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Annual report suite 2012

Americas

Americas [map]
Ron Largent [photo]

Ron Largent
Executive Vice President
– Americas

Attributable gold production (000oz) Average number of employees (100% basis)
OPERATIONS
1 Argentina
Cerro Vanguardia 219 1,884
2 Brazil
AGA Mineração 388 4,239
Serra Grande 98 1,081
3 United States
Clipple Creek & Victor 247 692

Regional profile

The Americas Region is an important growth area for AngloGold Ashanti, with operations in Argentina, in Brazil, and in the United States.

Argentina

  • AngloGold Ashanti has a 92.5% stake in Cerro Vanguardia, the company’s sole operation in Argentina, with Fomicruz (the province of Santa Cruz) owning the remaining 7.5%.

    Located to the northwest of Puerto San Julián in the province of Santa Cruz, Cerro Vanguardia consists of multiple small open-pits with high stripping ratios. Shallow underground mining began in 2010 to access high-grade material and accounts for about 19% of current production. The orebodies comprise a series of hydrothermal vein deposits containing gold and large quantities of silver, produced as a by-product. 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) comprises two operational units, namely the Cuiabá and the Córrego do Sítio complexes. The Cuiabá complex includes the Cuiabá and Lamego mines and the Cuiabá and Queiroz plants.

    In operation for 26 years, the Cuiabá complex is principally a cut-and-fill mine accessed by ramp and shaft. Lamego is a new underground mine that exploits sulphide ore. Ore from the Cuiabá and Lamego mines is processed in the gold plant at the Cuiabá complex. The concentrate produced is then transported 15km by aerial ropeway to the Queiroz plant where milling, flotation, roasting, leaching, precipitation and refining occur. Total annual capacity of the complete circuit is 1.7Mt and recoveries of 93% are achieved.

    The Córrego do Sítio operation comprises one surface (oxide) and two underground (sulphide) mines, as well as a heap leach pad and sulphide plant. The latter, originally acquired from Eldorado late in 2008, was refurbished and brought into operation in January 2012.
  • Serra Grande is located in central Brazil, in the state of Goiás, about 5km from the city of Crixás. Serra Grande comprises three mechanised underground mines: Mina III, Mina Nova (which includes the Pequizão orebody) and Palmeiras – and an open-pit on the outcrop of the Mina III orebody. One dedicated metallurgical plant treats all ore mined. Annual capacity of the processing circuit, which has grinding, leaching, filtration, precipitation and smelting facilities, is 1.15Mt. During the year, AngloGold Ashanti increased its holding in Serra Grande from 50% to 100%.

United States

  • AngloGold Ashanti holds a 100% interest in Cripple Creek & Victor (CC&V) Gold Mining Company’s Cresson mine, located in the state of Colorado. A surface mining operation provides ore to a crusher and valley leach facility, one of the largest in the world. Production from the mine life extension (MLE1) project, which involved expanding capacity at the heap-leach pad, began in 2011 and is expected to continue until 2016 at current mining rates. A further life extension and production expansion project (MLE2) was approved in 2012 and production is expected to increase to more than 375,000oz from 2015.

Exploration projects

Two advanced exploration projects currently underway in Colombia are Gramalote and La Colosa projects – see Review of projects for further details.

Extensive exploration activities are being conducted in the region by either AngloGold Ashanti teams or together with joint venture partners, in Canada, Brazil and Argentina. See Review of exploration for further details.

Key performance indicators

AIFR – Americas [graph] Production – Americas [graph]
Productivity – Americas [graph] Total cash costs – Americas [graph]
Number of reportable environmental incidents
 Americas [graph]
Continental Africa – key statistics
Units 2012 2011 2010
Operation
Tonnes treated/milled Mt 25.7 23.6 23.8
Pay limit oz/t 0.024 0.026 0.025
g/t 0.822 0.891 0.843
Recovered grade oz/t 0.034 0.034 0.034
g/t 1.16 1.15 1.17
Gold production 000oz 953 891 842
Total cash costs $/oz 683 528 432
Total production costs $/oz 921 765 615
Capital expenditure $m 390 456 311
Productivity oz/TEC 17.47 20.70 22.44
Safety
Number of fatalities 1 2
AIFR per million hours worked 4.34 6.33 5.66
People
Average no of employees: Total 7,896 7,389 6,582
Permanent employees 5,509 5,273 4,737
Contractors 2,387 2,116 1,845
Environment
Total water consumption ML 7,456 6,750 5,817
Total water usage intensity kL/oz 7.45 6.92 6.22
Total energy usage million GJ 5.89 5.25 4.69
Total energy intensity GJ/oz 5.88 5.39 5.02
Total greenhouse gas (GHG) emissions 000tCO2e 389 348 314
Total GHG emissions/oz tCO2e/oz 0.39 0.36 0.34
Cyanide * used t 5,807 4,795 4,531
No. of reportable environmental incidents 1
Rehabilitation liabilities: Total $m 249.5 230.3 135.2
Restoration $m 211.9 192.3 102.6
Decommissioning $m 37.6 38.0 32.6
Community
Community expenditure $000 5,148 4,939 5,480
Payments to government $m 356 302 219
Dividends $m 10 7 6
Taxation $m 146 121 77
Withholding tax (royalties, etc) $m 44 33 24
Other indirect taxes and duties $m 10 11 6
Employee taxes and other contributions $m 94 83 68
Property tax $m 3 3 3
Other (includes export taxes) $m 49 44 35
  1. * International Cyanide Code compliance: CC&V was certified in 2007 and recertified in 2010; Córrego do Sítio and Queiroz (AGA Mineração) and Serra Grande were certified in 2009 and recertified in 2012. Cerro Vanguardia was certified in 2011.

Performance in the Americas Region in 2012

Safety
Regrettably, there was a fatal accident at the Cerro Vanguardia mine in January 2012, the first fatal accident at this mine since July 2002. The all injury frequency rate for the region improved to 4.34 per million hours worked.
Production
Combined production from the operations in this region increased by 7% to 953,000oz (2011: 891,000oz) in 2011. These operations now contribute about 24% towards group production (2011: 21%).

The increase in total cash costs was largely a result of inflationary effects in all countries, especially Argentina; lower by-product credits in Argentina and Brazil; higher costs for equipment maintenance and some contract and technical services in Argentina and the United States; and higher labour and operational development costs in Brazil. The Americas Region had the lowest regional cost within AngloGold Ashanti with CC&V ($638/oz) and Cerro Vanguardia($640/oz) being the lowest and third lowest respectively of all group operations.
Capital expenditure
Capital expenditure was largely invested in the implementation of various projects such as the Córrego do Sítio Sulphide project in Brazil (14%), the MLE/MLE2 projects in the United States (22%), and the heap leaching project in Argentina (5%). Ore Reserve development in Argentina and Brazil (19%), exploration (6%) and other stay-in-business expenditure (32%) complete the balance of the capital investments in the region.
People
An average of 7,896 people in total were employed in the region during the year, 7% more than the 7,389 people employed in 2011. This number was made up of 5,509 (70%) permanent employees and 2,387 (30%) contractors. This figure excludes the more than 1,200 people employed in Colombia and at the greenfield operations in the region. The Americas Region employs around 12% of group employees.

Productivity at these operations is relatively high, at 17.47oz/TEC in 2012 (2011: 20.70oz/TEC).
Communities
Social issues arising from heightened community expectations and ASM, as well as ongoing concerns for security in Colombia are areas of concern for this region.
Environment
AGA Mineração won the Environmental Management Award presented by the state of Minas Gerais. Severe drought again had a significant impact on production at CC&V during the year. Water management and permitting continued to be a challenge in Colombia.
Mineral Resource
and Ore Reserve
At the end of 2012, the total attributable Mineral Resource (inclusive of Ore Reserve) for the Americas Region, was 61.59Moz (2011: 49.29Moz) and the attributable Ore Reserve, 11.01Moz (2011: 10.89Moz). This makes up around 25% and 15% of the group’s Mineral Resource and Ore Reserve respectively.
Growth
Plans are under way to increase production from the Americas Region. At the Brazilian operations, the Córregio do Sítio sulphide project at AGA Mineração is scheduled to reach full production in 2013, with optimisation programmes to be introduced at the Cuiabá and Lamego operations. In the United States at CC&V, following approval of the second mine life extension project, development has begun.
Outlook*
In 2013, production is expected to be between 0.977Moz and 1.048Moz, at a total cash cost of between $669/oz and $694/oz. Capital expenditure of around $503m is planned, mainly on the implementation of MLE2 in the United States (35%), ore reserve development in Argentina and Brazil (16%) and other stayin- business items.

  1. * AngloGold Ashanti may not be able to reach these targets. Refer to the “Forward-looking statements” of this report, to the section entitled “Understanding and mitigating our risks”, and to the page entitled “Risk factors related to AngloGold Ashanti’s suite of 2012 reports”.