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Critical accounting policies
The preparation of AngloGold Ashanti’s financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the year. For a full discussion of the Company’s critical accounting policies, please
see “Item 5: Operating and financial review and prospects – Critical accounting policies” in the Company’s Annual Report on
Form 20-F for the year ended December 31, 2009 which was filed with the SEC on April 19, 2010, as amended on May 18,
2010.
Recently accounting pronouncements - adopted and issued
For a description of accounting changes and recent accounting pronouncements, including the expected dates of adoption and
estimated effects, if any, on the Company’s financial statements, see notes A “Basis of presentation” and B “Accounting
developments” to the condensed consolidated financial statements.
Contractual obligations
In addition to the contractual obligations as disclosed in the Company’s Annual Report on Form 20-F for the year ended
December 31, 2009, during the three months ended March 31, 2010, the Company drew down $35 million under the $1.15
billion syndicated loan facility. The Company repaid $350 million on the $1.15 billion syndicated loan facility and made normal
scheduled loan repayments of $2 million.
An amount of $613 million due on the 2009 convertible bonds is included in long-term debt as of March 31, 2010.
Short-term debt as of March 31, 2010 includes $251 million (including accrued interest) under the 2009 Term Facility and $711
million under the $1.15 billion syndicated loan facility. As of March 31, 2010, $nil million was drawn under the 2009 Revolving
Credit Facility. As at March 31, 2010, the estimated fair value of all derivatives making up the hedge positions was a negative
$2,204 million (at December 31, 2009: negative $2,366 million).
Recent developments
On February 19, 2010, AngloGold Ashanti announced that following discussions with the Environmental Protection Agency of
Ghana (EPA), the Iduapriem mine in Ghana had been temporarily suspended to address adverse environmental impacts arising
from the current tailings storage facility.
On February 24, 2010, AngloGold Ashanti announced that Mr Tito Mboweni, the former Governor of the South African Reserve
Bank has been appointed, with effect from June 1, 2010, as chairman of AngloGold Ashanti, to succeed Mr Russell Edey, following
his retirement as chairman and from the board at the conclusion of the annual general meeting held on May 7, 2010.
On March 26, 2010, AngloGold Ashanti announced that it has entered into a definitive joint venture agreement (JVA) with l’Office
des Mines d’Or de Kilo-Moto (OKIMO) relating to the development of the Ashanti Goldfields Kilo (AGK) project in the Democratic
Republic of the Congo (DRC) and the transfer of the exploitation permits to AGK. Under the JVA, AngloGold Ashanti and OKIMO
agree to jointly develop the AGK project through the joint company AGK, in which AGA holds an 86.22 percent interest and OKIMO
holds the remaining 13.78 percent. The JVA provides for the exploitation permits to be transferred from OKIMO to AGK covering an
area of approximately 6,000 square kilometers in the Ituri district in the northeastern DRC.
Following its announcement of February 19, 2010 of a temporary suspension of operations at the Iduapriem mine, AngloGold
Ashanti announced on March 30, 2010 that it had applied for a permit from the EPA for the construction of the tailings facility and
expected gold production to resume at Iduapriem in April. The Company was accelerating the establishment of a water treatment
plant and a new tailings storage facility which it aims to commission in the third quarter of 2010 and early 2011, respectively. In
addition, it announced that at its Obuasi mine in Ghana, AngloGold Ashanti had suspended the operation of gold processing
pending the implementation of a revised water management strategy to reduce contaminants contained in its discharge. Details of
the strategy were submitted to the EPA.
On April 9, 2010, AngloGold Ashanti noted the following investment grade ratings assigned to it:
• Moody’s Investors Service
:
Baa3, Outlook Stable
• Standard & Poor’s
:
BBB-, Outlook Stable
On April 21, 2010, AngloGold Ashanti announced that it had secured a $1.0 billion, four-year unsecured revolving credit facility. In
addition, the Company also announced the appointment of Mr Ferdinand (Fred) Ohene-Kena, the former Ghanaian Minister of
Mines and Energy to the board. The appointment became effective on June 1, 2010.
On April 22, 2010, AngloGold Ashanti announced the pricing of an offering of $1.0 billion of 10 year and 30 year unsecured notes
issued by its wholly-owned subsidiary AngloGold Ashanti Holdings plc and guaranteed by the Company. The issue was significantly
oversubscribed and the offering closed on April 28, 2010.