Glossary of terms

Abnormal item

This is a material item possessing a high degree of abnormality which arises from events or transactions that fall within the ordinary activities of the reporting entity and which are not expected to reoccur.

Adjusted headline earnings

Headline earnings excluding unrealised non-hedge derivatives and fair value gains (losses) on interest rate swaps and deferred tax thereon.

Adjusted operating profit

Operating profit adjusted to exclude corporate administration and other expenses, market development costs, exploration costs, amortisation of intangible and tangible assets, impairment of tangible assets, unrealised non-hedge derivatives, other operating expenses, other operating income and abnormal items.

Adjusted operating margin

Adjusted operating profit divided by gold sales including realised non-hedge derivatives.

Average number of employees

The monthly average attributable number of employees and contractors employed during the year, where contractors are defined as individuals who have entered into a fixed-term contract of employment with a group company or subsidiary.

By-products

Any products that arise from the core process of producing gold, including silver, uranium and sulphuric acid.

Capital expenditure

Total capital expenditure on tangible assets to maintain and expand operations.

Cash operating margin

Cash operating profit divided by gold sales including realised non-hedge derivatives.

Cash operating profit

Adjusted operating profit (loss) plus amortisation of intangible and tangible assets less non-cash revenues.

Dividend cover

Adjusted headline earnings per ordinary share divided by dividends per ordinary share.

Effective tax rate

Current and deferred taxation as a percentage of profit before taxation.

EBITDA

Profit before taxation, net interest, growth in the Environmental Rehabilitation Trust Fund, amortisation of tangible and intangible assets, impairment of tangible assets, profit (loss) on disposal of assets and subsidiaries, profit (loss) on disposal of investments; foreign exchange gain (loss) on transactions other than sales, unwinding of the decommissioning obligation, unrealised non-hedge derivatives, and fair value gains (losses) on interest rate swaps.

Equity

Shareholders' equity adjusted for other comprehensive income and deferred taxation. Where average equity is referred to, this is calculated by averaging the figures at the beginning and the end of the financial year.

Free cash flow

Net cash inflow from operating activities less capital expenditure to maintain operations.

Grade

The quantity of gold contained within a unit weight of gold-bearing material generally expressed in ounces per short ton of ore (oz/t), or grams per metric tonne (g/t).

Interest cover

EBITDA divided by finance costs adjusted for the equity portion of the convertible bonds.

Life-of-mine (LOM)

Number of years that the operation is planning to mine and treat ore, and is taken from the current mine plan.

Market capitalisation

Number of ordinary shares in issue at close of business on 31 December multiplied by the closing share price as quoted on the JSE Securities Exchange South Africa.

Milling

A process of reducing broken ore to a size at which concentrating can be undertaken.

Mineral reserves

A mineral reserve is the economically mineable material derived from a measured and/or indicated mineral resource. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified. Mineral reserves are sub-divided in order of increasing confidence into probable mineral reserves and proved mineral reserves.

Mineral resources and ore reserves

Mineral resources and ore reserves are reported in accordance with the Australasian code for reporting for mineral resources and ore reserves (JORC 2004) together with the South African code for reporting the mineral resources and mineral reserves (SAMREC 2000).

Net asset value

Shareholders' equity divided by shares in issue.

Net capital employed

Equity plus minority interests, interest-bearing borrowings, less cash and cash equivalents. Where average net capital employed is referred to, this is the average of the figures at the beginning and the end of the financial year.

Net operating assets

Tangible assets, current and non-current portion of inventories, trade and other receivables (excluding value added taxation), less trade and other payables.

Net debt

Borrowings less cash and cash equivalents.

Net tangible asset value per share

Shareholders' equity less intangible assets, divided by the number of ordinary shares in issue.

Non-hedge derivative gain (loss)

Derivatives that are neither designated as meeting the normal sale exemption under IAS39, nor designated as cash flow hedges.

Operating margin %

Adjusted operating profit as a percentage of gold income including realised non-hedge derivatives.

Ounces (oz) (troy)

Used in imperial statistics. A kilogram is equal to 32.1507 ounces.

Price received ($/oz and R/kg)

Attributable gold income including realised non-hedge derivatives divided by attributable ounces/kilograms sold.

Realised non-hedge derivatives

Represents the income statement effect of non-hedge derivatives that settled during the current period.

Rehabilitation

The process of restoring mined land to allow an appropriate post-mining use. Rehabilitation standards are determined amongst others by the South African Department of Minerals and Energy, the US Bureau of Land Management, the US Environmental Protection Agency, and the Australian Minerals Industry Code for Environmental Management, and address ground and surface water, topsoil, final slope gradient, waste handling and re-vegetation issues.

Region

Defines the operational management divisions within AngloGold Ashanti and these are South Africa, Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, Tanzania, United States of America and Zimbabwe.

Return on net capital

Adjusted headline earnings before finance costs expressed as a percentage of average net capital employed, adjusted for the timing of acquisitions and disposals and projects in progress but not generating an income.

Return on equity

Adjusted headline earnings expressed as a percentage of the average equity, adjusted for the timing of acquisitions and disposals and projects in progress but not generating an income.

Stripping ratio

The number of units of unpayable material that must be mined to expose one unit of ore.

Total cash costs

Total cash costs include site costs for all mining, processing and administration, as well as contributions from by-products and are inclusive of royalties and production taxes. Amortisation, rehabilitation, corporate administration, retrenchment, capital and exploration costs are excluded.

Total cash costs per ounce are the attributable total cash costs divided by the attributable ounces of gold produced.

Total production costs

Total cash costs including amortisation, retrenchment, rehabilitation and other non-cash costs. Corporate administration, capital and exploration costs are excluded.

Total production costs per ounce are the attributable total production costs divided by the attributable ounces of gold produced.

Unrealised non-hedge derivatives

This represents the change in fair value of all open non-hedge derivative positions from the previous reporting date to the current reporting date.

Weighted average number of ordinary shares in issue

The number of ordinary shares in issue at the beginning of the year, increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the income of the group.