

773

873

938

912

Brazil

AGA Mineração

671

562

518

644

646

1,006

893

712

966

1,023

Serra Grande

764

634

635

748

719

1,103

1,020

861

1,062

970

CONTINUING OPERATIONS

792

744

712

785

836

1,054

986

910

1,020

1,195

Discontinued operations

Cripple Creek & Victor

(7)

894

829

732

1,030

1,147

927

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Yatela mine in closure from 2015

(6)

Sold effective 30 June 2014

(7)

Sold effective 3 August 2015. Numbers included to the date of disposal

(8)

Excludes stockpile write-offs

Costs (continued)

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Capital expenditure ($m)

2017

2016

2015

2014

2013

South Africa

150

182

206

264

451

Vaal River

Great Noligwa

(1)

Kopanang

Moab Khotsong

117

West Wits

Mponeng

171

TauTona (including Savuka)

Surface Operations

Surface Operations

(2)

Technology

Technology

Continental Africa

409

291

315

454

839

DRC

Kibali (45%)

(3)

110

124

179

341

Ghana

Iduapriem

Obuasi

(4)

–

196

Guinea

Siguiri (85%)

Mali

Morila (40%)

Sadiola (41%)

Yatela (40%)

Namibia

Navachab

(5)

Tanzania

Geita

157

119

116

129

154

Other and non-controlling interests

See footnotes overleaf

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

2017

2016

2015

2014

2013

Australasia

153

109

285

Australia

Sunrise Dam

Tropicana (70%)

(3)

241

Other

–

Americas

234

225

196

225

253

Argentina

Cerro Vanguardia (92.5%)

Brazil

AGA Mineração

136

122

127

123

Serra Grande

Other and non-controlling interests

Other

CONTINUING OPERATIONS

953

811

799

1,040

1,836

Discontinued operations

Cripple Creek & Victor

(6)

169

157

Sub-total

953

811

857

1,209

1,993

Equity-accounted investments

(123)

(100)

(131)

(191)

(411)

Total

830

711

726

1,018

1,582

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Sold effective 30 June 2014

(6)

Sold effective 3 August 2015

Capital expenditure ($m) (continued)

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Average number of employees (permanent and contractor employees)

2017

2016

2015

2014

2013

South Africa

26,245

28,507

28,325

29,511

32,406

Vaal River

Great Noligwa

(1)

2,207

2,731

Kopanang

3,879

4,055

4,052

4,424

5,365

Moab Khotsong

6,143

6,310

6,469

4,573

5,692

West Wits

Mponeng

5,962

6,105

6,249

6,737

6,516

TauTona (including Savuka)

3,822

4,723

4,656

4,712

5,256

Surface Operations

Surface Operations

(2)

3,161

3,140

2,929

3,058

2,142

Other

3,278

4,174

3,970

3,800

4,704

Continental Africa

13,593

12,691

11,942

16,070

16,625

DRC

Kibali (45%)

(3)

2,428

2,180

2,061

2,245

158

Ghana

Iduapriem

1,598

1,576

1,565

1,352

1,590

Obuasi

(4)

1,066

766

856

3,541

5,194

Guinea

Siguiri (85%)

3,353

3,509

3,445

3,494

3,673

Mali

Morila (40%)

305

324

389

500

390

Sadiola (41%)

592

588

585

654

810

Yatela (40%)

(5)

226

367

Namibia

Navachab

(6)

793

938

Tanzania

Geita

4,251

3,748

3,041

3,265

3,504

See footnotes overleaf

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

2017

2016

2015

2014

2013

Australasia

974

925

836

832

925

Australia

Sunrise Dam

489

422

400

374

457

Tropicana (70%)

(3)

485

503

436

458

468

Americas

8,511

8,126

7,679

7,441

7,542

Argentina

Cerro Vanguardia (92.5%)

2,001

1,877

1,687

1,640

1,696

Brazil

AGA Mineração

4,932

4,662

4,546

4,398

4,377

Serra Grande

1,578

1,587

1,446

1,403

1,469

Other, including corporate and non-gold producing subsidiaries

2,157

2,400

2,731

3,056

8,104

CONTINUING OPERATIONS

51,480

52,649

51,513

56,910

65,602

Discontinued operations

Cripple Creek & Victor

(7)

753

1,147

832

Total

51,480

52,649

52,266

58,057

66,434

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(2)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(3)

Kibali and Tropicana began production in the fourth quarter of 2013

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Yatela mine in closure from 2015

(6)

Sold

effective

June

2014

(7)

Sold effective 3 August 2015. Employee numbers included to the date of disposal

Average number of employees (permanent and contractor employees) (continued)

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Safety

All injury frequency rate

(1)

Number of fatalities

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

South Africa

12.68

12.02

10.81

11.85

12.63

Vaal River

Great Noligwa

(2)

15.44

12.06

Kopanang

20.99

21.37

17.50

13.56

17.58

Moab Khotsong

15.55

12.58

13.54

18.62

16.35

West Wits

Mponeng

18.88

15.77

13.37

16.33

17.86

TauTona (including Savuka)

12.79

17.97

11.88

12.60

14.16

Surface Operations

Surface Operations

(3)

4.21

5.63

5.14

5.42

5.08

Other

Continental Africa

0.39

0.51

0.50

1.56

1.97

DRC

Mongbwalu

1.98

6.15

Ghana

Iduapriem

0.39

0.42

0.00

1.06

1.98

Obuasi

(4)

–

0.30

1.28

3.01

2.39

Guinea

Siguiri

0.13

0.39

0.64

Mali

Sadiola

1.25

1.56

0.51

0.50

1.28

Yatela

2.34

0.95

0.00

Namibia

Navachab

(5)

6.39

5.58

Tanzania

Geita

0.43

0.39

0.47

0.51

0.98

See footnotes overleaf

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Business context

Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

All injury frequency rate

(1)

Number of fatalities

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

Australasia

8.53

9.49

8.56

10.73

7.91

Australia

Sunrise Dam

12.10

8.24

11.59

12.54

11.19

Tropicana

(6)

6.11

10.87

6.80

9.96

8.60

Americas

3.29

3.96

5.61

3.79

4.74

Argentina

Cerro Vanguardia

1.77

2.39

1.63

1.40

0.58

Brazil

AGA Mineração

3.48

3.46

5.51

4.22

5.94

Serra Grande

5.49

8.05

9.49

4.53

6.10

Colombia

1.26

2.56

1.64

0.32

2.51

United States

Cripple Creek & Victor

19.47

9.54

9.89

Greenﬁelds exploration

2.24

2.52

7.96

3.57

4.20

Total

7.49

7.71

7.18

(7)

7.36

7.48

(1)

Per million hours worked

(2)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016 and 2017, Obuasi was on care and maintenance

(5)

Sold effective 30 June 2014

(6)

Tropicana began production in the fourth quarter of 2013

(7)

All injury frequency rate for the group adjusted for the earthquake impact is 7.15

Safety

(continued)

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Environmental performance

(1)

Energy usage (PJ)

Water usage (ML)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

South Africa

10.05

10.54

10.65

11.31

11.80

20,503

23,161

25,182

27,219

27,228

Vaal River

(2)

4.61

4.87

(6)

4.89

5.31

5.63

10,813

12,275

13,259

13,402

14,331

West Wits

(2)

4.61

4.93

5.03

5.24

5.54

3,688

4,411

3,949

2,626

3,160

Mine Waste Solutions

0.83

0.74

0.73

0.76

0.62

6,002

6,475

7,974

11,191

9,737

Continental Africa

9.17

8.46

(6)

8.41

(6)

9.47

12.01

16,651

11,911

16,931

17,582

21,031

Ghana

Iduapriem

1.46

1.02

0.89

0.62

1.25

2,137

936

750

342

795

Obuasi

(3)

0.26

0.30

0.56

1.46

1.77

–

3,129

3,696

3,685

Guinea

Siguiri

2.40

2.58

(6)

2.50

(6)

2.36

2.31

6,349

3,395

5,145

5,375

6,478

Mali

Sadiola

1.55

1.40

1.59

2.11

3,476

3,940

4,625

4,051

4,330

Yatela

–

0.10

0.12

0.24

0.52

–

254

Namibia

Navachab

(3)

0.74

1,005

Tanzania

Geita

3.49

3.07

2.93

3.21

3.32

4,689

3,637

3,249

4,101

4,484

Australasia

6.32

5.62

5.14

5.52

2.81

6,783

7,577

6,648

6,749

3,925

Australia

Sunrise Dam

2.18

2.03

1.97

2.29

2.14

1,115

1,779

1,772

1,866

1,828

Tropicana

(4,5)

4.14

3.59

3.17

3.23

0.73

5,668

5,798

4,876

4,883

(5)

2,097

See footnotes overleaf

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Energy usage (PJ)

Water usage (ML)

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

Americas

4.23

3.94

4.86

6.04

6.06

8,283

8,067

10,839

12,170

11,732

Argentina

Cerro Vanguardia

1.90

1.76

1.69

1.71

1.72

1,487

1,152

1,121

1,079

964

Brazil

AGA Mineração

1.77

1.64

1.53

1.48

1.40

5,292

5,959

6,233

6,346

Serra Grande

0.56

0.54

0.48

0.45

1,504

1,623

1,507

1,921

1,379

United States

Cripple Creek & Victor

1.16

2.37

2.42

2,252

2,937

3,042

Total

29.76

28.55

(6)

29.06

(6)

32.34

32.68

52,219

50,716

59,601

63,721

63,916

(1)

Refer to the <SDR> for deﬁnitions of these environmental indicators

(2)

These include consumption by Surface Operations’ facilities located in these areas

(3)

Sold effective 30 June 2014

(4)

Excludes pre-production water use at Tropicana

(5)

Tropicana began production in the fourth quarter of 2013

(6)

Restated due to error in source data for 2014 and 2015

Environmental performance⁽¹⁾ (continued)

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Strategy

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Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, financial and sustainability statistics continued

GHG emissions (000t CO₂e)

No. of reportable environmental incidents

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

South Africa

2,733

2,864

2,756

2,981

3,025

Vaal River

(2)

1,242

1,282

(5)

1,232

1,360

1,415

West Wits

(2)

1,290

1,375

1,331

1,420

1,445

Mine Waste Solutions

201

207

193

201

165

Continental Africa

666

682

(5)

694

(5)

824

969

Ghana

Iduapriem

124

108

113

Obuasi

(4)

198

199

Guinea

Siguiri

163

194

(5)

189

(5)

178

175

Mali

Sadiola

106

104

118

156

Yatela

–

Namibia

Navachab

(3)

Tanzania

Geita

238

228

218

238

246

Australasia

372

336

359

174

Australia

Sunrise Dam

122

113

116

135

123

Tropicana

(5)

250

223

220

224

Environmental performance⁽¹⁾ (continued)

See footnotes overleaf

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

GHG emissions (000t CO₂e)

No. of reportable environmental incidents

2017

2016

2015

2014

2013

2017

2016

2015

2014

2013

Americas

182

180

375

449

399

Argentina

Cerro Vanguardia

106

120

115

118

119

Brazil

AGA Mineração

Serra Grande

United States

Cripple Creek & Victor

204

281

233

AngloGold Ashanti

3,953

4,062

(6)

4,162

(6)

4,613

4,566

(1)

Refer to the <SDR> for deﬁnitions of these environmental indicators

(2)

These include consumption by Surface Operations’ facilities located in these areas

(3)

Sold effective 30 June 2014

(4)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance

(5)

Tropicana began production in the fourth quarter of 2013

(6)

Restated due to error in source data

Environmental performance⁽¹⁾ (continued)

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR STATISTICS BY OPERATION CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Social performance⁽¹⁾

Community investment ($000)

2017

2016

2015

2014

2013

South Africa

(2)

5,971

4,584

6,288

8,073

8,391

Continental Africa

9,025

7,562

6,008

3,933

13,279

Ghana

Iduapriem

415

202

134

148

302

Obuasi

120

204

208

1,197

Guinea

Siguiri (85%)

890

1,706

501

220

1,326

Mali

Morila (40%)

Sadiola (41%) and Yatela (40%)

455

449

241

175

126

Namibia

Navachab

(3)

Tanzania

Geita

6,331

4,176

3,757

1,973

5,489

DRC

Kibali (45%)

(4)

768

959

1,129

654

4,140

Mongbwalu (86.22%)

430

584

Australasia

684

552

344

247

463

Australia

Sunrise Dam

684

552

344

247

301

Tropicana

(4)

–

125

See footnotes overleaf

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Strategy

Performance review

Accountability

Shareholder information

FIVE-YEAR

STATISTICS BY OPERATION

CONTINUED

Operational, ﬁnancial and sustainability statistics continued

Community investment ($000)

2017

2016

2015

2014

2013

Americas

9,834

9,016

4,159

3,659

5,761

Argentina

Cerro Vanguardia (92.5%)

8,885

5,814

712

1,223

1,096

Brazil

AGA Mineração

377

1,758

1,574

712

1,297

Serra Grande

114

383

142

153

472

Colombia

451

1,053

1,154

993

1,905

United States

Cripple Creek & Victor/Denver ofﬁce

577

578

991

Sub-total

25,515

21,715

16,799

15,912

27,894

Equity-accounted investments

(1,460)

(1,559)

(1,571)

(1,113)

(5,358)

Total

24,055

20,156

15,228

14,799

22,536

(1)

Refer to the <SDR> for the deﬁnition of this social indicator

(2)

Community investment at the South African operations is aggregated and is overseen via the corporate entity and includes corporate community investment

(3)

Sold effective 30 June 2014

(4)

Kibali and Tropicana began production in the fourth quarter of 2013

Social performance⁽¹⁾ (continued)

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Accountability

Shareholder information

The Mineral Resource and Ore

Reserve for AngloGold Ashanti

Limited (AngloGold Ashanti)

are reported in accordance

with the minimum standards

described by the South African

Code for the Reporting of

Exploration Results, Mineral

Resources and Mineral

Reserves (The SAMREC Code,

2016 edition), and also

conform to the standards set

out in the Australasian Code

for Reporting of Exploration

Results, Mineral Resources

and Ore Reserves (JORC Code,

2012 Edition).

MINERAL RESOURCE AND ORE RESERVE – SUMMARY

Local prices of gold

South Africa

ZAR/kg

Australia

AUD/oz

Brazil

BRL/oz

Argentina

ARS/oz

2017 Ore Reserve

512,059

1,491

3,573

17,898

2017 Mineral Resource

601,870

1,824

4,492

21,242

The SAMREC and JORC Codes require the use of reasonable economic assumptions. These

include long-range commodity price and exchange rate forecasts that are reviewed annually and

are prepared in-house using a range of techniques including historic price averages.

2017 Ore Reserve – gold price

1,100

/oz

2017 Mineral Resource – gold price

1,400

/oz

Gold price

The following local prices of gold were used as a basis for estimation in the December 2017 declaration:

The Mineral Resource is inclusive of the

Ore Reserve component unless otherwise

stated. In complying with revisions to the

SAMREC Code, the changes to AngloGold

Ashanti’s Mineral Resource and Ore Reserve

have been reviewed and it was concluded

that none of the changes are material to the

overall valuation of the company. AngloGold

Ashanti has therefore once again resolved

not to provide the detailed reporting as

deﬁned in Table 1 of the Code, apart from

the maiden Ore Reserve declaration for

Gramalote. The company continues to

provide the high level of detail it has in

previous years in the

<R&R>

in order to

comply with the transparency requirements

of the code.

AngloGold Ashanti strives to actively create

value by growing its major asset – the Mineral

Resource and Ore Reserve. This drive is

based on active, well-deﬁned brownﬁelds

and greenﬁelds exploration programmes,

innovation in both geological modelling and

mine planning, and continual optimisation of

the asset portfolio.

Picture:

Serra Grande, Brazil

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Accountability

Shareholder information

MINERAL

RESOURCE

The AngloGold Ashanti gold Mineral

Resource reduced from 214.7Moz

in December 2016 to 208.2Moz in

December 2017. This gross annual

decrease of 6.6Moz includes depletion

of 4.8Moz. The balance of 1.8Moz

reductions in Mineral Resource, results

from an increase due to exploration and

modelling changes of 1.9Moz and a

reduction due to other factors of 0.4Moz,

while changes in economic assumptions

resulted in a 3.3Moz reduction. The

Mineral Resource has been estimated

at a gold price of $1,400/oz (2016:

$1,400/oz).

The AngloGold Ashanti copper Mineral

Resource increased from 7,933 million

pounds in December 2016* to 8,000

million pounds in December 2017. The

increase was due to the attributable

percentage for Quebradona increasing

from 92.72% to 93.5%. The Mineral

Resource has been estimated at a copper

price of $3.16/lb (2016: $2.90/lb).

Previously reported as a by-product in
the

<R&R>

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

Gold: Mineral Resource

Moz

Mineral Resource as at 31 December 2016

214.7

Depletions

(4.8)

Sub-total

209.9

Additions

Siguiri

Decreased costs resulted in a reduced cutoff grade

1.4

Obuasi

Mineral Resource update based on recaptured geological data

0.6

Other

Additions less than 0.5Moz

1.6

Sub-total

213.5

Reductions

TauTona

Mine put into orderly closure and part of the Mineral Resource
transferred to Mponeng

(2.6)

West Wits Surface Cost increase resulted in reductions

(0.8)

Moab Khotsong

Due primarily to reclassiﬁcation of Mineral Resource

(0.8)

Other

Reductions less than 0.5Moz

(1.1)

Mineral Resource as at 31 December 2017

208.2

Rounding of numbers may result in computational discrepancies

Gold: Mineral Resource reconciliation 2016 vs. 2017 (Moz)

Total (attributable)

Ounces
(millions)

216

214

212

210

208

206

204

214.7

2016

-4.8

Depletion

1.0

Exploration

0.9

Methodology

-0.2

Gold price

-3.2

Cost

0.1

Geotechnical

-0.4

Other

208.2

2017

Picture:

Tropicana, Australia

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Shareholder information

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

ORE

RESERVE

The AngloGold Ashanti gold Ore Reserve

reduced from 50.1Moz in December

2016 to 49.5Moz in December 2017.

This gross annual decrease of 0.6Moz

includes depletion of 4.3Moz. The balance

of 3.7Moz additions in Ore Reserve, results

from exploration and modelling changes of

4.0Moz and other factors of 0.5Moz, while

changes in economic assumptions resulted

in a 0.8Moz reduction. The Ore Reserve

has been estimated using a gold price of

$1,100/oz (2016: $1,100/oz).

Gold: Ore Reserve

Moz

Ore Reserve as at 31 December 2016

50.1

Depletions

(4.3)

Sub-total

45.8

Additions

Gramalote

Positive prefeasibility study complete and approved by board

1.8

AGA Mineração

Inclusion of transitional and sulphide material in the Córrego do
Sítio Rosalino open-pit as well as Mineral Resource conversions

0.8

Tropicana

Model update for Havana South and new designs for Boston Shaker

0.6

Obuasi

Updated mine plan based on updated Mineral Resource models

0.4

Cerro Vanguardia Due to improved methodology

0.3

Other

Additions less than 0.3Moz

0.8

Sub-total

50.5

Reductions

TauTona

Mine has been placed into orderly closure

(0.7)

Other

Reductions less than 0.3Moz

(0.3)

Ore Reserve as at 31 December 2017

49.5

Rounding of numbers may result in computational discrepancies

Gold: Ore Reserve reconciliation 2016 vs. 2017 (Moz)

Total (attributable)

Ounces
(millions)

50.1

2016

-4.3

Depletion

5.0

Exploration

-1.0

Methodology

-0.1

Gold price

-0.7

Cost

-0.2

Geotechnical

0.1

Metallurgical

0.6

Other

49.5

2017

0.1

Revenue
factor

Picture:

Geita, Tanzania

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Business context

Strategy

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Accountability

Shareholder information

Sale of assets

AngloGold Ashanti announced on 19 October

2017 that it was selling various assets in

the Vaal River region of its South African

operations. As at 31 December 2017, the

sales processes were still underway and

therefore do not affect the stated Mineral

Resource and Ore Reserve for 2017. However,

with the conclusion of the sales at the end of

February 2018, the following reductions in

the Mineral Resource and Ore Reserve will

take place:

Kopanang:

Mineral Resource

3.02Moz

Ore Reserve

0.36Moz

Moab Khotsong:

Mineral Resource

16.30Moz

Ore Reserve

4.87Moz

Surface Operations:

Mineral Resource

0.87Moz

Ore Reserve

0.87Moz

By-products

Several by-products will be recovered as a result

of processing of the gold Ore Reserve. These

include 40.4kt of uranium oxide from the South

African operations, 0.37Mt of sulphur from Brazil

and 21.8Moz of silver from Argentina.

Corporate governance

AngloGold Ashanti has established a

Mineral Resource and Ore Reserve Steering

Committee (RRSC), which is responsible for

setting and overseeing the company’s Mineral

Resource and Ore Reserve governance

framework and for ensuring that it meets

the company’s goals and objectives while

complying with all relevant regularity codes.

Its membership and terms of references are

mandated under a policy document signed off

by the Chief Executive Ofﬁcer.

Over more than a decade, the company

has developed and implemented a rigorous

system of internal and external reviews aimed

at providing assurance in respect of Mineral

Resource and Ore Reserve estimates. The

following operations were subject to an

external review in line with the policy that

each operation project will be reviewed by

an independent third party on average once

every three years:

•

Mineral Resource and Ore Reserve

at Mponeng

•

Mineral Resource at Obuasi

•

Ore Reserve at Obuasi

•

Mineral Resource and Ore Reserve

at Tropicana

•

Mineral Resource and Ore Reserve

at Gramalote

•

Mineral Resource and Ore Reserve at Kibali

The external reviews were conducted by

AMEC, Aranz Geo, Snowden, Optiro, SRK and

Optiro respectively. Certiﬁcates of sign-off have

been received from the companies conducting

the external reviews to state that the Mineral

Resource and/or Ore Reserve comply with the

SAMREC and JORC Codes and AngloGold

Ashanti’s internal reporting guidelines.

In addition, numerous internal Mineral

Resource and Ore Reserve process reviews

were completed by suitably qualiﬁed

Competent Persons from within AngloGold

Ashanti and no signiﬁcant deﬁciencies were

identiﬁed. The Mineral Resource and Ore

Reserve are underpinned by appropriate

Mineral Resource Management processes

and protocols that ensure adequate

corporate governance. These procedures

have been developed to be compliant with

the guiding principles of the Sarbanes-Oxley

Act of 2002 (SOX).

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

Picture:

Moab Khotsong, South Africa

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Shareholder information

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

AngloGold Ashanti makes use of a web-

based group reporting database called the

Mineral Resource and Ore Reserve Reporting

System (Rcubed) for the compilation and

authorisation of Mineral Resource and Ore

Reserve reporting. It is a fully integrated

system for the reporting and reconciliation

of Mineral Resource and Ore Reserve

that supports various regulatory reporting

requirements including the SEC and the

JSE under SAMREC. AngloGold Ashanti

uses R3 to ensure a documented chain of

responsibility exists from the competent

persons at the operations to the RRSC.

AngloGold Ashanti has also developed an

enterprise-wide risk management tool that

provides consistent and reliable data that

allows for visibility of risks and actions across

the group. This tool is used to facilitate, control

and monitor material risks to the Mineral

Resource and Ore Reserve, thus ensuring

that the appropriate risk management and

mitigation plans are in place.

Competent Persons

The information in this report relating to

exploration results, the Mineral Resource

and the Ore Reserve is based on information

compiled by or under the supervision of

the Competent Persons as deﬁned in the

SAMREC or JORC Codes. All Competent

Persons are employed by AngloGold Ashanti,

except for Kibali and Morila, and have

sufﬁcient experience relevant to the style

of mineralisation and type of deposit under

consideration and to the activity which they

are undertaking. The legal tenure of each

operation and project has been veriﬁed to the

satisfaction of the accountable Competent

Person and their respective Ore Reserve

have been conﬁrmed to be covered by the

required mining permits or there exists a

realistic expectation that these permits will be

issued. This will be detailed in the 2017 Mineral

Resource and Ore Reserve document.

Accordingly, the chairman of the Mineral

Resource and Ore Reserve Steering

Committee, VA Chamberlain, MSc (Mining

Engineering), BSc (Hons) (Geology), MGSSA,

FAusIMM, assumes responsibility for the

Mineral Resource and Ore Reserve processes

for AngloGold Ashanti and is satisﬁed that

the Competent Persons have fulﬁlled their

responsibilities. VA Chamberlain has 30 years’

experience in exploration and mining and is

employed full-time by AngloGold Ashanti and

can be contacted at the following address:

76 Rahima Moosa Street, Newtown, 2001,

South Africa.

A detailed breakdown of AngloGold Ashanti’s

Mineral Resource and Ore Reserve and

backup detail are provided on the websites,

www.anglogoldashanti.com and

www.aga-reports.com.

Picture:

Serra Grande, Brazil

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Shareholder information

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

Gold: Mineral Resource by region (attributable) inclusive of Ore Reserve

Gold as at 31 December 2017

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Measured

138.59

1.83

254.26

8.17

Indicated

741.80

2.29

1,696.52

54.54

Inferred

28.22

14.52

409.69

13.17

Total

908.62

2.60

2,360.47

75.89

Continental Africa Measured

47.06

1.75

82.34

2.65

Indicated

467.81

2.60

1,218.43

39.17

Inferred

203.41

3.41

693.91

22.31

Total

718.27

2.78

1,994.69

64.13

Australasia

Measured

33.57

0.97

32.40

1.04

Indicated

127.10

1.98

251.04

8.07

Inferred

35.38

1.84

64.93

2.09

Total

196.05

1.78

348.37

11.20

Americas

Measured

27.47

5.07

139.23

4.48

Indicated

1,064.46

0.99

1,054.24

33.89

Inferred

802.73

0.72

577.57

18.57

Total

1,894.67

0.93

1,771.04

56.94

AngloGold

Ashanti total

Measured

246.70

2.06

508.24

16.34

Indicated

2,401.18

1.76

4,220.23

135.68

Inferred

1,069.74

1.63

1,746.09

56.14

Total

3,717.61

1.74

6,474.56

208.16

Rounding of numbers may result in computational discrepancies

Gold: Mineral Resource by region (attributable) exclusive of Ore Reserve

Gold as at 31 December 2017

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Measured

8.75

20.06

175.41

5.64

Indicated

82.13

10.28

844.59

27.15

Inferred

15.83

15.97

252.82

8.13

Total

106.71

11.93

1,272.82

40.92

Continental Africa Measured

4.80

4.78

22.96

0.74

Indicated

276.51

2.65

733.10

23.57

Inferred

203.00

3.42

693.59

22.30

Total

484.31

2.99

1,449.65

46.61

Australasia

Measured

10.53

0.57

6.05

0.19

Indicated

84.41

1.79

151.43

4.87

Inferred

35.38

1.84

64.93

2.09

Total

130.32

1.71

222.41

7.15

Americas

Measured

16.59

6.11

101.42

3.26

Indicated

982.51

0.92

903.33

29.04

Inferred

800.69

0.72

573.94

18.45

Total

1,799.79

0.88

1,578.70

50.76

AngloGold

Ashanti total

Measured

40.67

7.52

305.84

9.83

Indicated

1,425.56

1.85

2,632.45

84.64

Inferred

1,054.90

1.50

1,585.28

50.97

Total

2,521.13

1.79

4,523.57

145.44

Contained gold

208

Moz

Gold grade

1.74

g/t

Gold grade

1.79

g/t

Contained gold

145

Moz

Mineral Resource (inclusive)

Mineral Resource (exclusive)

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Shareholder information

MINERAL RESOURCE AND ORE RESERVE – SUMMARY CONTINUED

Gold: Ore Reserve by region (attributable)

Gold as at 31 December 2017

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Proved

131.24

0.50

65.22

2.10

Probable

663.28

1.00

665.99

21.41

Total

794.52

0.92

731.21

23.51

Continental Africa Proved

35.79

1.48

53.06

1.71

Probable

184.07

2.57

472.31

15.19

Total

219.86

2.39

525.37

16.89

Australasia

Proved

23.04

1.14

26.33

0.85

Probable

42.69

2.33

99.60

3.20

Total

65.73

1.92

125.94

4.05

Americas

Proved

8.89

2.89

25.67

0.83

Probable

81.83

1.61

131.68

4.23

Total

90.72

1.73

157.35

5.06

AngloGold

Ashanti total

Proved

198.96

0.86

170.29

5.47

Probable

971.87

1.41

1,369.57

44.03

Total

1,170.83

1.32

1,539.86

49.51

Copper: Inclusive Mineral Resource by region - attributable

Copper as at 31 December 2017

Tonnes

Grade

Contained copper (Cu)

Category

million

%Cu

Tonnes million Pounds million

Americas

Measured

–

Indicated

105.25

1.08

1.14

2,508

Inferred

471.60

0.53

2.49

5,492

Total

576.85

0.63

3.63

8,000

AngloGold

Ashanti total

Measured

–

Indicated

105.25

1.08

1.14

2,508

Inferred

471.60

0.53

2.49

5,492

Total

576.85

0.63

3.63

8,000

* The copper Mineral Resource exclusive and inclusive of the Ore Reserve are the same as there is no Ore Reserve

Rounding of numbers may result in computational discrepancies

Contained copper*

8,000

Mlb

Copper grade

0.63

%Cu

Gold grade

1.32

g/t

Contained gold

Moz

Mineral Resource (inclusive)

Ore Reserve

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PLANNING FOR THE FUTURE

Our exploration programme

covers greenfields and

brownfields projects.

Exploration within AngloGold

Ashanti is focused on creating

significant value for the

company by providing long -

term optionality and improving

the quality of our portfolio.

Exploration

The objectives are met by:

•

Greenﬁelds exploration, which aims to discover a large, high-value Mineral Resource

that will ultimately lead to the development of new gold mines. AngloGold Ashanti’s

greenﬁelds exploration team has been recognised for three years in succession, as the

industry’s most successful team in terms of Mineral Resource discovery by SNL*, a

leading industry research group. The team has a proven track record that includes the

discovery of world-class ore bodies at Tropicana, La Colosa, Gramalote, and Nuevo

Chaquiro. These discoveries are attributed to our committed and professional team

of geoscientists working on a portfolio of highly prospective and rigorously prioritised

greenﬁelds ground holdings.

•

Brownﬁelds exploration, which focuses on delivering value through incremental additions

to the Ore Reserve in existing mines as well as new discoveries in deﬁned areas around

existing operations. Brownﬁelds exploration actively seeks to create of value by growing

our Mineral Resource and Ore Reserve, our major asset. The brownﬁelds exploration

programme is based on innovation in geological modelling and mine planning, and

continual optimisation of our asset portfolio.

* SNL 2016 Strategies for Gold Reserves Replacement, best for the period studied from 2001-2015,

page 16

Greenﬁelds exploration

Our greenﬁelds holdings/tenements consist of

over 9,000km

of highly-prospective ground

in four countries: Australia, Colombia, Brazil

and the United States and include ground

positions in Argentina and Tanzania. Actual

expenditure on greenﬁelds exploration

activities was $30.7m in 2017 and this

included over 64km of diamond, reverse

circulation and aircore drilling.

In Australia, in the Laverton district,

exploration commenced as part of the Butcher

Well and Lake Carey farm-in agreement with

Saracen Mineral Holdings. The agreement

gives AngloGold Ashanti earn-in rights to

340km

of tenements on and along the

western margin of Lake Carey in the Laverton

district of Western Australia, including those

hosting the historically-mined Butcher Well

gold deposits. AngloGold Ashanti can earn

Picture:

La Colosa, Colombia

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Shareholder information

PLANNING FOR THE FUTURE CONTINUED

up to 70% of the joint venture by spending

A$15m within 48 months from start date

to earn 51% and a further A$10m within

24 months thereafter to earn 70%. Work

completed as part of the agreement in 2017

included 26.6km of reverse circulation and

diamond drilling, 20.4km of aircore drilling

and 3,897 ground gravity stations. The work

focused on Butcher Well, where drilling

returned several very encouraging intercepts.

In addition, aircore drilling at the nearby Mt

Minnie project returned several encouraging

results over 3km of strike extent and follow

up reverse circulation and diamond drilling

conﬁrmed these results.

In Brazil, exploration focused on the Tromai

joint venture (AngloGold Ashanti earning

into 70% equity from Trek Mining). The work

focused on acquisition of regional airborne

magnetic, radiometric and electromagnetic

data in addition to reverse circulation

and diamond drilling of known structures

associated with artisanal mining and soil

geochemistry. A total of 26,549-line km of

magnetic/radiometric data were collected

along with 4,560km of electromagnetic

data. In addition, 4.7km of diamond drilling

and 5.7km of reverse circulation drilling

were completed. Moderate results were

received and further work is planned to

test targets generated from airborne

geophysical techniques.

In the United States, a reconnaissance

rotosonic drill programme was completed at the

Celina project in Minnesota (100% AngloGold

Ashanti) with 29 holes drilled for 1,034m.

A regional magnetic airborne survey was

also completed over a total of 50,697km. In

addition, we successfully bid for 238 additional

mining claims covering 382km

in Minnesota

In Nevada, AngloGold Ashanti entered into an

option agreement with Renaissance Gold for

the Silicon Project whereby AngloGold Ashanti

will make a series of payments over a three-

year period to acquire 100% of the project

area. Exploration activities conducted at Silicon

included geological and spectral mapping,

along with surface geochemical sampling in

preparation for diamond drill testing of the

low-sulphidation vein target in 2018.

In Colombia, at Nuevo Guintar (100%

AngloGold Ashanti), activities focused on

reaching a decision point. Soil sampling,

ground magnetic and induced polarisation

(IP) programmes were completed along with

a 1,478m diamond drilling programme. The

principle target was a 500m by 300m gold and

multi-element soil geochemistry anomaly with

an epithermal signature. No signiﬁcant results

were received from the diamond drilling.

In Tanzania and Argentina, early stage

grassroots evaluation and reconnaissance

programmes progressed.

Brownﬁelds exploration

Brownﬁelds exploration was carried out in 10

countries, in and around AngloGold Ashanti

operations. A total of 594,794m of diamond

and reverse circulation drilling was completed

during the year.

South Africa: Exploration in the South Africa

region continued with a total of four holes

drilled at Mponeng’s Western Ultra Deep

Levels (WUDLs). All these holes target the

Ventersdorp Contact Reef.

Surface drillholes UD60 and UD58A were

completed and the sites rehabilitated. Piloting

of surface drill hole UD63A and UD61 was

completed. Site establishment is underway

and the foundations have been completed.

Argentina: At Cerro Vanguardia, drilling

achieved 15,620m and focused ﬁrstly on

testing ground magnetics anomalies around

Laura, Sonia and extensions of Vanguardia

2 veins, and secondly on deﬁning lateral and

down-dip extensions of mineralisation in

poorly-drilled areas of Ariadna, El Palo, Gesica,

Patricia, Patty, Teresa, Vanguardia E and 3W,

Verónica, Goyo, Portero, Zorro veins. The

Claudia joint venture earn-in was concluded

ahead of its ﬁrst-year anniversary. A ground

geophysics programme designed to search

for shallow blind structures is ongoing and will

continue in the ﬁrst half of 2018.

Brazil: In the Iron Quadrangle, at Cuiabá,

exploration activities focused on underground

drilling for orebody extension, Mineral Resource

conversion and testing of targets. Deep drilling

moved from L28-30 to L24 to reach the

northern edge of the Cuiabá structure.

Regional mapping and sampling continued

around Cuiabá at the Pompeu target, with 45%

of the soil sampling programme executed and

582 samples collected. The programme, which

is aimed at developing drill targets, is expected

to be completed in the ﬁrst half of 2018 .

At Lamego, drilling was done at Cabeça de

Pedra and at Carruagem. The drilling was

predominantly focused on the Carraguem SW

orebody where drilling is being undertaken

from a hangingwall drive. The results are

promising, especially on the normal limb where

the Carraguem orebody shows continuity

along with Carraguem SW. Mineral Resource

modelling is in progress.

Exploration drilling at Córrego do Sítio (CdS)

achieved 53,987m, with 78% (41,903m) of

the drilling being done underground in the

CdSI and CdSII mines. The purpose of these

drilling programmes was for Mineral Resource

conversion to support the production plan.

Surface exploration drilling (12,084m) had

three distinct purposes, targeting Mineral

Resource addition (3,463m), Mineral Resource

conversion (8,515m) and new targets (106m).

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Performance review

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Shareholder information

PLANNING FOR THE FUTURE CONTINUED

A total of 38,500m was drilled at Serra

Grande. Exploration focused on extension

and inﬁll of known ore bodies, this included

drilling at Orebody IV, Structure III, Inga,

Pequizao, Palmeiras and Mangaba. Positive

results were achieved from the Mangaba

target that increased the orebody’s grade

conﬁdence, while continuity of the inferior

zone was conﬁrmed at Flamboyant. Signiﬁcant

intersections were returned from the down-

plunge extension of Orebody VI, conﬁrming

both grade and thickness, as well as from

structures below Orebody VI. At Structure III

and on Orebody A, signiﬁcant intersections

were obtained conﬁrming that theory that

layers were repeated and the ore zones

stacked as well as down-plunge projections.

Field work continued on regional leases

and conﬁdentiality agreements were signed

with interested parties.

Colombia: A total of 3,724m were drilled at

Gramalote before the decision was made

to stop drilling in the ﬁrst half of the year.

Field-based exploration focused on rock chip

sampling and soil sampling at the San Javier,

Santa Barbara, and Encarnaciones targets to

continue delineation of the quartz vein systems

identiﬁed in those areas.

The La Colosa project was formally placed

on care and maintenance in the ﬁrst quarter

and consequently, all ﬁeld activities came

to an end in April 2017. As part of the site

investigation, geotechnical and hydrology

drilling programmes, 946m were drilled.

A total of 2,132m was drilled at Quebradona.

In June, the decision was made halt

the drilling programme owing to budget

constraints. During the second half of

the year, work focused on supporting the

prefeasibility study with ﬁeld activities,

geological and geotechnical logging.

Tanzania: Drilling programmes focused on both

surface and underground operations. Surface

drilling projects included Nyankanga Block 5

(Cut 9), Matandani BST, Geita Hill East, Star &

Comet Cut 2 NW Extension, Geita Hill-Lone

Cone Blocks 1 & 2 (underground potential),

Nyankanga 3D Seismic Targets 1 & 5 and

reconnaissance drilling at Selous Satellite target.

Underground drilling programmes were carried

out at Nyankanga Block 5 and Star & Comet

Cuts 2 & 3 projects. A total of 347 drillholes

(48,561m) were completed.

Surface geological mapping was carried out

within the Nyamulilima Block on areas around

Selous-Mabe-Xanadu, Roberts South, Star &

Comet Cut 2 NW & South as well as on areas

around Ridge 8 and in the Star & Comet Cut

3 – Ridge 8 Gap. The focus of the mapping

exercise was to establish the surface geology

of the prospective areas of Nyamulilima Block

and deﬁne the potential targets for future

exploration. Surface geological mapping

was also carried out at Kalondwa Hill, Fikiri-

Jumanne-Samena through to Prospect 30

targets, to support target generation and

prioritisation of future exploration works.

Guinea: At Siguiri, exploration activities

included reconnaissance drilling on the John

Deere, Kolenda South and Silakoro NE targets,

as well as Mineral Resource deﬁnition drilling at

Kami, Tubani, Silakoro, Seguelen, Sokunu and

Foulata. A total of 48,198m was drilled during

the year.

Preliminary interpretation of the airborne

magnetic and a radiometric geophysical

survey over portions of Block 1 and Block 2

and the Saraya West licence were completed.

Seven targets were identiﬁed across the

Seguelen West area, as well as an area

northeast of the Foulata deposit and potential

extensions of the Saraya mineralisation within

the Saraya West licence.

Target generation and evaluation of the

Corridor Blocks and tailings storage facilities

exploration licences was carried out.

Picture:

Gramalote, Colombia

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PLANNING FOR THE FUTURE CONTINUED

This was followed by ﬁeld mapping. Soil

sampling programmes to cover an untested

area in the northwest of Block1 and on Saraya

West PL were completed.

Ghana: No exploration was conducted at

Obuasi. At Iduapriem, 7,214m of drilling was

completed at the Block 1W/Nueng. Drilling

targeted a fold model which predicted the

conglomerate reef package near surface. It

intersected the conglomerate reef package

at 153m to 168m and the later part of the

drilling campaign continued to conﬁrm a single,

truncated A reef.

At Block 4S, a total of 1,708m was drilled

to upgrade material to Indicated Mineral

Resource, increasing conﬁdence in the

structural model and modelling of reef

displacement along the main fault.

A mapping campaign at Block 5 Extension

informed the drill plan to intersect the mapped

reef packages perpendicularly. A total of

2,412m was drilled with the aim of resolving

the full extent of the reef packages along strike

and the inﬂuence of faults and intrusives on

the conglomerates. Recent mapping at the

northern extent of the pit reveals continuation

of the reefs with a southeast dip direction

as opposed to the eastern dip direction that

exists within the main pit.

Democratic Republic of the Congo: Drilling

(22,364m) at Kibali focused around the

Sessenge, Kombokolo, Aerodrome-Pamao,

Pamao-Makoke-Megi, Rhino-Agbarabo and

KZD areas. Regional exploration covered the

Kalimva-Ikamva, Belengo, Aindi Watsa-Dilolo-

Zambula, Ndala North and South KZ areas.

At the KCD pit,

the results were received for

the 1,491m deep diamond drilling to test

the down-plunge projection of the Banded

Ironstone Formation. Results conﬁrmed the

down-plunge extension of the 3000 lode,

the 5000 lode and a new lode. A follow up

programme from underground will test

this further.

At Kalimva, the second phase (26 holes

totalling 3,072m) of reverse circulation drilling

was completed to test high-grade shoots

within the 1.6km long shear system. Logging

and assay results received to date support a

model with ﬁve stacked, plunging shoots of

>2g/t within the 1.6km strike. At Ikamva, a

fence of seven reverse circulation holes were

drilled to follow up on the pit optimisation done

in the western part of Ikamva. The observed

mineralised zone is thinner and deeper than

expected and some of the holes ended in

mineralisation. Another phase of close spaced

drilling is planned.

Mali: At Sadiola, a total of 14,260m of

drilling was completed. Reverse circulation

drilling for oxide potential was completed at

Sadiola South, Tambali West, Dogoﬁle South,

Timbabougouni, Voyager West, Tabakoto

West and Lakanﬂa. Drilling focused on the new

oxide targets identiﬁed at a targeting workshop

held in June with participants from SEMOS,

IAMGOLD and AngloGold Ashanti.

Australia: A total of 88,871m of exploration

drilling was done at Sunrise Dam targeting

the Vogue Deeps, the western area of Vogue

1800, 1600 and 1400 Blocks, Cosmo,

northern and down dip extensions to Cosmo

and Cosmo East, Dolly Porphyry, Carey Shear,

Elle and Astro North ore bodies.

The drilling results from Vogue continue to

be encouraging with signiﬁcant intercepts

returned from all panels. Assay results from

deﬁnition drilling in the southern panel of

Cosmo and Cosmo East down dip were

returned with one signiﬁcant intercept returned

from Cosmo East down dip, and three

signiﬁcant intercepts from an isolated area

between the Dolly and Cosmo ore bodies.

Further drilling from the southern panel will be

completed during 2018.

Drilling of the Carey Shear continued from a

drill platform in the COS1630. One signiﬁcant

intercept was returned for Carey Shear with

two further signiﬁcant intercepts returned

from further up hole. Drilling of this target will

continue in the ﬁrst half in 2018.

Mineral Resource deﬁnition drilling of the

Elle target continued and Mineral Resource

creation drilling to the south commenced.

Seven signiﬁcant intercepts were returned for

Elle, and nine signiﬁcant intercepts related to

the Midway shears in this area.

USEFUL LINKS

www.anglogoldashanti.com

Blue sky tangible drilling of Astro North began

and assay results are pending.

At Tropicana, a total of 93,428m of drilling

was completed. During the ﬁrst half of 2017,

drilling targeted Sanpan, Zebra, New Zebra,

Hat-Trick, Springbok, Southern Mining

Lease (ML) conceptual targets, Angel Eyes,

Beetlejuice, Crouching Tiger, Kamikaze and

Little Wing targets.

Resource development drilling continued

to complete extensional drilling at Boston

Shaker to evaluate the underground

potential down dip of the Long Island pit

design. Following the scoping study which

is currently underway, a prefeasibility study

on underground mining will begin in 2018, in

conjunction with inﬁll drilling programmes.

Find more detail on the company’s exploration

programmes under Exploration Updates on

the company’s website.

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Rehabilitation and closure

Rehabilitation and closure make up the ﬁnal

stage in the mining process.

This happens as mines eventually exhaust

their economically viable resources and

mining operations cease. Although ﬁnalisation

of this stage comes at the end of the mine

life, at AngloGold Ashanti planning for mine

closure is incorporated into our mine plans

at the start of the exploration stage. We then

continually revise the processes and plans

to adapt to any relevant changes that may

be applicable during the life of mine. Once

mining activities cease, the ﬁnal closure plan

is implemented.

Responsible closure planning follows a holistic

approach, taking into account all aspects of

pre-operational planning, operational activities

and post-closure activity.

The approach for many of our older mines is to

incorporate closure considerations into existing

operational plans as far as possible, to reduce

operating and ﬁnal closure costs and to mitigate

the socio-economic impacts of closure. To

support this goal, we apply a comprehensive

closure planning management standard and

guidelines that offer practical assistance to

operations on how to apply the standard.

The purpose of the closure management

standard is to facilitate the design and

implementation of closure plans to the extent

possible during the life of a mine.

In our newer operations, planning for

closure begins at mine conception and is

incorporated in mine design – in essence,

new mines are designed with closure in mind.

Social considerations are also addressed, as

communities close to the mine may be affected

by closure. The closure planning standard

provides for continuing community engagement

and the development, where possible, of

alternative livelihoods to mitigate the impact

of closure. The objectives for overall closure,

including social and workforce aspects, are

clearly identiﬁed in closure plans, as these guide

the deﬁnition of applicable options.

Our approach to the rehabilitation process

is governed by our land use and biodiversity

management standards and adapted for site-

speciﬁc requirements. These standards include

legal compliance as a minimum. Concurrent

rehabilitation is undertaken where feasible,

balanced against the need to avoid limiting

access to resources in the future. Some

speciﬁc examples of the rehabilitation and

closure processes and/or plans are set out in

the regional reviews.

In Australia, the Australian Government’s

Senate continued with its inquiry to

investigate whether resource companies

are retaining adequate funds for mine

rehabilitation and whether the process is

being adequately monitored. Our mines

have made progress on integrated closure

planning, which includes completion of a

gap analysis of existing closure plans with

the group’s closure standard, identifying

knowledge gaps, and the scoping of projects

to close out these gaps. For more on this,

see page 108 the Regional review section.

In South Africa, proposed Amendments to the

Financial Provision Regulations, 2015 were

published for comment in October 2016.

The mining industry has been engaging the

Department of Environmental Affairs regarding

the proposed amendments relating to closure

liabilities. On 10 November 2017, proposed

ﬁnancial provision regulations were published

for comment by interested and affected parties

(Proposed Financial Provision Regulations). The

Proposed Financial Provision Regulations will

supersede the Financial Provision Regulations,

2015 if they are brought into effect in its current

form by the Minister of Environmental Affairs. This

is expected in 2018, with a compliance deadline

of February 2019. Signiﬁcant differences in

the Proposed Financial Provision Regulations

in comparison to the Financial Provisions

Regulations, 2015 include, amongst others:

•

The calculation for ﬁnancial provision

includes the consumer price index

•

Reduction of the period for calculation from

10 years to three years

•

The calculation of ﬁnancial provision

must account for ‘residual environmental

impacts’ which includes any environmental

impact or risk that may result or arise

after actions for ﬁnal rehabilitation,

decommissioning and closure have been

implemented. This, however does not

include latent risks

•

All provisions relating to care and

maintenance have been removed

•

Mining companies may now use any

combination of the three ﬁnancial vehicles

(ﬁnancial guarantee, rehabilitation trust

or a bank account) administered by the

Minister; however ﬁnancial guarantees

may not be used to account for ‘residual

environmental impacts’

•

The Minister may no longer retain such

portion of the ﬁnancial provision as may be

required to rehabilitate the closed mining or

prospecting operation in respect of latent,

residual or any other environmental impacts

but may still use a portion of the ﬁnancial

provision to do so subject to the mining

company being notiﬁed 30 days prior to

such action being taken

•

Plans, reports and ﬁndings of reviews

submitted by mining companies pursuant to

the ﬁnancial provision will no longer require

approval from the Minister, thus only the

ﬁnancial provision submitted by mining

companies needs to be approved

PLANNING FOR THE FUTURE CONTINUED

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Accountability

Shareholder information

PLANNING FOR THE FUTURE CONTINUED

Remediation obligations and provisions

The company’s long-term environmental

remediation obligations include

decommissioning and restoration liabilities

relating to past operations. These obligations

are based on an operation’s Environmental

Management Plan and the relevant regulatory

requirements. An assessment of closure

liabilities is undertaken annually and these

liabilities are presented in the table alongside.

Provisions for remediation costs are made

when there is a present obligation, when it

is probable that expenditure on remediation

work will be required and when the cost

can be estimated within a reasonable range

of possible outcomes. These costs are

based on information currently available, the

technology expected to be available at the

time of the clean-up, the expected time-

frame for remediation, laws and regulations

presently or virtually certain to be enacted, and

previous experience of remediation. Provision

for restoration and decommissioning costs is

made at the present value of the expenditures

expected to settle the obligation using

estimated cash ﬂows based on current prices

and discounted at a pre-tax rate that reﬂects

current market assessments of the time value

of money.

Rehabilitation liabilities per operation ($ million)

Operation

2017

2016

Restoration

Decom-

missioning

Total

South Africa

17.8

100.7

118.5

95.2

Great Noligwa

(1)

3.4

28.2

31.6

–

Kopanang

–

9.3

13.2

Moab Khotsong

(2)

3.3

15.5

18.8

33.3

TauTona

(2)

4.1

17.1

21.2

15.5

Mponeng

2.5

6.1

8.6

8.1

Legacy projects
- Vaal River

–

3.0

4.2

- West Wits

–

0.4

0.3

- Other

0.2

–

0.2

First Uranium SA

4.3

20.3

24.6

19.5

Nufcor

–

0.8

0.9

Continental
Africa

252.5

178.4

430.9

429.8

Ghana

Iduapriem

30.1

14.2

44.3

44.0

Obuasi

(3)

149.8

61.6

211.4

216.2

Guinea

Siguiri

29.1

30.3

59.4

56.0

Mali

(4)

Morila

–

9.0

7.0

Sadiola

14.1

12.5

26.6

27.2

Yatela

4.2

9.0

13.2

14.6

DRC

Kibali

(4)

–

10.5

9.5

Tanzania

Geita

25.2

31.3

56.5

55.3

Australasia

54.6

33.7

88.3

71.4

Australia

Sunrise Dam

27.1

15.0

42.1

29.7

Tropicana

27.5

18.7

46.2

41.7

Operation

2017

2016

Restoration

Decom-

missioning

Total

Americas

106.3

40.3

146.6

149.1

Argentina

Cerro Vanguardia

48.2

18.0

66.2

63.3

Brazil

AGA Mineração

42.0

15.3

57.3

61.4

Serra Grande

9.4

7.0

16.4

16.6

United States of
America

Other

0.5

–

0.5

Colombia

La Colosa

5.8

–

5.8

7.0

Gramalote

(4)

0.4

–

0.4

0.3

Other

–

3.7

431.2

353.1

784.3

749.2

Less equity-
accounted
investments
included above

(4)

(18.6)

(41.0)

(59.6)

(44.0)

Less liabilities held
for sale included
above

(5)

(3.4)

(25.7)

(29.1)

–

Total

409.2

286.4

695.6

705.2

(1)

Includes Vaal River shared infrastructure which does not form part of the
liabilities held for sale

(2)

Includes Savuka

(3)

Includes Mpasatia (Bibiani pit)

(4)

The equity-accounted investments refer to the Mali assets, Kibali in the DRC

and Gramalote in Colombia

(5)

Includes the liabilities held for sale of Moab Khotsong, Kopanang and Nufcor

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LEADERSHIP AND
ACCOUNTABILITY

SECTION 5

In this section, we review our performance and philosophy regarding corporate governance, remuneration

and assurance of the information presented.

The board

152

Executive management

153

Audit and Risk Committee: chairman’s letter

154

Corporate governance

162

Remuneration and Human Resources Committee:
chairman’s letter

168

Remuneration report

170

Approvals and assurances

194

Picture:

Cerro Vanguardia, Argentina

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THE BOARD

HDSAs

•

HDSA

•

Other South Africans

•

Non-South Africans

Length of service on the board

•

Less than three years

•

From three to five years

•

Six to eight years

•

More than eight years

The overriding

role of board of

directors is to ensure

the ethical and

effective leadership

for the long-term

sustainability of

the business, and

mutual benefit of

all stakeholders.

1: Sipho

Pityana

(Chairman)

2: Albert

Garner

3: Rhidwaan

Gasant

4: Dave

Hodgson

5: Nozipho

January-Bardill

6: Michael

Kirkwood

7: Maria

Richter

8: Rodney

Ruston

9: Sindiswa

Zilwa

10: Srinivasan

Venkatakrishnan

(Chief Executive

Ofﬁcer)

11: Christine

Ramon

(Chief Financial

Ofﬁcer)

12: Maria

Sanz Perez

Company secretary

Executive directors

Independent non-executive directors

64% 36%

M e n

Wo m e n

Gender breakdown of the board

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EXECUTIVE

MANAGEMENT

1: Srinivasan

Venkatakrishnan

(Chief Executive

Ofﬁcer)

2: Christine

Ramon

(Chief Financial

Ofﬁcer)

3: Charles

Carter

4: Graham

Ehm

5: Ludwig

Eybers

6: David

Noko

7: Chris

Sheppard

8: Maria

Sanz Perez

9: Tirelo

Sibisi

AngloGold Ashanti's executive

management team (Executive

Committee) comprises nine

members two of whom are

executive directors.

This committee oversees

the day-to-day management

of the group’s activities and

is supported by country

and regional management

teams as well as by group

corporate functions.

67% 33%

M e n

Wo m e n

Gender breakdown of
executive management

HDSAs

•

HDSA

•

Other South Africans

•

Non-South Africans

Length of service with AngloGold Ashanti

•

Less than five years

•

From five to ten years

•

More than ten years

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This report is presented in accordance with

the company’s Memorandum of Incorporation

(MOI), the requirements of the Companies Act,

No. 71 of 2008, as amended, (the Companies

Act), Principles 8, 15 and the recommended

practices contained in the King IV Report

on Corporate Governance for South Africa,

2016 (King IV) ), as well as the Audit and Risk

Committee’s formally approved charter, which

is in line with the JSE Listings Requirements

and is reviewed and approved by the board on

an annual basis.

Role and focus

The Audit and Risk Committee is an

independent statutory committee and all

members were appointed by AngloGold

Ashanti shareholders at the Annual General

Meeting (AGM) held on 16 May 2017. The

Audit and Risk Committee has decision-

making authority with regards to its statutory

duties and is accountable in this regard

to both the shareholders and the board of

AngloGold Ashanti.

It is the Audit and Risk Committee’s principal

regulatory duty to oversee the integrity of the

group’s internal control environment and to

ensure that ﬁnancial statements comply with

International Financial Reporting Standards

(IFRS) and fairly present the ﬁnancial position

of the group and company and the results of

their operations.

Management has established and maintains

internal controls and procedures, which are

reviewed by the Audit and Risk Committee

and reported on through regular reports to the

board. These internal controls and procedures

are designed to identify and manage, rather

than eliminate, the risk of control malfunction

and aim to provide reasonable but not

absolute assurance that these risks are well

managed and that material misstatements

and/or loss will not materialise.

The board assumes ultimate responsibility

for the functions performed by the Audit and

Risk Committee, relating to the safeguarding

of assets, accounting systems and practices,

internal control processes and preparation

of ﬁnancial statements in compliance with all

applicable legal and regulatory requirements

and accounting standards.

Composition and duties

The Audit and Risk Committee comprises

six independent non-executive directors who

collectively possess the skills and knowledge

to oversee and assess the strategies and

processes developed and implemented by

management to manage the business within

a continually evolving business environment.

I was again elected as chairman of the Audit

and Risk Committee and fulﬁlled this role

during the 2017 ﬁnancial year.

The Audit and Risk Committee’s duties as

required by section 94(2) of the Companies

Act, King IV, JSE Listings Requirements and

board-approved terms of reference is set out

in the Audit and Risk Committees annual work

plan. These duties were discharged as follows:

Financial reporting

•

Reviewed the trading and market updates

and the half year and full year results

•

Conﬁrmed the integrity of the group’s

Integrated Report, Annual Financial

Statements and the Form 20-F

•

Reviewed the expertise, experience and

performance of the ﬁnance function and

Chief Financial Ofﬁcer

Risk management, internal control,
internal audit and combined assurance

•

Assessed the scope and effectiveness of

the systems to identify, manage and monitor

ﬁnancial and non-ﬁnancial risks

•

Reviewed the procedures for detecting,

monitoring and managing the risk of fraud

•

Reviewed the scope, resources, results and

effectiveness of the internal audit department

•

Approved the internal audit plan, monitored

the execution of the approved plan and

approved subsequent changes to the

approved plan

AUDIT AND RISK COMMITTEE

Chairman’s letter

Rhidwaan Gasant

Chairman: Audit and Risk Committee

It is my pleasure to present,

on behalf of the Audit and Risk

Committee, an over view of

the activities this committee

performed during the 2017

financial year.

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AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

•

Ensured that a combined assurance

model is applied to provide a co-ordinated

approach to all assurance activities

External auditors

•

Nominated the appointment of independent

external auditors by the shareholders

•

Reviewed and approved the terms

of engagement as contained in the

engagement letter of the external auditors

•

Approved the remuneration of the external

auditors

•

Approved the integrated audit plan of the

external auditors

•

Pre-approved all non-audit services in line

with the formal policy on non-audit services

•

After considering the written conﬁrmation

of the auditor’s independence and the

length of tenure assessed that there were

no impediments on the external auditors’

independence and the effectiveness of the

group’s external audit function

•

Approved the appointment of the external

auditors to provide independent reasonable

and/or limited assurance on certain

sustainability indicators as included in

the

<SDR>

•

In terms of the JSE Listing Requirement 3.84(g):

• The Committee satisﬁed itself that the

external auditor is accredited on the

JSE list of Auditors and Accounting

Specialists, and that the individual auditor

responsible for performing the functions

of the auditor, does not appear on the

JSE list of disqualiﬁed individual auditors,

as set out in Section 22

• Considered the results of the most recent

IRBA (Independent Regulatory Board

of Auditors – South Africa) and PCAOB

(Public Company Accounting Oversight

Board – United States of America) review

results and concluded that there were no

signiﬁcant matters reported

• Consider the decision letter for all

other engagement ﬁle reviews of the

engagement partner

• Consider all legal proceeding outcomes

against the external auditor for the past

seven years.

Governance

•

Reviewed developments in reporting

standards, corporate governance and

best practice

•

Monitored the governance of information

technology (IT) and the effectiveness of the

group’s information systems

•

Reviewed the adequacy and effectiveness of

the group’s compliance function

•

Evaluated the effectiveness of the committee

through an external assessment

Proceedings and performance review

During 2017, the Audit and Risk Committee formally met ﬁve times and meetings were attended

by all members of the committee.

R Gasant (Chairman) – BCompt (Hons), CA (SA), ACIMA, Executive Development

Programme

5/5

Prof LW Nkuhlu – BCom, CA (SA), MBA – retired May 2017

3/3

MJ Kirkwood – AB, Economics & Industrial Engineering

5/5

RJ Ruston – MBA Business, BE (Mining)

5/5

MDC Richter – BA, Juris Doctor

5/5

AH Garner – BSE, Aerospace and Mechanical Sciences

5/5

SV Zilwa* – BCompt (Hons), CA (SA), Advanced Diploma in Financial Planning, Advanced

Taxation Certiﬁcate, Advanced Diploma in Banking – appointed at the May 2017 AGM

2/2

SV Zilwa, although appointed to the board with effect from 1 April 2017, her appointment as the Audit and
Risk committee member was effective from 16 May 2017

The Chief Financial Ofﬁcer, Senior Vice President: Finance, Group General Counsel and Company

Secretary, Senior Vice President: Group Internal Audit; Vice President: Group Tax; Group Risk

Manager; Chief Information Ofﬁcer; Group Compliance Ofﬁcer, the external auditors, as well as

other assurance providers are invited to attend committee meetings in an ex ofﬁcio capacity and

provide responses to questions raised by committee members during meetings. The full Audit and

Risk Committee meets separately during closed sessions with management (including the Chief

Executive Ofﬁcer), internal audit and external audit at every scheduled quarterly meeting.

The Audit and Risk Committee was subjected to an independent external assessment during

2017. The assessment focused on its effectiveness. The results of the assessment were

discussed, actions taken and processes put in place to address identiﬁed areas of improvement.

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Highlights of 2017

In addition to the execution of the Audit and Risk Committee’s statutory duties, set out below are some highlights from 2017.

Focus area

Actions

Financial reporting

Market updates, half-

year and annual IFRS

reports

Reviewed and recommended the trading and market updates, half-year and annual IFRS ﬁnancial

statements to the board for approval and subsequent submission to the JSE, SEC and other stock

exchanges as applicable, after:

•

ensuring that complex accounting areas comply with IFRS

•

carefully evaluating signiﬁcant accounting judgements, including but not limited to environmental

rehabilitation provisions, taxation provisions and the valuation of the portfolio of assets (including

impairments) and estimates

•

discussing the accounting treatment of signiﬁcant accounting and auditing matters as well as

non-routine transactions with management and the external auditors including the accounting for

the disposal of certain of the South African assets, the restructuring of some of the South African

operations, and the provision for the silicosis class action

•

reviewing and assessing the disclosure of contingent liabilities, commitments and impact of outstanding

litigation in the ﬁnancial reports

•

reviewing, assessing and approving adjusted and unadjusted audit differences reported by the external auditors

•

reviewing and assessing management’s assessment of impairment indicators and identiﬁed impairments

•

reviewing the key audit matters communicated by the external auditors in their audit report in terms of

International Standard on Auditing 701

•

reviewing the dividend proposal submitted by management for recommendation to the Board

•

reviewing and approving the ﬁling of the Form 20-F with the SEC

•

reviewing the representation letter that management will be required to sign

•

considering and approving management’s documented assessment of the company’s going concern

status including key assumptions

AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

Picture:

AGA Mineração, Brazil

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AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

Focus area

Actions

Financial reporting

New accounting

standards

The Audit and Risk Committee considers the signiﬁcance of new

standards, interpretations and amendments to standards in issue that

are not yet adopted but are likely to affect the ﬁnancial reporting in

future years. During 2017, the following were considered:

Focus area

Actions

Tax exposures

Tax, tax exposures,

effective tax rate, tax-

related judgements

Reviewed and approved the group’s tax strategy and tax management

policy. Received the quarterly update on the management of the group’s

tax exposures (including uncertain tax positions) with speciﬁc focus on:

•

effective tax rates

•

impact that pending changes to legislation will have on ﬁscal duties

•

pending litigation in terms of tax exposure and the appropriate

accounting thereof

Mineral Resource and Ore Reserve Report

Mineral Resource and

Ore Reserve Report

Reviewed and recommended for approval the annual Mineral Resource

and Ore Reserve Report, prepared in accordance with the minimum

standards described by the Australasian Code for Reporting of

Exploration Results, Mineral Resource and Ore Reserve (the JORC

Code, 2012 Edition), and also conform to the standards set out in the

South African Code for the Reporting of Exploration Results, Mineral

Resources and Mineral Reserves (The SAMREC Code, 2016), after:

•

discussing the internal control environment associated with the

Mineral Resource and Ore Reserve estimation process

•

receiving conﬁrmation that the Competent Persons appointed

approved the Mineral Resource and Ore Reserve

•

reviewing and assessing for reasonableness the year-on-year

reconciliation of the Mineral Resource and Ore Reserve

Corporate governance

King IV

Monitored the progress of assessing the recommended practices

underpinning the 16 Principles of King IV applicable to AngloGold Ashanti

ensuring that an ethical culture is created that supports the effective

control of the organisation at all levels, measuring the performance of the

organisation from an economical, societal and environmental perspective

ensuring a legitimate and sustainable business.

•

IFRS 15 – Revenue recognition: effective date 1 January 2018 – the impact will be limited

to the recognition of by-product revenue in Revenue from product sales. Revenue from
product sales includes Gold Income and by-product revenue. This change in classiﬁcation
results in a consequential increase in costs of sales, and therefore will not have an impact on
previously reported Gross proﬁt.

•

IFRS 9 – Financial Instruments: The Group’s ﬁnancial assets include debt instruments

(held to maturity bonds and negotiable certiﬁcates of deposit), cash restricted for use and
cash and cash equivalents which will be subject to IFRS 9 expected credit loss model as
they are to be carried at amortised cost. The accounting policy for listed equity investments
will depend on the nature of the listed investment. Listed equity investments which are held
to meet rehabilitation liabilities in future will be classiﬁed as fair value through proﬁt and loss.
Listed equity investments held for other purposes will be classiﬁed as fair value through
other comprehensive income. Financial liabilities are currently carried at amortised cost
with no requirements to change their recognition or presentation under IFRS 9. We have
evaluated the possible impact of the adoption of IFRS 9, effective date 1 January 2018,
including the expected credit loss model and we do not expect the adoption to have a
signiﬁcant impact on total assets, total liabilities or the results of the group.

•

IFRS 16 – Leases: with an effective date of 1 January 2019, it is likely to affect future

ﬁnancial reporting and we are still assessing all of the potential consequences. With the
removal of the operating lease classiﬁcation, leases that are within the scope of IFRS 16 will
result in increase in assets and liabilities. We expect an increase in depreciation expense
and in cash ﬂow from operating activities as the lease payments will now be recorded as
ﬁnancing outﬂows in our cash ﬂow statement. Management expects that the mining and
drilling contracts which are not ﬁnance leases under the current accounting standards, will
potentially have the most impact on adoption of IFRS 16.

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AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

Focus area

Actions

Subsidiary Audit

and Risk Committees

Monitored the proceedings of relevant statutory subsidiary Audit and

Risk Committees during each of its meetings.

Risk management

Reviewed and approved the risk management policies, standards

and processes; received and considered reports from the Group Risk

Manager in relation to the key strategic and operational risks facing the

company, and received presentations on the following emerging risks

and topics to obtain an in-depth analysis and understanding:

•

Tax risk

•

Security and insurance cover for bullion at operations

•

Cyber security

IT governance

The Audit and Risk Committee received and reviewed detailed

reports from the Chief Information Ofﬁcer on the group’s information

and technology framework and had detailed discussions around

cyber security including inherent risks and vulnerabilities within the

current AngloGold Ashanti landscape. The Audit and Risk Committee

considered the current action plans in place to manage the associated

risk exposure. The Audit and Risk Committee also monitored the

successful implementation of SAP at Siguiri – Guinea.

Combined assurance

The Audit and Risk Committee closely monitored the actions

implemented by management during 2017 to further enhance

the AngloGold Ashanti combined assurance model and to ensure

integration between the various in-house assurance providers. The aim

of the combined assurance process is to enable an effective integrated

internal control environment that supports the integrity of information

used for internal decision-making by management, the Board and its

committees as well as supporting the integrity of external reports.

The Audit and Risk Committee considers the current model

as effective and efﬁcient in that it fully integrates with the risk

management function. It will however continue to monitor it in light of

the ever changing operational environment.

Focus area

Actions

Sarbanes-Oxley (SOX)

compliance

The Audit and Risk Committee has overseen the SOX compliance

efforts of management through receiving quarterly updates on controls

associated with ﬁnancial reporting and assessed the ﬁnal conclusion

reached by the Chief Executive Ofﬁcer and Chief Financial Ofﬁcer on

the effectiveness of the internal controls over ﬁnancial reporting.

Compliance

The Audit and Risk Committee continued to monitor the reﬁnement

of the global compliance governance framework that allows for a

systematic risk-based approach for group, regions and operations to

identify and monitor compliance to major laws, regulations, standards

and codes. Received formal feedback from the Group Compliance

Ofﬁcer on the outcome of the independent quality assurance review

performed on the compliance function during 2017 for which the

overall conclusion was satisfactory.

Litigation matters

The Audit and Risk Committee received and considered reports on

signiﬁcant litigation matters and assessed the possible impact thereof

on the group ﬁnancial results.

Picture:

Tropicana, Australia

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Internal audit

Group Internal Audit is a key independent

assurance and consulting business partner

within AngloGold Ashanti, under the leadership

of the Senior Vice President: Group Internal Audit

who has direct access to the chairmen of both

the Audit and Risk Committee and the board.

The Senior Vice President: Group Internal Audit,

who reports functionally to the Audit and Risk

Committee and administratively to the Chief

Financial Ofﬁcer, is not a member of the Executive

Committee but has a standing invitation to attend

these meetings when required.

As part of its mandated responsibilities, the

Audit and Risk Committee has assessed the

performance of the Senior Vice President:

Group Internal Audit in terms of the annually

reviewed and approved internal audit charter

and is satisﬁed that the internal audit function is

independent and appropriately resourced, and

that the Senior Vice President: Group Internal

Audit has fulﬁlled the obligations of the position

by performing the following functions and

reporting to the Audit and Risk Committee on:

•

evaluating ethical leadership and corporate

citizenship within AngloGold Ashanti

•

assessing the governance of risk within

AngloGold Ashanti

•

reviewing the governance of Information

Technology within AngloGold Ashanti

•

assessing compliance with laws, rules, codes

and standards within AngloGold Ashanti

•

evaluating the effectiveness of internal

controls over ﬁnancial reporting and internal

controls in general

•

reporting ﬁndings to management and the

Audit and Risk Committee and monitoring

the remediation of all signiﬁcant deﬁciencies

reported

•

implementing a Combined Assurance

Framework for the group

The Audit and Risk Committee considered

the internal control heat-map for AngloGold

Ashanti as presented by Group Internal Audit

and monitored the implementation of signiﬁcant

audit recommendations through a formal

tracking process.

As Chairman of the Audit and Risk Committee,

I meet with the Senior Vice President: Group

Internal Audit in private before each meeting

and on an ad-hoc basis throughout the year.

The Audit and Risk Committee is of the

opinion, having considered the written

assurance statement provided by Group

Internal Audit, that nothing has come to its

attention indicating that the group’s system of

internal ﬁnancial controls is not effective and

does not provide reasonable assurance that

the ﬁnancial records may be relied upon for the

preparation of the annual ﬁnancial statements.

External audit

The audit cycle at AngloGold Ashanti is

continuous as the External Auditor performs

half yearly reviews on the results of the group.

During August 2017, the annual integrated

audit plan, associated fees and the 2017 global

engagement letter were tabled at the committee

meeting for consideration and approval.

As Chairman of the Audit and Risk

Committee, I meet with the primary

engagement team members in private before

each scheduled meeting where I am also

briefed on general matters relating to the

accounting and auditing profession as it may

impact on AngloGold Ashanti.

As part of its ongoing assessment of the

independence and effectiveness of the external

auditors, the Audit and Risk Committee has

also considered during its evaluation of the

independence of the Ernst & Young Inc. (EY)

factors such as:

•

the tenure of service

•

the quality of planning, delivery and

execution of the audit

•

quality and knowledge of the audit team,

speciﬁcally the senior management team,

including the lead engagement partner

•

the results of the most recent IRBA

and PCAOB regulatory reviews and the

responses of the ﬁrm on observations

raised in these reports

•

outcome of the service quality assessment

review performed during the ﬁrst half of 2017

•

the robustness of the audit, including

the audit team’s ability to challenge

management as well as demonstrate

professional scepticism and independence

To further safeguard auditor independence,

a formal policy on the approval of all non-

audit related services has been approved and

implemented. In terms of the policy, the Audit

and Risk Committee has established that the

sum of the non-audit and tax fees in a year

must not exceed 40% of the sum of the audit

and audit related fees in the year. The Audit

and Risk Committee received an update on

tax and non-audit fees with each request as a

percentage of total audit and audit-related fees

AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

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AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

and is comfortable that the external auditor’s

independence had not been jeopardised.

During 2017, external audit fees comprised of

audit services ($6.14m), audit related services

($0.73m), non-audit fees ($0.04m) and tax

services ($0.16m).

The Audit and Risk Committee did not note

any signiﬁcant ﬁndings and considers the

service provided by the external auditors to

have been independent, effective and robust.

Transformation of the external audit

In the spirit of AngloGold Ashanti’s

commitment to transformation, the Audit

and Risk Committee closely monitors and

guides transformation within the context of the

external audit. The current auditors, EY, are

level 1 contributors and under the guidance

of the Audit and Risk Committee, certain

AngloGold Ashanti subsidiaries, such as

Mine Waste Solutions and the Rehabilitation

Trust, are audited by Nexia SAB&T, a level 1

contributor. In addition, Nexia SAB&T also

performs certain audit work of the South

African operations, under the supervision

of EY.

Finance function and chief
ﬁnancial ofﬁcer

The Audit and Risk Committee received

feedback on an internal assessment

conducted on the skills, expertise and

resourcing of the ﬁnance function and was

satisﬁed with the overall adequacy and

appropriateness of the function. The Audit and

Risk Committee further reviewed the expertise

and experience of the Chief Financial Ofﬁcer,

Christine Ramon and was satisﬁed with the

appropriateness thereof.

As Chairman of the Audit and Risk Committee,

I meet with the senior ﬁnance team in private

before each scheduled meeting where I am

also briefed on general matters relating to

the administration of the ﬁnance function, the

effectiveness of the internal control environment

associated with ﬁnancial reporting as well as

any transactions that may require additional

consideration in terms of accounting.

Whistleblowing

The Audit and Risk Committee received

quarterly updates on AngloGold Ashanti’s

whistleblowing process. Reports received

and investigated did not reveal any

malpractice relating to accounting practices,

internal ﬁnancial controls, internal audit

function or the content of the company and

group ﬁnancial statements.

During the year, 187 reports were received,

which is consistent with the number of

reports received in 2016 (162). We have

noted an increase in the number of reports

from the Continental Africa region and as a

committee view this as a positive reﬂection

of a greater awareness and understanding of

the beneﬁts of the whistle-blowing process.

As a committee, we are comfortable that

each report received is taken seriously and

thoroughly investigated.

Tax governance and strategy

The Audit and Risk Committee received

and reviewed detailed reports from the

Chief Financial Ofﬁcer and Vice President:

Group Tax, jointly, on the group’s tax

position, including uncertain tax positions,

tax provisions, status of the group’s tax

compliance globally and relevant global ﬁscal

developments impacting the group.

The committee also approved the group’s tax

strategy and tax management policy, which

together, set out the group’s approach to

tax in areas such as tax efﬁciency, tax risk

management and tax governance

and oversight.

Looking forward

The Audit and Risk Committee realises

that its work is increasingly broad and

complex and, as a committee, we are

required to stay on top of developments

impacting AngloGold Ashanti.

During 2018, the Audit and Risk

Committee will continue to monitor:

•

Reﬁnement of the disclosures provided

in terms of the Principles as deﬁned in

the King IV code

•

Impact of the new leases accounting

standard applicable from 1 January

2019 on the existing accounting

policies and contracts in place

•

Progress made in the Extensible

Business Reporting Language (XBRL)

tagging process for Companies and

Intellectual Property Commission (CIPC)

ﬁling purposes

In the spirit of continuous reﬁnement and

improvement of the group’s combined

assurance model and changing

operational risk proﬁle, the Audit and Risk

Committee will continue to monitor the

successful integration of the core technical

engineering and mining disciplines into

the combined assurance review process

where so dictated by risk, during 2018.

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AUDIT AND RISK COMMITTEE CONTINUED

Chairman’s letter

Statement of internal control

The opinion of the board on the effectiveness

of the internal control environment is informed

by the conclusion of the Audit and

Risk Committee.

Based on the assessment by the Audit and

Risk Committee of the results of the formal

documented review conducted by Group

Internal Audit and other identiﬁed assurance

providers in terms of the evolving combined

assurance model of the group’s system

of internal controls and risk management,

including the design, implementation and

effectiveness of the internal ﬁnancial controls

and considering information and explanations

given by management and discussions with

both the internal and external auditors on the

results of their audits, nothing has come to the

attention of the board that caused it to believe

that the company’s system of internal controls

and risk management is not effective and

that the internal ﬁnancial controls do not form

a sound basis for the preparation of reliable

ﬁnancial statements.

Annual ﬁnancial statements

The Audit and Risk Committee has evaluated

the consolidated and separate annual ﬁnancial

statements for the year ended 31 December

2017 and concluded that they comply, in all

material aspects, with the requirements of

the Companies Act, International Financial

Reporting Standards, and JSE Listing

Requirements. The Audit and Risk Committee

therefore recommended the approval of the

annual ﬁnancial statements to the board.

Conclusion

The Audit and Risk Committee is

satisﬁed that it has considered and

discharged its responsibilities in

accordance with its mandate, statutory

responsibilities and terms of reference

during the year under review.

Rhidwaan Gasant

Chairman: Audit and Risk Committee

19 March 2018

Picture:

AGA Mineração, Brazil

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Shareholder information

Good corporate governance is

an integral part of the group’s

sustainability. Adherence to the

standards and recommendations

set out in the King IV Report

and other relevant laws and

regulations is vital to achieving

our strategic priorities.

Ethical leadership and
corporate citizenship

The board is responsible for the oversight

of corporate governance at AngloGold

Ashanti. The board acknowledges that sound

governance principles and practices underpin

the creation of value and the sustainability

of the business, and are thus crucial to the

achievement of the business objectives.

AngloGold Ashanti also recognises that

strategy, performance, sustainability and risk

are inseparable. Our values-driven culture and

The Code of Business Principles and Ethics

(Our Code) underpins AngloGold Ashanti’s

governance structures and processes,

committing the company to high standards

of business integrity and ethics in all its

activities. The board of AngloGold Ashanti is

committed to promoting good governance and

providing ethical leadership and thus supports

the principles and outcomes contained in

the King Report on Corporate Governance

for South Africa 2016 (King IV). AngloGold

Ashanti reviewed its application of the King IV

principles and is satisﬁed that the company is

materially compliant with King IV. A statement

on AngloGold Ashanti’s application of the

principles of King IV is available on

www.anglogoldashanti.com.

Our Code, launched in 2010, is the deﬁning

document on AngloGold Ashanti’s values

and ethics, in addition to applicable laws,

regulations, standards and contractual

obligations in the countries in which the

company operates. It provides a framework

and sets requirements for the implementation

of key corporate policies and guidelines.

Among other areas, it addresses fraud, bribery

and corruption, conﬂict of interests, gifts,

hospitality and sponsorships, use of company

assets, privacy and conﬁdentiality, disclosures

and insider trading.

The board ensures at all times that the

company is, and is seen to be, a responsible

corporate citizen by not only considering

the ﬁnancial performance of the company,

but also by striving to enhance and invest

in the economic life of the communities in

which it operates, society in general and

the environment. The board’s Social, Ethics

and Sustainability Committee ensures the

application of these principles and the

Executive Committee is responsible for

ensuring these principles are adhered to.

CORPORATE GOVERNANCE

Composition of the board
of directors

The company is governed by a unitary board

of directors, which at year-end consisted

of eleven directors – nine independent

non-executive directors and two executive

directors. The board comprises directors with

a variety of skills, professional experience

and backgrounds which complement each

other in the execution of the board’s duties.

The composition of the board promotes

the balance of power and of authority and

precludes any one director from dominating

decision-making.

AngloGold Ashanti’s board

Independent non-executive
directors (9)

SM Pityana (Chairman)

AH Garner

DL Hodgson

MDC Richter

MJ Kirkwood

NP January-Bardill

R Gasant

RJ Ruston

SV Zilwa

Executive directors (2)

KC Ramon (CFO)

S Venkatakrishnan (CEO)

Tenure

9 years or longer

6 to 8 years

27%

3 to 5 years

55%

Less than 3 years

Diversity

Women

36%

Men

64%

HDSA

45.5%

Other South Africans

Non-South African

45.5%

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CORPORATE GOVERNANCE CONTINUED

Appointment and rotation of directors

New directors are appointed by the board

pursuant to the recommendations of the

Nominations Committee, which conducts

a rigorous assessment of the credentials of

each candidate. Several factors including

the requirements of relevant legislation, best

practice recommendations, qualiﬁcations

and skills of prospective board members and

the requirements of the Directors’ Fit and

Proper Standards of the company, as well

as regional demographics are considered in

appointing board members. The appointment

of all directors is subject to the approval of

the shareholders at the next annual general

meeting following their appointment.

In terms of the company’s Memorandum of

Incorporation (MOI), one-third of the directors

are required to retire at each annual general

meeting and, if they are eligible and available

for re-election, will be put forward for re-

election by shareholders. Those directors

eligible for re-election at the forthcoming

AGM are, Messrs AH Garner and R Gasant

and Mesdames NP January-Bardill and KC

Ramon. See the

<NOM>

Board diversity

In 2016, the board adopted a policy on the

promotion of gender diversity at board level

which aimed to ensure that at least 30% of

the board is comprised of women when the

composition of the board and succession

planning is considered. This year, with women

representation on the board presently at 36%,

the board revised the voluntary target to 40%

representation by 2020.

The board also considered race diversity at

board level and determined a voluntary target

of 50% black representation to be appropriate.

For AngloGold Ashanti to leverage the beneﬁts

of having a globally diverse board aligned

to the company’s geographic footprint,

race is not limited to ‘black’ as deﬁned by

the Department of Mineral Resources but

also includes foreign black nationals. Black

representation from a global perspective

(including the CEO who is a foreign Indian) is

currently at 55% (historically disadvantaged

representation is at 45%).

Both gender and race diversity will be

considered in determining the optimum

composition of the board and when possible

will be balanced appropriately, also taking

into consideration the skills, experience,

independence and knowledge which the

Board as a whole requires to be effective.

Directors’ interests

Directors are required to declare their interests

annually and to disclose any conﬂicts of

interest, if and when they arise, to determine

whether there are any that conﬂict with

their duties at AngloGold Ashanti. Once a

conﬂict has been disclosed, it is managed

appropriately by the board. A Declaration of

Interest form is maintained by the company

secretary and any new interest is declared at

each meeting.

Directors’ dealings in shares
and closed periods

In accordance with statutory and regulatory

requirements, directors, management and any

restricted employees may not deal directly

or indirectly in the securities of the company

during speciﬁc closed or prohibited periods.

All directors and the company secretary

require the prior approval of the chairman

when dealing in the company’s shares. The

company secretary retains a record of all such

share dealings.

Independence of directors

Determination of director independence is

guided by King IV, the Companies Act, the JSE

Listing Requirements, the NYSE independence

test and the company’s internal policy on

independence, as well as best practice.

For the year under review, all non-executive

directors were found to be independent in

terms of mind, character and judgement.

Executive directors

The group’s Chief Executive Ofﬁcer (CEO),

Srinivasan Venkatakrishnan, is responsible for

the execution of the company’s strategy and

reports to the board. He chairs the Executive

Committee that comprises nine members, and

is responsible for the day-to-day management

of the group’s affairs. The committee’s

work is supported by country and regional

management teams as well as by group

corporate functions.

The group has a Chief Financial Ofﬁcer (CFO).

This position is held by Christine Ramon. As

required by the JSE Listings Requirements,

the Audit and Risk Committee annually

considers and expresses its satisfaction at

the level of expertise and experience of

the CFO.

The Audit and Risk Committee concluded

that Christine Ramon, together with other

members of the ﬁnancial management team,

had effectively and efﬁciently managed the

group’s ﬁnancial affairs during the period under

review as detailed in the CFO’s review, which is

included in the

<AFS>

Both the CEO and CFO are executive directors

on the board.

The board and board committees

The board is supported by its committees

and has delegated certain functions to these

committees without abdicating any of its

own responsibilities. This process of formal

delegation involves approved and documented

terms of reference, which are reviewed when

required, or at least annually.

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AngloGold Ashanti’s board and committees

The overriding role of the board is to ensure the long-term sustainability and success of the business, for the mutual benefit of all stakeholders.

Its overall role is one of strategic leadership. This includes the setting, monitoring and review of strategic targets and obje ctives, the approval of

capital expenditure, acquisitions and disposals, and oversight of governance, internal controls and risk management.

Audit and Risk Committee

Social, Ethics and Sustainability
Committee

Remuneration and Human
Resources Committee

Nominations Committee

Investment Committee

The Audit and Risk Committee

oversees the integrity of ﬁnancial

reporting, the existence of

proper internal controls, the

integrity of the

<IR>

<AFS>

and

<R&R>

and risk management

processes and assesses the

company’s continuing ability to

operate as a going concern.

The committee assists the

board with the oversight of IT

governance, risk management

and the implementation of a group

ethics and regulatory compliance

programme. It ensures the

company has qualiﬁed external

auditors and internal auditors.

More detailed information on

the committee’s achievements

is available in the Audit and Risk

Committee chairman’s letter.

The key responsibility of the

Social, Ethics and Sustainability

(SES) Committee is to assist

the board in monitoring matters

relating to safety, health, the

environment and ethical conduct

and to ensure that the company

develops and behaves as a

responsible corporate citizen.

The committee ensures that the

sustainability strategy positions

the company as a leader in

mining and that sustainability

objectives are effectively

integrated into the business. This

committee oversees the integrity

and approves the

<SDR>

More information on the work

done during the year by the

SES committee is available in

the

<SDR>

This Remuneration and Human

Resources Committee assists the

board in ensuring that AngloGold

Ashanti’s remuneration policies

are in its long-term interests. The

committee ensures that in terms

of the decisions made, non-

executive directors, executive

directors, senior management

and all other employees are fairly

and responsibly remunerated

and that shareholder value is

delivered. It assists the board in

the development of the company’s

human resources environment.

More information on the

achievements of the committee

is available in the Remuneration

Report.

The Nominations Committee

consists of three independent non-

executive directors and is chaired

by the Chairman of the board. The

committee develops processes to

identify, assess and recommend

board candidates for appointment

as executive and non-executive

directors, including the Chairman,

Chief Executive Ofﬁcer and the

Company Secretary, and at the

same time gives full consideration

to succession planning and

leadership in the group. It reviews

board composition, including the

balance of skills, experience and

independence. The committee

develops and implements the

annual evaluation processes,

whether internal or external.

The Investment Committee

assesses individual capital

projects and investment and

divestment opportunities to ensure

that investments, divestments

and ﬁnancing proposals are in

accordance with AngloGold

Ashanti’s primary objective of

creating shareholder value on a

sustainable long-term basis.

CORPORATE >GOVERNANCE >CONTINUED

The latest approved board charter and committees’ terms of references, containing detailed information regarding the their responsibilities and mandates, are available on the company’s website,

www.anglogoldashanti.com/en/sustainability/policies/Pages/default.aspx

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Shareholder information

Board and committee meeting attendance

Directors’ attendance at the board and committee meetings during 2017 is disclosed below.

Board

Audit and Risk

Committee

Investment

Committee

Remuneration and

Human Resources

Committee

Social, Ethics and

Sustainability

Committee

Nominations

Committee

Number of meetings in 2017

SM Pityana

n/a

AH Garner

n/a

R Gasant

n/a

DL Hodgson

n/a

NP January-Bardill

n/a

MJ Kirkwood

n/a

LW Nkuhlu

(1)

n/a

KC Ramon

n/a

MDC Richter

(2)

n/a

RJ Ruston

n/a

S Venkatakrishnan

n/a

SV Zilwa

(3)

n/a

(1)

LW Nkuhlu retired from the board with effect from 16 May 2017

(2)

MDC Richter was appointed to the Nomination Committee with effect from May 2017

(3)

SV Zilwa was appointed to the board with effect from 1 April 2017. Her appointment as a member of the Audit and Risk Committee was effective from 16 May 2017

CORPORATE GOVERNANCE CONTINUED

Board and committee
evaluations

The performance of the board is evaluated

annually and includes an assessment of

the board as a whole, individual directors

and each committee by members of the

committee. An external board evaluation

is conducted every third year and for the

other two years, the company secretary

facilitates the process.

The evaluation of the effectiveness

and performance of the board and its

committees was externally assessed in

2017. The overall results indicated the

board was performing well, and that the

governance structures are better than

satisfactory and closely aligned with

best practice.

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CORPORATE GOVERNANCE CONTINUED

Company secretary

The company secretary, Maria Sanz Perez,

is responsible for developing, implementing

and maintaining effective processes and

procedures to support the board and its

committees in the discharge of their duties and

responsibilities. She advises the board and

individual directors on their ﬁduciary duties and

on corporate governance requirements and

best practices.

In line with the JSE Listings Requirements,

the board evaluated the qualiﬁcations,

competence and experience of the company

secretary in December 2017 and was satisﬁed

that Maria Sanz Perez is qualiﬁed to serve as

company secretary. The board also conﬁrmed

the company secretary’s independence and

that she maintains an arms-length relationship

with the board and is not a director of the

company. Maria Sanz Perez’s qualiﬁcations

and experience can be viewed on page 153 of

this report.

Legal, ethical and regulatory
compliance

The group’s geographical spread makes its

legal and regulatory environment diverse

and complex. Given the critical importance

of compliance in building a sustainable

business, group compliance plays an essential

role in coordinating compliance with laws

and regulations, standards and contractual

obligations and in assisting and advising the

board and management on designing and

implementing appropriate compliance policies

and procedures.

External and internal standards
and regulations

AngloGold Ashanti adheres strictly to legislative

and regulatory requirements, including several

external and voluntary standards which are

listed below.

The company is a member of and a signatory

to the:

•

International Council on Mining and Metals

•

Principles of the United Nations

Global Compact

•

Extractive Industries Transparency

Initiative (EITI)

•

United Nations Guiding Principles on

Business and Human Rights

•

Voluntary Principles on Security and

Human Rights

•

World Gold Council’s Conﬂict-Free Gold

Standard

The company is committed to complying with

the following standards:

•

Universal Declaration on Human Rights

•

International Bill of Human Rights

•

International Labour Organization standards

In addition, we have group policies and

charters to which we adhere. Increasingly,

customers and consumers want assurance

that the gold they are purchasing has not

contributed to conﬂict or human rights abuse.

This has resulted in a number of measures

being introduced by industry-related

organisations which we are part of, to prevent

gold and other commodities from being

used to fund conﬂict and other violations of

human rights.

By virtue of its shares or depository receipts

being registered with the Securities and

Exchange Commission (SEC) in the United

States, AngloGold Ashanti is also subject

to the various laws regarding securities

that are applicable in that country. This is in

addition to being subject to the various listing

requirements applicable for all the stock

exchanges that the company is listed on.

These are the JSE, Ghana and the Australia

stock exchanges.

South African Employment Equity
Act 55 of 1998

In compliance with Section 21 of the Employment

Equity Act 55 of 1998, the company is obliged

to ﬁle with the Department of Labour, the

employment equity statistics for its South African

workforce. A report was ﬁled with the Department

of Labour in December 2017, covering

the period 1 August 2016 to 31 July 2017.

A copy of the report is available on the AngloGold

Ashanti website, www.anglogoldashanti.

com/sustainability, in the section entitled

“Employment Equity Reports”.

Governance – supply chain
management and procurement
policies

Supply chain management is about more

than just procuring the right product, at the

right time and in the right quantities. Effective

supply chain management, undertaken

with integrity and in line with our values and

governance principles, can add value to our

business by improving efﬁciency, relationships

and reputation and, ultimately, can affect our

long-term sustainability. As a global company

operating on most of the world’s continents,

responsible management of the supply chain

is an increasingly important ethical and human

rights consideration for our business. External

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CORPORATE GOVERNANCE CONTINUED

ratings agencies and customers are ever more

aware of the implications and importance of

ethical conduct in the supply chain.

Responsible supply chain management has

the potential to add value to communities,

local governments and society as a whole,

and particularly so in developing countries.

We have adopted a cross-functional approach

to supply chain management to ensure best

practice while complying with international

human rights and labour standards and

ensuring the economic participation of

local stakeholders.

Tax strategy and tax
management policy

Our tax strategy, which is aligned with

AngloGold Ashanti’s strategy and objectives,

is to manage all our global tax obligations in

a transparent, responsible and sustainable

manner, within the governance framework

established by our Tax Management Policy,

respecting the differing interests of all

our stakeholders.

We recognise that AngloGold Ashanti must

earn and maintain its social licence to operate

in partnership with government and community

stakeholders, thus contributing towards their

sustainable future in the countries where we

operate. Aligned with our vision, mission and

values, we acknowledge our obligations as

a responsible corporate citizen and that our

operations contribute material tax revenues, in

terms of both taxes borne and taxes collected,

to the economies of the countries in which we

conduct our business.

AngloGold Ashanti is a member of the

EITI, a global standard to promote open

and accountable management of natural

resources. The group is committed to

reporting amounts paid to governments in

respect of operations in countries that have

implemented the Standard.

The principles governing the group’s tax strategy

and policy have been reviewed and approved by

the board of directors of AngloGold Ashanti who,

together with the Audit and Risk Committee,

monitor adherence to the policy.

Our tax policy governs the management of tax

throughout AngloGold Ashanti and conﬁrms

the deﬁned parameters within which the

board-approved tax strategy is applied. This

governance framework utilises a combination

of suitably skilled resources, internal processes,

together with internal and external controls.

Our overall objective is to act responsibly

in ensuring efﬁciency in our tax affairs in

all countries in which AngloGold Ashanti

operates, always in full compliance with the

law, taking into account, however, that such

laws may be subject to regular amendment

and differing interpretations and practices

prevailing from time to time.

USEFUL LINKS

For our detailed Tax Policy see
www.anglogoldashanti.com

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Shareholder information

Dear Shareholders

The Remuneration and Human

Resources Committee (Remco)

is of the view that AngloGold

Ashanti’s leadership team s

distinguished itself by its ability

to deliver on its commitments and

make key strategic advances, amid

volatile political risk conditions in

some jurisdictions and the now-

customary swings in commodit

and currency markets.

This was the ﬁfth consecutive year that the

team either met or beat its guidance to the

market on capital, cost and operating metrics.

This provides the predictability essential for a

public company operating in a cyclical market,

with variable operating conditions.

The gold price provided no tailwind. Bullion was

little changed in 2017, averaging $1,258/oz

compared with $1,249/oz the previous year,

remaining stubbornly about a third lower than

the peak of the cycle in 2011. This becalmed

price has begun to place pressure on margins

across the industry given the re-emergence

of inﬂationary pressures in recent years. Given

the signiﬁcant proportion of operating costs

denominated in local currencies, the strength

of the Brazilian real, Australian dollar and

South African rand, relative to 2016, were

another headwind with respect to proﬁtability.

These averaged 8%, 3% and 9% stronger

respectively against the US dollar in 2017.

As is customary, the company’s leadership

provided a comprehensive list of priorities at

the beginning of 2017 and again made good

on these commitments in each key area by

year’s end.

The team set a new safety benchmark

of 349 days without a workplace fatality,

including the ultra-deep South African

mines. After year-end, the International

Operations posted 450 days without a fatality,

setting a new record. These are important

achievements that mark progress made

over the years in improving the safety of all

workplaces but they were tainted by the

string of accidents recorded in South Africa

in the second half of the year. The executive

team is fully aligned on the need to improve in

this most important area of work.

On the operating front, accelerating inﬂation

and stronger currencies were checked by the

efﬁciency initiatives and ongoing focus on cost

control across the company, with the increase

in cash costs held at 6%, within the guidance

range. Production topped the forecast at

3.755Moz and exploration managed to offset

the majority of depletion, maintaining the Ore

Reserve at 49.5Moz, compared to 50.1Moz

the previous year.

The year in review was an important one for the

long-term health of the business, given higher

capital expenditure on a series of brownﬁelds

projects designed to extend life and increase

margin at key assets. Each of these self-funded,

high-return projects remain on schedule and on

budget. This strong operating performance was

achieved alongside continued probity in respect

of corporate costs, with the total overhead

expense for the year contained at $64m or less

than $17/oz, versus $61m the previous year.

This remains among the most competitive in the

global peer group.

The cash ﬂow generation capability of the

business remains strong, with earnings before

interest, tax, depreciation and amortisation of

$1.48bn (2016: $1.55bn). Modest free cash ﬂow

of just $1m for the 2017 year was nonetheless

better than expected, given that it was achieved

despite the static gold price, elevated capital

reinvestment, ongoing lock-up of value-added

tax remittances in some African jurisdictions

and the funding required to conduct extensive

restructuring of the South African business to exit

loss-making mines. The sale of Kopanang and

Moab Khotsong and putting into orderly closure

of TauTona were difﬁcult decisions, given that

REMUNERATION AND HUMAN RESOURCES COMMITTEE:

Chairman’s letter

Michael Kirkwood

Chairman: Remuneration and Human
Resources Committee

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REMUNERATION AND HUMAN RESOURCES COMMITTEE: CONTINUED

Chairman’s letter

they affected thousands of people in different

ways but it was essential to stem unsustainable

losses and cash outﬂows. These processes

were handled with due sensitivity by AngloGold

Ashanti’s operating and human resource teams,

in line with the company’s values.

Importantly, the leadership team was able to

again execute on the company’s overarching

objective, which is to build a values-driven

gold-mining business with a ﬂexible balance

sheet and improving portfolio of assets that

allows it to thrive in a wide range of market

and operating conditions. The drive to create

real, long-term value in a capital-intensive

sector is rarely a glamorous business but the

commitment of the team to doing just that

is noteworthy.

Aside from the important operational work,

this remuneration report is rich in information

regarding the continuing efforts to transform

and modernise AngloGold Ashanti’s approach

to human resources management and

employee development. In particular, the

initiatives in respect of improving gender

diversity, talent management and the

advancement of local skills in operating

jurisdictions are critically important to ensuring

the company is at all times reﬂective of the

demography of host countries, but also

staffed with the best talent on offer. Continued

progress in this regard is critical to AngloGold

Ashanti’s success and longevity.

Aside from ensuring alignment of the

company’s remuneration and human resource

practices with the strategic direction of

the company, including King IV regulatory

recommendations, the committee was

involved in the following:

•

The Remco actively canvassed shareholders

for input into AngloGold Ashanti’s

remuneration reporting and policy. The

continued engagement with the owners

of the company is invaluable in ensuring

alignment on the manner in which reward,

strategy and operating outcomes are linked.

The company’s 2016 remuneration policy

received 97% shareholder approval, an

outcome that is testament to this alignment.

Therefore, no substantial changes have

been made to the 2017 remuneration

policy, though the committee will continue

in its efforts to further transparency and

disclosure in line with King IV

•

As communicated in the 2016 report, the

revised Deferred Share Plan (DSP) will be

implemented in 2018, replacing previous

short and long-term incentive schemes

•

The King IV report on Corporate

Governance was published on 1 November

2016. It is the view of the Remco that

AngloGold Ashanti’s remuneration policy

provides a solid foundation to adopt the

recommendations of King IV. The principles

of King IV are echoed strongly in AngloGold

Ashanti’s philosophy of stakeholder

inclusivity, good corporate citizenship and

safeguarding the value created by the

company’s activities

•

Notwithstanding the efforts to adhere to

King IV’s guidelines, the adoption of single

ﬁgure reporting will be deferred until after

implementation of the new DSP scheme,

given that it will simplify and further improve

transparency of the incentive scheme,

by effectively consolidating four incentive

schemes into one

•

Key talent was retained across the various

disciplines and leadership succession was

enhanced by bolstering bench strength

where possible

The Remco will continue to carefully monitor

industry trends, the needs of the business,

the expectations of broader society and the

requirements of shareholders in ensuring that

AngloGold Ashanti employs ﬁt-for-purpose

practices in rewarding employees.

I’d like to bid a fond farewell to Professor

Wiseman Nkuhlu who, true to his name, was

a source of invaluable experience and counsel

in our deliberations on remuneration. We

wish him well in a richly deserved retirement,

although from all accounts he has far from

slowed down. I also express a warm welcome

to Ms. Sindiswa Zilwa, whom we were

pleased to name as his replacement. Sindi

is a Chartered Accountant with extensive

experience in the ﬁeld. I’d also like to thank

PricewaterhouseCoopers, which has provided

guidance and specialist expertise on the

formulation of our remuneration policy.

In closing, I would like to again thank the

members of the committee for their support

and efforts during the past year.

Michael Kirkwood

Chairman: Remuneration and Human

Resources Committee

19 March 2018

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Shareholder information

AngloGold Ashanti’s remuneration

approach aims to create

a sustainable executive

remuneration structure

with increased alignment to

shareholder views and interests,

underpinned by s t rategic

objectives and values.

At AngloGold Ashanti, the remuneration

policy aims to align with the company’s

strategic objectives while working to deliver

on both internal and external stakeholder

interests, in a manner that recognises

uncontrollable market dynamics. This is

accomplished by means of a governance

and application framework that primarily

aims to attract, retain and motivate a

skilled workforce through fair, responsible,

transparent and competitive remuneration.

Following extensive engagement with

shareholders in 2016, a redesign of the

incentive structures was ﬁnalised and the new

Deferred Share Plan (DSP) was endorsed at

the May 2017 annual general meeting. The

focus of the redesign was on simpliﬁcation,

transparency, increased alignment to

shareholder interests, while remaining

compliant with regulatory requirements. The

scheme has placed greater focus on cash

generation and capital efﬁciency while reducing

measures that are outside of management’s

control such as the gold price. The new

scheme was implemented in January 2018,

and has replaced all current short- and long-

term incentive plans. While the new scheme

is described in detail under the Remuneration

Policy below, it should be noted that the

Implementation Report still refers to previous

short- and long-term incentive plans as they

continue to wind down.

As required by King IV, AngloGold Ashanti’s

remuneration policy and implementation report

as detailed in this Remuneration Report will

be tabled for separate non-binding advisory

votes by shareholders at the upcoming annual

general meeting (AGM). In the event that either

the remuneration policy or the implementation

report, or both, are voted against by 25%

or more of the voting rights entitled to be

exercised by shareholders at the AGM, the

committee will ensure that the following

measures are taken in good faith and with best

reasonable efforts:

•

An engagement process with shareholders

to ascertain the reasons for the dissenting

votes, and

•

Appropriately addressing legitimate and

reasonable objections and concerns

raised which may include amending

the remuneration policy or clarifying or

adjusting remuneration governance and/

or processes.

REMUNERATION REPORT

Section two: overview of remuneration policy

Key principles of our remuneration policy

In order to continue to support AngloGold Ashanti’s remuneration approach, our

remuneration policy is based on the following key principles:

Alignment with

strategic objectives and

shareholder interests

Ensure that the

remuneration of

executive management

is fair and responsible

in the context of overall

employee remuneration

in the organisation

Apply the appropriate

global remuneration

benchmarks

Remunerate to

motivate and reward

the right behavior

and performance

of employees and

executives

Promote an ethical

culture and responsible

corporate citizenship

Provide competitive

rewards to attract,

motivate and retain highly

skilled executives and

staff vital to the success

of the organization

Ensure that performance

metrics are challenging,

sustainable and cover all

aspects of the business

including both critical

ﬁnancial and non-

ﬁnancial drivers

Ensure that our

remuneration structure

is aligned to our values

and that the correct

governance frameworks

are applied across our

remuneration decisions

and practices

The use of performance

measures that support

positive outcomes across

the economic, social and

environmental context in

which we operate.

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Remuneration design

When determining appropriate remuneration,

the Remuneration and Human Resources

Committee (Remco) considers:

•

The potential maximum total remuneration

that each member of the executive

management team could earn related to

their performance

•

External inﬂuences, primarily being:

•

shareholder views and recommendations

associated with executive remuneration

•

economic trends

•

competitive pressure

•

the labour market and the pay-gap

between the executive management team

and the rest of the employee population in

the company

•

Market benchmarks, choosing appropriate

benchmarks in a market with similar

attributes, including complexity, size and

geographic spread

Remuneration practices are designed to be

fair, transparent and compliant with legislative

requirements within all jurisdictions in which

the company operates. In 2016, AngloGold

Ashanti received extensive feedback from

shareholders on its remuneration policy.

This feedback and our responses are

outlined alongside:

Fair and responsible pay

Senior management remuneration continues

to be a sensitive topic. Scarce skills and

talent retention remain a challenge, and

this is compounded by the need to remain

globally competitive in countries where labour

rates are generally cheaper. Balancing these

two elements has become challenging,

particularly given the global requirement

for fuller disclosure of senior management

earnings, and the remuneration committee’s

responsibility to ensure that executive earnings

are not out of line with their peers and closely

related to performance.

As an organisation, we have begun the process

of developing a framework that describes how

we deﬁne fair and responsible pay for all our

employees. As a starting point, it is imperative

that all our employees receive a minimum level

of remuneration that enables participation in

the economy. To this point, we can conﬁrm that

all employees are paid at least 25% above the

respective regional minimum wage, and in most

instances much higher than this. Furthermore,

benchmarking exercises are conducted on

an annual basis in each region to ensure that

all our employees are paid a market-related

salary for the role which they occupy, with due

consideration to levels of performance.

AngloGold Ashanti tracks the Gini co-efﬁcient

from a South African perspective to ensure that

the income dispersion between high and low

income earners is not outside market norms. The

analysis is done by PricewaterhouseCoopers

(PwC) as an independent third party and,

based on January 2017 analysis, PwC

concluded that AngloGold Ashanti had

a slightly more beneﬁcial level of income

dispersion than that of South African

companies in general, as well as a better Gini

co-efﬁcient when compared with the South

African mining industry. The co-efﬁcient has

furthermore improved on a year-on-year basis

from the results of 2016.

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Shareholder feedback

AngloGold Ashanti’s response

Shareholders requested a longer vesting period

for long-term incentives.

AngloGold Ashanti increased the deferral period of the new DSP to ﬁve years for Executive

Committee members, promoting long-term sustainability, with signiﬁcant post-employment

exposure for good leavers.

Shareholders expressed a preference for

a simpliﬁed incentive scheme, with greater

transparency.

A single, simpliﬁed incentive scheme driven by both short- and long-term measures of

performance was introduced in 2018. Greater transparency is created through disclosure of the

scorecard parameters in all media.

Shareholders asked for more focus on

performance-related measures to be used to

assess and drive the business, thus reducing the

impact of gold price volatility and other measures

which are beyond management inﬂuence.

Performance metrics which govern the DSP have been selected to address controllable

performance with a balance that mitigates the windfall impact of non-controllable external factors

such as the gold price.

Shareholders expressed support for malus and

clawback policies.

Malus and clawback conditions have been included in the new DSP.

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REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Gender equality

The AngloGold Ashanti board of directors

is comprised of 36% female representation,

which is a 9% increase from 2016. The

executive management team has a 33%

female representation.

AngloGold Ashanti is committed to gender

equality, and our policy is to pay men and

women equally for equivalent roles.

The graphs below illustrate the gender

distribution for employees on stratum level III

and higher across four equally-sized quartiles.

All individuals at this level are ranked from

lowest to highest paid. This list is then divided

into four sections (quartiles), with an equal

number of employees in each section. The

quartiles (from lowest to highest) are called

the lower quartile, quartile two, quartile three,

and highest quartile. A pay gap percentage

is calculated for each quartile. The pay

gap percentage is the difference between

the average earnings of men and women,

expressed relative to men’s earnings.

It is evident from the graphs that the overall

number of females represented in the

organisation, at a stratum III and above level

is low. This can generally be attributed to the

mining sector being largely male dominated.

We are actively addressing this in our Human

Resources practices and have included metrics

in our incentive scheme which are designed to

improve our gender ratio.

The pay gap ratio indicates that in the lower

quartile men earn on average 2.18% higher

than females, 2.2% higher in quartile two, and

1.67% higher in quartile three. It is important

to note that while there is a higher number

of men in the highest quartile population,

the average pay received by males in this

population is 14.87% lower than their female

counterparts. We are on a journey towards

full equality. Current anomalies will be

managed over time.

The pie charts alongside indicate a 6%

difference between the number of men

and women who received a bonus for their

performance in 2017.

Proportions of colleagues at Stratum III and
higher who were awarded a bonus in 2017

(Women)

•

Received a bonus

•

Did not receive a bonus

Proportions of colleagues at Stratum III and
higher who were awarded a bonus in 2017

(Men)

•

Received a bonus

•

Did not receive a bonus

Lower quartile

•

Women

•

Men

2.18%

pay gap

Quartile two

2.20%

pay gap

•

Women

•

Men

Quartile three

1.67%

pay gap

•

Women

•

Men

Highest quartile

-14.87%

pay gap

•

Women

•

Men

In addition to our efforts to pay equal

remuneration for men and women who

perform equivalent roles, we, as an

organisation, subscribe to various bodies

and interest groups that focus on gender

diversity. This has allowed us the opportunity

to network and acquire best practice from

other organisations, particularly in the

mining sector.

Some of these external initiatives include:

•

30% Club Boardwalk. This initiative

nurtures the development of aspiring

female leaders who are currently in

senior management positions. To

date, 25 female employees across

management levels have participated in

this development initiative

•

Women in Mining (WIM) – AngloGold

Ashanti has joined the South African

and Australian chapters of WIM. This

organisation provides, among others,

development initiatives that include

mentorship and coaching circles for

women in mining

•

The South Africa region’s key focus

areas on women development include

enterprise development, bursary allocation

and support of women-owned businesses

in surrounding communities

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Shareholder information

2018 Remuneration policy and structure

The table below sets out the remuneration policy that applies to the executive management team for 2018, which was endorsed by shareholders at the 2017 annual general meeting. The table details

each component’s link to the company strategy, objectives, performance measurements and the maximum opportunity associated with each component.

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Base salary

A competitive salary provided to executives

to ensure that their experience, contribution

and appropriate market comparisons are

fairly reﬂected

•

Base salaries are reviewed annually and are effective

from 1 January each year

•

Executive base salaries are determined by considering

their performance; market comparison against companies

with a similar geographic spread; market complexity, size

and industry; and internal peer comparisons

•

The CEO makes recommendations on the Excom but

does not make recommendations on his own base

salary. This is reviewed by the Remco and approved by

the board

Executive base salary increases and

increases for all non-bargaining unit

employees are closely aligned, where

practical. This is informed by inﬂation,

which can be matched directly or above/

below consumer price index (CPI)

Individual performance on a scale of 1 to 5,

measured against speciﬁc key performance

indicators (KPIs), are reviewed by the Remco.

A CPI increase pool is approved annually by

Remco. In high-inﬂation countries, individual

increases may be differentiated according to

each individual’s performance rating. In-low

inﬂation countries, a ﬂat CPI is generally applied

to all executives and employees.

Pension

Provides a post retirement beneﬁt aligned

to the schemes in the respective country in

which the team member operates

•

Funds vary depending on jurisdiction and legislation

•

Deﬁned beneﬁt funds are not available for new

employees, in line with company policy

24.75% of CEO’s base salary and lower

contributions for others, depending on

their scheme

Not applicable

Medical insurance

Provides medical aid assistance aligned to

the schemes in the respective country in

which the team member operates

•

Provided to all executives through either a percentage

of fee contribution, reimbursement or company

provided healthcare providers

In line with approved policy

Not applicable

Beneﬁts

Provided to ensure broad competitiveness

in the respective markets

Beneﬁts are provided based on local market trends and

can include items such as life assurance, disability and

accidental death insurance, assistance with tax ﬁling, cash

in lieu of untaken leave (above legislated minimum leave

requirements) and occasional spousal travel as per the

executive travel guidelines

In line with approved policy

Not applicable

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Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Deferred Share Plan (DSP) – endorsed by shareholders at the 2017 Annual General Meeting, and implemented with effect from 1 January 2018

With effect from 1 January 2018, the
company will be using a single incentive for
short-term and long-term performance

The DSP is designed to encourage group
executives to meet the strategic short-,
medium- and long- term objectives that will
enable value delivery to shareholders, by
achieving deﬁned company objectives

A single set of performance objectives are
used and reviewed and selected annually,
based on their impact on the company

Permanent employees who do not participate in a
production bonus are eligible to participate in the DSP, but
participation is at the discretion of Remco.

A portion of the award is paid in cash as a bonus, and the
balance is delivered as either deferred cash (for Stratum
levels III and below) or deferred shares (for Stratum IV and
above), vesting equally over a period of two to ﬁve years.

The total incentive is determined based on a combination
of company and individual performance measures, deﬁned
annually and weightings are applied to each measure.
The metrics are deﬁned against the objectives that most
strongly drive company performance and are weighted to
ﬁnancial outcomes, production, cost and sustainability.

Each metric is weighted and has a threshold, target and
stretch deﬁnition based on the company budget and the
desired stretch targets for the year

At the end of each ﬁnancial year, company and CEO’s
performances are assessed by Remco and the board
against the deﬁned metrics to determine the quantum of
the cash portion and the quantum of the deferred
portion namely:

CEO: Maximum award – 450% of base
salary (150% is cash bonus; 300%
delivered as deferred shares over a period
of ﬁve years), subject to company and
individual modiﬁers.

On target award – 300% of base salary
(100% is cash bonus; 200% delivered as
deferred shares over a period of ﬁve years,
subject to company and individual modiﬁers).

Threshold award – 150% of base salary
(50% is cash bonus; 100% delivered as
deferred shares over a period of ﬁve years),
subject to company and individual modiﬁers.

Below threshold achievement results in
no payment.

CFO: Maximum award – 382.5% of base
salary (120% is Cash bonus; 262.5%
delivered as deferred shares over a period
of ﬁve years), subject to company and
individual modiﬁers.

On-target award – 255% of base salary
(80% is cash bonus; 175% delivered as
deferred shares over a period of ﬁve years),
subject to company and individual modiﬁers.

Threshold award – 127.5% of base salary
(40% is cash bonus; 87.5% delivered as
deferred shares over a period of ﬁve years),
subject to company and individual modiﬁers.

Below threshold achievement results in
no payment.

One set of performance metrics is used to
determine the cash portion and deferred
portion. Future vesting of the deferred portion is
subject to continued employment.

Performance measures are weighted between
company and individual KPIs:

CEO: Performance measures – 70% weighting
towards company objectives

30% weighting towards individual KPIs (as
reviewed by the board)

CFO and Exco: Performance measures –
60% weighting towards company objectives

40% weighting towards individual KPIs
(as reviewed by the CEO, Remco and the board)

Company and individual performance measures
are assessed over the ﬁnancial year, with the
exception of certain company measures that
are measured over a trailing three-year basis, as
indicated below.

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Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Continued

Cash portion:

Base pay x individual performance weighting x on target

cash percentage x individual performance modiﬁer (KPI:

1 – 5 rating)

Base pay x company performance weighting x on-target

cash percentage x company performance modiﬁer

Deferred cash/shares:

Employees up to Stratum III will receive a deferred cash

element while employees on Stratum IV and above will

receive deferred shares, calculated as follows:

Base pay x individual performance weighting x on target

deferred percentage x individual performance modiﬁer

(KPIs: 1 – 5 rating)

Base pay x company performance weighting x on-target

deferred percentage x company performance modiﬁer

The deferred shares are awarded as conditional rights to

shares with dividend equivalents.

Vesting of the deferred portion occurs over a period of

time either a two-, three-, or ﬁve-year period, depending

on the level of the participant.

EXCO: Maximum award – 352.5% of

base salary (105% is cash bonus; 247.5%

delivered as deferred shares over a period

of ﬁve years), subject to company and

individual modiﬁers.

On-target award – 235% of base salary

(70% is cash bonus; 165% delivered

as deferred shares over a period of ﬁve

years), subject to company and individual

modiﬁers.

Threshold award – 117.5% of base salary

(35% is cash bonus; 82.5% delivered

as deferred shares over a period of ﬁve

years), subject to company and individual

modiﬁers.

Below threshold achievement results in

no payment.

Company metrics, each with their own

weighting, are:

•

Relative total shareholder return (TSR)*

•

Absolute TSR*

•

All-in sustaining costs

•

Normalised cash return on equity*

•

Production

•

Ore Reserve pre-depletion*

•

Mineral Resource additions pre-depletion*

•

Safety, Health, Environment and Community*

•

People

These measures are on a trailing three-year
backward looking basis or on a combination
of annual and three-year measures

Remco reserves the right to apply a safety

multiplier to the total score which can detract

from the ﬁnal score.

Relative TSR is measured against a carefully

selected peer group of 10 comparators

recommended by Remco and approved by the

Board. The comparator group is retained for

measurement for the full three-year review period.

Full details of the DSP metrics are provided in

the remuneration policy.

Malus and clawback

The Remco may determine that an unvested award or part of an award may not vest, or may determine that any cash bonus, vested shares, or their equivalent value in cash be returned to the

company in the event that any of the following matters is discovered:

•

A material misstatement of the company results which may have caused the over allocation of cash bonus, deferred cash and deferred share allocations

•

Misconduct, this will include the lapse of all deferred cash and deferred shares, both vested and unvested, in line with the rules of the DSP

•

Where there is an error in the calculation of any performance condition used in the calculation of the performance conditions which may have resulted in an overpayment

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Section two: overview of remuneration policy

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REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Prior period short- and long-term incentives

With effect from January 2018, AngloGold Ashanti has implemented the DSP, which replaced all previous short- and long-term incentive plans. However, for purposes of the implementation report,

which reﬂects the incentives payable for 2017, the following section describes the short- and long-term incentives applicable for 2017.

Remuneration scenarios of the DSP at different performance levels

The graphs below depict the pay mix of the executive team in line with the 2018

remuneration policy set out in Part 2. The graphs represent outcomes of the DSP

detailed above (which replaced the Bonus Share Plan (BSP) and the Long Term

Incentive Plan (LTIP), effective 1 January 2018, as advised in the 2016 Remuneration

report, at below threshold performance (which will result in zero variable pay); threshold;

target; and maximum performance.

The graphs are modelled on a business performance score of 60% (company modiﬁer),

which reﬂects historical performance.

Chief executive officer

(Rm)

Base salary

Benefits

DSP cash

DSP deferral

Below threshold

Threshold

Target

Maximum

Executive committee

(Rm)

Base salary

Benefits

DSP cash

DSP deferral

Below threshold

Threshold

Target

Maximum

Chief financial officer

(Rm)

Base salary

Benefits

DSP cash

DSP deferral

Below threshold

Threshold

Target

Maximum

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REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Operation and objective

Maximum opportunity

Performance measures

Short-Term Incentive (Bonus Share Plan – BSP)

STIP metrics are deﬁned annually and weightings are applied to each
measure. The metrics are deﬁned against the objectives that most strongly
drive company performance and are heavily weighted to production, cost
and safety.

Each metric is weighted and has a threshold, target and stretch deﬁnition
based on the company budget and the desired stretch targets for the year.

The STIP is delivered as a cash element and a deferred equity element which
is fully realised after 24 months.

At the end of each ﬁnancial year, the company’s and CEO’s performances are
assessed by Remco and the board against the deﬁned metrics to determine
the award to be granted.

Stratum III employees and above who are not on production bonuses, qualify
for participation.

The deferral is intended to be delivered in equity, but Remco retains the
discretion to deliver in cash should there be a requirement, for example,
where the shares available for issue are below the required amount to satisfy
employee allocation needs.

Participation in the STIP is at the discretion of the Remco.

CEO:
Maximum award – 200% of base salary
(cash 80% + deferred equity/cash award 120%)
Target award – 100%
(cash 40% + deferred equity/ cash award 60%)
Threshold award – 50%
(cash 20% + deferred equity/ cash award 30%)
Below threshold achievement results in a 0% payment

CFO:
Maximum award – 175%
(cash 70% + deferred equity/cash award 105%)
Target award – 87.5%
(cash 35% + deferred equity/cash award 52.5%)
Threshold award – 43.75%
(cash 17.5% + deferred equity/cash award 26.25%)
Below threshold achievement results in a 0% payment

EXCO:
Maximum award – 150%
(cash 60% + deferred equity/ cash award 90%)
Target award – 75%
(cash 30% + deferred equity/cash award 45%)
Threshold award – 37.5%
(cash 15% + deferred equity/cash award 22.5%)
Below threshold achievement results in a 0% payment.

CEO:
Performance measures:
70% company objectives
30% individual KPIs (as reviewed by the board)
Both company and individual performance are
assessed over the ﬁnancial year

CFO and EXCO:
Performance measures:
60% company objectives
40% individual KPIs (as reviewed by the CEO, Remco and
the board)
Both company and individual performances are
assessed over the ﬁnancial year.

The company metrics measured are:

•

Production

•

All-in sustaining costs

•

Adjusted free cash ﬂow

•

Safety, health and environment

•

Ore Reserve pre-depletion

•

Project delivery/capital expenditure

Co-Investment Plan

The CIP is offered annually to create shareholding opportunity for executives
to meet their minimum shareholding requirements (introduced in 2013). These
were implemented to achieve alignment of shareholder and executive interests

The executive invests up to 50% of their net cash bonus in company shares,
after 12- and 24-month periods, the company offers an equity match of shares
purchased on market, provided the executive remains in employment and
retains the original investment

150% of the equity originally invested over a deferred
24-month period.

Quantum based on STIP achievement

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Strategy

Performance review

Accountability

Shareholder information

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Operation and objective

Maximum opportunity

Performance measures

Long-Term Incentive Plan

The LTIP metrics are reviewed and deﬁned annually in accordance with the

strategy. (It is important to note that any amendment would be applied on a go-

forward basis to newly allocated awards with no retrospective metric changes to

existing awards.)

Weightings are provided to the metrics which must be achieved over a three-

year period.

The TSR is measured against a carefully selected peer group of 10

comparators that was recommended by the Remco and approved by the

board. The comparator group is retained for measurement for the full three-

year review period.

The score against all relevant measures contributes towards the percentage of

total awards that will vest at the end of the three-year period.

Only senior management from Stratum IV and above are eligible to participate

in the LTIP.

A share under the LTIP is a fully paid ordinary share in the capital of the company,

subject to performance vesting restrictions. The dilution may not exceed 5% of the

company’s ordinary share capital.

Participation in the LTIP is at the discretion of the Remco.

CEO:

Range of award – 160% – 250% of base salary

CFO:

Range of award – 140% – 200% of base salary

EXCO:

Range of award – 140% – 200% of base salary

The TSR is calculated by the growth in capital from

purchasing a share in the company, assuming that

the dividends are reinvested each time they are paid.

The TSR is then used to rank the performance of the

company against its competitors (Barrick, Gold Fields,

Harmony, Kinross, Goldcorp, Newmont, Gold ETF

(World Gold Council SPDR classiﬁcation), Randgold,

Newcrest and Sibanye-Stillwater).

The remaining 50% performance measurement are:

•

Operational performance (measured through, all in

cost, project delivery and asset optimisation)

•

Future optionality (measured by technology

innovation and Mineral Resource and Ore Reserve)

•

Development and attraction and retention of

people (measured by the succession (strategic) cover

ratio and talent retention)

•

A safety multiplier applied to the total score which

can either enhance or detract from the ﬁnal score by

20%. The safety multiplier cannot however increase

the maximum pay-out above the deﬁned caps

Dividends

At vesting equivalent cash payments subject to applicable PAYE are provided

to all participants of the STIP and LTIP.

In line with AngloGold Ashanti dividend payments.

Paid post vesting.

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Accountability

Shareholder information

In line with AngloGold Ashanti’s strategic

objectives, the DSP metrics were designed to

deliver on these key focus areas.

•

Maintain a strong foundation: People

are the foundation of our business. Our

business must operate according to our

values if it is to remain sustainable in the

long term. This includes a drive to improve

safety performance, reduce fatalities, and

retain key skills

•

Improving ﬁnancial ﬂexibility: Ensuring

that our balance sheet remains able to meet

our funding needs

•

Optimise our cost base: Ensure that all

spend is optimally structured and necessary

to fulﬁll the core business objectives

•

Improve portfolio quality: A focus on a

portfolio of assets that must be actively

managed to improve the overall mix of

our production base as we strive for a

competitive valuation as a business

•

Maintain long-term optionality, albeit at

a reasonable cost: Creating a competitive

pipeline of long-term opportunities

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

DSP metrics:

•

Production

•

All-in sustaining costs

•

Normalised cash return on equity

•

Relative and absolute total shareholder return

•

Asset optimisation

•

Safety

DSP metrics:

•

Production

•

All-in sustaining costs

•

Relative and absolute total

shareholder return

•

Asset optimisation

DSP metrics:

•

Ore Reserve pre-depletion

•

Mineral Resource additions pre-depletion

•

Relative and absolute total

shareholder return

•

All-in sustaining costs

DSP metrics:

•

People

•

Safety

•

Environment, health and community

•

Relative and absolute total shareholder return

DSP metrics:

•

Mineral Resource additions pre-depletion

•

Ore Reserve pre-depletion

•

Production

•

All-in sustaining costs

•

Relative and absolute total

shareholder return

Alignment of strategy, pay and performance in the DSP scheme

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Recruitment policy

When recruiting executives, a comparative

benchmarking exercise will be undertaken to

determine the size, nature and complexity of

the role and also skills availability in the market

prior to making a competitive offer. For new

appointments, the Remco may compensate

for remuneration forfeited from the previous

employer. The intention is to not grant more

than the executive would have received in

a 12-month period. However, Remco does

have the discretion to compensate higher

values if, through a fair value valuation, it can

be demonstrated that the amount forfeited

exceeds that granted. Remco will compensate

the amount forfeited through variable pay which

can be a combination of equity and cash.

Termination policy

Members of the executive management

team have open-ended contracts (except

where prescribed retirement ages apply) with

termination periods deﬁned in their contracts.

In addition, incentive scheme rules clearly

specify termination provisions by termination

category. In the event of a termination, the

company has the discretion to allow the

executive to either work out their notice or

to pay the guaranteed pay for the stipulated

notice period in lieu of notice.

Guaranteed pay includes base salary and

other beneﬁts as detailed in the table, but

excludes variable pay.

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Reasons for termination

Voluntary resignation

Dismissal/ termination for cause

Normal and early retirement,

retrenchment and death

Mutual separation

Base

salary

Paid over the notice period or as

a lump sum

Base pay will be paid until

employment ceases

Base pay is paid for a deﬁned

period based on cause and

local policy as executives have

different employment entities

Paid over the notice period or as

a lump sum

Pension

Pension contributions for the

notice period will be paid; the

lump sum would not include

pension contributions unless

contractually agreed

Pension will be paid until

employment ceases

Pension will be paid until such

time that employment ceases

Pension contributions for the

notice period will be paid; the

lump sum would not include

pension contributions unless

contractually agreed

Medical

provisions

Where applicable medical

provision for the notice period

will be paid; the lump sum would

not include contributions unless

it is contractually agreed.

Medical provision/payment will

be provided until employment

ceases

Medical provision/payment will

be provided until such time that

employment ceases

Where applicable, medical

provision for the notice period

will be paid; the lump sum would

not include contributions unless

contractually agreed.

Beneﬁts

Applicable beneﬁts may continue

to be provided during the notice

period but will not be paid on a

lump sum basis

Beneﬁts will fall away when

employment ceases

Beneﬁts will fall away at such

time that employment ceases

Applicable beneﬁts may continue

to be provided during the notice

period but will not be paid on a

lump sum basis

DSP cash

bonus

Forfeit, no bonus

No bonus

Discretion to pro-rate for period

worked

Discretion to pro-rate for period

worked

Deferred

cash

awards

Unvested awards lapse

The vesting date will be

accelerated, and the participant

shall be entitled to receive a

proportion of the unvested

deferred cash

The vesting date will be

accelerated, and the participant

shall be entitled to receive a

proportion of the unvested

deferred cash

Deferred

awards

Unvested awards lapse

Participant may continue to

hold shares post termination of

employment. Vested shares may

be exercised within six months

following termination date

Participant may continue to

hold shares post termination of

employment. Vested shares may

be exercised within six months

following termination date

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Minimum shareholding requirements

Remco is of the opinion that share ownership by executive management demonstrates their

commitment to the success of the company, and serves to reinforce the alignment between

executive and shareholder interests. With effect from March 2013, a minimum shareholding

requirement (MSR) was introduced for the executive team.

All executive management are required to have a minimum shareholding in the company as

per the table below:

Within three years

of appointment/from

introduction of the MSR

Within six years of

appointment/from

introduction of the MSR

Holding period required

CEO

100% of net annual

base salary

200% of net

annual base salary

Indeﬁnite

Executive

management

75% of net annual

base salary

150% of net

base salary

Indeﬁnite

The following count towards an individual’s MSR:

•

JSE shares purchased on the market, either directly or indirectly, for personal reasons

•

Vested shares from the company’s previous share incentive schemes (BSP and LTIP and

any other historic schemes), as well as vested shares from the company’s current

Deferred Share Plan

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Service contracts

All members of the executive management

team have permanent employment contracts

which entitle them to standard group beneﬁts

as deﬁned by their speciﬁc region and

participation in the company’s DSP.

South African executives are paid a portion of

their remuneration offshore which is detailed

under a separate contract. This reﬂects global

roles and responsibilities and considers

offshore business requirements. All such

earnings are subject to tax in South Africa.

Change in control
and notice periods

Executive management team contracts are

reviewed annually and currently continue

to include a change in control provision.

The change in control is subject to the

following triggers:

•

The acquisition of all or part of AngloGold

Ashanti; or

•

A number of shareholders holding less than

35% of the company’s issued share capital

consorting to gain a majority of the board

and make management decisions; or

•

Executive management contracts are either

terminated or their role and employment

conditions are curtailed.

In the event of a change in control becoming

effective, the executive will in certain

circumstances be subject to both the notice

period and the change in control contract

terms. The vesting date of a portion of

unvested DSP awards will be accelerated

to the date of the event. The balance of the

shares will vest on the original vesting dates.

Remuneration consultants

Where appropriate, Remco obtains advice

from independent remuneration consultants.

The consultants are employed directly by

Remco and engage directly with them to

ensure independence.

Following a review of potential advisors,

Remco appointed PricewaterhouseCoopers

(PwC) to provide specialist, independent

remuneration advice on all forms of executive

and non-executive pay. It is the committee’s

practice to undertake a detailed review of

potential advisors every three years. PwC’s

appointment was most recently extended

by the Committee for a further three years

following a review of the quality of advice

received, and a review of advisors in the

external market.

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Key focus areas for 2017 with which PwC

assisted were:

•

Gini co-efﬁcient, wage differential

calculations and associated benchmarking

•

Market trends, updates and best

practice guidelines

•

Committee training where required

In line with best common practice, Remco,

which is comprised solely of independent

non-executive directors, engages independent

consultants in relation to remuneration related

matters. The current advisor is PwC whose

appointment, terms of reference and fees

payable are determined solely by the Remco.

PwC is invited to attend all the meetings of

the committee and have regular access to the

chairman and members of the committee.

PwC informs and assists the committee’s

deliberations by drawing on their global reach

and perspective on compensation matters and

trends. They brief the remuneration committee

on regulatory developments in South Africa and

major international markets. They comment on

technical matters, and generally opine on the

committee’s work. Each year, the committee

evaluates the performance of PwC as the

independent advisor and sets their fees to

reﬂect time commitment, value added and

market norms. For the year ended on

31 December 2017, the fees payable to PwC

amounted to ~R315,000 (2016: R ~260,000).

This excludes a once-off fee of ~R800,000 for

incentive scheme development.

Additionally, the committee avails itself of the

services and output of Mercer, who provide

global survey data and analysis. Mercer’s charges

amounted to ~ R460,620 (2016: R ~ 440,000).

Non-executive directors’
remuneration policy

The company’s non-executive directors

are paid based on their role and there is no

differentiation by nationality. The policy is

applied using the following principles:

•

A board fee is paid for the six annual

board meetings and board committee

members receive annual committee fees for

participation

•

Fees are reviewed annually and increases

implemented in July. They are set using a

global comparator group which is derived

from companies with similar size, complexity

and geographic spread

•

Non-executive directors receive a travel

allowance for travel outside of their home

country for site visits and board meetings

•

Non-executive directors are not eligible to

receive any short- or long-term incentives

For the fourth successive year, no increase to

non-executive director fees will be requested in

the 2018 annual general meeting.

REMUNERATION REPORT CONTINUED

Section two: overview of remuneration policy

Non-binding advisory vote on our Remuneration Policy

In terms of the JSE Listings Requirements, shareholders will be required to cast a non-binding

advisory vote on the remuneration policy as presented in this report.

Voting results on our remuneration policy at the 2017, 2016 and 2015 annual general meetings

was as follows:

Vote for

Votes against

Votes withheld

Remuneration policy

16 May 2017

98.23

1.77

0.60

4 May 2016

87.17

12.83

0.30

6 May 2015

84.98

15.02

7.15

Picture:

Iduapriem, Ghana

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

This section of the

Remuneration Report explains

the implementation of our

remuneration policy by providing

details of the remuneration paid

to executives and non-executive

directors for the financial year

ended 31 December 2017. The

2017 year was one of transition

from the old STI and LTI to the

new DSP, under which rewards will

be made from 2018 onwards.

For 2017, two new longer-term performance

metrics were introduced as transitionary

measures (absolute total shareholder return

and normalised cash return on equity). Long-

term incentives were cash settled. This was

as a result of the diminishing share pool.

Executive pay

In 2017, the gold price remained relatively

stable, while the share price displayed

ongoing volatility. Cost control remained a key

imperative and the external market reﬂected

similar challenges.

On behalf of AngloGold Ashanti, Mercer

conducts an annual bespoke survey of

executive remuneration. For 2017, Remco

reviewed the comparator group against

AngloGold Ashanti to ensure that changes

in the market had not led to variances that

made the current matches inappropriate.

The review consisted of a detailed analysis

of companies who it was felt were

appropriate for inclusion in the benchmark.

The companies included in the comparator

group were ranked in terms of a number of

criteria selected in areas which were aligned

with AngloGold Ashanti. The table alongside

summarises the ﬁnal comparator group.

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

2017 Comparator benchmark group

Anglo American Platinum Limited

Barrick Gold Corporation

Goldcorp Incorporated

Gold Fields Limited

Harmony Gold Mining Company Limited

Impala Platinum Holdings Limited

Kinross Gold Corporation

Lonmin Plc

Newmont Mining Corporation

Randgold Resources Limited

Sasol Limited

Sibanye-Stillwater

South32 Limited

Yamana Gold Incorporated

In 2017, the annual January increases resulted

in each member of the executive management

team receiving an increase in line with the CPI

in their respective jurisdictions.

In 2017, certain changes were made to the

executive management team. Ron Largent,

the Chief Operating Ofﬁcer – International

retired effective the end of June 2017,

and Ludwig Eybers was appointed as his

replacement on 22 February 2017, in line

with our succession planning process. The

remuneration impact was as follows:

•

Ron Largent received the standard

payments as per policies currently in place

for retirement at AngloGold Ashanti. He

therefore received the following:

•

Pro-rata BSP shares for all unvested awards

•

Pro-rata LTIP shares for all unvested awards

•

An ex-gratia bonus of $520,000 in lieu of

a performance bonus for the six months

worked in 2017

•

Ludwig Eybers was appointed on a base

salary of R7,400,000

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Performance review

Accountability

Shareholder information

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

The table below summarises our executive director and prescribed ofﬁcer remuneration for 2017. It comprises an overview of all the pay elements

available to the executive management team for the 12-month period ended 31 December 2017.

Figures in
thousands

Appointed

with effect

from

Resigned/

retired with

effect from Salary

(1)

Performance

related

payments

(STIP)

(2)

Pension

Other

beneﬁts and

encashed

leave

(3)

Sub-

total

Exercised

BSP share

Award

value

Exercised

LTIP share

Award

value

Total

rands

Total

dollars

(4)

Executive directors

S Venkatakrishnan

2017

Full year

13,318

8,382

3,296

3,388

28,384

–

28,384

2,134

2016

Full year

12,660

7,323

3,133

3,785

26,901

–

26,901

1,832

KC Ramon

2017

Full year

8,423

4,607

727

1,627

15,384

–

15,384

1,157

2016

Full year

8,007

4,354

800

743

13,904

–

13,904

947

Prescribed ofﬁcers

I Boninelli

2017

–

2016

31 March

1,607

–

161

10,124

11,892

12,704

12,291

36,887

2,513

CE Carter

(5)

2017

Full year

9,408

4,411

1,330

1,717

16,866

5,592

2,646

25,104

1,887

2016

Full year

10,180

4,439

1,523

2,058

18,200

4,342

–

22,542

1,535

GJ Ehm

(6)

2017

Full year

8,778

4,116

306

1,489

14,689

3,043

1,545

19,277

1,449

2016

Full year

9,466

3,740

381

3,781

17,368

4,910

2,570

24,848

1,693

L Eybers

(7)

2017

Full year

7,400

3,691

327

2,570

13,988

–

13,988

1,051

2016

–

RW Largent

2017

30 June

8,189

–

2,887

22,601

33,677

14,154

15,127

62,958

4,733

2016

Full year

17,722

7,728

3,314

5,810

34,574

13,107

3,184

50,865

3,465

DC Noko

(8)

2017

Full year

6,767

3,173

644

1,888

12,472

–

12,472

938

2016

Full year

6,432

2,805

643

4,227

14,107

–

14,107

961

ME Sanz Perez

2017

Full year

6,737

3,159

795

1,078

11,769

–

11,769

885

2016

Full year

6,404

2,985

641

2,389

12,419

9,349

2,315

24,083

1,640

CB Sheppard

2017

Full year

7,154

3,354

681

272

11,461

–

11,461

862

2016

Full year

6,604

2,965

674

339

10,582

–

10,582

721

TR Sibisi

(9)

2017

Full year

5,786

2,886

703

9,452

–

9,452

711

2016 18 January

4,887

2,398

497

166

7,948

–

7,948

541

(1)

Salaries are disclosed only for the periods from or to
which ofﬁce was held, and include car allowances
where applicable.

(2)

Performance-related payments are calculated on the
year’s ﬁnancial results.

(3)

Includes health care, pension allowance, cash in
lieu of dividends, vested CIP match awards, group
personal accident, disability and funeral cover.
Surplus leave days accrued are automatically
encashed unless work requirements allow for
carry over.

(4)

Values have been converted using the average
annual exchange rate for 2017: R13.3014:$1
(2016: R14.6812:$1).

(5)

Beneﬁts for 2017 and 2016 for C Carter include a
dependant’s scholarship award of $2,500.

(6)

GJ Ehm’s 2015 increase was delivered as a lump
sum payment (2.5% adjustment) of ZAR196,927 in
January 2016. He received a project bonus in terms
of delivering against the Obuasi Project Charter. The
bonus was based on 60% of pay, of which 40%
was paid in 2015 and the balance in February 2016,
based on meeting of performance requirements.
Other beneﬁts include a secondment allowance for
time spent in Ghana.

(7)

L Eybers was appointed prescribed ofﬁcer on
22 February 2017. Full year ﬁgures are however
reﬂected as Mr Eybers was already within AngloGold
Ashanti’s employment.

(8)

DC Noko received a project bonus for delivering
against the Obuasi Project Charter. The bonus was
based on 60% of pay, of which 40% was paid in
2015 and the balance in February 2016, based
on meeting of performance requirements. Other
beneﬁts include a secondment allowance for time
spent in Ghana.

(9)

TR Sibisi commenced employment on 18 January
2016 and as such her remuneration for 2016 is for
just over 11 months of the year.

Note that while we have endeavoured to comply with
King IV reporting requirements throughout this report,
the committee decided to defer adoption of single ﬁgure
reporting until next year’s report, after implementation of
the new DSP scheme.

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Minimum shareholding achievements

For the purposes of the MSR calculation, only fully owned and vested awards count towards the determination of the MSR.

Executive

Three year target

achievement date

Three-year MSR target

achievement percentage

MSR holding as at

31 December 2017 as

% of net base pay

Six-year MSR target

achievement percentage

Executive directors

S Venkatakrishnan

March 2016

100%

1,229%

200%

KC Ramon

March 2018

75%

188%

150%

Prescribed ofﬁcers

CE Carter

March 2016

75%

239%

150%

GJ Ehm

March 2016

75%

387%

150%

L Eybers

(1)

March 2020

75%

58%

150%

DC Noko

March 2016

75%

519%

150%

ME Sanz Perez

March 2016

75%

405%

150%

C Sheppard

(2)

March 2019

75%

35%

150%

TR Sibisi

(3)

March 2020

75%

21%

150%

(1)

Appointed prescribed ofﬁcer with effect from 22 February 2017 and the three-year MSR achievement is only due in March 2020.

(2)

The prescribed ofﬁcer joined the company 1 June 2015 and the three-year MSR achievement is only due in March 2019.

(3)

The prescribed ofﬁcer joined the company 18 January 2016 and the three-year MSR achievement is only due in March 2020.

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

Short-term incentive
performance outcomes (BSP)

Safety was once again an important

issue for AngloGold Ashanti in 2017. Of

the 22% allocated to safety, health and

environment, 15% of the measure is

directly apportioned to safety. Given the

poor safety outcome in 2017, 0% was

attributed to the safety related measures.

The balance of the measures resulted in

a good outcome with an achievement of

80.24% out of 100%.

The table overleaf summarises AngloGold

Ashanti’s remuneration metrics, their

weightings, and performance against

these metrics applicable to the BSP

during 2017.

The BSP company performance distribution

over the past ﬁve years was as follows:

BSP percentage achieved

(%)

81.10

81.47

80.24

71.14

46.10

2013

2014

2015

2016

2017

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Performance review

Accountability

Shareholder information

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

BSP company
performance measure 2017

Target weighting

Achievement

Actual achievement

against measures

Threshold measures

Target

measures

Stretch

measures

Production (000oz)

20%

20.00%

3,755

3,600

3,678

3,755

All-in sustaining costs ($/oz)

20%

19.18%

1,054

1,085

1,068

1,051

Free cash ﬂow ($m)

20%

219

105

157

Project delivery/capital expenditure

10%

8.84%

Measured against a detailed project plan

2017 Ore Reserve pre-depletion, excluding asset sales
and mergers and acquisitions (Moz)

3.71

Plus 1.04

Plus 1.66

Plus 2.07

Delivery of Colombian Ore Reserve

To schedule

Safety,
health and
environment

AIFR: three-year rolling average (7.42)

7.49

5% performance

improvement (7.42)

10% performance

improvement (7.18)

20% performance

improvement (6.30)

FIFR: three-year rolling average (0.061)

0.058

5% performance

improvement (0.055)

10% performance

improvement (0.047)

20% performance

improvement Zero

fatalities

Major hazard management: Preventative
action closure rates for incidents with actual
and potential high, major and extreme
consequences

84%

90% of preventative

actions closed out

on time

95% of preventative

actions closed out

on time

100% of preventative

actions closed out

on time

High, major or extreme environmental
incidents as deﬁned in the Company
Incident Classiﬁcation and Reporting
Management Standard

1.25%

Two (2)

reportable

environmental

incidents

One (1) reportable

environmental

incident

Zero (0) reportable

environmental

incidents

Environment: site speciﬁc bow-tie
Environmental Risk Assessments
conducted in the risk categories identiﬁed
on the Group Environment Risk Scoreboard

1.25%

1.22%

39 total bow-ties

completed

Two (2) additional

bow-tie analysis

completed

Three (3) additional

bow-tie analysis

completed

Four (4) additional

bow-tie analysis

completed

Health: Site compliance with the global
safety standards on occupational
environment and health, wellbeing and
ﬁtness for work

2.50%

96%

90%

compliance

95%

compliance

100% compliance

Community: Number of human rights
violations

0.0%

3 Human rights

violations

2 human rights

violations

1 human rights

violation

0 human rights

violations

Production loss events as a result of
community unrest

0.4% of annual

budgeted production

0.25% of annual

budgeted production

0.15% of annual

budgeted production

Total % for company performance

100%

80.24%

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REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

2017 cash settled LTIP awards

Final cash settled LTIP (CSLTIP) awards

were allocated in 2017, under the previous

policy. A total number of 2,572,437 awards

were allocated to 123 senior employees. The

average overall number per Stratum level

(as a percentage of base salary) allocated is

as follows:

2017 Comparator benchmark ranking

Stratum level

Average 2017 allocation

(as % of base salary)

IV L

60%

IV H

80%

V L

80%

VI L

197%

VI H

200%

VII L

200%

While we envision the 2017 CSLTIP to be cash

settled, the company maintains the option to

settle in shares bought on market.

The 2017, LTIP introduced two new measures, namely absolute total shareholder return and normalised cash return on equity (nCROE). The full

measures are as follows:

2017 LTIP performance measure

Target

weighting

Threshold

measures

Target measures

Stretch measures

Financial

Measures

Relative TSR: Three-year relative ranking with the

selected comparator group. The comparators are:

Barrick, Gold Fields, Harmony, Newmont, Kinross,

Goldcorp, Gold ETF (World Gold Council SPDR

classiﬁcation), Randgold, Newcrest and Sibanye-

Stillwater

15%

Median TSR of

comparators

Halfway between

median and

upper quartile

Upper quartile

TSR of

comparators

Absolute total shareholder return

15%

USD COE

USD COE + 2%

USD COE + 6%

Normalised cash return on equity (nCROE)

20%

USD COE

USD COE + 2%

USD COE + 6%

Portfolio

optimisation

•

Project delivery Kibali (2%), Siguiri (4%), Sadiola (4%)

20%

As per the detailed project delivery matrix

approved by the Remco

•

Asset optimisation as deﬁned by the Management

Action Plan (10%)

As deﬁned by the Management Action Plan

Future

optionality

•

Mineral Resource

20%

10.71

17.13

21.41

•

Ore Reserve (pre-depletion, asset sales and disposals)

3.17

5.08

6.34

•

Delivery of Colombian Ore Reserve

Measured against budget and schedule

Core value:

People

•

Strategic coverage ratio

10%

1:0.60

1:0.70

1:0.85

•

Retention of top talent pool

12% turnover pa

8% turnover pa

5% turnover pa

Core value:

Safety

•

Major hazard management

±20%

95% critical

control

compliance

97.5% critical

control

compliance

100% critical

control

compliance

Total

100%

Note: COE = Cost of equity

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REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

Vesting outcomes of the 2015 LTIP awards

The LTIP distribution reﬂects ongoing below threshold TSR performance over the three-year period. The table below summarises AngloGold

Ashanti’s 2015 LTIP metrics, their weightings, and performance against these metrics, which will vest in 2018:

2015 LTIP performance measure

Target

weighting Achievement

Threshold

measures

Target

measures

Stretch

measures

Total
Shareholder
return

Three-year relative ranking with the selected
comparator group. The comparators are: Barrick,
Gold Fields, Harmony, Newmont, Kinross, Goldcorp,
Gold ETF (World Gold Council SPDR classiﬁcation),
Randgold, Newcrest and Sibanye-Stillwater

50%

0.0%

Sliding scale:

50% – 60%

Sliding scale:

60% – 80%

Sliding scale:
80% – 100%

Portfolio
optimisation

– Project delivery

20%

12.3%

As per the detailed project delivery matrix

approved by the Remco

– Asset optimisation as deﬁned by the Management

Action Plan

As deﬁned by the Management Action Plan

Future
optionality

– Innovation SA technology

20%

11.9%

Measured against budget

– 2015 Mineral Resource (adjusted)

Plus 9Moz

Plus 14Moz

Plus 18Moz

– 2015 Ore Reserve (adjusted)

Plus 2.9Moz

Plus 4.6Moz

Plus 6Moz

Core value:
People

Strategic coverage ratio – measured as a % ratio
of key positions with at least one successor ready
within one year

10%

10.0%

1:0.50

1:0.60

1:0.75

Retention of top talent pool measured through key
staff retention (turnover excluding retrenchments,
retirements and deaths)

12% pa

8% pa

5% pa

Core value:
Safety

Percent of basic and leading controls adopted and
fully implemented

±20%

Multiplier

+20%

Basic controls:

90%

Basic controls:

100%

Leading

controls: 50%

Basic controls:

100%

Leading

controls: 90%

Percent of front-line supervisors trained and found
competent in both safety leadership and hazard and
risk management

85% front line

supervisors

trained

and found

competent

90% front line

supervisors

trained

and found

competent

95% front line

supervisors

trained

and found

competent

Total

100%

41.0%

The LTIP performance over the past ﬁve

years is illustrated below:

LTIP percentage achieved

(%)

37.4

32.4

41.0

26.1

37.2

2013

2014

2015

2016

2017

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Total remuneration outcomes:

Srinivasan Venkatakrishnan:

Chief Executive Ofﬁcer

Start date:

1 July 2000

Notice period:

12 months

Change of control: (as described in the Remuneration Policy section

“Change of control and notice periods”) on page 181:

12 months

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

Chief executive officer – pay elements

(Rm)

Maximum

Target

Actual

Base salary

Note: For below threshold performance there are no performance rewards

LTIP

Benefits

BSP cash bonus

BSP shares

CIP

The total actual pay for Mr Venkatakrishnan in 2017 that could result from the remuneration policy as

stated above is shown in relation to target and maximum earning potential. As Mr Venkatakrishnan

did not exercise shares in 2017, his actual pay only shows CIP matching.

Achievements 2017

Maximum bonus opportunity:

(as % of base pay)

Final bonus result:

(as % of base pay)

80%

62.93%

Key achievements in the year:

•

Improved safety performance with the

South African region recording its longest

ever fatality-free run of 349 days and

the International Operations recording

467 days without a fatal accident.

Unfortunately the South Africa region

faced a signiﬁcant setback in the fourth

quarter of 2017, when there were

seven fatalities

•

Production performance was turned

around. Met or exceeded group

production targets for four successive

quarters, despite a poor start in the South

African region for the ﬁrst quarter 2017.

Final production numbers exceeded the

top end of production guidance and

annual stretch budget

•

Tight capital discipline was maintained with

all capital expenditure being optimised and

reduced without impacting on the integrity

of the business

•

The South Africa region was successfully

restructured and the sales of Moab

Khotsong and Kopanang concluded,

saving a signiﬁcant number of jobs

•

Progressive work on the Obuasi project

was undertaken. The ﬁscal, development

and security agreements have been

signed and are awaiting ratiﬁcation by the

Ghanaian parliament

•

Improved production, optimised costs

and rationalised capital expenditure

assisted in maintaining debt and ﬁnancial

covenant levels stable, notwithstanding

increased investment

•

Colombian projects were rationalised and

the strategy re-set to meet group needs.

The Gramalote prefeasibility study is largely

complete and the maiden Ore Reserve has

been declared

•

Further development of brownﬁelds

expansion projects progressed on the

Siguiri hard rock expansion and power

plant project, the Geita power plant, the

underground mine at Tropicana and related

plant enhancements, and at Sunrise Dam

•

Developed internal succession capability in

key roles, improved the succession cover

ratio and retention of key talent

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REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

CEO’s performance bonus outcome – 2017

2017 performance year bonus outcome

Weighting

Outcome

Financial performance targets:

Production (000oz)

20%

20.00%

All-in sustaining costs ($m)

20%

19.18%

Adjusted free cash ﬂow ($m)

20%

20.00%

Project delivery/capital expenditure

10%

8.84%

2015 Ore Reserve pre-depletion (Moz)

8.00%

Safety, health and environment

22%

4.22%

Total % for company performance

100%

80.24%

Organisational performance weighting

70.00%

A – Organisational performance weighted outcome

56.17%

Individual performance results:

Actual individual targets and strategic objectives are not

individual performance weighting

30.00%

Maximum performance rating bonus correlation

75.00%

B – Maximum bonus opportunity based on

individual performance

22.50%

Total % of maximum bonus pay opportunity (A+B)

78.67%

Maximum bonus opportunity (as % of base pay)

80.00%

Final bonus result (as % of base pay)

62.93%

Base pay during the year

13,318,320

Annual bonus

8,381,805

CEO vesting outcome of the 2015 LTIP awards

2015 LTIP performance measures

Weighting

Outcome

Total shareholder return

50%

0.00%

Portfolio optimisation

20%

12.30%

Future optionality

20%

11.90%

Core value: People

10%

10.00%

Total

100%

34.20%

Core value: Safety multiplier

±20%

6.84%

A – LTIP performance measures

41.04%

B – Number of shares allocated in 2015

230,875

2015 number of shares allocated based on 200%

of annual basic salary

C – Share price as at 23 February 2018

115.00

Value of 2018 vesting

10,896,377

Note: the above value is an estimate and the actual value can only be determined based on the share price as
at the date when the award is exercised

In 2014, the CEO started a bursary scheme in conjunction with University of Witwatersrand,

South Africa. It is aimed at supporting the education of deserving historically disadvantaged

South African students from our operating areas, with a strong bias in favour of women. Total

contributions by the CEO into the bursary have been R2.25m since the start, which has been

matched equally by the company.

So far, the bursary has beneﬁtted, in whole or in part, 25 students, of whom 20 have graduated

with a degree. A number of them have completed their Honours and three students have gone

on and successfully passed their Initial Test of Competency (ITC) Board examination, conducted

by the South African Institute of Chartered Accountants. The bursary is currently supporting

four remaining students and the CEO and the company, are working with the University of

Witwatersrand on how best to utilise the surplus currently in the fund to assist those who are

presently registered at the university, and in need of funding.

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REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

Total remuneration outcomes:

Christine Ramon

Chief Financial Ofﬁcer

Start date:

1 October 2014

Notice period:

6 months

Change of control: (as described in the Remuneration Policy section

“Change of control and notice periods”) on page 181:

6 months

Chief financial officer – pay elements

(Rm)

1 3

Maximum

Target

Actual

Base salary

Note: For below threshold performance there are no performance rewards

LTIP

Benefits

BSP cash bonus

BSP shares

CIP

Total actual pay for Ms Ramon in 2017 that could result from the remuneration policy as stated

above is shown in relation to target and maximum earning potential. As Ms Ramon did not

exercise shares in 2017 pay only reﬂects CIP matching.

Achievements 2017

Maximum bonus opportunity:

(as % of base pay)

Final bonus result:

(as % of base pay)

Key achievements in the year:

•

Fully managed AngloGold Ashanti’s liquidity requirements, ensuring all key metrics

remained intact

•

Successfully reviewed group-wide tax exposures and opportunities

•

Maintained stable debt and ﬁnancial covenant levels, despite increased investment spend

•

Portrayed strong leadership in the successful integration of the Finance and Group Tax

functions into the various operations by being actively involved at an operational level and

with people and the cost drivers

•

Actively participated in the professional ﬁnancial and accounting policy formulation

industry bodies

70%

54.70%

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REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

CFO’s performance bonus outcome – 2017

2017 performance year bonus outcome

Weighting

Outcome

Financial performance targets:

Production (000oz)

20%

20.00%

All-in sustaining costs ($m)

20%

19.18%

Adjusted free cash ﬂow ($m)

20%

20.00%

Project delivery/capital expenditure

10%

8.84%

2015 Ore Reserve pre-depletion (Moz)

8.00%

Safety, Health and Environment

22%

4.22%

Total % for company performance

100%

80.24%

Organisational performance weighting

60.00%

A – Organisational performance weighted outcome

48.14%

Individual performance results:

Actual individual targets and strategic objectives are not

individual performance weighting

40.00%

Maximum performance rating bonus correlation

75.00%

B – Maximum bonus opportunity based on

individual performance

30.00%

Total % of maximum bonus pay opportunity (A+B)

78.14%

Maximum total bonus opportunity (as % of base pay)

70.00%

Final bonus result (as % of base pay)

54.70%

Base pay during the year

8,422,943

Annual bonus

4,607,417

CFO vesting outcome of the 2015 LTIP awards

2015 LTIP performance measures

Weighting

Outcome

Total shareholder return

50%

0.00%

Portfolio optimisation

20%

12.30%

Future optionality

20%

11.90%

Core value: People

10%

10.00%

Total

100%

34.20%

Core value: Safety multiplier

±20%

6.84%

A – LTIP performance measures

41.04%

B – Number of shares allocated in 2015

114,637

2015 number of shares allocated based on 200%

of annual basic salary

C – Share price as at 23 February 2018

115.00

Value of 2018 vesting

5,410,408

Note: the above value is an estimate and the actual value can only be determined based on the share price as
at the date when the award is exercised

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Non-executive directors’ fees and allowances

The board has elected to not to take an increase in 2017, given prevailing market conditions. This will be the ﬁfth consecutive year that the

non-executive directors have not received an increase.

The table below summarises directors’ fees for the period as well as the comparative totals for 2016 and 2015:

Director fees

Committee

fees

Travel

allowance

Total

US dollars

2017

2016

2015

SM Pityana (Chairman)

312,500

59,750

–

372,250

378,250

411,250

AH Garner

123,500

43,500

33,750

200,750

199,500

203,750

LW Nkuhlu

(1)

43,500

33,500

–

77,000

255,750

260,250

MJ Kirkwood

123,500

68,500

38,750

230,750

249,500

241,750

NP January-Bardill

123,500

56,000

–

179,500

189,500

189,250

R Gasant

123,500

58,500

–

182,000

193,250

195,250

RJ Ruston

123,500

56,000

32,500

212,000

230,750

226,250

MDC Richter

123,500

48,500

31,250

203,250

199,500

204,250

DL Hodgson

123,500

43,500

–

167,000

175,750

180,250

SV Zilwa

(2)

90,000

45,000

–

135,000

–

Total

1,310,500

512,750

136,250

1,959,500

2,071,750

2,112,250

(1)

Director retired with effect from 16 May 2017

(2)

Director joined with effect from 1 April 2017

REMUNERATION REPORT CONTINUED

Section three: Remuneration Implementation Report – January to December 2017

Shareholder vote on non-executive directors’ remuneration

The table below sets out the results of the vote on non-executive director’s remuneration in 2017, as well as the vote on remuneration at the 2016 and

2015 annual general meetings.

Remuneration of non-executive directors

Vote

for

Vote

against

Vote

withheld

16-May-17

98.31

1.69

0.30

04-May-16

91.25

8.76

0.12

06-May-15

89.21

10.79

0.77

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APPROVALS

AND ASSURANCES

AngloGold Ashanti’s annual

reports for the 2017 financial

year have been approved and

assured as follows:

<IR>

Integrated
Report 2017

The Integrated Report for the year ended

31 December 2017 was recommended by

the Audit and Risk Committee for approval by

the board, and was approved by the board of

directors on 19 March 2018.

<AFS>

Annual Financial
Statements 2017

The Annual Financial Statements for the year

ended 31 December 2017 were approved

by the board of directors on 19 March 2018.

The ﬁnancial statements were prepared by the

corporate reporting staff of AngloGold Ashanti

Limited, headed by Meroonisha Kerber, the

group’s Senior Vice President: Finance. This

process was supervised by Christine Ramon,

the group’s Chief Financial Ofﬁcer, and

Srinivasan Venkatakrishnan, the group’s Chief

Executive Ofﬁcer.

In accordance with the Companies Act, No.

71 of 2008, as amended, the Annual Financial

Statements for AngloGold Ashanti Limited,

for the year ended 31 December 2017, were

audited by Ernst & Young Inc., the company’s

independent external auditors, whose unqualiﬁed

audit report can be found in the

<AFS>

<R&R>

Mineral Resource and Ore
Reserve Report 2017

The Mineral Resource and Ore Reserve

information as included in the Integrated

Report was approved by the board of directors

on 19 March 2018.

The chairman of the Mineral Resource

and Ore Reserve Steering Committee is

responsible for AngloGold Ashanti’s Mineral

Resource and Ore Reserve processes and

systems and is satisﬁed that, as reported in

the

<R&R>

, the Competent Persons have

fulﬁlled their responsibilities.

<SDR>

Sustainable Development
Report 2017

The

<SDR>

was approved by the board of

directors on 19 March 2018. Independent

combined reasonable and limited assurance of

this report was provided by Ernst & Young Inc.

Picture:

AGA Mineração, Brazil

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SHAREHOLDER
AND CORPORATE
INFORMATION

SECTION 6

We provide information relating to our shareholders and useful

administrative detail relating to the company.

Shareholder information

196

Forward-looking statements

198

Administration and corporate information

199

Picture:

Iduapriem, Ghana

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SHAREHOLDER

INFORMATION

AngloGold Ashanti Limited

(Registration number

1944/017354/06) was incorporated

in the Republic of South Africa in

1944 and operates under the South

African Companies Act No. 71 of

2008, as amended, with a primary

listing on the JSE in South Africa.

Company history – in brief

AngloGold Limited was founded in June 1998

with the consolidation of the gold mining interests

of Anglo American. The company, AngloGold

Ashanti in its current form, was formed in April

2004 following the business combination of

AngloGold Limited (AngloGold) with Ashanti

Goldﬁelds Company Limited (Ashanti).

Stock exchange listings

AngloGold Ashanti is an independent

gold producer with a diverse spread of

shareholders comprising the world’s largest

ﬁnancial institutions.

At the end of December 2017, AngloGold

Ashanti had 410,054,615 ordinary shares in

issue and a market capitalisation of $4.18bn

(2016: $4.29bn). As at 19 March 2018, the

date of this report, the market capitalisation

was $3.71bn.

The primary listing of the company’s ordinary

shares is on the JSE in South Africa. Its ordinary

shares are also listed on stock exchanges in

New York (NYSE), in the form of American

Depositary Shares (ADSs), in Australia, in

the form of Clearing House Electronic Sub-

(CDIs) and in Ghana, in the form of Ghanaian

Depositary Shares (GhDSs).

Shareholder diary

•

Financial year end: 31 December

•

Suite of 2017 annual reports published:

29 March 2018

•

Annual general meeting: 16 May 2018

Change of details

Shareholders are reminded that the onus is

on them to keep the company, through their

nominated share registrars, apprised of any

change in their postal address and personal

particulars. Similarly, where shareholders

receive dividend payments electronically (EFT),

they should ensure that the banking details

which the share registrars and/or CSDPs have

on ﬁle are correct.

Annual reports

The 2017 suite of annual reports is available

on the corporate reporting website,

www.aga-reports.com.

Shareholdings

The top 10 shareholders together own 38.33%

of the shares in issue. There is one shareholder

with a holding exceeding 5% of the total

ordinary issued share capital. A comparison of

the top 10 shareholders and their holdings is

as follows:

The Bank of New York Mellon holds

159,347,405 shares, being a holding of 39%

(2016: 176,085,993 shares, a holding of

43%), through various custodians in respect

of AngloGold Ashanti’s American Depositary

Share Programme on the NYSE.

As at 31 December 2017, the top 10 shareholders in AngloGold Ashanti were:

Rank

Shareholder

No. of shares

% of issued

share capital

BlackRock Inc (Combined)

38,926,159

9.49

Public Investment Corporation (Pretoria)

25,808,607

6.29

VanEck Global (New York)

18,860,494

4.60

Investec Group (Combined)

17,799,709

4.34

Dimensional Fund Advisors (London)

16,228,876

3.96

Old Mutual (Combined)

15,560,591

3.79

The Vanguard Group, Inc (Combined)

15,215,012

3.71

Paulson & Co (New York)

12,782,400

3.12

State Street Corporation (Combined)

10,049,336

2.45

Franklin Resources (Combined)

7,805,748

1.90

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SHAREHOLDER

INFORMATION

CONTINUED

Dividend policy

Dividends are proposed by, and approved by

the board of directors of AngloGold Ashanti,

based on the company’s ﬁnancial performance.

For the year ended 31 December 2017, the

directors of AngloGold Ashanti declared a gross

cash dividend per ordinary share of 70 South

African cents (assuming an exchange rate

of R11.66/$, the gross dividend payable per

ADS is equivalent to 6 US cents). The dividend

policy now provides for an annual dividend

payment to be based on 10% of the free cash

ﬂow generated by the business for that ﬁnancial

year, before growth capital expenditure. The

board will exercise its discretion on an annual

basis, taking into consideration the prevailing

market conditions, balance sheet ﬂexibility and

future capital commitments of the group.

Withholding tax

On 1 April 2012, the South African government

imposed a withholding tax on dividends and

other distributions payable to shareholders. The

withholding tax rate was increased from 15% to

20% with effect from 1 March 2017.

Annual general meeting

Shareholders on the South African register

who have dematerialised their shares in the

company (other than those shareholders

whose shareholding is recorded in their own

names in the sub-register maintained by their

CSDP) and who wish to attend the annual

general meeting to be held on 16 May 2018

in person, will need to request their CSDP or

broker to provide them with the necessary

letter of representation in terms of the custody

agreement entered into between them and the

CSDP or broker.

Voting rights

The Companies Act provides that if voting is

by a show of hands, any person present and

entitled to exercise voting rights has one vote,

irrespective of the number of voting rights that

person would otherwise be entitled to. If voting

is taken by way of poll, any shareholder who is

present at the meeting, whether in person or

by duly appointed proxy, shall have one vote

for every share held.

There are no limitations on the right of non-South

African shareholders to hold or exercise voting

rights attaching to any shares of the company.

CDI holders are not entitled to vote in person at

meetings, but may vote by way of proxy.

Options granted in terms of the share incentive

scheme do not carry rights to vote.

Shareholder spread as at 31 December 2017:

Class of shareholder

Number of

shares held

% of total

shares in issue

Number of

shareholders

% of total

shareholders

Public shareholders

403,380,942

98.38

11,916

99.92

Non-public: Directors

300,023

0.07

Strategic holdings

(government of Ghana)

6,373,650

1.55

0.01

Total 410,054,615

100.00

11,925

100.00

Stock exchange data

High

(R or $/share)

Low

(R or $/share)

Average

(R or $/share)

Volume

traded

(000)

Ave monthly

volume traded

(000)

JSE

2017

183.50

116.65

141.55

461,832

1,818

2016

317.00

114.80

209.18

507,000

1,772

NYSE

2017

13.52

8.94

10.59

2,520

3,036

2016

22.65

7.33

14.35

3,762

4,190

Source: Bloomberg

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Certain statements contained in this

document, other than statements of historical

fact, including, without limitation, those

concerning the economic outlook for the gold

mining industry, expectations regarding gold

prices, production, total cash costs, all-in

sustaining costs, all-in costs, cost savings

and other operating results, productivity

improvements, growth prospects and outlook

of AngloGold Ashanti’s operations, individually

or in the aggregate, including the achievement

of project milestones, commencement and

completion of commercial operations of

certain of AngloGold Ashanti’s exploration

and production projects and the completion

of acquisitions, dispositions or joint venture

transactions, AngloGold Ashanti’s liquidity and

capital resources and capital expenditures

and the outcome and consequence of any

potential or pending litigation or regulatory

proceedings or environmental health and

safety issues, are forward-looking statements

regarding AngloGold Ashanti’s operations,

economic performance and ﬁnancial

condition. These forward-looking statements

or forecasts involve known and unknown

risks, uncertainties and other factors that

may cause AngloGold Ashanti’s actual

results, performance or achievements to

differ materially from the anticipated results,

performance or achievements expressed or

implied in these forward-looking statements.

Although AngloGold Ashanti believes that the

expectations reﬂected in such forward-looking

statements are reasonable, no assurance can

be given that such expectations will prove

to have been correct. Accordingly, results

could differ materially from those set out in

the forward-looking statements as a result of,

among other factors, changes in economic,

social and political and market conditions, the

success of business and operating initiatives,

changes in the regulatory environment

and other government actions, including

environmental approvals, ﬂuctuations in gold

prices and exchange rates, the outcome of

pending or future litigation proceedings, and

business and operational risk management.

For a discussion of such risk factors, refer to

AngloGold Ashanti’s annual reports on Form

20-F ﬁled with the United States Securities

and Exchange Commission. These factors

are not necessarily all of the important

factors that could cause AngloGold Ashanti’s

actual results to differ materially from

those expressed in any forward-looking

statements. Other unknown or unpredictable

factors could also have material adverse

effects on future results. Consequently,

readers are cautioned not to place undue

reliance on forward-looking statements.

AngloGold Ashanti undertakes no obligation

to update publicly or release any revisions

to these forward-looking statements to

reﬂect events or circumstances after the

date hereof or to reﬂect the occurrence of

unanticipated events, except to the extent

required by applicable law. All subsequent

written or oral forward-looking statements

attributable to AngloGold Ashanti or any

person acting on its behalf are qualiﬁed by

the cautionary statements herein.

Non-GAAP ﬁnancial measures

This communication may contain certain “Non-

GAAP” ﬁnancial measures. AngloGold Ashanti

utilises certain Non-GAAP performance

measures and ratios in managing its business.

Non-GAAP ﬁnancial measures should be

viewed in addition to, and not as an alternative

for, the reported operating results or cash

ﬂow from operations or any other measures

of performance prepared in accordance with

IFRS. In addition, the presentation of these

measures may not be comparable to similarly

titled measures other companies may use.

AngloGold Ashanti posts information that is

important to investors on the main page of its

website at www.anglogoldashanti.com and

under the “Investors” tab on the main page.

This information is updated regularly. Investors

should visit this website to obtain important

information about AngloGold Ashanti.

FORWARD-LOOKING

STATEMENTS

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ADMINISTRATION AND CORPORATE INFORMATION

AngloGold Ashanti Limited

Registration No. 1944/017354/06
Incorporated in the Republic of South Africa

Share codes:

ISIN: ZAE000043485
JSE: ANG
NYSE: AU
ASX: AGG
GhSE: (Shares)
GhSE: (GhDS) AGA

AAD

JSE Sponsor:

Deutsche Securities (SA) Proprietary Limited

Auditors: Ernst & Young Inc.

Ofﬁces

Registered and Corporate

76 Rahima Moosa Street
Newtown 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624

Australia

Level 13, St Martins Tower
44 St George’s Terrace
Perth, WA 6000
(PO Box Z504
6, Perth WA 6831)
Australia
Telephone: +61 8 9425 4602
Fax: +61 8 9425 4662

Ghana

NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 302
235814/6
Fax: +233 302 229975

ADR Depositary

BNY Mellon (BoNY)
BNY Shareowner Services
PO Box 30170
College Station, TX 77842-3170
United States of America
Telephone:
+1 866-244-4140
(Toll free in USA)
or +1 201 680 6825 (outside USA)
E-mail: shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com

Global BuyDIRECT^SM

BoNY maintains a direct share purchase and
dividend reinvestment plan for
AngloGold Ashanti
Telephone: +1-888-BNY-ADRS

Ghana

Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 303 773400
Fax: +233 303 778155

Directors

Executive

S Venkatakrishnan*

(Chief Executive Ofﬁcer)
KC Ramon

(Chief Financial Ofﬁcer)

Non-Executive

SM Pityana

(Chairman)

A Garner

R Gasant

DL Hodgson

NP January-Bardill

MJ Kirkwood*
M Richter

RJ Ruston~
SV Zilwa

* British

Indian

# American

~ Australian

South African

Ofﬁcers

Executive Vice President – Legal, Commercial
and Governance and Company Secretary:
ME Sanz Perez

Investor Relations Contacts

Stewart Bailey
Telephone: +27 11 637 6031
Mobile: +27 81 032 2563
E-mail: sbailey@anglogoldashanti.com

Fundisa Mgidi

Telephone: +27 11 637 6763

Mobile: +27 82 821 5322

E-mail: fmgidi@anglogoldashanti.com

Sabrina Brockman

Telephone: +1 646 880 4526

Mobile: +1 646 379 2555

E-mail: sbrockman@anglogoldashantina.com

General e-mail enquiries

Investors@anglogoldashanti.com

AngloGold Ashanti website

www.anglogoldashanti.com

Company secretarial e-mail

companysecretary@anglogoldashanti.com

Share Registrars

South Africa

Computershare Investor Services (Pty) Limited

Rosebank Towers, 15 Biermann Avenue,

Rosebank, 2196

(PO Box 61051, Marshalltown 2107)

South Africa

Telephone: 0861 100 950 (in SA)

Fax: +27 11 688 5218

Website: queries@computershare.co.za

Australia

Computershare Investor Services Pty Limited

Level 11, 172 St George’s Terrace

Perth, WA 6000

(GPO Box D182 Perth, WA 6840)

Australia

Telephone: +61 8 9323 2000

Telephone: 1300 55 2949 (Australia only)

Fax: +61 8 9323 2033

2256/17

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www.anglogoldashanti.com / www.aga-reports.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.

AngloGold Ashanti Limited

Date: March 29, 2018

By:

/s/ M E SANZ PEREZ________

M E Sanz Perez

Name:
Title:

EVP: Group Legal, Commercial & Governance