Ghana

The two AngloGold Ashanti operations in Ghana are Obuasi and Iduapriem, which combined had total attributable production of 527,000 ounces, equivalent to approximately 10% of group production, for the year.

Obuasi

Description: Obuasi, which is wholly owned by AngloGold Ashanti, is located in the Ashanti region of southern Ghana, approximately 80 kilometres from Kumasi. It is primarily an underground mine operating at depths of 1,500 metres, although some surface mining does occur. Three treatment plants process the ore: a sulphide plant treats the ore from underground, a tailings plant for tailings reclamation operations and an oxide plant is used to batch treat remnant open-pit ore and stockpiles. The mine was established in 1897 and has produced more than 30 million ounces of gold in all.

Safety: Regrettably there were four fatalities during the year, two were caused by accidents involving machinery, one a fall of ground and one involved an employee falling down a rock pass. The LTIFR for the year deteriorated to 2.72 per million man hours worked, from 2.29 in 2006, while the FIFR rose from 0.08 in 2006 to 0.19 per million man hours in 2007.

Remedial action has been taken to improve safety at Obuasi, including the conducting of a training programme to identify and address workplace hazards for all employees involved in hazardous tasks. Each work team on the mine will, before it begins, evaluate the task at hand to determine the risks and to assign and implement a control known as a ‘simplified risk assessment’. This procedure is to be conducted by every employee prior to the conducting of any hazardous task on the mine.

The process to obtain ISO 18001 accreditation for Obuasi began in early 2008.

Operating review: Gold production at Obuasi declined by 7% to 360,000 ounces in 2007 (2006: 387,000 ounces). This decline in production was largely attributable to the decline in volumes mined although the recovered grade improved marginally. An 11-day plant shut down in the third quarter and power outages during the year also contributed to the reduced production.

Total cash costs rose by 16% to $459/oz (2006: $395/oz), largely as a result of the reduced production and increases in prices of consumables and rates of service contracts.

An adjusted gross loss of $24 million was recorded for the year (2006: loss of $42 million) which was an improvement of 42%. This is mainly attributable to a more favourable gold price. Capital expenditure totalled $94 million.

Growth prospects: The Obuasi Deeps project has added 1.3 million ounces to reserves and there is the potential to add another 6 million ounces to reserves thereafter.

Outlook: Production at Obuasi in 2008 is projected to be between 365,000 ounces and 390,000 ounces, at an estimated total cash cost of between $431/oz and $441/oz. Planned capital expenditure is expected to be in the region of $130m million, to be spent mostly on projects ($41 million), exploration ($4 million), stay-in-business expenses ($52 million) and ore reserve development ($33 million).

Iduapriem

Description: Iduapriem comprises two properties, Iduapriem and Teberebie, in which, prior to September 2007, AngloGold Ashanti had a combined effective stake of 85%. The International Finance Corporation held 10% and the government of Ghana, 5%. AngloGold Ashanti acquired these minority shareholdings and, with effect from 1 September 2007, its shareholding in the Iduapriem operation increased to 100%.

The Iduapriem mine is situated in the western region of Ghana, some 70 kilometres north of the coastal city of Takoradi and 10 kilometres south-west of Tarkwa. Iduapriem is an open-pit mine and its processing facilities include a carbon-in-pulp (CIP) plant.

Safety: With the heightened focus on training and education, safety performance improved consistently throughout the year. As at year end, the mine had achieved 3.57 million hours worked without a lost-time injury. The LTIFR was 0.46 (2006: 1.15). No fatalities were recorded.

Operating review: After the problems experienced in the first quarter of the year with a mill gearbox failure at the treatment plant which impacted adversely on production, there was a turnaround in the second and third quarters. Unfortunately, at the start of the fourth quarter, the mine suffered another setback in production when a fire broke out at the main substation which affected one of two transformers that supply power to the mine. The problem took about a month to resolve following which a series of crusher problems further impacted on the mine’s performance for the quarter. Total production for the year was 185,000 ounces which was 6% lower than the previous year.

Total cash costs for the year was 1% higher at $373/oz owing to the combined impact of the mill shutdown and increases in contract mining costs. Adjusted gross profit more than trebled to $23 million compared with $7 million in 2006, largely as a result of the higher gold price received.

Attributable capital expenditure for the year amounted to $23 million which was significantly up on the $5 million spent in 2006. The increased capital expenditure was spent primarily on the plant expansion and other items.

The expansion project, which will increase current plant capacity by about 15%, was a highlight of the year with additional staff being located on site to progress with detailed design work and preparation for the mobilisation of the main contractors. Construction of the expansion project advanced with the appointment of the civil contractor and completion of the tender for the structural mechanical and process piping component of the project. The electrical and instrumentation contracts are yet to be tendered. By year-end, good progress had been made with the earthworks and infrastructure for the new crushing plant, ball mill and thickener areas. Long lead items such as the gyratory crusher, ball mill shell and other relevant equipment arrived on site before year-end. The project is expected to be commissioned during the fourth quarter of 2008.

Growth prospects: The mine has limited growth prospects on surface. The scoping study to evaluate the viability of exploiting the considerable low-grade mineral resources of other properties lying in the Tarkwaian conglomerates that extend below the economic limits of the existing pits was not pursued during the year. However, the recent surge in the gold price has caused renewed interest in evaluating this prospect further. Additional drilling is planned to be carried out in 2008 to give more confidence to existing data and the scoping study will subsequently be progressed to pre-feasibility stage.

Outlook: Production at Iduapriem is projected to increase to between 215,000 ounces and 230,000 ounces in 2008, mainly as a result of the commissioning of the expansion project towards the end of the year and the projected improved performance of the existing crushing and milling circuits. A scats treatment project will also be initiated to bring in additional ounces which would otherwise have remained unused in stockpiles targeted for processing at the end of mine life.

Total cash costs are estimated to be in a range of $395/oz to $405/oz and capital expenditure will be around $42 million, to be spent primarily on the expansion project and tailings dam.