Performance review

Planning for the future

Planning to ensure the long-term sustainability of our business is guided by our financial and non-financial strategic objectives. In particular, it is based on exploration that develops a project pipeline of resources and reserves.

In parallel with our exploration work, our planning includes investing in the skills and technological developments needed to access, safely and efficiently, the extensive deep-level reserves at our South African operations.

In addition, our planning takes into consideration the remediation and social obligations that come with the cessation of mining and the closure of mining operations.

EXPLORATION

Our exploration programme covers greenfields and brownfields projects. The first steps of this programme are to identify prospective gold deposit targets, which undergo further intensive evaluation once identified as being worthwhile.

  • Greenfields exploration aims to discover large, high-value gold deposits that can provide a pipeline of further high-quality and rigorously prioritised exploration projects, which in turn lead to the development of new mines.
  • Brownfields exploration focuses on delivering value through incremental additions to reserves in existing mines as well as new discoveries in defined areas around existing operations. Brownfields exploration actively drives the creation 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.

Greenfields exploration

AngloGold Ashanti’s greenfields exploration team has a proven track record that includes the world-class discoveries of La Colosa, Gramalote, Tropicana, and Quebradona (Nuevo Chaquiro). These discoveries are attributed to our committed and professional team of geologists working on a portfolio of highly prospective and strategic ground holdings.

In 2014, the greenfields exploration business unit delivered exploration successes while simultaneously reducing costs. It has been highly successful in delivering new quality gold ounces and, now, copper tonnes into our resource inventory. The maiden copper-gold Mineral Resource for Nuevo Chaquiro in Colombia exemplifies the unit’s success. This is a significant copper-gold porphyry-style mineralised system, one of five known porphyry centres on the property – see www.anglogoldashanti.com for specific details on this deposit, including the exploration location maps.

During the year, greenfields activities became more focused, helped by rationalising tenements in Colombia and Australia. In 2014, realised expenditure was $41m. AngloGold Ashanti remains committed to its core greenfields projects and has over 13,000km2 of highly-prospective ground in Australia, Colombia, and Guinea along with small ground positions in Argentina and Brazil. Advanced greenfields exploration activities were conducted in four countries with the completion of over 100,000m of diamond, reverse circulation and aircore drilling. Drilling programmes aimed to test new high-priority targets in Australia and further delineate existing discoveries in Colombia, Guinea and Brazil.

The Nuevo Chaquiro maiden Mineral Resource is another significant discovery by AngloGold Ashanti, this time a large, high-grade polymetallic porphry.

Colombia: Exploration success continued at the Nuevo Chaquiro deposit, which is part of the Quebradona project, in joint venture with B2Gold (AngloGold Ashanti 89.75%). In November, AngloGold Ashanti announced a maiden Inferred Mineral Resource estimate for Nuevo Chaquiro of 604Mt at an average grade of 0.65% copper, 0.32g/t gold, 4.38g/t silver and 116ppm molybdenum for a contained metal content of 3.95Mt copper, 6.13Moz gold, 85.2Moz silver and 70,000t molybdenum*. The discovery represents a realistic inventory of mineralisation within a conceptual underground mine design, based on two lifts using a combination of block caving and panel caving. Results from the latest Mineral Resource drilling in December 2014 continue to return multiple consistently mineralised intersections in the high-grade (>0.6% Cu) intrusive phase within the declared Mineral Resource. Drilling is now aimed at better defining and extending the high-grade (>0.6% Cu) zone and bringing this to indicated status.

Brazil: Exploration progressed on the Graben project, in joint venture with Graben Mineração (AngloGold Ashanti earning 51%). Following the completion of high-resolution ground magnetics surveying and 3D inversion modelling, approximately 1,100m of diamond drilling were completed in December on priority targets within the highly prospective Juruena Belt. These holes targeted de-magnetised intrusive rocks associated with alteration and possible sulphide mineralisation. The holes successfully intersected altered and mineralised rocks.

Guinea: Exploration work continued in Siguiri Blocks 2, 3 and 4 (AngloGold Ashanti 85.0%) until 20 July, after which work was suspended due to the outbreak of the Ebola virus disease in the immediate region. On the Kounkoun trend located within 50km of the Siguiri mine, in Block 3, 7,259m of reverse circulation drilling was completed to test the continuation of mineralisation between KK1 and KK2. IP and drill testing of other targets in the region delivered negative results. In December, the greenfields exploration unit withdrew from Guinea and transferred responsibility for Siguiri Blocks 2-4 to the Siguiri brownfields unit.

Australia: In Western Australia, exploration activities on the Tropicana project, in joint venture with Independence Group NL (AngloGold Ashanti 70%), progressed solidly through the year with more than 60,000m of aircore, 1,800m of reverse circulation and 500m of diamond drilling being completed. Encouraging results were returned from Madras prospect approximately 25km south of the Tropicana Gold Mine. The Strawbridge Project (AngloGold Ashanti 100%) in Western Australia was added to the portfolio late in the year. In New South Wales at the Mullion Project (AngloGold Ashanti 100%), significant geophysical surveying was completed.

Brownfields exploration

Brownfields exploration was carried out in 11 countries, in and around our operations. A total of 389,900m of diamond and reverse circulation drilling was completed during the year.

South Africa: Five surface holes were drilled during the year – four at the West Wits operations at Mponeng’s Western Ultra Deep Levels (WUDLs) and one at the Vaal River operations – achieving a total length of 6,923m.

Argentina: Mineral Resource expansion and exploration continued at Cerro Vanguardia with follow-up drilling for vein extensions along strike and at depth, identifying additional mill ore. Mapping, trenching and channel sampling work defined new exploration targets.

Brazil: Mineral Resource development drilling continued at the Cuiabá and Lamego mines to support long-term planning and Mineral Resource definition ahead of mining. Surface drilling at the Córrego do Sítio mine continued to infill and expand the oxide Mineral Resource. Regional exploration tested near-mine satellite projects. At Serra Grande, exploration drilling continued to delineate the Inga mineralised structure. Geophysical surveys and soil sampling campaigns were completed as part of the target generation programmes in the district.

Colombia: Exploration in the Gramalote area focused on infill drilling to support the updated Mineral Resource estimate for the Gramalote Central deposit. Drilling was also directed at expanding the nearby Monjas West target. At La Colosa, Mineral Resource development drilling continued at a slower pace compared to previous years with other drilling expanded to support geotechnical, hydrological and site infrastructure studies. The geological model was updated with expansion of the deposit to the northwest and at depth.

United States: Mineral Resource development drilling continued at Cripple Creek and Victor and was directed toward identifying expansion opportunities for the current open pit operations through high wall laybacks. Selective drilling also tested deeper targets below or adjacent to planned open pit designs.

Tanzania: Focus has largely been on infill drilling within Geita’s current open pits (Geita Hill, Nyankanga and Star & Comet) and their extensions. Limited reconnaissance drilling programs were undertaken to test the underground potential at Star & Comet Deeps. A total of 111 holes (20,220m) was completed.

Guinea: At Siguiri, 17,823m of reverse circulation and diamond drilling were done across six projects in Block 1. These included reconnaissance, Mineral Resource delineation, and infill projects for oxide and fresh rock mineralisation. The Ebola virus epidemic in West Africa led to significant disruptions, particularly with field mapping and geophysics and the work programme was suspended in the second half of the year.

Long-term planning for the sustainability of our business is based on exploration that develops a pipeline resource and reserve.

Ghana: Underground exploration at Obuasi focused on a portion of the Red Zone 6 (Block 9) area above 50 level with the aim of upgrading the block’s Inferred Mineral Resource. At Iduapriem, the main focus in early-2014 was the logging, sampling and analysis of core from 2013’s Block 7&8 infill drilling. Several new targets were produced from the existing regional magnetic data over the Iduapriem concession. Analysis of a distinct magnetic anomaly in an area west of the Teberebie warehouse, which is also being exploited by artisanal and small-scale miners, led to the identification of hydrothermal, vein-hosted, mineralisation. Initial sampling results show some promise and a detailed follow-up will begin in 2015.

Democratic Republic of the Congo: Drilling at Kibali totalled 19,018m, with an additional 1,666m drilled on regional projects. The aim is to add material to the Ore Reserve at above run-of-mine grade, to find gap fillers where required, or to add sufficient new material (3-5Moz) to justify a step change to the operation. At Gorumbwa, three phases of infill drilling were completed during the year. A revised Mineral Resource estimation was completed in November and showed 470,500oz from 4.56Mt @ 3.21g/t (within the $1500 shell at 0.5g/t cut-off), with 22% of the Mineral Resource remaining Inferred.

Mali: A number of key oxide targets were identified at Sadiola. Research by the Centre for Exploration Targetting continued during the year and a structural framework for mineralisation was defined for Tambali and the FE complex. The most promising target, FE2S, shows potential for low-grade, wide ore zones over a 1.2km strike length. Some results remain outstanding for drilling along the Sadiola northern extension. Limited fresh rock exploration was conducted in the FE3 and FE4 pits with positive results at both. A scoping study was done for the newly generated Tambali Mineral Resource. Drilling targets were defined for a possible infill programme. Field mapping and sampling continued over the lease area and the geological map has been refined with new information from most target area.

Australia: A 3D seismic survey to image the mineralised zone down dip of Tropicana was designed and completed during the year. Its dataset is high quality and is being interpreted to create a structural model that will be used to help plan drill holes in 2015. At Sunrise Dam all mine exploration was focused on Mineral Resource definition and extension to support the underground mine. Drilling totalled 53,100m for the year – 67% diamond core and 33% UGRC. Drilling in 2014 targeted the Vogue/Dolly area (42%); Cosmo East (23%); Sunrise Shear (22%) and GQ South (13%). Drilling in Vogue/Dolly defined an Indicated Mineral Resource above the 1,700mRL, in line with the plan to start mining stopes in the upper part of Vogue/ Dolly area in 2015. In Cosmo East, the mining area has now been upgraded to an Indicated Mineral Resource down to the ~1,500mRL, enabling planned mining below the current 1,625mRL level. The 2015 programme is on more extensional drilling and defining new areas to replenish the Inferred Mineral Resource.

More detail on the company’s exploration work for the year is included under the Exploration updates on the website at www.anglogoldashanti.com.

TECHNOLOGY AND INNOVATION

Towards a new mining method for ultra-deep South African mines

A new mining method is being developed to safely mine all of the gold, only the gold, all of the time.

The long-term future of our South African mining operations lies in extracting ore from depths never before achieved and where safety and cost considerations preclude the use of conventional mining practices. Safety is paramount, and at AngloGold Ashanti our approach to addressing the challenges of depth is to design and develop innovative mechanised methods that remove miners from hazardous and unhealthy working places.

To overcome the challenges of depth we established the AngloGold Ashanti Technology Innovation Consortium (ATIC) charged with investigating and devising ways of safely mining all of the gold, all of the time and at greater depths than those at which we currently operate. The key component of the new mining method under development is the use of mechanical boring techniques targeting the gold reefs alone, thereby minimising dilution, while reducing or even eliminating seismicity risks.

An initial test site was established at TauTona mine in South Africa where reef-boring applications are being tested along with that of ultra-high strength backfill (UHSB). The success of this technology will enable the wider deployment of small-scale prototype units, initially targeting mining opportunities not currently available using conventional practices.

In 2014, ATIC which includes a group of original-equipment manufacturers, made significant progress in advancing and differentiating the profiles of the individual key technology projects. Progress on developing technologies for safe, automated mining for selective use at our deeplevel mines is as follows:

Ore body knowledge and exploration – geological drilling

Geological drilling is a key area of development for the new mining method. ATIC determined that a solution for fast and accurate geological information of the complex vein structures will be required to ensure that only the gold is being mined during the reef boring process. During 2014, significant progress was made in achieving targeted drilling rates with no loss in accuracy. An overall 294m depth (drill string length available) was reached in line with the set target of 8m/hour and depths of between 270m-300m. Reverse circulation is currently undergoing technical development to convert it into an underground application that can operate efficiently.

Reef boring

We have progressed beyond initial trials and are in the preliminary stages of producing from trial sites as we work to develop an optimal methodology for high-stress pillar environments.

The developments of the reef boring technologies have progressed beyond initial trials and are in the preliminary stages of producing ore from trial sites. Reef boring machines in three different sizes have been commissioned in an attempt to address the variable reef channel widths that reside in the deep underground mining environment of AngloGold Ashanti’s assets. These machines have been commissioned and, in many cases, deployed to the operating environment for testing and further improvement. The biggest challenges were found in areas with softer footwall conditions, typically associated with the C-reef ground. The commissioning, application and development of reef boring machines will continue at various prototype sites. Work teams will continue to focus on improving technical and work management aspects of machine performance toward design expectations.

  • Machine manufacturing: Four medium-reef (width 400-800mm) machines and two smallreef (width 0-400mm) machines were manufactured and delivered. Final design of the MK4 machine was approved and manufacturing is in progress. Delivery is expected in the second quarter of 2015 for the extension test site at TauTona mine.
  • TauTona – test site: 30 holes were drilled during the year at diameters of between 660mm and 720mm to address changing reef channel. Improvement in the drilling theory remains a focus area and different reamer cutter configurations were tested. Due to the reef channel increasing, more holes will be drilled and the further information obtained will allow us to evaluate the extent to which the reamers can be deployed at the prototype sites.
  • TauTona mine – prototype site: Three medium-reef (width 400mm-800mm) Atlantis machines were commissioned at TauTona and were progressively deployed at different prototype sites on 97 Level where 28 holes were drilled. Industrial and mechanical engineers assisted with support on technical and work management aspects to improve machine performance to reach design expectations. One machine was modified to allow it to operate in raise-boring mode, whereby the machine is set up on an upper level and connected for drilling downwards.
  • Great Noligwa and Kopanang: Testing started using the new hydro-power equipment, the narrow-reef (0-400mm) machine. Nine holes were drilled. This drilling method requires a double-pass drilling sequence where an initial pilot or direction hole is drilled, followed by a larger diameter cutter that reams the initial hole to a greater width. Drilling of the 115mm pilot holes succeeded in delivering acceptable drilling rates and directions. However, reaming with 250mm and 350mm reamers remains a challenge as the softer footwall conditions associated with the C-reef ground caused the cutter head to diverge from the direction hole into the barren rock below the reef. It was decided to test the technology in the Vaal Reef where footwall conditions are more consistent, and the machine was moved to Kopanang.

    Thermal spalling which has shown encouraging results in initial tests at Kopanang will be considered for extracting the narrow C-reef vein at Great Noligwa.

  • Site equipping: In 2014 equipping of the prototype sites was completed and work continues on equipping sites for 2015.

Ultra high-strength backfill (UHSB)

The successful development of the UHSB product, together with the reef-boring technology for use in mining applications as a support medium, creates the potential for the earlier-than-planned mining of shaft pillars, the pre-extraction of planned stabilising pillars and post-extraction of existing stabilising pillars.

During the year, alterations were made to the underground backfill plant at TauTona mine to enhance the efficiency of the system. All available reef-bored holes in the prototype production block and test site have been filled. A data-logging software system was installed and commissioned in the prototype production site and a tailings dry plant has been commissioned on surface.

Surface testing to increase the mixing volume from 4m³/hour to 8m³/hour produced positive results. Alternative mixing methodologies were developed with a laboratory-scale mixer in Germany. A full-scale prototype mixer was manufactured, delivered and commissioned. Initial trials gave positive results, now the mixing trials are focused on increasing the volume per mix as well as to reduce the mixing times.

REHABILITATION AND CLOSURE

Closure planning continues throughout the duration of a project and the life of mine.

Preparations for rehabilitation and closure are integral to mine planning and development, and evolve from the start of exploration to the end of mining activity. Closure planning, which takes into account community livelihoods and land rehabilitation, continues throughout the life of the mine and is integrated into daily business activities, beginning at the very start of projects and operations. Integration takes into account the end use of land and, where applicable, open pits. Waste rock dumps are designed and constructed to maximise opportunities for progressive rehabilitation. In addition sustainable livelihood developments are incorporated into each operation’s community investment programmes.

This being an integral part of every operation’s life cycle, includes the assessment of associated liability costs and the assurance of adequate financial provision to cover these costs, as well as optimised planning to ensure closure costs are minimised.

Mining operations may be halted permanently or temporarily before a mine’s Mineral Resource or Ore Reserve are fully depleted. This may be for a multitude of individual or combined reasons than can include a decline in the gold price, excessive cost inflation, labour issues, political risk, safety or environmental issues. AngloGold Ashanti takes these possibilities into account to ensure that its responsibilities to rehabilitation and commitment to leaving a positive legacy once mining has ceased are fulfilled.

Our remediation obligations are integral to the environmental management plans (EMPs) of each of our operations and comply fully with the requirements of the regulatory authorities. And while we prepare for the physical liabilities we also prepare for their costs.

Our closure, decommissioning and restoration liabilities are appraised each year – both their costs and the work that will be involved. The likely quantum of costs and their timing can be estimated within reasonable limits based on our current knowledge of the effects mining has had on the environment. Costs can also be estimated based on expectations of the technologies likely to be available when remediation takes place, on likely future legal and regulatory enactments and on previous experience of remediation.

In making these estimates we use conventional financial methodologies to calculate the present value of the financial settlement obligations and their timing. Future cash flows are based on current prices and discounted at a pre-tax rate that reflects current market assessments of the time value of money. Our estimate of the group’s rehabilitation obligation increased to $851.0m at the end of 2014, from $728.4m at the end of 2013 as a consequence of a number of factors. The year-on-year increase in rehabilitation liabilities is due to the annual revision in the life-of-mine plans, changes in assumptions such as the discount and inflation rates and an increase in cost estimates.

We are confident that our provisions are adequate and that we shall be able to honour our remediation obligations as and when our operations approach closure.

Rehabilitation liabilities per operation ($ million)
  2014 2013
Operation Restoration Decommissioning Total Total
South Africa 12.2 71.3 83.5 78.1
Great Noligwa 0.2 2.3 2.5 7.0
Kopanang 1.1 11.0 12.1 10.6
Moab Khotsong 4.2 19.0 23.2 18.8
TauTona (1) 2.7 10.3 13.0 10.7
Mponeng 1.1 1.7 2.8 1.2
Legacy projects       6.8
– Vaal River 7.4 7.4  
– West Wits 3.5 3.5 4.5
– Other 0.4 0.4 0.5
Mine Waste Solutions 2.5 15.4 17.9 17.4
Nufcor SA 0.7 0.7 0.6
Continental Africa 291.9 171.3 463.2 411.0
Ghana
       
Iduapriem 34.8 8.3 43.1 37.2
Obuasi 153.7 63.6 217.3 183.5
Mpasatia (Bibiani pit) 10.0 10.0 9.6
Guinea
       
Siguiri 36.4 38.8 75.2 69.9
Mali (2)
       
Morila 3.8 1.2 5.0 4.8
Sadiola 13.6 12.5 26.1 27.3
Yatela 6.1 10.1 16.2 14.6
DRC
       
Mongbwalu 2.8 1.8 4.6 7.2
Kibali (2) 6.9 6.9 3.7
Tanzania
       
Geita 30.7 28.1 58.8 53.2
Australasia 32.0 33.5 65.5 53.1
Australia
       
Sunrise Dam 21.1 11.3 32.4 29.3
Tropicana 10.9 22.2 33.1 23.8
Americas 221.9 50.9 272.8 236.6
Argentina
       
Cerro Vanguardia 42.0 15.5 57.5 47.3
Brazil
       
AngloGold Ashanti Mineração 55.8 19.6 75.4 86.5
Serra Grande 14.8 6.6 21.4 22.4
United States of America
       
Cripple Creek & Victor 103.6 9.2 112.8 78.7
Colombia
       
La Colosa 5.7 5.7 1.7
Other 4 4
  562.0 327.0 889.0 778.8
Less equity-accounted investments included above(2) (7.3) (30.7) (38.0) (50.4)
  554.7 296.3 851.0 728.4
  1. (1) Includes Savuka.
  2. (2) The equity-accounted investments refer to the Mali assets and Kibali in the DRC.

Five-year operational statistics One-year outlook