Issuu on Google+

ANNUAL REPORT 2001


Corporate Information

Contents Chairman’s Statement Highlights Chief Executive’s Review Operations Review Financial Review Production Ore Reserves and Mineral Resources Financial Statements and Corporate Information

Financial Calendar Annual General Meeting First Quarter Results Second Quarter Results Third Quarter Results Full Year Results

28 May May July October February

2 3 4 8 17 20 22 25

2002 2002 2002 2002 2003

2001

1.66

Ashanti Goldfields Company Limited

2000

1.74

Registered in Ghana No. 7094 ARBN 074 370 862

1999

1.56

1998

1.55

1997

1.17

Registered Office Gold House Patrice Lumumba Road PO Box 2665 Accra, Ghana Telephones:

Total Gold Production (millions of ounces)

2001

335.0

2000

335.0

1999

372.0

1998

385.0

1997

450.0

Total Gold Price Realised (US$ per ounce)

2001

190.0

2000

187.0

1999

205.0

1998

218.0

1997

254.0

Total Cash Operating Costs before exceptional items (US$ per ounce)

2001

158.9

2000

203.9

1999

211.2

1998

208.1

1997

171.4

Group Operating Cash Flow before exceptional items (US$ millions)

2001

62.7

2000

30.5

1999

66.1

1998

73.9

1997

58.4

Earnings before exceptional items (US$ millions)

(Satellite) Fax: (Satellite) Website

65

Bibiani Mine PO Box 98, Bibiani, Ghana Telephone: Satellite Fax:

(+233-51) 20118 873 761314865

Freda-Rebecca Mine PO Box 70, Bindura, Zimbabwe Telephone: (+263-71) 7300/1 Fax: (+263-71) 6919

(+233-21) 772190 (+233-21) 772235 (+233-21) 778160 (+233-21) 778167 (+233-21) 761311 874 1562524 (+233-21) 775947 874 1562525 www.ashantigold.com

Geita Mine PO Box 532 Geita, Tanzania Telephone: Fax:

Ernest Abankroh Company Secretary Telephone: (+233-21) 774977 Fax: (+233-21) 778155 E-Mail Address ernest.abankroh@ashantigold.com London Office 3rd Floor, Roman House Wood Street London EC2Y 5BA United Kingdom Telephone: (+44-20) 7256 9938 Fax: (+44-20) 7256 9939 Investor Relations Corporate Office James Anaman Managing Director, Public Affairs Telephones: (+233-21) 778178 (+233-21) 772190 Fax: (+233-21) 778156 E-Mail Address james.anaman@ashantigold.com London Office Corinne Gaisie UK Representative Telephone: (+44-20) 7256 9938 Fax: (+44-20) 7256 9939 E-Mail Address corinne.gaisie@ashanti.co.uk Golin Harris Allan Jordan (New York) Telephone: (+1-212) 697 9191 Fax: (+1-212) 697 3720 E-Mail Address ajordan@golinharris.com

(+255-28) 2520 500 (+255-28) 2520 502

Iduapriem Mine PO Box 283, Tarkwa, Ghana Telephone: (+233-362) 505 (Satellite) 873 1627111 Fax: (+233-362) 479 (Satellite) 873 1627112 Obuasi Mine PO Box 10, Obuasi, Ghana Telephones: (+233-582) 494–8 (+233-582) 475 Fax: (+233-582) 268 Siguiri Mine c/o Société Ashanti Goldfields de Guinée KM4, Cameroun B.P. 1006 Conakry, Guinée Telephone: (+1-301) 916 53 87 Satellite 873 761333884 873 685-51881 Fax: (+1-301) 916 53 79 Satellite 873 76333885 Ashanti Exploration 4, Nortei Ababio Street Roman Ridge PO Box 2665, Accra, Ghana Telephones: (+233-21) 774377 (+233-21) 767335/6 Fax: (+233-21) 778739

Cover picture: Mrs Kallo Maimouna Maga, Headmistress of the Siguiri Primary School and some of her pupils in an outdoor play session during school vacation

Photography by Norman Childs. Designed and produced by THE

& FACTOR. Printed in England by royle corporate print


Corporate Profile

1

is an African-based international gold mining and exploration group with six producing mines in four African countries: Ghana, Guinea, Tanzania and Zimbabwe. The mines, in which the Group has interests have 44 million ounces of measured and indicated gold resources and active exploration projects in seven African countries. The Company is listed on five international stock exchanges.

■ To be a premier precious metals mining company in Africa

Ashanti’s objectives are to: ■ Retain and consolidate its position as a senior tier gold producer and diversify where appropriate ■ To enhance shareholder value for the long term ■ Maintain appropriate levels of hedge protection to assist the Group in meeting its commitments as and when they fall due ■ Reduce and refinance Group debt ■ Participate in the continuing consolidation occuring within the industry ■ Maintain the best mining practices and highest safety standards

Ashanti’s strategy seeks to: ■ Maximise cash generation through strong operational performance at all our mines ■ Continue with the restructuring of the hedge book ■ Continue to maintain cost and performance focus by setting and attaining critical measures in production, cost and profitability ■ Secure operational and financial gains by continually improving internal resources and systems ■ Foster good relations with key stakeholders ■ Maintain and increase ore reserves by focusing on exploration near existing operations ■ Increase asset portfolio with focused exploration in strategically important countries ■ Continue with the high degree of safety-consciousness established among staff with a view to achieving a National Occupational Safety Award (NOSA) Five-Star rating across the Group ■ Continue to provide social amenities in pursuit of our objectives of good corporate citizenship where we operate


2

Chairman’s Statement

In 2001, Ashanti made considerable progress in a number of key areas, notably in production and finance, despite the continuing challenges that faced the gold industry during the year. The performance of the five Ashanti mines and the Geita gold mine, which we operate and own jointly with AngloGold Limited, not only compared favourably with industry standards of production and efficiency but also either attained or maintained very high ratings by the National Occupational and Safety Association (NOSA) of South Africa. The Chief Executive’s Review and other relevant reports which follow, spell out these achievements in greater detail. Stock Market Performance Ashanti’s shares performed very strongly on the New York Stock Exchange by the end of the year, having traded from US$1.875 on 2 January to US$4.25 on 31 December 2001. This represented a substantial improvement in a difficult investment climate. In order to concentrate on the New York Exchange as the main centre for trading our stock in North America we have with effect from 31 January 2002 delisted from the Toronto Stock Exchange. At home, the Ghana Investment Promotion Council presented the Company with two special awards for its contributions to the economy and its election as the country’s number one in a “Club of 100” top corporate bodies in Ghana. Earnings and Dividend Ashanti more than doubled its earnings during 2001 from US$30.5 million (before exceptional items) in 2000 to US$62.7 million. As a result of this and a programme of cost reductions, the Group also generated cash during the year which resulted in a reduction in its gross debt level by US$39.8 million. Although the Company’s liquidity position further improved during the year, the Board is unable to recommend the payment of dividends this year because of its negative reserves and the prevailing restrictions under

M E BECKETT

the banking covenants and the Board’s overall objective of reducing the Company’s indebtedness. Gold Industry The gold price remained at historical lows, and a return above US$300 per ounce on a sustainable basis was thought to be optimistic. In the circumstances, we continued to pursue successful measures to drive down costs, and consolidate what we have achieved in the immediate past. Debt Restructuring During the year, the Board reviewed the Company’s refinancing options and was pleased to announce, on 25 January 2002, a conditional agreement with an ad hoc committee of holders of the 51/2% Exchangeable Guaranteed Notes due 2003 (the “Existing Notes”) regarding a proposed restructuring of the Existing Notes. A further announcement on conditional margin free arrangements and a new revolving credit facility, was made on 18 March 2002. Further details are set out in the Financial Review on page 18. Upon successful completion and implementation of Ashanti’s debt restructuring, the Company’s financial flexibility is expected to improve substantially. Investor Relations The progress made on the restructuring and reports on our strong operations formed the thrust of the Group’s investor relations efforts during the year. Our two major shareholders, Lonmin Plc and the Government of Ghana, re-affirmed their support for the Company. His Excellency, President Kuffour, in particular, has indicated that his government saw Lonmin as a strategic partner and Lonmin have also confirmed that, although their focus was on platinum their interest in Ashanti had not waned. We are grateful to both shareholders for their continued support. Ashanti also held comprehensive briefing sessions with the President of Ghana and his cabinet, as well as with relevant parliamentary committees in Ghana during 2001. We count on the continued support of all our shareholders during our restructuring efforts and beyond.


3

Board of Directors During the period under review, we appointed Mr T E Anin as a non-executive director on 27 July 2001 and Mr G E Haslam on 8 March 2002. Dr K Duffuor, Mr A Ashiabor, Dr D Creed and Mr J N Robinson resigned as directors on 23 July, 31 July, 31 August 2001 and 8 March 2002, respectively.

Salient Features

We are pleased to report that the Board has requested Trevor Schultz to serve an additional year as Chief Operating Officer until 31 December 2003, following his attainment of the normal retirement age of 60 years. The extension is subject to shareholders’ approval.

■ Group gross debt levels reduced further by US$39.8 million

Employees and the Community Through these difficult trading conditions Ashanti’s employees have remained dedicated, loyal and very resourceful and this has underscored our achievements on safety, production and finance this year and we thank them for their outstanding contribution. The Board maintained incentive schemes and other measures to reward the efforts of its employees. In addition, Ashanti joined the Global Compact of the United Nations Organisation which seeks to promote world-class standards in human rights, labour policies and environmental practices. Future In 2002, we will continue to strive to consolidate on our achievements during 2001 with a view to ensuring that Ashanti remains a competitive and successful company able to capitalise on its outstanding natural and human resources.

M E Beckett Chairman

■ Earnings of US$62.7 million – more than double as compared to last year’s pre-exceptional earnings ■ Strong operational performance resulting in gold production of 1.66 million ounces at a cash operating cost of US$190 per ounce

■ Significant progress made towards refinancing Ashanti’s debt ■ All mines achieved superior NOSA safety ratings

Highlights

2001

Financial (US$) Total Turnover Earnings before exceptional items Earnings after exceptional items Operating cash flow before exceptional items Earnings per share before exceptional items Earnings per share after exceptional items Gold Production (ounces) Obuasi Bibiani Iduapriem/Teberebie Ayanfuri Siguiri Freda-Rebecca Geita (group share) Total

2000

554.4m 62.7m 62.7m

582.2m 30.5m (141.1m)

158.9m 0.56 0.56

203.9m 0.27 (1.25)

528,451 253,052 205,130 11,517 283,199 102,654 272,781 1,656,784

640,988 273,711 193,868 36,316 303,381 112,164 176,836 1,737,264

Total Production Costs before exceptional items (US$ per ounce) Cash operating costs 190 187 Royalties 8 8 Depreciation and amortisation 55 65 Total 253 260 Mine Ore Reserves and Mineral Resources (million ounces)* Proved and Probable Ore Reserves 26.1 Measured and Indicated Mineral Resources 44.0 *includes 100% of Geita

ASHANTI ENDED THE YEAR 2001 ON A VERY STRONG NOTE

25.3 43.3


4

Chief Executive’s Review

Overview

Exploration

I am pleased to report that Ashanti overcame significant challenges to end 2001 on a stronger note. Apart from confronting a depressed gold price environment, Ashanti initiated moves to refinance and restructure its 2003 debt obligations.

Our exploration efforts centred on replenishing reserves and resources at our mine sites. We were able to delineate further reserves and resources at Geita (before depletion) and also increased the reserves at Iduapriem/Teberebie.

The Company maintained its focus on cash generation, which it applied to reduce its debt, and continued to restructure its hedge book.

Operations Ashanti’s operations performed well in 2001. Group production and cost targets were exceeded, particularly at Iduapriem and Geita. The Group’s total gold production for the year was 1,656,784 ounces which compares with a total gold production of 1,737,264 ounces in 2000. The reduced production in 2001 was mainly due to the closure of surface mining operations at Obuasi, cessation of mining at Ayanfuri, and reduced production at Siguiri and Bibiani. Total cash operating costs were US$190 per ounce as compared to US$187 per ounce in 2000, due to lower production. Obuasi’s cash operating costs however fell by 8 per cent from US$208 per ounce in 2000 to US$192 per ounce in 2001. Solid operational performance has helped to reduce Group debt levels further.

While we were unable to replenish fully reserves at Siguiri, at Obuasi, we found promising high-grade intersections below 50 Level (5,000 feet), suggesting a significant resource potential at the mine. The opportunities to undertake further exploration to prove up the world-famous Obuasi ore body, remain an exciting prospect for us.

Financial Performance During the year, the Group’s earnings more than doubled, our hedge book was further restructured and we applied cash generated from our business to pay down our debts and provide the basis for growth. The Group’s gross debt level was reduced further by US$39.8 million in 2001. This included a reduction in the amounts owed under the revolving credit facility from US$88.8 million in 2000 to US$55.0 million. To afford us greater flexibility, we negotiated a US$25.4 million working capital facility for 2002 from some of our existing banks on a voluntary basis. Reduction in debt levels led to a 43 per cent decrease in interest charges. Corporate administration expenditure was 16 per cent lower at US$21.2 million. Whilst mine site related exploration progressed during the year, non mine site exploration was rationalised during 2001. Turning to the restructuring of our debt, we are proactively implementing a refinancing plan to restructure our balance sheet and provide greater financial flexibility. This involves the proposed restructuring of the Existing Notes (including an equitisation of 25%), ongoing margin free arrangements and a new revolving credit facility. Details of these are provided in the Financial Review.

opposite: Overview of the world’s largest BIOX® plant and other installations at Obuasi at night


5

DURING THE YEAR, THE COMPANY’S EARNINGS MORE THAN DOUBLED . . .


6

Chief Executive’s Review

Community Relations

Safety, Health and Environment

Maintaining good community relations is essential for Ashanti’s operations and its African franchise value. We therefore continued to discharge our responsibilities to the communities and countries in which we operate. At Bibiani, we created opportunities for farming for the local community and assisted them in that regard. A microcredit scheme and a training programme that we initiated for the youth have been extremely successful. A similar programme initiated at our Freda-Rebecca mine in Zimbabwe was also instrumental in keeping employee morale high and operations stable in the difficult economic situation in that country.

The Group safety performance in 2001 was within the corporate target level of 0.8 injuries per 200,000 hours worked and we continue to maintain a world class safety record.

In 2001, Ashanti joined the Global Compact, a United Nations-sponsored initiative to foster greater responsibility and participation by the world’s private sector in enhancing corporate governance. Ashanti was the first company to join in Ghana and I am particularly honoured to be serving on the body which advises the UN SecretaryGeneral on Global Compact issues.

NOSA safety audits, which are internationally acknowledged in the mining industry, were undertaken at all our mines. With the recent upgrade at Obuasi, all Ashanti operations are now internationally rated at four stars or better. The Group strives to improve on its standards of environmental protection. Land restoration runs parallel with mining activities at open pit mining operations within the Group.

Employees The improvement in Ashanti’s performance during 2001 would not have been possible without the tireless efforts and loyalty of our employees. I therefore take this opportunity to thank everyone of them for their hard work and perseverance and count on their support in the future.

S E Jonah Chief Executive and Group Managing Director

left: Land reclamation after cessation of surface mining at Obuasi opposite: Heap leach operator at work in Siguiri, Guinea


7

ALL ASHANTI’S OPERATIONS ARE RATED FOUR STARS OR ABOVE BY NOSA OF SOUTH AFRICA


8

Operations Review

Overview In 2001, Management continued to focus on the maintenance of world class safety and operational and cost efficiencies, whilst enhancing production and sustainability at each operation through the implementation of key strategic initiatives.

Obuasi Obuasi produced 528,451 ounces, principally from underground ore. This compared with the 640,988 ounces the mine produced from both underground and surface ores the previous year. Cash operating costs reduced to US$192 per ounce as against US$208 per ounce in 2000. The improvement in cost was achieved through closure of the high cost surface operations as well as cost control measures and re-engineering of mining and processing operations. Underground Mining Production from underground mining reached 2,507,000 tonnes, 7 per cent more than the 2,348,000 tonnes produced in 2000. The grade for 2001 at 7.90 g/t, was slightly ahead of the 7.87 g/t achieved in 2000. Production from the main mechanised stoping areas was improved by the introduction of new trucks and improved layouts. The portion of fully developed reserves was increased to provide greater operational flexibility. These improvements have led to a reduction in unit mining costs. Major underground project works in 2001 included the further development, support and track installation on the high volume railway system at the 41 Level main haulage. Development was completed from the Kwesi Mensah Shaft (KMS) through to the Brown Sub-Vertical Shaft (BSVS) in the south of the mine and to Blocks 5 and 6 in the north. The Sansu Ventilation Shaft was commissioned. The surface foundation work for the 300 south ventilation airway was completed in preparation for raise-boring operations in 2002. The development of the decline to the bottom of KMS to facilitate the removal of rock spillage was completed. At the Kwesi Renner Shaft (KRS) excavation for the crusher station

was completed. A new pump station was constructed and commissioned on 8 Level in the north of the mine to improve mine pumping capacity and water control. Surface Mining Surface rehabilitation work on landscaping and re-vegetating the old pits and waste dumps was ongoing during the year. There was no production from surface mining activity at Obuasi in 2001. Processing Gold clean up was started in the Pompora Treatment Plant (PTP) and the Oxide Treatment Plant (OTP) remained on care and maintenance. As a result, a total of 4.06 million tonnes were processed compared to 5.33 million tonnes in 2000 when the two plants were in operation. At the Sulphide Treatment Plant (STP), new flotation cleaner cells were introduced resulting in an increase in the concentrate grade from around 55 g/t to 85 g/t. Accompanying the increase in precious metal grade is an increase in the sulphur grade of the concentrates which has enhanced the BIOX速 process. The plant modification led to a reduction in concentrate tonnage throughput, an increase in BIOX速 residence time and a significant reduction in reagent consumption resulting in reduced operating costs. Gold production from the treatment plant was 482,982 ounces from the processing of 2.39 million tonnes of ore at a grade of 7.53 g/t and a plant recovery of 83.5 per cent. This compares with 412,824 ounces from 2.47 million tonnes at a grade of 6.32 g/t and a recovery of 82.1 per cent in 2000. In the financial year 2001, ore throughput at the Tailings Treatment Plant (TTP) was 1.67 million tonnes at a grade of 2.46 g/t compared with 1.83 million tonnes in 2000 at a grade of 2.39g/t. Recovery at 32.7 per cent was an improvement on the 31.1 per cent achieved in 2000. Despite the 9 per cent reduction in processed tonnage, recovered gold fell by only 2 per cent from 43,756 ounces in 2000 to 42,999 ounces in 2001 due to improved grade and recovery. The reduced tonnage

opposite: The Obuasi 41 level underground train approaches a tipping point


9

MANAGEMENT CONTINUED TO FOCUS ON THE MAINTENANCE OF WORLD CLASS SAFETY AND OPERATIONAL AND COST EFFICIENCIES


10

Operations Review

throughput resulted from mechanical problems with pumps and excavators in the second half of the year. Exploration As was the case in 2000, the main objectives of the underground diamond drilling programme were the upgrading of the resource status across the mine and the delineation of new resources in the south section above 41 level, the north section of the mine above 20 level and below 50 level across the base of the mine between the Adansi shaft and the BSVS. In the south, promising intersections were obtained in the previously weak East Lode and at Sansu. Drilling below 50 level provided consistently good results across strike showing that mineralisation extended down to the deepest levels drilled. Several plus 20 g/t intersections over mineable widths were made in quartz material down to 56 level in the vicinity of the KMS. The most significant intersection occurred at 62 level below KMS, where 13.3 metres of quartz with visible gold assayed 66 g/t. This hole confirmed the down dip extension of the ore body to at least some 400 metres below the 1,600 metres elevation, currently the deepest level of the existing mine infrastructure.

Ayanfuri Production continued at Ayanfuri on a reduced scale for the first half of the year as some small deposits were extracted and old pits cleaned up. A total of 11,517 ounces were produced in 2001 at a cash operating cost of US$243 per ounce. At the end of the 2nd quarter, Ayanfuri’s operations ceased and the mine closure plan is currently being implemented.

Iduapriem (80% owned)

mined grade at 1.58 g/t was higher than the 1.25 g/t achieved in 2000. The higher grades resulted from the mining of higher grade material from the Teberebie ore blocks. Gold production from the Carbon-in-Leach (CIL) plant increased to 158,103 ounces from 128,374 ounces in 2000. This was largely due to the increased feed grade of 1.92 g/t compared to 1.58 g/t in 2000. Mill throughput and recovery were respectively 1.5 per cent and 1.3 per cent higher than in 2000. Heap leach gold production was 47,027 ounces compared to 38,518 ounces in 2000. The higher heap leach gold production was due to a 16 per cent increase in tonnage, and a 16 per cent increase in stacked grade. Recovery at 61.7 per cent compares with 67.5 per cent the previous year reflecting the harder and less leachable nature of the heap leach ore coming from the Teberebie pits. During 2001, a feasibility study was undertaken on upgrading the CIL plant capacity to 4.0 million tonnes from its present 2.9 million tonnes per annum in order to reduce unit costs. The project includes the installation of an additional SAG mill, upgrading of the elution circuit, conversion from CIL to Carbon-in-Pulp (CIP), and the relocation of crushing activities to a larger crusher which is already in operation close to the Teberebie pits. The installation of an overland conveyor to transfer crushed product to the Iduapriem processing plant is also proposed. The results of the study are positive, improving cash flow overall and expanding the ore reserves. The project reached the approval stage at the end of the year and is expected to be completed during 2002.

Gold production for 2001 was 205,130 ounces of gold, exceeding 193,868 ounces of gold in 2000. Cash operating costs were reduced to US$214 per ounce from US$223 per ounce in 2000. At 4.85 million tonnes, the ore mined in 2001 was approximately the same as the previous year. However, the

left: Boukaria, a village near the Siguiri mine, benefits from potable water provided by Ashanti opposite: Gold pour in Obuasi


11

THE IMPROVEMENT IN COSTS AT OBUASI WAS ACHIEVED THROUGH CLOSURE OF THE HIGH COST SURFACE OPERATIONS AS WELL AS EFFECTIVE COST CONTROL MEASURES


12

Operations Review

Bibiani Bibiani produced 253,052 ounces at a cash cost of US$170 per ounce during 2001 compared to 273,711 ounces at a cash cost of US$134 per ounce the previous year. The reduction in gold production at Bibiani is due to the reduced mill feed grade and lower recovery. This resulted in the higher cash operating cost per ounce produced. Milled throughput for the year was 2.77 million tonnes at a feed grade of 3.46 g/t compared to 2.76 million tonnes at 3.70 g/t the previous year. As was the case in previous years the reconciliation between the reserve model and the actual mined grade and tonnage showed a positive variance and the operation has continued to exceed performance levels predicted in the feasibility study and mine plan. Metallurgical recovery in 2001 decreased to 83.7 per cent from 86.7 per cent in 2000 due to the mining and processing of more refractory type ore during the second half of the year. During the year, the evaluation of a trackless underground mining operation to exploit extensions of the open pit resources to depth continued but was not finalised. This work will continue in 2002. Business initiatives to acquire prospective ground within economic haulage distance of the processing plant and extend mine life beyond 2004 will also be further progressed in 2002. In 2001 a small deposit, Mpesetia, containing 30,000 reserve ounces was acquired and approvals to mine this ore and truck it to Bibiani are being progressed.

Siguiri – Guinea (85% owned) In 2001, Siguiri produced a total of 283,199 ounces at a cash operating cost of US$220 per ounce compared with 303,381 ounces at US$181 per ounce in 2000. Production and cash operating costs were impacted by lower than expected metallurgical recovery from the material stacked during the year. A total of 8.52 million tonnes of ore were mined compared to 10.80 million tonnes in 2000 and the heap leach plant

processed a total of 9.06 million tonnes grading 1.33 g/t compared with 8.88 million tonnes at 1.34 g/t the previous year. Apparent plant recovery for the year reduced to 73.1 per cent from 79.3 per cent in 2000. This was largely due to solution reticulation and third layer stacking problems which resulted in lower than anticipated leach rates. During 2001, considerable work was undertaken to solve these problems. The third layer stacking was suspended while the solution management system was upgraded and the controls on blending the lateritic and saprolitic ore types improved.

Freda-Rebecca – Zimbabwe Full year production in 2001 was 102,654 ounces at a cash operating cost of US$222 per ounce compared to 112,164 ounces at US$198 per ounce in 2001. Underground production for the year at 1.16 million tonnes at a head grade of 3.56 g/t was 11 per cent higher than the 1.04 million tonnes achieved in 2000. Some 56,000 tonnes of open pit oxide ore were also extracted from the Phoenix Prince pit, adjacent to the processing plant. Processed tonnage for the year was 1.12 million tonnes at 3.30 g/t compared with 1.00 million tonnes at 3.89 g/t in 2000. Plant recovery in 2001, however, was 86.4 per cent compared to 89.8 per cent the previous year. Processing operations were affected by a series of mechanical problems on the SAG mills in the first half of the year, whilst problems with the primary crushers and leach tank agitator gearboxes impacted on production in the second half of the year. Persistent interruptions to the processing plant combined with reduced leach tank capacity made it difficult to maintain steady state operating conditions and gold recovery was adversely affected. The low recovery and lower feed grade therefore accounted for the decrease in gold production relative to 2000.

left: Water quality tests at Iduapriem opposite: Medical check up at the Iduapriem mine clinic


13

AS AT 31 DECEMBER 2001, ASHANTI’S HEDGE BOOK HAD A POSITIVE MARK-TO-MARKET VALUE OF US$88.8 MILLION BASED ON A SPOT PRICE OF US$277 PER OUNCE.


14

Operations Review

The economic and political situation in Zimbabwe during 2001 continued to pose a series of difficult problems for the management team. The lack of foreign exchange and the fixed exchange rate coupled with high inflation put severe pressure on the supply function and operating costs. Towards the end of the year, the foreign exchange problem was alleviated slightly but the situation remained tight.

A total of 4.52 million tonnes of ore grading 3.80 g/t were mined at a strip ratio of 6.0:1. This compares to 1.24 million tonnes at 3.00 g/t at a strip ratio of 9.6:1 in the previous year. In 2001, a total of 4.58 million tonnes were processed at a grade of 3.91 g/t and a recovery of 93.0 per cent compared to 2.08 million tonnes at 2.94 g/t and a recovery of 92.0 per cent in 2000.

Geita (50% J.V.) – Tanzania Geita mine, in its first full year of production, produced a total of 545,562 ounces at a cash operating cost of US$143 per ounce, of which 50 per cent is attributable to Ashanti.

In the last quarter of 2001, the haul road between the Kukuluma deposit and the processing plant was completed and a haulage contract was signed to commence production from that deposit in the first quarter of 2002.

Summary of production and cash operating costs per ounce Obuasi

Ayanfuri

Iduapriem*

Bibiani

Siguiri

FredaRebecca

Geita**

Total/ Average

Twelve months to 31 Dec 2001 Production (ounces) Cost per ounce (US$)

528,451 192

11,517 243

205,130 214

253,052 170

283,199 220

102,654 222

272,781 143

1,656,784 190

Twelve months to 31 Dec 2000 Production (ounces) Cost per ounce (US$)

640,988 208

36,316 245

193,868 223

273,711 134

303,381 181

112,164 198

176,836 145

1,737,264 187

* Iduapriem figures include those of Teberebie. ** This number represents 50% of Geita’s production in 2001; 2000 being 100%.

left: Routine environmental tests at Geita opposite: The carbon-in-leach processing plant at Bibiani


15

ALL OF ASHANTI’S OPERATING MINES GENERATED POSITIVE CASH FLOWS IN 2001


16

Operations Review

Exploration Ashanti’s exploration effort continued to focus on and around its existing mining operations. East Africa Tanzania – At Geita, exploration during the year focused on the identification and evaluation of several prospects within Geita Gold Mine’s extensive mining and prospecting licences. An indicated resource of 4.5 million tonnes grading 2.2 g/t, equivalent to 313,000 ounces of contained gold was delineated at Chipaka, situated 6 kilometres northwest of the plant. Significant mineralisation (including 39 metres grading 9.4 g/t from 90 metres) was intersected down plunge from the Geita Hill open pit and will require follow-up. Encouraging results were also received from the Prospect 30, Samena and Nyamatigata prospects. Infill drilling of the Nyankanga underground resource commenced towards the end of the year as part of the full feasibility study. Pit optimisations will also be undertaken on the Roberts and Chipaka resources to seek to delineate open pit reserves. Elsewhere in Tanzania, Ashanti continued its regional assessment of the Lake Victoria Goldfields Belt during the year. West Africa Guinea – Exploration around the Siguiri mine site was mainly targeted at locating and defining oxide mineralisation. Saprolite reserves were outlined at Sintroko, 4 kilometres south of the Kosise pit. Definition drilling of both laterite and saprolite was also completed at the newly identified and nearby Soukonu deposit and in an area immediately south of the current Kosise pit limits.

to minor bedrock mineralisation. Exploration has re-focused onto a package of permits subject to an agreement signed with Rio Tinto in October 2001. Mali – Follow up geochemical sampling and RAB drilling were undertaken on a number of prospects in southeastern Mali. Additional targets have been identified and are currently being evaluated. Ghana – Exploration and assessment continued on a number of prospects on and in the vicinity of the Bibiani, Iduapriem and Obuasi operations. Southern Africa Zimbabwe – At the RAN project near Freda-Rebecca, an initial resource of 2.8 million tonnes grading 2.6 g/t gold and 0.42 per cent copper was outlined, a portion of which should be amenable to open pit mining. A feasibility study is currently being undertaken. In addition a small open pit oxide reserve was delineated at the Phoenix Prince prospect. Central Africa D.R.Congo – During the year, Ashanti increased its Kimin concession by 6,000 square kilometres. The concession now covers most of the historically productive Kilo greenstone belt. Exploration will commence as soon as the unrest in that part of the country is finally curbed to ensure the safety of our employees.

Côte d’Ivoire – Rotary Air Blast (RAB) and aircore drilling showed that the 20 kilometre long M’Basso/Bebou and the 7 kilometre striking Abrabine gold-in-soil anomalies, in the Allangaou permit of south-eastern Côte d’Ivoire, were related

left: The Vice-President of Ghana, Alhaji Aliu Mahama, presents a special award for Ashanti’s contribution to the Ghanaian economy to James Anaman, Managing Director, Public Affairs


Financial Review

17

Summary ■ Annual gold production of 1.66 million ounces ■ Average cash operating cost of US$190 per ounce ■ Earnings of US$62.7 million – more than doubled as compared to last year’s pre-exceptional earnings

31 December 1999 oz m

Protection

8.1

■ Conditional agreement reached with an ad hoc committee of noteholders to a proposed restructuring of the Existing Notes ■ New conditional margin free trading arrangements agreed with all but one active hedge counterparty ■ Conditional agreement reached with a syndicate of four banks to underwrite a new US$100 million revolving credit facility Revenue Total revenue for the year of US$554.4 million was 5 per cent lower than last year’s level of US$582.2 million, due to lower production. The average gold price realised during the year of US$335 per ounce was in line with the price obtained in 2000. Spot revenue amounted to US$455.8 million (2000: US$485.2 million). Hedging income totalled US$98.6 million, comprising US$41.6 million realised from the close-outs of maturing hedging contracts and US$57.0 million released from income from previously closed-out hedging contracts (deferred hedging income). In accordance with the Group’s accounting policy, income from early close-outs is credited to revenue for the originally designated delivery period. At 31 December 2001, deferred hedging income totalled US$65.6 million (2000: US$120.0 million) of which US$35.0 million will be credited to revenue in 2002.

Hedging The table given below shows the changes to Ashanti’s hedge book over a two-year period from 31 December 1999:

S VENKATAKRISHNAN

Reduction achieved oz m

5.1

3.0

(Average price: US$362/oz)

Commitments

12.2

7.5

4.7

(Average price: US$347/oz)

■ Group gross debt level reduced by US$39.8 million to US$325.9 million ■ Working capital facility of US$25.4 million secured for 2002

31 December 2001 oz m

Lease rates Prevailing spot price Mark-to-Market Valuation (US$)

7.6

5.0

US$289/oz

US$277/oz

2.6

Negative Positive 253 million 88.8 million

During the two-year period ended on 31 December 2001, Ashanti reduced its commitment levels and lease rate exposure by 4.7 million ounces and 2.6 million ounces respectively. As at 31 December 2001, Ashanti’s hedge book had a positive mark-to-market value of US$88.8 million based on a spot price of US$277 per ounce (2000: positive mark-to-market value of US$29.1 million based on a spot price of US$273 per ounce). Ashanti’s 50 per cent share of the Geita hedge book (which is margin free) had a negative mark-to-market value of US$2.4 million at the year end. Ashanti had 5.1 million ounces of protection at an average rate of US$362 per ounce at 31 December 2001. Over the life of the hedge book, Ashanti has 40 per cent of total forecast production protected and 61 per cent of total forecast production committed. The Ashanti hedge book’s mark-to-market has benefited significantly over the past two years from a lower US interest rate environment and the time decay of the book. The lease rate spike during April/May 2001 did not have a material impact and cashflows generated from lease rate swaps over the year were positive. During 2001, two significant restructurings on the book led to an improvement in committed levels and the simplification of the lease rate swaps. The first entailed the accelerated conversion of a convertible structure, which led to a reduction of 554,400 ounces of commitments. The second restructuring entailed the removal of the spot indexing feature of one of the gold lease rate swaps which will benefit Ashanti at higher spot prices.


18

Financial Review

Cash Operating Costs Total cash operating costs were US$190 per ounce as compared to US$187 per ounce in 2000, primarily due to lower production at Siguiri and Bibiani. Obuasi’s cash operating costs fell by 8 per cent from US$208 per ounce in 2000 to US$192 per ounce in 2001. Cash operating costs for the individual mines are set out on page 14. Exploration and Corporate Administration Exploration expenditure during the year was lower at US$6.5 million (2000: US$14.2 million) due to rationalisation of nonmine site exploration expenditure. Corporate Administration expenditure for the year was also lower by 16 per cent at US$21.2 million (2000: US$25.3 million) due to our cost reduction efforts. Depreciation Total depreciation and amortisation charge (before exceptional items) for the year was lower at US$94.9 million (2000: US$114.8 million) due to the asset impairment recorded in 2000. Total Costs Total costs before exceptional items, but including depreciation and amortisation for the year, amounted to US$457.6 million (2000: US$493.1 million). The total cost per ounce fell from US$284 per ounce in 2000 to US$276 per ounce in 2001. In cash flow terms, despite lower production, total costs (excluding depreciation and amortisation but including capital expenditure) were unchanged at US$252 per ounce. Financing Costs Total interest charges fell by 43 per cent from US$51.3 million in 2000 to US$29.4 million in 2001. This significant reduction was due primarily to lower debt levels as compared to 2000. Taxation Total taxation charged to the profit and loss account amounted to US$6.8 million (2000: US$8.8 million). This included US$6.6 million of corporate tax for the current year, US$8.2 million in respect of prior years and a credit for release of deferred tax of US$8.0 million. Earnings Earnings for the year were more than double the level recorded last year at US$62.7 million (2000: Earnings before exceptional items at US$30.5 million). This was due to lower depreciation and interest charges partly off-set by lower production. Earnings per share was US$0.56 (2000: US$0.27 per share before exceptional items). Dividend The Group is in the process of strengthening its financial position by restructuring its balance sheet. The banking covenants presently prohibit the payment of cash dividends until gross borrowings fall below US$300 million. Given these reasons and the deficit in Ashanti’s reserves, no dividend is proposed for 2001. Cash Flow The net cash inflow from operating activities was US$95.4 million (2000: US$149.4 million). The reduction in 2001 was due to the non-consolidation of Geita following the sale of a 50 per cent interest in December 2000 and lower cash flows from other operations. Net interest paid was US$22.4 million (2000: US$56.4 million) and capital expenditure was US$49.6 million (2000: US$145.6 million).

Capital Expenditure Group capital expenditure decreased from US$145.6 million in 2000 to US$49.6 million primarily due to the completion of the Geita project in 2000. The Group’s capital expenditure during 2001 included US$30.1 million at Obuasi and US$19.5 million at the other mines, excluding Geita. Ashanti’s 50 per cent share of Geita’s 2001 capital expenditure amounted to US$7.5 million. Debt The Group’s gross debt fell by US$39.8 million, from US$365.7 million in 2000 to US$325.9 million in 2001. The Group’s net debt level as at 31 December 2001 was US$270.7 million (2000: US$292.1 million). These amounts exclude the 50 per cent share of the US$124.3 million non-recourse Geita project finance loan. No drawings were made under the Group’s revolving credit facility (“Existing RCF”) during 2001. The amounts outstanding under this Facility fell from US$88.8 million in 2000 to US$55.0 million in 2001. Ashanti has also secured an extension of its working capital facilities, on a voluntary basis from certain of its current lending banks, of US$25.4 million which is available for drawing, pursuant to the terms of the Existing RCF, up to 30 December 2002. Proposed Restructuring, Margin Free Arrangements and New Revolving Credit Facility On 25 January 2002, Ashanti announced that it had agreed terms in principle with an Ad Hoc Committee (“Ad Hoc Committee”) of the holders of 51⁄2% Exchangeable Guaranteed Notes due 15 March 2003 (“Existing Notes”) representing approximately 62 per cent of the outstanding principal of US$218.6 million to a Proposed Restructuring (“Proposed Restructuring”) of the Existing Notes. The principal terms of the proposed restructuring are: ■ Equitisation of US$54,642,750 of the Existing Notes (representing 25 per cent of the Existing Notes) by the issue of ordinary shares in Ashanti (“Ashanti Shares”) at US$3.70 per Ashanti Share. ■ Exchange of US$163,928,250 of the Existing Notes (representing 75 per cent of the Existing Notes) for US$163,928,250 of 7.95% Exchangeable Guaranteed Notes due 30 June 2008 (“New Exchangeable Notes”). ■ The New Exchangeable Notes will be exchangeable by the holders into Ashanti Shares at any time at an exchange price of US$5.75. ■ The New Exchangeable Notes will be mandatorily redeemable by Ashanti in semi-annual instalments of US$12 million commencing on 31 December 2003 to the extent not already exchanged. The balance of any New Exchangeable Notes not exercised or redeemed will be repayable in full on 30 June 2008. Ashanti also has the option on each semi-annual redemption date to redeem an additional US$12 million of New Exchangeable Notes. ■ Ashanti will, upon completion of the Proposed Restructuring, pay to the then holders of the Existing Notes an exchange fee of 2 per cent of the face value of the then outstanding Existing Notes. In aggregate, this payment will amount to approximately US$4.37 million. The Proposed Restructuring, which is intended to be implemented by way of a scheme of arrangement to be sanctioned by the Grand Court of Cayman Islands, is subject to the satisfaction of a number of conditions including: the preparation and despatch of formal documentation; listing of the new securities to be issued on the relevant stock exchanges; the approval of the requisite majorities of the holders of the Existing Notes, Ashanti’s


Financial Review

shareholders and its hedge counterparties; and the approval of its lending banks or repayment of the Existing RCF. The members of the Ad Hoc Committee have undertaken to vote in favour of the scheme of arrangement to implement the Proposed Restructuring, subject to Ashanti complying with certain obligations and satisfying certain conditions within certain time limits. In particular, the formal documentation to implement the Proposed Restructuring must be posted by 31 May 2002 and the relevant scheme meetings held by no later than 31 August 2002. A pre-condition to the Ad Hoc Committee being bound by a written undertaking to vote in favour of the Proposed Restructuring was Ashanti entering into appropriate ongoing margin free arrangements with its hedge counterparties, other than Credit Suisse First Boston International (“CSFB”). Interim margin free agreements (“Interim Margin Free Agreements”) have now been signed by all of Ashanti’s active hedge counterparties other than CSFB (the “Relevant Hedge Counterparties”). However, one of the Interim Margin Free Agreements (signed by a Relevant Hedge Counterparty, which has agreed to novate half of its hedge book to Standard Bank London Limited conditionally only upon the Interim Margin Free Agreements becoming effective prior to 15 March 2003), is being held by Ashanti’s lawyers subject to an escrow agreement. This Interim Margin Free Agreement will be released from escrow to Ashanti on Ashanti certifying, prior to 15 March 2003, that it believes (acting in good faith) that, should the relevant Interim Margin Free Agreement be released from escrow, all the conditions to the Interim Margin Free Agreements will become effective unless, prior to that date, Ashanti has been notified that there has been an event of default resulting in an early termination event under the ISDA Master Agreement between such counterparty and Standard Bank London Limited. All of the Interim Margin Free Agreements are now conditional upon satisfaction of the following conditions (the “Conditions”) prior to 15 March 2003: ■ the Proposed Restructuring (or such other restructuring as is approved by an appropriate majority of hedge counterparties) being completed; ■ release from escrow to Ashanti of the Interim Margin Free Agreement currently held in escrow; and ■ Ashanti having available to it loan facilities in an amount of not less than US$25 million available for drawing for working capital purposes for a period of not less than 15 months from the date of posting of the documentation to shareholders in relation to the Proposed Restructuring. If the Conditions are satisfied at a stage when CSFB has not signed the Interim Margin Free Agreement then, subject to Ashanti complying with certain covenants and no events of default being declared, Ashanti will benefit in the period after 31 December 2002 from ongoing margin free trading arrangements unless CSFB is entitled to, and actually does, call for margin. Based on CSFB’s current hedgebook with Ashanti and current market conditions, Ashanti believes that CSFB would only be entitled to call for margin after 31 December 2002 as a result of breaching the enhanced margin limits if the gold price exceeded approximately US$370 per ounce. It should be noted however that the threshold for a triggering of the margin limits in respect of CSFB will also vary as a result of changes in US interest rates, gold lease rates and gold price volatility. Once the Interim Margin Free Agreements have become effective and have been signed by CSFB, the Interim Margin Free Agreements will terminate and the Existing Margin Free Trading Letter with its hedge counterparties dated October 2000 (“Existing

19

MFTL”) will be amended and restated to provide for margin free trading on an ongoing basis, subject only to certain limited termination rights. As part of the implementation of the Proposed Restructuring, Ashanti has mandated four banks to arrange a new US$100 million five year revolving credit facility (“New RCF”) for the Ashanti Group. Those banks or their affiliates have also agreed to underwrite the New RCF. The underwriting and the facility are conditional inter alia on (i) Interim Margin Free Agreements being signed by all the Relevant Hedge Counterparties; (ii) execution of a facility agreement by no later than 15 June 2002; (iii) the non-occurrence of certain material adverse changes; (iv) the Proposed Restructuring being completed and (v) appropriate regulatory approvals. The Refinance Plan (containing the Proposed Restructuring, Interim Margin Free Agreements and New RCF) which Ashanti submitted to its hedge counterparties and its lending banks under the terms of its Existing RCF and Existing MFTL has not been objected to by either the hedge counterparties or the lending banks within the period permitted for objections. The above restructuring, once implemented, will improve Ashanti’s balance sheet (by decreasing debt and increasing equity), extend the maturity profile of Group debt and increase Ashanti’s financial flexibility. Going Concern Ashanti has secured an extension of its working capital facilities, within the Existing RCF, on a voluntary basis from certain of its current lending banks of US$25.4 million. The working capital facility is available for drawing only up to 30 December 2002. This working capital facility, if drawn, falls due for repayment on 30 December 2002. The outstanding balance of the Existing RCF falls due for repayment on 15 January 2003 and the Existing Notes fall due for repayment on 15 March 2003. Under the Existing MFTL, Ashanti benefits from margin free trading with its hedge counterparties only until 31 December 2002 and from increased margin thresholds until 31 December 2004, subject in each case, to compliance with covenants and no event of default being declared. The above matters raise substantial doubt about the Group’s ability to continue as a going concern. Ashanti is proposing to implement the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF in order to ensure the Company’s continued operational existence. There remain a number of conditions which need to be satisfied in order for the Proposed Restructuring to become effective and the Interim Margin Free Agreements and the New RCF to become unconditional. There can be no guarantees that these conditions will be satisfied. Should any of the relevant conditions not be satisfied or if the Proposed Restructuring is withdrawn for any reason, then it is possible that, unless a standstill or other accommodation is reached with its bank group, hedge counterparties and in due course the holders of its Existing Notes, Ashanti might not be able to meet its debts as they fall due. If the Proposed Restructuring is not successfully implemented during the current financial year, there will be uncertainty as to whether the Group will be able to continue in operational existence for at least the next 12 months. However, taking into account the progress which Ashanti has achieved in relation to the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF and other relevant factors, the Directors have formed the judgement, at the time of approving these financial statements, that it is appropriate to continue to use the going concern basis in preparing these financial statements.


20

Gold Production Summary 2001

12 months to 31 Dec 2001

12 months to 31 Dec 2000

2,507 7.90

2,348 7.87

– – – –

891 4.20 8,907 10.0

Sulphide Treatment Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

2,394 7.53 83.5 482,982

2,466 6.32 82.1 412,824

Pompora Treatment Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

– – – 2,470

787 8.01 82.4 167,725

Oxide Treatment Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

– – – –

245 2.85 74.2 16,683

Tailings Treatment Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

1,666 2.46 32.7 42,999

1,831 2.39 31.1 43,756

Obuasi Total Processed Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

4,060 5.45 74.3 528,451

5,329 5.06 73.9 640,988

Distribution of Obuasi Production (ounces) Underground Surface Tailings Total

485,452 – 42,999 528,451

493,926 103,306 43,756 640,988

332 1.50 1,059 3.2

884 1.50 2,988 3.4

329 1.20 90.8 11,517

1,121 1.21 83.3 36,316

4,852 1.58 13,839 2.9

4,824 1.25 14,954 3.1

2,731 1.92 94.6 158,103

2,691 1.58 93.4 128,374

Obuasi Underground Mining Ore production (’000 tonnes) Ore grade (g/t) Surface Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio

Ayanfuri Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio Heap Leach Ore stacked (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

Iduapriem Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio CIL Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)


Gold Production Summary 2001

21

12 months to 31 Dec 2001

12 months to 31 Dec 2000

2,633 0.91 61.7 47,027 205,130

2,264 0.78 67.5 38,518 166,892

26,976

2,560 3.58 13,981 5.5

2,368 3.38 15,223 6.4

2,769 3.46 83.7 253,052

2,761 3.70 86.7 273,711

8,517 1.34 5,268 0.6

10,804 1.33 5,333 0.5

9,064 1.33 73.1 283,199

8,878 1.34 79.3 303,381

1,156 3.56

1,042 3.69

Surface Mining Ore processed (’000 tonnes) Ore grade (g/t)

56 2.10

– –

Processing Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

1,121 3.30 86.4 102,654

1,003 3.89 89.8 112,164

4,522 3.80 27,215 6.0

1,240 3.00 11,852 9.6

4,582 3.91 93.0 545,562 272,781

2,075 2.94 92.0 176,836 176,836

Group Summary (ounces) Managed gold production Geita JV 50% (ounces) Total gold production Less minority interests

1,384,003 272,781 1,656,784 73,249

1,737,264 – 1,737,264 81,584

Total Attributable (ounces)

1,583,535

1,655,680

Iduapriem

(continued)

Heap Leach Ore stacked (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces) Total Gold Produced (ounces)

Teberebie Gold Produced (ounces)

Bibiani Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio CIL Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

Siguiri Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio Heap Leach Ore stacked (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces)

Freda-Rebecca Underground Mining Ore production (’000 tonnes) Ore grade (g/t)

Geita Mining Ore production (’000 tonnes) Ore grade (g/t) Waste mined (’000 tonnes) Strip ratio CIL Plant Ore processed (’000 tonnes) Head grade (g/t) Recovery (%) Gold produced (ounces) Ashanti’s share (ounces)


22

Ore Reserves and Mineral Resources

Measured and Indicated Mineral Resources as at 31 December 2001

Location

Measured Tonnes Grade (million) (g/t)

Tonnes (million)

Indicated Grade (g/t)

Tonnes (million)

Total Grade (g/t)

Gold Ounces (million)

Equity Ounces (million)

Obuasi Underground Surface Tailings

22.5 17.8 15.1

11.2 3.0 2.0

34.8 1.6 5.3

9.5 2.8 2.2

57.3 19.4 20.4

10.1 3.0 2.1

18.7 1.9 1.4

18.7 1.9 1.4

Sub Total

55.4

6.1

41.8

8.3

97.2

7.0

21.9

21.9

Other Locations Iduapriem (80%)/Teberebie (90%) Bibiani surface Bibiani tailings Siguiri (85%) Freda-Rebecca Geita (50%) Youga (45%)

58.8 1.4 4.4 28.7 12.3 43.3 –

1.6 1.9 1.1 1.1 2.5 3.7 –

37.6 6.8 0.4 56.1 2.8 45.0 7.4

1.6 3.2 0.9 1.2 2.8 4.1 3.0

96.4 8.2 4.8 84.8 15.1 88.4 7.4

1.6 3.0 1.1 1.1 2.5 3.9 3.0

5.0 0.8 0.2 3.1 1.2 11.1 0.7

4.0 0.8 0.2 2.6 1.2 5.5 0.3

Sub Total

148.9

2.2

156.1

2.3

305.0

2.3

22.1

14.7

Total

204.3

3.2

197.9

3.6

402.2

3.4

44.0

36.6

2000 Total

184.3

3.4

204.0

3.6

388.3

3.5

43.3

35.6

Proved and Probable Ore Reserves as at 31 December 2001 Tonnes (million)

Proven Grade (g/t)

Tonnes (million)

Probable Grade (g/t)

Tonnes (million)

Grade (g/t)

Gold Ounces (million)

Equity Ounces (million)

Obuasi Underground Surface Tailings

5.0 1.3 15.1

7.9 5.2 2.0

37.3 – 5.3

8.0 – 2.2

42.3 1.3 20.4

8.0 5.2 2.1

10.9 0.2 1.3

10.9 0.2 1.3

Sub Total

21.4

3.6

42.6

7.3

64.0

6.0

12.4

12.4

Other Locations Iduapriem (80%)/Teberebie (90%) Bibiani surface Bibiani tailings Siguiri (85%) Freda-Rebecca Geita (50%) Youga (45%)

31.4 1.4 4.4 20.9 4.3 37.7 –

1.7 1.9 1.1 1.1 2.5 3.4 –

7.2 6.1 0.4 35.8 1.1 25.0 5.0

1.7 3.2 1.0 1.2 2.4 4.5 3.2

38.6 7.5 4.8 56.7 5.4 62.7 5.0

1.7 3.0 1.1 1.2 2.5 3.8 3.2

2.1 0.7 0.2 2.1 0.4 7.7 0.5

1.7 0.7 0.2 1.8 0.4 3.9 0.2

Sub Total

100.0

2.2

80.5

2.5

180.5

2.4

13.7

8.9

Total

121.4

2.5

123.2

4.2

244.6

3.3

26.1

21.3

2000 Total

107.5

2.6

128.3

4.0

235.8

3.3

25.3

20.4

Location

Total

Notes on the Ore Reserves and Mineral Resources Statement 1. This ore reserve and mineral resource statement is classified according to the Australasian Code for the Reporting of Identified Mineral Resources and Ore Reserves issued by the Joint Committee for the Australasian Institute of Geoscientists and the Australian Mining Industry Council (JORC). 2. All Identified Mineral Resources are reported as in situ or contained resources utilising JORC guidelines and are inclusive of the stated Ore Reserve.


Ore Reserves and Mineral Resources

23

3. The Proved and Probable Ore Reserves contained within the Identified Mineral Resources have been estimated using guidelines of the JORC code and are reported as recoverable ore reserves to which appropriate factors have been applied to allow for mining loss and dilution. 4. For economic studies and the determination of cut-off grades, a gold price of US$300 (2000: US$300) per ounce was assumed. 5. The Ore Reserves and Identified Mineral Resources reported represent 100 per cent of the Ore Reserves and Mineral Resources at the respective properties and no allowance has been made for minority interests or Joint Venture interests. Ashanti’s percentage interest is shown in brackets for properties where Ashanti has less than 100 per cent ownership and the corresponding entity ounces are disclosed accordingly.

7. The competent persons who have overseen the estimation of the Ore Reserves and Identified Mineral Resources are listed as follows: Mine

Obuasi Iduapriem Bibiani Siguiri Freda-Rebecca Geita Youga

Resources

Reserves

J Amanor K Osei C de Vente A Pardey J Chinyaukira R Adofo/J Hill D Bansah

J Chamberland S Ndede J Seaward A Pardey V Utete J Yelland T Obiri-Yeboah

8. At a gold price of US$275 per ounce, it is estimated that the ore reserves will decrease by approximately 5 per cent. 9. Data may not compute exactly due to rounding.

6. Inferred identified mineral resources are not reported in the statement. Reconciliation for the year ending 31 December 2001

Location

Measured and Indicated Mineral Resources (Ounces million) Net Opening (Depletion)/ Closing 31 Dec 2000 Additions 31 Dec 2001

Proved and Probable Ore Reserves (Ounces million) Net Opening (Depletion)/ Closing 31 Dec 2000 Additions 31 Dec 2001

Obuasi Ayanfuri Iduapriem (80%) Bibiani Siguiri (85%) Freda-Rebecca Geita (50%) Youga (45%)

20.0 0.1 5.1 1.1 3.3 1.3 11.7 0.7

1.9 (0.1) (0.1) (0.1) (0.2) (0.1) (0.6) –

21.9 – 5.0 1.0 3.1 1.2 11.1 0.7

11.1 – 2.2 1.0 2.3 0.4 7.8 0.5

1.3 – (0.1) (0.1) (0.2) – (0.1) –

12.4 – 2.1 0.9 2.1 0.4 7.7 0.5

Total

43.3

0.7

44.0

25.3

0.8

26.1


24

Glossary of Terms

adit A tunnel driven horizontally into a mountainside providing access to an ore deposit.

ore Material that contains one or more minerals, at least one of which has commercial value and which can be recovered at a profit.

BIOXŽ Gencor’s registered name for its bio-oxidation leaching process.

open pit/open cut Surface mining in which the ore is extracted from a pit. The geometry of the pit may vary with the characteristics of the orebody.

bio-oxidation The use of bacterial activity to oxidise sulphide minerals. carbon-in-leach (CIL) process A modification of CIP whereby carbon is added directly into the slurry during leaching as opposed to CIP where carbon is added after leaching is complete. carbon-in-pulp (CIP) process A process used to recover dissolved gold from a cyanide leach slurry. Coarse activated carbon particles are moved countercurrent to the slurry, absorbing the gold as it passes through the circuit. Loaded carbon is removed from the slurry by screening. The gold is recovered from the loaded carbon by stripping in a caustic cyanide solution followed by electrolysis or by zinc precipitation. cash operating cost A measure of the average cost of producing an ounce of gold, calculated by dividing the total cash operating costs in a period by the total gold production over the same period. contained ounces Represents ounces in the ground without reduction due to mining loss or dilution. cyanide leaching The extraction of a precious metal from an ore by its dissolution in a cyanide solution. decline An inclined underground access way. diamond drilling or core drilling A drilling method, where the rock is cut with a diamond bit, usually to extract cores. dilution Waste which is commingled with ore in the mining process. feasibility study A detailed technical and economic analysis of the viability of a project covering all aspects from geology, environmental and legal matters to mining, processing and operations. flotation A recovery process by which valuable minerals are separated from waste to produce a concentrate. Selected minerals are induced to become attached to air bubbles and to float. forward sales The sale of a commodity for delivery at a specified future date and price, usually at a premium to the spot price. geochemical sampling Samples of soils, stream sediments or rock chips taken to ensure the quantities of trace and minor elements. grade The relative quality or percentage of ore metal content. heap leaching A low-cost technique for extracting metals from ore by percolating leaching solutions through heaps of ore placed on impervious pads. Generally used on low-grade ores. indicated mineral resource That part of a Mineral Resource which has been explored, sampled and tested through appropriate techniques at locations which are too widely or inappropriately spaced to confirm geological and/or grade continuity but which are spaced closely enough for continuity to be assumed, and from which data have been collected to allow tonnage, densities, shape, physical characteristics, grade and mineral content to be estimated with a reasonable level of confidence. inferred mineral resource That part of a Mineral Resource inferred from geological evidence and assumed but not verified geological and/or grade continuity, where information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes is limited or of uncertain quality and reliability and on the basis of which tonnage, grade and mineral content can be estimated with a low level of confidence. measured mineral resource That part of a Mineral Resource which has been explored, sampled and tested through appropriate techniques at locations such as outcrops, trenches, pits, workings and drill holes which are spaced closely enough to confirm geological and/or grade continuity, and from which detailed reliable data have been collected to allow tonnage, densities, shape, physical characteristics, grade and mineral content to be estimated with a high level of confidence. milling/mill The comminution of the ore, although the term has come to cover the broad range of machinery inside the treatment plant where the gold is separated from the ore. mineralised zone Any mass of host rock in which minerals, at least one of which has commercial value occur. mtpa Million tonnes per annum.

orebody A continuous well defined mass of material of sufficient ore content to make extraction economically feasible. oxide That portion of a mineral deposit within which sulphide minerals have been oxidised, usually by surface weathering processes. pre-stripping Removal of overburden in advance of beginning operations to remove ore in an open pit operation. probable ore reserve That mineable part of a Measured and/or Indicated Mineral Resource, inclusive of diluting materials and allowing for losses which may occur when the material is mined, on which appropriate assessments have been carried out, including consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors, to demonstrate at the time of reporting that extraction could reasonably be justified. prospect A mineral deposit with insufficient data available on the mineralisation to determine if it is economically recoverable, but warranting further investigation. prospecting licence An area for which permission to explore has been granted. proved ore reserve That mineable part of a Measured Mineral Resource, inclusive of diluting materials and allowing for losses which may occur when the material is mined, on which appropriate assessments have been carried out, including consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors, to demonstrate at the time of reporting that extraction could reasonably be justified. reclamation The process by which lands disturbed as a result of mining activity are reclaimed back to a beneficial land use. recoverable ounces Represents ounces in the ground factored for mining loss and dilution. recovery A term used to indicate the proportion of valuable material obtained during the mining or processing of an ore. The recovery is generally expressed as a percentage of the material recovered compared to the total material present. reverse circulation drilling A drilling method employing double walled drill rods. The drilling fluid (usually air or water) is pushed down the annulus between the rods. The cuttings are blown up the middle. spot price The current price of a metal for immediate delivery. stope The underground excavation from which ore is extracted. strike length Horizontal distance along the direction that a structural surface takes as it intersects the horizontal. stripping The process of removing overburden to expose ore. strip ratio The ratio of overburden and segregable waste to ore in an open pit operation. sulphide A mineral characterised by the linkages of sulphur with a metal or semi-metal, iron sulphide. Also a zone in which sulphide minerals occur. tailings The waste material from ore after the economically recoverable metals or minerals have been extracted. Changes in the metal prices and improvements in technology can sometimes make the tailings economic to reprocess at a later date. trenching Making elongated open-air excavations for the purposes of mapping and sampling. waste Rock lacking sufficient grade and/or other characteristics of ore to be economic. Metric Conversion 1 1 1 1 1 1

tonne = 1t gramme = 1g gramme per tonne = 1 g/t hectare = 1 ha kilometre = 1 km metre = 1m

= = = = = =

1.10231 tons 0.03215 ounces 0.02917 ounces per ton 2.47105 acres 0.621371 miles 3.28084 feet

All tons are short tons of 2,000 pounds. All ounces are troy ounces: 29.166 troy ounces equal one ton.


Contents of Financial Statements and Corporate Information

Board of Directors Report of the Directors Corporate Governance Directors’ Responsibilities Independent Auditors’ Report Group Profit and Loss Account Group Balance Sheet Group Cash Flow Statement Reconciliation of Movements in Group Shareholders’ Funds Company Balance Sheet Notes to the Financial Statements Hedging Appendix Five Year Financial Summary Shareholder Information Officers Notice of Annual General Meeting Forward Looking Statements Corporate Information

25

26 27 29 31 31 32 33 34 35 36 37 54 58 59 61 62 64 65


26

Board of Directors

Michael Ernest Beckett* (1,2) Chairman of the Board and Chairman of the Audit and Finance Committee. Age 65. British. Appointed a director in March 1994. Chairman of Clarkson Plc and Watts Blake Bearne Limited. Director of other public companies. Theophilus Ernest Anin* (1,2,3) Age 69. Ghanaian. Joined the Board on 27 July 2001. A professional banker and solicitor with over 30 years’ experience in banking, financial management, and consulting in the public and private sectors. A director of the Bank of Ghana. Merene Mamaa Botsio-Phillips (5) General Counsel Age 44. Ghanaian. Appointed in October 1996. Director of The Air Transport Licensing Authority of Ghana. Formerly a director and Company Secretary of Ghana Airways Limited. The Rt. Hon. The Baroness Chalker of Wallasey PC* (3) Chairman of the Corporate Governance Committee. Age 60. British. She was appointed to the Board in March 2000. Advisory Director of Unilever Plc and N.V. Non-Executive Director and President of South African Business Initiative, President and Chairman of the Boards of Management of the British Executive Service Overseas and the London School of Hygiene and Tropical Medicine. Director of other public companies. Dr Chester Arthur Crocker* (1,2,3) Chairman of the Management Development and Remuneration Committee. Age 61. American. Appointed in February 2000. Professor of Strategic Studies at Georgetown University’s School of Foreign Service. Chairman of the Board of United States Institute of Peace and an advisor on strategy and negotiations to a number of US and European Companies. Former US Assistant Secretary of State for African Affairs. Thomas Richard Gibian* (1,2) Age 48. American. Mr Gibian is a non-Executive Director and Managing Director of Emerging Markets Partnership and Chief Operating Officer of AIG, African Infrastructure Fund. He is also a director of Interwave. He was appointed to the Board in March 2000. Gordon Edward Haslam Age 57. British. Appointed to the Board in March 2002. Director and Chief Executive of Lonmin Plc. Director of other public companies. Sam Esson Jonah (4) Chief Executive and Group Managing Director; Chairman of the Risk Management Committee. Age 52. Ghanaian. Appointed in May 1982. Director of Lonmin Plc, Commonwealth Africa Investment Fund Limited and Ecobank Transnational Incorporated. Chairman of Ghana Airways Limited, Chancellor of the University of Cape Coast, Ghana. Member of the UN Global Compact on Governance. Member of the Advisory Committee, Termite Fund which focuses on the mining and energy industries in Africa in seeking investor interest. Member of the International Investment Advisory Council of the President of South Africa. Dr Michael Peter Martineau* (2) Age 57. British. Appointed in February 2000. Director, President and Chief Executive Officer of Carpathian Gold Limited and a director of Adryx Mining & Metals Limited. Former director of several mining and exploration companies in Africa, Australia, United Kingdom and USA including Cluff Resources Plc and SAMAX Resources Limited.

Nicholas Jeremy Morrell* (2) Age 54. British. Appointed to the Board in February 1997. Former Director and Chief Executive of Lonmin Plc. Eleanor Darkwa Ofori Atta Executive Director, Corporate Relations Age 58. Ghanaian. Appointed in March 1994. She is responsible for corporate services including human resources. Trevor Stanley Schultz (4) Chief Operating Officer Age 60. American/Australian. Appointed in October 1996. Director of Diamond Fields International Limited. Formerly Vice President of BHP Minerals International responsible for Resources Development. Srinivasan Venkatakrishnan (Venkat) (4) Chief Financial Officer Age 36. British. He joined the Board in July 2000 from Deloitte & Touche where he was a Director in the Reorganisation Services Division. * Non-executive (1) (2) (3) (4) (5)

Audit and Finance Committee Member Management Development and Remuneration Committee Member Corporate Governance Committee Member Risk Management Committee Member Substitute director to E D Ofori Atta

Board Committees Audit and Finance Committee The Audit and Finance Commitee reviews and reports to the Board on the compliance, integrity and major judgemental aspects of the Group’s published financial statements, the scope and quality of the internal and external audit and the adequacy of the Group’s internal controls. Management Development and Remuneration Committee The Management Development and Remuneration Committee is responsible for the appointment of directors, determination of the level and structure of executive directors’ remumeration, and the review of their performance and service agreements. It then makes recommendations to the Board on these matters in accordance with its terms of reference and reviews and approves succession programmes with respect to top management. Corporate Governance Committee The Corporate Governance Committee is responsible for the monitoring of the general conduct of directors in line with best practice and screens individuals proposed for appointment to the Board. It is also responsible for the non-financial aspects of the Group’s safety, health and environmental issues and makes recommendations, as appropriate, to the Board. Risk Management Committee The Risk Management Committee reviews and monitors execution of risk management policies of the Group with particular focus on financial risks, including hedging, and where necessary make recommendations to the Board.


Report of the Directors

The directors present their report and the audited financial statements for the year ended 31 December 2001. Principal Activities The principal activities of the Group are the exploration, development and mining of gold. The progress of the business during the year and likely future developments are reported in the Chairman’s Statement, the Chief Executive’s Review, Operations Review and the Financial Review. Results and Dividends The results for the year are set out on page 32. The Board does not recommend paying a dividend for the year ended 31 December 2001 (2000: nil). Directors Details of the directors of the Company as at the date of this report are given on page 26. All the directors shown served throughout the year, with the exception of Mr T E Anin who was appointed on 27 July 2001 and Mr G E Haslam who was appointed on 8 March 2002. Each of them will retire in accordance with the Company’s Regulations and being eligible, offer themselves for election at the Annual General Meeting. During the year, Dr K Duffuor, Mr A Ashiabor and Dr D R Creed resigned as directors on 23 July, 31 July and 31 August 2001 respectively. Mr John Neil Robinson also resigned as a director on 8 March 2002. The directors retiring by rotation at the Annual General Meeting are The Rt. Hon. The Baroness Chalker of Wallasey PC, Dr C A Crocker, Mr T R Gibian and Dr M P Martineau, who being eligible offer themselves for re-election. Directors’ Interests The interests of the directors holding office at the end of the year in the ordinary shares of the Company are shown in note 22 to the financial statements. None of the directors had any interests in the shares of any of the Company’s subsidiaries at any time during the year. None of the directors had a material interest in any contract of significance with the Group during the year, other than Mr S E Jonah, who had an interest in a Technical Services Agreement dated 14 March 1994 between the Company and Lonmin Plc. Under this agreement, Lonmin Plc has agreed to provide, to Ashanti, technical services and the services of Mr S E Jonah. As remuneration for such services, the Company paid Lonmin Plc a total of US$0.7 million during the year (2000: US$1.8 million). Employee Relations and Employment Policies Ashanti values its employees and attaches high importance to employee relations and welfare. To ensure employee commitment it maintains regular communication and consultation through personal contact and the Company’s internal communication systems. The Company’s quarterly and annual reports are disseminated to employees. Workers and staff are represented on Divisional Boards, the highest decision making bodies at the operating level. The Company practices an open door policy across the Group, which allows workers to discuss issues of concern to them. Ashanti does not discriminate on the basis of race, colour, religion, sex or disability and is committed to providing equal opportunities, safe and clean working conditions and attractive remuneration to staff. Policies on employment are developed and reviewed to suit prevailing conditions and the Group has comprehensive policy guidelines on HIV/AIDS awareness, prevention and control programmes. The Company recognises teamwork and endeavours to attract and retain the best talents by rewarding superior performance and providing them with opportunities to develop their skills and apply their creativity.

27

Employee Incentive Schemes Since flotation in 1994, the Company has operated the AGC Senior Management Share Option Scheme (the “Option Scheme”) and the 1994 Employee Share Scheme (the “Employee Share Scheme”). On 25 April 2001, the Option Scheme and the Employee Share Scheme were re-adopted at the Annual General Meeting (each with modifications). The Company also operates the Bonus CoInvestment Scheme that was introduced in 1999. Notes 21 and 22 to the accounts on pages 48 to 51 detail the employee share schemes and other schemes currently in place. Share Capital Details of the changes in the share capital during the year, including treasury shares, are shown in note 21 to the financial statements. As has been our annual practice, the directors are seeking renewal, at the Annual General Meeting, of the authority to allot shares for cash with a disapplication of pre-emption rights. The directors have no present intention of exercising the authority to allot additional shares. Similarly, authority for the Company to purchase its own shares, as and if appropriate, is being sought. Donations Charitable donations for the year amounted to US$0.2 million. No donations were made for political purposes. Substantial Shareholders Details of the Company’s 20 largest shareholders are shown on page 59. Proposed Restructuring, Margin Free Arrangements and New Revolving Credit Facility On 25 January 2002, Ashanti announced that it had agreed terms in principle with an Ad Hoc Committee (“Ad Hoc Committee”) of the holders of 51/2% Exchangeable Guaranteed Notes due 15 March 2003 (“Existing Notes”) representing approximately 62% of the outstanding principal of US$218.6 million to a Proposed Restructuring (“Proposed Restructuring”) of the Existing Notes. The principal terms of the proposed restructuring are: ■ Equitisation of US$54,642,750 of the Existing Notes (representing 25% of the Existing Notes) by the issue of ordinary shares in Ashanti (“Ashanti Shares”) at US$3.70 per Ashanti Share. ■ Exchange of US$163,928,250 of the Existing Notes (representing 75% of the Existing Notes) for US$163,928,250 of 7.95% Exchangeable Guaranteed Notes due 30 June 2008 (“New Exchangeable Notes”). ■ The New Exchangeable Notes will be exchangeable by the holders into Ashanti Shares at any time at an exchange price of US$5.75. ■ The New Exchangeable Notes will be mandatorily redeemable by Ashanti in semi-annual instalments of US$12 million commencing on 31 December 2003 to the extent not already exchanged. The balance of any New Exchangeable Notes not exercised or redeemed will be repayable in full on 30 June 2008. Ashanti also has the option on each semi-annual redemption date to redeem an additional US$12 million of New Exchangeable Notes. ■ Ashanti will, upon completion of the Proposed Restructuring, pay to the then holders of the Existing Notes an exchange fee of 2% of the face value of the then outstanding Existing Notes. In aggregate, this payment will amount to approximately US$4.37 million. The Proposed Restructuring, which is intended to be implemented by way of a scheme of arrangement to be sanctioned by the Grand Court of Cayman Islands, is subject to the satisfaction of a number of conditions including: the preparation and despatch of formal documentation; listing of the new securities to be issued on the relevant stock exchanges; the approval of the requisite majorities of the holders of the Existing Notes, Ashanti’s shareholders, and its hedge counterparties; and the approval of its lending banks or repayment of


28

Report of the Directors

the Existing RCF. The members of the Ad Hoc Committee have undertaken to vote in favour of the scheme of arrangement to implement the Proposed Restructuring, subject to Ashanti complying with certain obligations and satisfying certain conditions within certain time limits. In particular, the formal documentation to implement the Proposed Restructuring must be posted by 31 May 2002 and the relevant scheme meetings held by no later than 31 August 2002. A pre-condition to the Ad Hoc Committee being bound by a written undertaking to vote in favour of the Proposed Restructuring was Ashanti entering into appropriate ongoing margin free arrangements with its hedge counterparties, other than Credit Suisse First Boston International (“CSFB”). Interim margin free agreements (“Interim Margin Free Agreements”) have now been signed by all of Ashanti’s active hedge counterparties other than CSFB (the “Relevant Hedge Counterparties”). However, one of the Interim Margin Free Agreements (signed by a Relevant Hedge Counterparty, which has agreed to novate half of its hedge book to Standard Bank London Limited conditionally only upon the Interim Margin Free Agreements becoming effective prior to 15 March 2003), is being held by Ashanti’s lawyers subject to an escrow agreement. This Interim Margin Free Agreement will be released from escrow to Ashanti on Ashanti certifying, prior to 15 March 2003, that it believes (acting in good faith) that, should the relevant Interim Margin Free Agreement be released from escrow, all the conditions to the Interim Margin Free Agreements will become effective unless, prior to that date, Ashanti has been notified that there has been an event of default resulting in an early termination event under the ISDA Master Agreement between such counterparty and Standard Bank London Limited. All of the Interim Margin Free Agreements are now conditional upon satisfaction of the following conditions (the “Conditions”) prior to 15 March 2003: ■ the Proposed Restructuring (or such other restructuring as is approved by an appropriate majority of hedge counterparties) being completed; ■ release from escrow to Ashanti of the Interim Margin Free Agreement currently held in escrow; and ■ Ashanti having available to it loan facilities in an amount of not less than US$25 million available for drawing for working capital purposes for a period of not less than 15 months from the date of posting of the documentation to shareholders in relation to the Proposed Restructuring. If the Conditions are satisfied at a stage when CSFB has not signed the Interim Margin Free Agreement then, subject to Ashanti complying with certain covenants and no events of default being declared, Ashanti will benefit in the period after 31 December 2002 from ongoing margin free trading arrangements unless CSFB is entitled to, and actually does, call for margin. Based on CSFB’s current hedgebook with Ashanti and current market conditions, Ashanti believes that CSFB would only be entitled to call for margin after 31 December 2002 as a result of breaching the enhanced margin limits if the gold price exceeded approximately US$370 per ounce. It should be noted however that the threshold for a triggering of the margin limits in respect of CSFB will also vary as a result of changes in US interest rates, gold lease rates and gold price volatility. Once the Interim Margin Free Agreements have become effective and have been signed by CSFB, the Interim Margin Free Agreements will terminate and the Existing Margin Free Trading Letter with its hedge counter parties dated October 2000 (“Existing MFTL”) will be amended and restated to provide for margin free trading on an ongoing basis, subject only to certain limited termination rights. As part of the implementation of the Proposed Restructuring, Ashanti has mandated four banks to arrange a new US$100 million five year revolving credit facility (“New RCF”) for the Ashanti Group. Those banks or their affiliates have also agreed to underwrite the New RCF. The underwriting and the facility are conditional inter alia on (i) Interim Margin Free Agreements being signed by all the Relevant Hedge Counterparties; (ii) execution of a facility agreement by no later than 15 June 2002; (iii) on the non-occurrence of certain material adverse changes; (iv) the Proposed Restructuring being completed and (v) appropriate regulatory approvals. The Refinance Plan (containing the Proposed Restructuring, Interim Margin Free Agreements and New RCF) which Ashanti submitted

to its hedge counterparties and its lending banks under the terms of its Existing RCF and Existing MFTL has not been objected to by either the hedge counterparties or the lending banks within the period permitted for objections. The above restructuring, once implemented, will improve Ashanti’s balance sheet (by decreasing debt and increasing equity), extend the maturity profile of Group debt and increase Ashanti’s financial flexibility. Going Concern Ashanti has secured an extension of its working capital facilities, within the Existing RCF, on a voluntary basis from certain of its current lending banks of US$25.4 million. This working capital facility is available for drawing only up to 30 December 2002. This working capital facility, if drawn, falls due for repayment on 30 December 2002. The outstanding balance of the Existing RCF falls due for repayment on 15 January 2003 and the Existing Notes fall due for repayment on 15 March 2003. Under the Existing MFTL, Ashanti benefits from margin free trading with its hedge counterparties only until 31 December 2002 and from increased margin thresholds until 31 December 2004, subject in each case, to compliance with covenants and no event of default being declared. The above matters raise substantial doubt about the Group’s ability to continue as a going concern. Ashanti is proposing to implement the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF in order to ensure the Company’s continued operational existence. There remain a number of conditions which need to be satisfied in order for the Proposed Restructuring to become effective and the Interim Margin Free Agreements and the New RCF to become unconditional. There can be no guarantees that these conditions will be satisfied. Should any of the relevant conditions not be satisfied or if the Proposed Restructuring is withdrawn for any reason, then it is possible that, unless a standstill or other accommodation is reached with its bank group, hedge counterparties and in due course the holders of its Existing Notes, Ashanti might not be able to meet its debts as they fall due. If the Proposed Restructuring is not successfully implemented during the current financial year, there will be uncertainty as to whether the Group will be able to continue in operational existence for at least the next 12 months. However, taking into account the progress which Ashanti has achieved in relation to the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF and other relevant factors, the Directors have formed the judgement, at the time of approving these financial statements that it is appropriate to continue to use the going concern basis in preparing these financial statements. Auditors Deloitte & Touche have agreed to continue as the Company’s auditors. A resolution to authorise the Board to determine their remuneration will be proposed at the Annual General Meeting. Annual General Meeting The Annual General Meeting of the Company will be held at the Len Clay Stadium, Obuasi, Ghana on Tuesday 28 May 2002 at 11.00 a.m. Full details are given in the Notice of Meeting on page 62 . Corporate Governance A statement on corporate governance under the Combined Code on Corporate Governance is set out at page 29. The Company has also joined the Global Compact of the United Nations Organisation (UNO), initiated by the UNO which is seeking wide participation from a diverse group of business and other organisations to promote and uphold core values in the areas of human rights, labour standards and environmental practices. Full details of the principles are set out on page 30. By order of the Board

M E Beckett Chairman 28 March 2002

Sam E Jonah Chief Executive and Group Managing Director


Corporate Governance

The Combined Code (the “Combined Code”) detailing the Principles of Good Corporate Governance and Code of Best Practice was published in June 1998. Statement of Compliance with the provisions of the Combined Code All companies listed on the London Stock Exchange, other than overseas companies such as Ashanti, are required to report on their compliance with the Combined Code which forms part of the Listing Rules of the Financial Services Authority. Notwithstanding this dispensation, the Board reports that the Company, in applying the principles of good governance, has complied throughout the year with the provisions of Sections 1 and 2 of the Combined Code, except for paragraphs A.2.1, A.3.2, A.6.2 and B.1.6, B.1.7, B.3.1, B3.2, B3.3 and B.3.5 where the requirements differ from general practice in Ghana. Statement of Appliance of the Principles of the Combined Code The Board of directors, which currently comprises five executive and eight non-executive directors, meets formally at least five times a year. There is a clear separation between the roles of the Chairman and the Chief Executive. The Chairman is responsible for the effectiveness of the Board, the balance of membership and for ensuring that all directors’ views are heard. The Chief Executive is responsible for the day-to-day operation of the business and for developing future strategies. In this, he is assisted by his fellow executive directors and the other senior managers who, together, form the Chief Executive’s Committee as detailed on page 61. Biographical details of the Board of directors and a brief description of the roles and functions of the principal board committees are given on page 26. The Board’s primary role is to determine the Group’s long-term direction and strategy and to monitor the management of the business to ensure that agreed performance targets are achieved. The Board is guided by matters that it has specifically reserved for its decision. These include major acquisitions and disposals, the approval of financial statements, authority levels for expenditure, succession plans, and key staff incentivisation. The Board pays particular attention to key areas of risk including safety, health and environment. The strong representation of non-executive directors on the Board, who are drawn from a wide variety of independent backgrounds, brings a broad diversity of experience to the business. Board practices and Committees Certain aspects of the Board’s role are carried out through committees, namely Audit & Finance Committee, Management

29

Development & Remuneration Committee, Corporate Governance Committee and Risk Management Committee. Each of the committees meets formally at least four times a year. The respective charter of these committees is outlined at page 26. Relations with Shareholders Following announcements of quarterly and annual results, tele-conference calls are organised which are open to the market, including shareholders providing them a forum for questions. In addition, meetings are held with institutional shareholders, fund managers, brokers and analysts, which also include visits to the Company’s operations. Shareholders’ interests and the Group’s assets are safeguarded by a system of internal control overseen by the Audit & Finance Committee. Internal Control The directors continued throughout the year with an ongoing process of identifying, evaluating and managing the significant risks faced by the Group progressively throughout the year. This process is regularly reviewed by the Board and accords with the Turnbull guidance on internal control. Information on the Group’s significant risks, together with the relevant control and monitoring procedures, is reviewed for completeness and accuracy by the Group’s management committees. The information is presented to the Board of directors to assess the effectiveness of the system on internal control. In addition, the committees of the Board monitor the Group’s significant risks on an ongoing basis. Assurance functions, including internal auditors, health and safety auditors and environmental auditors, perform reviews of control activities and provide regular written and oral reports to the Board, Audit & Finance, Risk Management and Corporate Governance committees. The managing directors of business units complete an internal control report which seeks to confirm that internal controls are operating effectively at the operational level. The results of this process are reviewed by the Group Risk Management Committee and are then presented to the Board as a further part of the Group’s internal controls. The whole risk management process, including the progress on embedding, is reviewed and strengthened as appropriate in order to assist the need for continuous improvement. The Board is responsible for the effectiveness of the Group’s system of internal control and for the review of its effectiveness. Such a system is designed to manage rather than to eliminate the risk of failure to achieve the Group’s objectives and can only provide reasonable but not absolute assurance against misstatement or loss.


30

Corporate Governance

The controls and procedures include: Organisational Structure The Group operates through a clearly defined organisational structure. The Board of directors, which meets regularly, is responsible for overall strategy, while the Chief Executive and Group Managing Director, assisted by the Chief Executive’s Committee, has day to day operational responsibility. The Board is also responsible for monitoring the Group’s performance which is measured against approved budgets and prior year performance. Financial Reporting Budgets are prepared annually for financial performance, operating costs and capital expenditure. Financial information is produced monthly and monitored against budgets. Variances are considered by the relevant management and appropriate action taken. Financial information is reviewed in relation to comprehensive information regarding production, primarily quantities and grades. Unaudited Accounts are published every quarter together with a report on production performance. Approval Procedures Systems are in place to ensure that transactions in respect of major areas of risk are subject to approval procedures. These include approval of the Group budget by the Board, approval of significant expenditure at the mines by the respective divisional Boards and approval of the Hedge Policy by the Board, upon recommendation from the Risk Management Committee. Controls over Hedging Transactions The Group has a Board approved hedge policy. The Group carries out its hedging activities in accordance with the guidelines stated in the policy, which are overseen by the Risk Management Committee.

Monitoring of Controls An internal audit function monitors the control procedures of the Group. The Audit & Finance Committee, comprising the non-executive directors, monitors the adequacy of the Group’s systems of internal financial control. Global Compact Ashanti has joined the Global Compact which was initiated and sponsored by the UN. Ashanti fully embraces the nine principles on governance promulgated by the Global Compact which are: 1. to support and respect the protection of international human rights within their sphere of influence; 2. to make sure our company is not complicit in human rights abuses; 3. to uphold freedom of association and the effective recognition of the right to collective bargaining; 4. to uphold the elimination of all forms of forced and compulsory labour; 5. to uphold the effective abolition of child labour; 6. to uphold the elimination of discrimination in respect of employment and occupation; 7. to support a precautionary approach to environmental challenges; 8. to undertake initiatives to promote greater environmental responsibility; and 9. to encourage the development and diffusion of environmentally friendly technologies. Ashanti is the first company in Ghana to join the Global Compact and plans to take a leading role in progressing with the advancement of the principles in Ghana by working closely with the local office of the United Nations Development Programme.


Directors’ Responsibilities/Independent Auditors’ Report

Directors’ Responsibilities The Ghana Companies Code, 1963 (Act 179) (“the Companies Code”) requires that for each financial period the directors must prepare financial statements which give a true and fair view of the state of affairs of the Company and the Group as at the end of the financial year and of the profit or loss of the Group for that period. In preparing those financial statements, the directors are required to: ■ select suitable accounting policies and then apply them consistently; ■ make judgements and estimates that are reasonable and prudent; ■ state whether applicable accounting standards have been followed; and

■ prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business. The directors are responsible for ensuring that the Group keeps accounting records which disclose, with reasonable accuracy, the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the Companies Code. They are also responsible for taking such reasonable steps that are open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities. The above statement should be read in conjunction with the statement of the auditors’ responsibilities set out below.

Independent Auditors’ Report to the members of Ashanti Goldfields Company Limited We have audited the financial statements of Ashanti Goldfields Company Limited for the year ended 31 December 2001 which comprise the profit and loss account, the balance sheets, the cash flow statement and the related notes 1 to 29. These financial statements have been prepared under the accounting policies set out therein. Respective responsibilities of directors and auditors

As described in the statement of directors’ responsibilities, the Company’s directors are responsible for the preparation of the financial statements in accordance with Ghanaian law. The financial statements are prepared in accordance with United Kingdom accounting standards. Our responsibility is to audit the financial statements in accordance with relevant Ghanaian legal and regulatory requirements, and the Listing Rules of the United Kingdom Financial Services Authority. The audit of the financial statements is carried out in accordance with United Kingdom auditing standards. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Ghana Companies Code, 1963 (Act 179). We also report whether, in our opinion, the financial statements are in agreement with the books, whether the books have been properly kept, whether we obtained the information and explanations we required and if, in our opinion, the directors’ report is not consistent with the financial statements. We review whether the corporate governance statement reflects the Company’s compliance with the seven provisions of the Combined Code specified for our review by the Listing Rules and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures. We read the directors’ report and the other information contained in the Annual Report for the above year as described in the contents section and consider the implications for our report if we become aware of any apparent misstatement or material inconsistencies with the financial statements.

Basis of Audit Opinion

We conducted our audit in accordance with United Kingdom auditing standards issued by the United Kingdom Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Going Concern

The accompanying financial statements have been prepared assuming that the Group will continue as a going concern. Note 1 details the refinancing requirements of the Group and the Group’s refinancing plans. These matters raise substantial doubt about the Group’s ability to continue as a going concern and in view of this we consider that it should be drawn to your attention, but our opinion is not qualified in this respect. The financial statements do not include any adjustments that might result should the Group be unable to continue as a going concern. Opinion

The financial statements are in agreement with the books, which in our opinion have been properly kept. In our opinion, we have obtained the information and explanations we required. In our opinion, the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2001 and of the profit of the Group for the year then ended and have been properly prepared in accordance with the Companies Code, 1963 (Act 179). Deloitte & Touche Accra, Ghana 28 March 2002

31


32

Group Profit and Loss Account For the year ended 31 December

Turnover Cash operating costs Other costs Royalties Depreciation and amortisation

Note

Group US$m

2001 Interest in joint venture US$m

2

477.7

76.7

554.4

582.2

(276.3) (31.7) (10.8) (82.3)

(38.9) (2.8) (2.2) (12.6)

(315.2) (34.5) (13.0) (94.9)

(324.3) (40.3) (13.7) (114.8)

– (21.7) – (193.5)

(324.3) (62.0) (13.7) (308.3)

(401.1)

(56.5)

(457.6)

(493.1)

(215.2)

(708.3)

76.6

20.2

96.8

89.1

(215.2)

(126.1)

4 3, 4 4 3, 4

Total operating costs Operating profit/(loss)

4

Share of operating profit of joint venture

Total US$m

2000 Before exceptional Exceptional items items US$m US$m

20.2

After exceptional items US$m

582.2

Total operating profit/(loss) Profit on sale of businesses

5

96.8 –

89.1 –

(215.2) 46.6

(126.1) 46.6

Profit/(loss) before interest Net interest payable: group Net interest payable: joint venture

7 7

96.8 (21.6) (7.8)

89.1 (51.3) –

(168.6) – –

(79.5) (51.3) –

Profit/(loss) before taxation Taxation

8

67.4 (6.8)

37.8 (5.8)

(168.6) (3.0)

(130.8) (8.8)

60.6 2.1

32.0 (1.5)

(171.6) –

(139.6) (1.5)

62.7 –

30.5 –

(171.6) –

(141.1) –

62.7

30.5

(171.6)

(141.1)

0.56 0.55

0.27 0.27

(1.52) (2.06)

(1.25) (1.79)

Profit/(loss) after taxation Minority interests Profit/(loss) attributable to shareholders Dividends

9

Retained profit/(loss) for the year Earnings per share (US$) Diluted earnings per share (US$)

10 10


Group Balance Sheet

33

As at 31 December

Fixed Assets Intangible assets Tangible assets Investments Investments – Geita joint venture Investments – Loans to joint venture and other investments

Note

Group US$m

2001 Interest in joint venture US$m

11 12

18.8 612.9

59.2 103.4

13

81.7

(81.7)

13

32.6

746.0 Current assets Stocks Debtors Cash

Total US$m

78.0 716.3

21.5 645.8

63.7 103.9

85.2 749.7

69.3

(69.3)

32.6

32.6

826.9

769.2

Total US$m

– 32.6 867.5

73.5 16.1 55.2

8.8 9.6 9.2

82.3 25.7 64.4

77.8 15.6 73.6

5.9 3.4 2.1

83.7 19.0 75.7

144.8

27.6

172.4

167.0

11.4

178.4

(155.0) (25.3)

(13.1) (10.8)

(168.1) (36.1)

(169.0) (7.2)

(9.4) (9.6)

(178.4) (16.8)

(180.3)

(23.9)

(204.2)

(176.2)

(19.0)

(195.2)

Net current (liabilities)/assets

(35.5)

3.7

(31.8)

(9.2)

(7.6)

(16.8)

Total assets less current liabilities

710.5

Creditors: amounts falling due within one year Creditors Borrowings

14 15 16

Group US$m

2000 Interest in joint venture US$m

17 18

795.1

760.0

850.7

Creditors: amounts falling due over one year Creditors Borrowings

17 18

(49.8) (300.6)

(31.1) (51.3)

(80.9) (351.9)

(98.2) (358.5)

(31.1) (57.9)

(129.3) (416.4)

Provisions for liabilities and charges

20

(19.8)

(2.2)

(22.0)

(24.5)

(1.7)

(26.2)

340.3

278.8

340.3 Capital and reserves Stated capital Reserves Equity shareholders’ funds Equity minority interests

21 23

545.2 (206.9)

544.3 (269.6)

338.3 2.0

274.7 4.1

340.3

278.8

The financial statements were approved by the Board of directors on 28 March 2002 and signed on its behalf by:

S E Jonah Director

S Venkatakrishnan Director

278.8


34

Group Cash Flow Statement For the year ended 31 December

Note

2001 US$m

2000 US$m

24

95.4

149.4

Returns on investments and servicing of finance Interest received Interest paid

2.0 (24.4)

4.7 (61.1)

Net cash outflow from returns on investments and servicing of finance

(22.4)

(56.4)

(2.9)

(5.8)

(49.6) – –

(145.6) 0.9 (1.5)

(49.6) –

(146.2) 230.3

20.5 9.7

171.3 13.3

30.2 (40.6)

184.6 (186.3)

Decrease in cash

(10.4)

(1.7)

Reconciliation of net cash flow to movement in net debt Decrease in cash Decrease in liquid resources

(10.4) (9.7)

(1.7) (13.3)

Cash outflow from financing Other

(20.1) 40.6 0.9

(15.0) 186.3 29.5

21.4 (292.1)

200.8 (492.9)

(270.7)

(292.1)

Cash inflow from operating activities

Taxation Corporate tax paid Capital expenditure and financial investment Purchase of tangible fixed assets Sale of tangible fixed assets Purchase of investments Net cash outflow from capital expenditure and financial investment Acquisitions and disposals

25

Cash inflow before use of liquid resources and financing Management of liquid resources Cash inflow before financing Financing

26

Movement in net debt Net debt at 1 January Net debt at 31 December

27


Reconciliation of Movements in Group Shareholders’ Funds

35

For the year ended 31 December

2001 US$m

2000 US$m

Profit/(loss) for the year Dividend

62.7 –

(141.1) –

New share capital issued Goodwill written back on disposal

62.7 0.9 –

(141.1) – 24.6

Opening shareholders’ funds

63.6 274.7

(116.5) 391.2

Closing shareholders’ funds

338.3

274.7

There are no recognised gains or losses other than as disclosed in the Group Profit and Loss Account.


36

Company Balance Sheet As at 31 December

Note

2001 US$m

2000 US$m

12 13

447.0 261.6

460.0 278.5

708.6

738.5

32.9 123.6 11.7

36.9 151.2 19.2

168.2

207.3

(53.1) (4.3)

(55.4) (4.3)

(57.4)

(59.7)

Net current assets

110.8

147.6

Total assets less current liabilities

819.4

886.1

Fixed Assets Tangible assets Investments

Current assets Stocks Debtors Cash

14 15 16

Creditors: amounts falling due within one year Creditors Borrowings

17 18

Creditors: amounts falling due over one year Creditors Borrowings

17 18

(669.6) (5.7)

(714.7) (6.8)

Provisions for liabilities and charges

20

(5.8)

(5.8)

Capital and reserves Stated capital Reserves

21 23

Equity shareholders’ funds

138.3

158.8

545.2 (406.9)

544.3 (385.5)

138.3

158.8

The financial statements were approved by the Board of directors on 28 March 2002 and signed on its behalf by:

S E Jonah Director

S Venkatakrishnan Director


Notes to the Financial Statements

1

Accounting policies The principal accounting policies adopted by the Group and used in the preparation of these financial statements are set out below. The accounting policies used in preparing the financial statements are consistent with those used by the Group in its financial statements for the year ended 31 December 2000. Going concern Ashanti has secured an extension of its working capital facilities, within the Existing RCF, on a voluntary basis from certain of its current lending banks of US$25.4 million. This working capital facility is available for drawing only up to 30 December 2002. This working capital facility, if drawn, falls due for repayment on 30 December 2002. The outstanding balance of the Existing RCF falls due for repayment on 15 January 2003 and the Existing Notes fall due for repayment on 15 March 2003. Under the Existing MFTL, Ashanti benefits from margin free trading with its hedge counterparties only until 31 December 2002 and from increased margin thresholds until 31 December 2004, subject in each case to compliance with covenants and no event of default being declared. The above matters raise substantial doubt about the Group’s ability to continue as a going concern. Ashanti is proposing to implement the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF (as outlined in the Financial Review) in order to ensure the Company’s continued operational existence. There remain a number of conditions which need to be satisfied in order for the Proposed Restructuring to become effective and the Interim Margin Free Agreements and the New RCF to become unconditional. There can be no guarantees that these conditions will be satisfied. Should any of the relevant conditions not be satisfied or if the Proposed Restructuring is withdrawn for any reason, then it is possible that, unless a standstill or other accommodation is reached with its bank group, hedge counterparties and in due course the holders of its Existing Notes, Ashanti might not be able to meet its debts as they fall due. If the Proposed Restructuring is not successfully implemented during the current financial year there will be uncertainty as to whether the Group will be able to continue in operational existence for at least the next 12 months. However, taking into account the progress which Ashanti has achieved in relation to the Proposed Restructuring, the Interim Margin Free Agreements and the New RCF and other relevant factors, the Directors have formed the judgement, at the time of approving these financial statements, that it is appropriate to continue to use the going concern basis in preparing this financial information. The financial statements do not include any adjustments that might result should the Group be unable to continue as a going concern. Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom Accounting Standards. Because the Group earns all its revenue in US dollars and the majority of its transactions are in US dollars, or based on them, the Group’s functional and reporting currency is US dollars. Basis of consolidation The Group financial statements comprise a consolidation of the results, assets and liabilities of the Company, its subsidiary undertakings and joint ventures. The results and cash flows of subsidiaries acquired or disposed of in the year are included in the consolidated profit and loss account and the consolidated cash flow statement from the date of acquisition or up to the date of disposal. Goodwill Goodwill, arising from the purchase of subsidiary undertakings and interests in associates and joint ventures represents the excess of the fair value of the purchase consideration over the fair value of the net assets acquired. Goodwill in accordance with Financial Reporting Standard (FRS) 10 is capitalised and amortised over the life of the underlying mine assets. Prior to 1 January 1998, goodwill was charged to reserves in the year of acquisition. On the subsequent disposal or termination of a previously acquired business, the profit or loss on disposal or termination is calculated after charging or crediting the amount of any goodwill previously charged to reserves or capitalised and not yet charged to the profit and loss account. Joint ventures A joint venture is an entity in which the Group holds a long-term interest and which is jointly controlled by the Group and one or more ventures under a contractual arrangement. The results of joint ventures are accounted for using the gross equity method of accounting. Transactions in other currencies Monetary assets and liabilities denominated in currencies other than the US dollar are translated at the rates of exchange ruling at the year end. Transactions denominated in currencies other than US dollars are translated at the rates ruling at the dates of the transactions. All translation differences are taken to the profit and loss account. Revenue recognition Sale of bullion is recognised when doré is produced in the gold room. The proceeds from sales of bullion produced prior to the year end but which have not been received are included as ‘gold in transit’ within cash balances. Exploration costs Exploration costs incurred prior to the establishment of a commercially mineable deposit are charged against profits.

37


38

Notes to the Financial Statements

1

Accounting policies (continued) Tangible fixed assets Tangible fixed assets are recorded at cost less accumulated depreciation. Repairs and maintenance expenditures are charged against profits as incurred. Major improvements and replacements that extend the useful life of an asset are capitalised. Once it has been established that a commercially minable deposit exists, mine development costs, including interest costs, are capitalised as tangible fixed assets. Mine development costs consist of those expenditures necessary to gain access to ore bodies prior to production and to extend production in an existing ore body, including costs of removing overburden, constructing underground shaft stations, and extending tunnels. Tangible fixed assets are depreciated as follows: Development costs, plant and equipment and processing plants are depreciated over the life of the mine using the unit of production method based on proved and probable reserves, or on a straight-line basis over their estimated useful lives if shorter. Buildings are depreciated on a straight-line basis. Following are the estimated useful lives of assets that are depreciated using the straight-line basis: Externally purchased software Vehicles Plant and equipment Buildings

3 years 5 years 5 to 15 years up to 30 years

Estimated useful lives are reviewed on an annual basis in conjunction with the life-of-mine plans. Tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. At such time, in accordance with FRS 11, Impairment of fixed and assets and goodwill (“FRS 11”) the net present value of the expected future cash flows attributable to the asset or its disposal value, if higher, is compared to the carrying value and an impairment charge is recorded if necessary. Stocks Stocks are valued at the lower of cost and net realisable value (which includes an appropriate proportion of production overheads). Interest and finance costs Interest is capitalised in respect of mine developments as part of tangible fixed assets from the time that it has been determined that a commercially minable deposit exists up to the commencement of production. All other interest costs are charged against profits as incurred. Front-end fees, commitment fees and other costs associated with the initial loan are deferred and amortised over the life of the loan to give a constant rate of return on the outstanding loan balance. Derivative financial instruments The Group uses derivative instruments to hedge its exposures to fluctuations in gold prices. In order to protect against the impact of falling gold prices, the Group enters into hedging transactions which provide a minimum price for production and allow the Group to take advantage of increases in gold prices. Instruments are accounted for as a hedge when they have been entered into to manage gold prices and are within limits established by the Board of Directors. Hedging transactions are used as part of the Group’s protection and commitment programme. Protected ounces represent future sales of gold for which the future price of gold has been fixed. Committed ounces represent future obligations of the Group to deliver gold at an agreed upon maximum price. Receipts and payments on interest rate instruments are recognised on an accruals basis over the life of the instrument. Gains or losses on other hedging contracts, including premiums receivable and payable on options, are recognised in the profit and loss account as designated production is delivered. In the case of earlier settlement of hedge contracts, gains or losses are deferred and brought into income at the originally designated delivery date. Deferred taxation Provision is made for deferred taxation only to the extent that it is probable that a liability or asset will crystallise in the foreseeable future. Environmental and site restoration obligations The expected costs of any committed decommissioning or other site restoration programmes incurred during the construction phase, discounted at the weighted average cost of capital, are provided for and capitalised at the beginning of each project and amortised over the life of the mine using the units of production method. Additional provisions are recorded during the production phase as environmental liabilities arise with a corresponding charge to operating results. Such costs are estimated based on studies performed by independent environmental specialists and represent management’s best current estimate of amounts that are expected to be incurred when the remediation work is performed within current laws and regulations or the terms of respective mining licenses. Pre-stripping and stripping costs Pre-stripping costs are the costs of removing overburden to expose ore after it has been determined that a commercially minable deposit exists. These costs are capitalised as tangible fixed assets and, upon commencement of production, depreciated using the unit of production method based on probable and proven reserves. Stripping costs incurred during the production phase to remove additional waste are deferred and charged to operating costs on the basis of the average life of mine stripping ratio. Investments In the Company balance sheet, investments in subsidiary undertakings are stated at cost less provision for any permanent diminution in value. Leased assets Assets acquired under finance leases are capitalised and the outstanding future lease obligations are shown in borrowings. Operating lease rentals are charged to the profit and loss account in equal amounts over the period of the lease.


Notes to the Financial Statements

2

3

39

Turnover

2001

2000

US$m

US$m

Bullion revenue Cash realised on maturing hedging contracts Deferred hedging income

381.7 39.0 57.0

485.2 54.4 42.6

Share of turnover of joint venture

477.7 76.7

582.2 –

554.4

582.2

Exceptional operating costs

2001

2000

US$m

US$m

Obuasi redundancy and related costs

7.0

Hedge close out (note a) Tangible fixed assets impairment (note b)

– –

14.7 193.5

215.2

a. In October 2000 Ashanti agreed as part of its negotiations with its banks and hedge counterparties during the period leading up to the Geita sale to close out certain hedge positions resulting in an exceptional loss of US$14.7 million. b. A review of the carrying value of fixed assets of the Group was carried out in 2000 under FRS 11 by comparing future projected cash flows discounted at 9.3% with net asset value. This resulted in an exceptional charge in 2000 of US$193.5 million, comprising US$150.0 million at Obuasi, US$35.0 million at Freda-Rebecca and US$8.5 million at Kimin. 4

Operating profit analysis by business area before exceptional operating costs 12 months to 31 December 2001 Obuasi Ayanfuri Iduapriem Production ozs

528,451

US$ million Revenue – spot – hedging

Cash operating costs Other costs Royalties

Bibiani

Siguiri

FredaRebecca

Geita (100%)

Hedging Income

Exploration

Corp. Admin.

Group

Geita (50%)

Total

11,517

205,130

253,052

283,199

102,654

1,384,003 272,781 1,656,784

143.5 –

3.1 –

55.8 –

68.7 –

76.6 –

34.0 –

– –

– 96.0

– –

– –

381.7 96.0

74.1 2.6

455.8 98.6

143.5

3.1

55.8

68.7

76.6

34.0

96.0

477.7

76.7

554.4

(101.4) – (4.3)

(2.8) (1.0) (0.1)

(44.0) (0.8) (1.7)

(43.1) (2.2) (2.1)

(62.2) – (2.6)

(22.8) – –

– – –

– – –

– (6.5) –

– (21.2) –

(276.3) (31.7) (10.8)

(38.9) (2.8) (2.2)

(315.2) (34.5) (13.0)

EBITDA Depreciation and amortisation

37.8

(0.8)

9.3

21.3

11.8

11.2

96.0

(6.5)

(21.2)

158.9

32.8

191.7

(37.5)

(0.5)

(4.9)

(13.8)

(18.6)

(3.9)

(1.9)

(1.2)

(82.3)

(12.6)

(94.9)

Operating profit – 31.12.01 – 31.12.00

0.3 (5.0)

(1.3) (3.9)

4.4 6.1

7.5 21.9

(6.8) 7.7

7.3 (2.6)

– 9.9

96.0 97.0

(8.4) (14.6)

(22.4) (27.4)

76.6 89.1

20.2 –

96.8 89.1

Costs include audit fees of US$0.4 million (2000: US$0.4 million)


40

Notes to the Financial Statements

5

Profit on sale of businesses

Profit on disposal of 50% interest in Geita Loss on disposal of 50% interest in Carmeuse Lime Products (Ghana) Ltd

6

2001

2000

US$m

US$m

– –

51.2 (4.6)

46.6

2001

2000

No. 4,777 543 1,896 2,973

No. 4,854 859 1,706 3,010

10,189

10,429

Employees

The average number of employees during the year was as follows: Underground mining Surface mining Processing Administration

Remuneration paid to directors of the Company (excluding amounts paid to Lonmin Plc in respect of Technical Services and the services of Mr S E Jonah) amounted to US$2.5 million (2000: US$3.3 million). 7

8

Net interest payable & similar charges

2001 US$m

2000 US$m

Exchangeable Notes Revolving Credit Facility Other loans and finance charges

12.0 8.0 7.0

12.0 29.0 19.4

Interest capitalised

27.0 –

60.4 (4.4)

Interest receivable

27.0 (5.4)

56.0 (4.7)

Share of interest payable by joint venture

21.6 7.8

51.3 –

29.4

51.3

2001 US$m

2000 US$m

Taxation Corporate tax – current year – in respect of prior years Deferred tax Tax charge on profit on ordinary activities Tax on the profit on disposal of Geita

6.6 8.2 (8.0)

0.5 4.5 0.8

6.8 –

5.8 3.0

6.8

8.8


Notes to the Financial Statements

9

41

Dividend No dividends were paid or proposed for the year (2000: Nil).

10 Earnings per share

The calculation of earnings per share is based on earnings after tax and minority interests and the weighted average number of shares outstanding during the year of 112.1 million (2000: 112.9 million). Earnings per share has been shown before and after exceptional items in order to show the impact of the exceptional items on the underlying results of the business. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential ordinary shares. The Company has three categories of dilutive potential ordinary shares being, warrants (under the agreement with the Company’s hedge counterparties), share options (under the Senior Management Share Option Scheme) where the exercise price is more than the average price of the Company’s ordinary shares during the period and employee share incentive plans where shares are issued free to senior management provided certain criteria are met. 2001

2000

62.7

30.5

Weighted average number of ordinary shares (millions) Dilutive warrants (millions) Dilutive share options (millions) Dilutive employee share incentive plans (millions)

112.1 0.8 0.8 0.5

112.9 – – –

Adjusted weighted number of ordinary shares (millions)

114.2

112.9

0.56 0.55

0.27 0.27

62.7

(141.1)

Weighted average number of ordinary shares (millions) Dilutive warrants (millions) Dilutive share options (millions) Dilutive employee share incentive plans (millions)

112.1 0.8 0.8 0.5

112.9 (2.8) (31.1) –

Adjusted weighted number of ordinary shares (millions)

114.2

79.0

0.56 0.55

(1.25) (1.79)

Before exceptional items Basic and diluted earnings attributable to ordinary shareholders (US$m)

Basic earnings per share (US$) Diluted earnings per share (US$) After exceptional items Basic and diluted earnings attributable to ordinary shareholders (US$m)

Basic earnings/(loss) per share (US$) Diluted earnings/(loss) per share (US$) 11 Intangible assets Group

Goodwill US$m

Cost At 1 January 2001 and 31 December 2001

21.9

Amortisation At 1 January 2001 Charge for the year

0.4 2.7

At 31 December 2001

3.1

Net book value At 31 December 2001 At 31 December 2000

18.8 21.5


42

Notes to the Financial Statements

12 Tangible assets Mine shafts, development and pre-production US$m

Plant and equipment US$m

Processing plants US$m

Buildings US$m

Assets in the course of construction US$m

Total US$m

Group Cost At 1 January 2001 Additions Disposals Transfers

800.5 29.8 – 6.0

529.4 6.4 (3.8) 5.9

414.3 0.8 (0.1) 4.3

90.9 0.2 – –

8.5 10.1 – (16.2)

1,843.6 47.3 (3.9) –

At 31 December 2001

836.3

537.9

419.3

91.1

2.4

1,887.0

Depreciation At 1 January 2001 Charges Disposals

569.8 23.1 –

339.3 28.2 (3.3)

238.2 21.9 –

50.5 6.4 –

– – –

1,197.8 79.6 (3.3)

At 31 December 2001

592.9

364.2

260.1

56.9

1,274.1

Net book value At 31 December 2001 At 31 December 2000

243.4 230.7

173.7 190.1

159.2 176.1

34.2 40.4

2.4 8.5

612.9 645.8

Company Cost At 1 January 2001 Additions Disposals Transfers

492.7 19.5 – 1.9

427.4 6.4 (2.4) 3.8

313.1 0.4 – 0.1

85.0 0.1 – –

5.8 – – (5.8)

1,324.0 26.4 (2.4) –

At 31 December 2001

514.1

435.2

313.6

85.1

Depreciation At 1 January 2001 Charges Disposals

378.7 7.4 –

252.5 22.4 (1.9)

188.5 5.1 –

44.3 4.0 –

– – –

864.0 38.9 (1.9)

At 31 December 2001

386.1

273.0

193.6

48.3

901.0

Net book value At 31 December 2001 At 31 December 2000

128.0 114.0

162.2 174.9

120.0 124.6

36.8 40.7

– 5.8

447.0 460.0

1,348.0

The net book value of tangible assets in the Group and Company includes US$4.1 million (2000: US$4.8 million) in respect of assets held under finance leases included within buildings.

Capital commitments Contracts placed but not provided for

2001 US$m

2000 US$m

2.7

4.0


Notes to the Financial Statements

43

13 Investments Group The Group’s investment in joint ventures is in respect of its 50 per cent interest in the Geita mine in Tanzania. This interest is accounted for under the gross equity basis of accounting. Investment in joint ventures US$m

Loans to joint ventures US$m

Other investments US$m

Total US$m

At 1 January 2001 Share of retained profit for the year

69.3 12.4

31.1 –

1.5 –

101.9 12.4

At 31 December 2001

81.7

31.1

1.5

114.3

Cost

Company Subsidiary

Joint

Other

undertakings

ventures

investments

Total

US$m

US$m

US$m

US$m

Cost At 1 January 2001 and 31 December 2001

387.0

85.6

1.5

474.1

Provisions At 1 January 2001 Provided in year

195.6 16.9

– –

– –

195.6 16.9

At 31 December 2001

212.5

212.5

Net book value At 31 December 2001 At 31 December 2000

174.5 191.4

85.6 85.6

1.5 1.5

261.6 278.5

Class of Principal activities

Group interest Shares held

per cent

Ghana Ashanti Goldfields (Bibiani) Limited

Gold Mining

100

Ghanaian-Australian Goldfields Limited

Gold Mining

Teberebie Goldfields Limited

Gold Mining

Ordinary No par value Ordinary No par value Ordinary No par value

Guinea Société Ashanti Goldfields de Guinée S.A.

Gold Mining

Ordinary

85

Zimbabwe Ashanti Goldfields Zimbabwe Limited

Gold Mining

Ordinary

100

Isle of Man Ashanti Treasury Services Limited Geita Treasury Services Limited

Treasury Treasury

Ordinary Ordinary

100 100

Cayman Islands Ashanti Capital Limited Ashanti Finance (Cayman) Limited Ashanti Capital (Second) Limited

Financing Financing Financing

Ordinary Ordinary Ordinary

100 100 100

The principal subsidiary undertakings are: Company and country of incorporation

80 90


44

Notes to the Financial Statements

14 Stocks

Mine stores Ore in stockpiles Gold in process

Group 2000 US$m

2001 US$m

2000 US$m

52.6 16.2 4.7

56.1 17.3 4.4

30.4 – 2.5

35.0 – 1.9

73.5

77.8

32.9

36.9

2001 US$m

2000 US$m

2001 US$m

2000 US$m

10.8 2.4 2.9 –

10.9 2.2 2.5 –

0.8 1.6 0.1 121.1

2.2 0.7 – 148.3

16.1

15.6

123.6

151.2

2001 US$m

2000 US$m

2001 US$m

2000 US$m

32.8 22.4

48.3 25.3

3.8 7.9

8.2 11.0

55.2

73.6

11.7

19.2

15 Debtors

Sundry debtors Prepayments Deferred expenses Amounts due from subsidiary undertakings

Group

16 Cash

Cash at bank and in hand Gold and cash in transit

Company

2001 US$m

Company

Group

Company

Cash at bank includes US$8.7 million (2000: US$15.5 million) on deposit with Standard Chartered Bank in Ghana as collateral for a loan to Ashanti Goldfields Zimbabwe Limited.

17 Creditors

Amounts falling due within one year: Trade creditors Deferred purchase consideration Accruals and deferred income

Amounts falling due over one year: Deferred purchase consideration Accruals and deferred income Amounts due to subsidiary undertakings

Group

Company

2001 US$m

2000 US$m

2001 US$m

2000 US$m

40.5 7.3 107.2

43.7 7.3 118.0

13.9 – 39.2

17.8 – 37.6

155.0

169.0

53.1

55.4

8.8 41.0 –

16.1 82.1 –

– 13.2 656.4

– 13.4 701.3

49.8

98.2

669.6

714.7

The total deferred purchase consideration of US$16.1 million comprises US$11.3 million in respect of Teberebie and US$4.8 million in respect of the acquisition of Golden Shamrock Mines Limited in 1996. Accruals and deferred income of US$148.2 million includes US$65.6 million (2000: US$120.0 million) in respect of deferred hedging income arising from the early close out of hedging contracts.


Notes to the Financial Statements

45

18 Borrowings

Group

Company

2001 US$m

2000 US$m

2001 US$m

2000 US$m

217.5 55.0 21.6 25.0 – 4.1 2.7

216.6 88.8 26.6 25.6 0.2 4.8 3.1

– – 3.2 – – 4.1 2.7

– – 3.0 – 0.2 4.8 3.1

325.9

365.7

10.0

11.1

Repayments falling due: Between one year and two years Between two and five years After five years

267.7 31.9 1.0

11.6 336.6 10.3

1.1 3.6 1.0

1.1 3.5 2.2

After more than one year Within one year

300.6 25.3

358.5 7.2

5.7 4.3

6.8 4.3

325.9

365.7

10.0

11.1

51/2 per cent Exchangeable Notes Revolving Credit Facility Bank loans and overdrafts Project finance loans Suppliers’ credit Finance leases Aviation loans

US$217.5 million (2000: US$216.6 million) of Exchangeable Notes is stated net of deferred loan fees of US$1.1 million (2000: US$2.0 million) which is being amortised over the period of the Notes. Details of the conversion rights of the 51/2 per cent Exchangeable Notes are set out in note 21. Details of the proposed restructuring of the Notes are set out in the Financial Review on page 18. The Revolving Credit Facility carries a margin over US LIBOR of 250 basis points. US$47.2 million of the amount drawn is due for repayment on 15 January 2003 and US$7.8 million is repayable in four equal quarterly instalments commencing on 31 March 2002. Certain of the tranches of the Revolving Credit Facility are secured on certain offshore bank accounts and certain other contracts and arrangements with hedging counterparties outside Ghana. The project finance loans of US$25.0 million are in respect of loans provided to subsidiaries Ghanaian-Australian Goldfields Limited and Teberebie Goldfields Limited and are secured by fixed and floating charges over their respective assets. The Group under its Revolving Credit Facility had undrawn committed borrowing facilities of US$25.4 million as at 31 December 2001 (2000: US$100 million) which is available for drawing until 30 December 2002. The provisions of the Revolving Credit Facility include tightly drawn restrictions on usage of drawdowns under this facility.


46

Notes to the Financial Statements

19 Financial instruments Debtors and creditors arising directly from the Group’s operations and gold in transit are excluded from the following disclosures. Interest rate profile of financial liabilities The interest rate profiles of the Group’s financial liabilities at 31 December 2001 and 31 December 2000, which are predominately US dollar denominated, were as follows: Fixed rate borrowings Weighted average Total gross Weighted average time for which borrowings interest rate period fixed US$m % Years

Floating rate borrowings US$m

Fixed rate borrowings US$m

31 December 2001

108.4

217.5

325.9

5.5

1.2

31 December 2000

149.1

216.6

365.7

5.5

2.2

Interest on floating rate borrowings are determined primarily by reference to US LIBOR. Interest rate profile of financial assets The interest rate profiles of the Group’s financial assets at 31 December 2001 and 31 December 2000, which are predominately US dollar denominated, were as follows: Fixed rate US$m

Floating rate US$m

Interest free US$m

Total US$m

31 December 2001

32.0

0.8

32.8

31 December 2000

45.8

2.5

48.3

The financial assets of the Group comprise cash at bank and in hand. Currency exposures The Group had no significant currency exposures given that all revenues are US dollar denominated as are the majority of its costs, monetary assets and financial liabilities. Fair values of financial assets and liabilities The fair value of the Group’s financial instruments is as follows: 2001 Book value US$m

2000 Fair value US$m

Book value US$m

Fair value US$m

178.4 83.1 25.3 32.8

216.6 141.9 7.2 48.3

133.5 141.9 7.2 48.3

Financial instruments held or issued to finance the Group’s operations: Long term convertible debt Other long term borrowings Short term borrowings Cash

217.5 83.1 25.3 32.8

Derivative financial instruments to hedge the Group’s exposure to gold price risk: Forwards European Put options European Call options granted Convertible structures Lease rate swaps

– – – – –

117.6 51.0 (48.3) 10.5 (42.0)

– – – – –

93.3 22.9 (48.5) 22.4 (61.0)

Fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between informed and willing parties. Where available, market values have been used to determine fair values. Where market values are not available, fair values have been calculated by discounting cash flows at prevailing gold prices and interest rates. The fair values have been determined using market information and appropriate methodologies, but are not necessarily indicative of the amounts that the Group could realise in the normal course of business.


Notes to the Financial Statements

47

19 Financial instruments (continued) Hedging It is the Group’s policy to hedge the risk of movements in the gold prices using several types of derivative financial instruments. Gains and losses on instruments used for hedging the gold price are not recognised until the exposure that is being hedged is itself recognised. Unrecognised gains and losses on the instruments used for hedging and the movements therein, are as follows: Gains US$m

Unrecognised gains and losses on hedges at 1 January 2001 Gains arising in previous years recognised in the year

Losses US$m

Net Gains US$m

124.5 (54.4)

(4.5) –

120.0 (54.4)

Gains and losses arising before 1 January 2001 not recognised in the year Gains and losses arising in the year and not recognised

70.1 –

(4.5) –

65.6 –

Unrecognised gains and losses on hedges at 31 December 2001

70.1

(4.5)

65.6

Gains and losses expected to be recognised within one year Gains and losses expected to be recognised after one year

34.7 35.4

– (4.5)

34.7 30.9

20 Provisions for liabilities and charges Group Deferred tax US$m

At 1 January 2001 (Credit)/charge for the year

Site rehabilitation US$m

Total US$m

9.9 (8.0)

14.6 3.3

24.5 (4.7)

1.9

17.9

19.8

2001 US$m

2000 US$m

2001 US$m

1.9 – –

9.9 – –

168.4 (2.3) (231.5)

174.5 (2.4) (245.7)

1.9

9.9

(65.4)

(73.6)

At 31 December 2001 The site rehabilitation provision is expected to be utilised over the next 20 years. Deferred taxation provided and unprovided comprises: Provided

Accelerated capital allowances Other timing differences Losses carried forward

Full potential 2000 US$m

Company

At 1 January 2001 and 31 December 2001

Deferred tax US$m

Site rehabilitation US$m

Total US$m

0.6

5.2

5.8


48

Notes to the Financial Statements

21 Stated capital Number of shares

Authorised 200,000,000 ordinary shares of no par value 1 special rights redeemable preference share of no par value

200,000,000 1 200,000,001 Issued shares

Stated capital US$m

Allotted and fully paid At 1 January 2001: Ordinary shares of no par value in issue Ordinary shares of no par value issued during the year

112,336,942 377,280

544.3 0.9

At 31 December 2001: Ordinary shares of no par value in issue Ordinary shares in treasury 1 special rights redeemable preference share of no par value

112,714,222 559,405* 1

545.2 – –

113,273,628

545.2

*The 559,405 ordinary shares held in treasury do not qualify for dividends and do not have voting rights. Based on the prices quoted on the New York Stock Exchange, the Company’s share price traded between a high of US$4.250 and a low of US$1.875. As at 31 December 2001, the Company’s market capitalisation based on a share price of US$4.250 on that date was US$481.4 million. The Government of Ghana holds the special rights redeemable preference share of no par value (the “Golden Share”). The Golden Share is non-voting but the holder is entitled to receive notice of and to attend and speak at any general meeting of the members or at any separate meeting of the holders of any class of shares. On winding up, the Golden Share has a preferential right to return of capital, the value of which will be 1,000 cedis. The Regulations of the Company provide that certain matters, principally matters affecting the rights of the Golden Share, the winding up of the Company or the disposal of a material part of the Group’s assets, shall be deemed to be a variation of the rights attaching to the Golden Share and shall be effective only with the written consent of the holder of the Golden Share. All of the ordinary shares rank pari passu in all respects. On 25 April 2001, the Company in general meeting passed a special resolution renewing an existing authority to make market purchases of its own shares up to an aggregate of 12,000,000 ordinary shares at a price per share (exclusive of expenses) of not more than 5 per cent above the average of the middle market quotations for the shares taken from the Daily Official List of the London Stock Exchange for the five business days immediately before the date of purchase. However, the Company did not utilise this authority. The authority for the Company to purchase its own shares will expire on 24 July 2002 or at the conclusion of the Annual General Meeting at which it is proposed to renew the authority. In February 1996, the Group raised US$250 million through an issue by a subsidiary of seven year 51/2 per cent Exchangeable Notes listed on the New York and London stock exchanges. The noteholders have the option of converting the notes into ordinary shares at a conversion price of US$27 per share. The notes were to mature on 15 March 2003, unless converted or redeemed earlier. As at 31 December 2001, the Company had purchased US$31.4 million of the notes leaving US$218.6 million notes still in circulation which could give rise to the issue of up to 8,096,296 ordinary shares (assuming full exchange of all of the outstanding notes at an exchange price of US$27 per share). The notes repurchased remain uncancelled.


Notes to the Financial Statements

49

21 Stated capital (continued)

In January 2002, the Company announced a proposed restructuring of the 51/2% Exchangeable Notes (“Existing Notes”) debt of US$218.6 million. The principal terms of the proposed restructuring are included in the Report of the Directors on page 27. In November 1999, pursuant to an agreement with the Company’s hedge counterparties, a wholly-owned subsidiary, Ashanti Warrants Limited, issued unlisted warrants to subscribe for Mandatorily Exchangeable Securities under which the securityholders have the option of converting the securities into ordinary shares at a conversion price of US$3 per share. The warrants were issued in three equal tranches with expiry dates of 28 April 2004, 28 October 2004 and 28 April 2005. The conversion rights of the warrants could give rise to the issue of up to 19,835,001 ordinary shares. As at 31 December, 2000, of the options granted to directors and staff 8,296,772 shares remained outstanding. As part of the review of the Company’s remuneration arrangements conducted prior to the Annual General Meeting on 25 April, 2001, option holders were invited to cancel all outstanding options voluntarily. The proposal was made on the basis that for every 10 shares currently under option a new option would be granted over three shares. In the case of executive directors and certain members of the Company’s senior management, their outstanding “underwater” options were required to be surrendered in order to receive any further awards under the Company’s long-term incentive plans. Options over 5,364,485 shares in respect of other Senior Management and over 508,050 shares in respect of executive directors were cancelled in accordance with the invitation. 2,189,787 options were lapsed. Following the cancellation and re-grant of options described above, on 3 May, 2001, the total number of ordinary shares over which executive directors and senior management now hold options is as follows: Period of exercise

13 July 2003–12 July 2010 28 August 2003–27 August 2010 3 May 2004–2 May 2011 (Replacement Options) 3 May 2004–2 May 2011

Code

Option price US$

Number of ordinary shares of no par value

A B C D

1.66 2.55 2.29 2.29

40,000 50,000 1,761,760 980,090 2,831,850

All options granted on 3 May, 2001 were granted with exercise prices of US$2.29. They ordinarily become exercisable on 3 May, 2004 and lapse on 2 May, 2011.


50

Notes to the Financial Statements

22 Directors’ interests The beneficial interests, including family interests, of the directors holding office at the end of the year in ordinary shares of the Company are set out below: Shares

M E Beckett S E Jonah T E Anin M Botsio-Phillips L Chalker C A Crocker T Gibian M P Martineau N J Morrell E D Ofori Atta J N Robinson T S Schultz S Venkatakrishnan

1 January 2001

31 December 2001

1 January 2001

1,359 45,302 – 100 – – 20,000 – – 553 – 23,548 –

1,359 45,302 53 100 – 5,000 20,000 – – 553 – 23,548 –

– 290,000 – 45,000 – – – – – 45,000 – 128,050 50,000

Shares under option Granted Surrendered & during the Cancelled year

– (290,000) – (45,000) – – – – – (45,000) – (128,050) –

– 260,664 – 32,260 – – – – – 30,009 – 93,644 52,828

31 December 2001

– 260,664 – 32,260 – –

30,009 – 93,644 102,828

An analysis of options held by directors as at 31 December 2001 using the codes shown in note 21 is set out below: B

C

D

Total

S E Jonah M Botsio-Phillips E D Ofori Atta T S Schultz S Venkatakrishnan

– – – – 50,000

87,000 13,500 13,500 38,415 –

173,664 18,760 16,509 55,229 52,828

260,664 32,260 30,009 93,644 102,828

Total

50,000

152,415

316,990

519,405

Between 1 January 2002 and 28 March 2002, there were no changes in the above directors’ interests. Bonus Co-Investment Plan and Restricted Share Scheme Under the Bonus Co-Investment Plan, executive directors and key employees are invited to invest a percentage of their annual remuneration in Ashanti ordinary shares (“Ashanti shares”). These are designated “Invested Shares” for the purposes of the Plan. Participants are then granted without further payment rights to receive additional shares referable to the number of shares which they have purchased as Invested Shares. These additional shares are designated “Matching Shares” for the purposes of the Plan. Normally, so long as the participant does not sell the Invested Shares within a two-year period following their purchase, the Matching Shares will normally be released to the employee in equal instalments on the first and second anniversaries of the award. Rights to receive Matching Shares will normally lapse if the participant leaves the Company or sells the Invested Shares within two years of the purchase of the Invested Shares. Under the Performance Share Plan, also called Restricted Share Scheme, executive directors and key employees receive free Ashanti shares, if Ashanti achieves certain performance conditions within a three-year period. Shares acquired by the Trustee will be conditionally awarded to employees nominated by the Company, and transferred to employees following the employee’s completion of three years’ service from the date of the award provided certain performance targets are met. Special provisions apply if the participant’s employment terminates by reason of death, disability, retirement or redundancy or other reasons in the Committee discretion or (in the case of an expatriate employee) on expiry without renewal of his fixed-term contract of employment, or on a person becoming a “majority shareholder controller” or on a reconstruction or liquidation of the Company. On 3 May 2001, 377,280 ordinary shares were awarded under the Restricted Share Scheme for which new Ashanti ordinary shares were issued, out of this, 91,680 shares were awarded to Directors. Shares in category ‘A’ were acquired from the market while in respect of category ‘B’, new shares were issued in line with the modified rules as approved at the Annual General Meeting of 25 April 2001. The full number of shares to which a participant is entitled would only be received if Ashanti meets challenging internal and/or external goals. Right to receive shares will normally lapse if the participant leaves the Company within three years of the grant of the award.


Notes to the Financial Statements

51

22 Directors’ interests (continued) The Bonus Co-Investment Plan uses Ashanti shares which have already been issued and these are purchased by an employee trust, which is funded by Ashanti on terms agreed by the Board. As at 28 February 2002 the following awards have been made to the directors under the Company’s Bonus Co-Investment Plan and Performance Share Plan since their introduction: Shares awarded under the Bonus Co-Investment Plan

Name

Shares awarded under the Performance Share Plan Category ‘A’ Category ‘B’

S E Jonah M Botsio-Phillips E D Ofori Atta T S Schultz S Venkatakrishnan

14,388 – – 7,697 –

9,000 6,000 6,000 6,000 3,000

– 12,000 10,560 35,328 33,792

Total

22,085

30,000

91,680

Awards made under both the Bonus Co-Investment Plan and the Performance Share Plan will be allowed to run their course, but it is currently intended that no further awards will be made under them. 23 Reserves Profit and loss account US$m

Group Share deals account US$m

Total US$m

Profit and loss account US$m

Company Share deals account US$m

Total US$m

At 1 January 2001 Retained profit/(loss) for the year

(288.6) 62.7

19.0 –

(269.6) 62.7

(404.5) (21.4)

19.0 –

(385.5) (21.4)

At 31 December 2001

(225.9)

19.0

(206.9)

(425.9)

19.0

(406.9)

In accordance with the Ghana Companies Code 1963 (Act 179), all transactions relating to the purchase and re-issue of the Company’s own shares are recorded in a non-distributable share deals account. Group reserves is after goodwill written off in previous years of US$476 million (2000: US$476 million) arising on the acquisition of subsidiary undertakings. 24 Reconciliation of operating profit before exceptional operating costs to operating cash flows

2001

2000

US$m

US$m

Total operating profit before exceptional operating costs Share of operating profit in joint ventures

96.8 (20.2)

89.1 –

Operating profit excluding joint ventures Depreciation and amortisation Loss on disposal of fixed assets Decrease/(increase) in stocks Decrease in debtors Decrease in creditors Decrease in deferred hedging income Increase in provisions Outflows related to exceptional operating costs

76.6 82.3 0.6 4.3 2.0 (16.7) (57.0) 3.3 –

89.1 114.8 5.2 (11.8) 10.8 (18.0) (34.6) 0.8 (6.9)

95.4

149.4

Net cash inflow from operating activities


52

Notes to the Financial Statements

25 Acquisitions and disposals Cash inflow from sale of 50% interest in Cluff Resources Limited (Geita mine) Purchase of Pioneer Goldfields Company Limited (Teberebie mine)

26 Financing Revolving Credit Facility – repayments Bridge Facility – drawdowns Other – repayments

27 Analysis of net debt

Cash at bank Bank overdraft

At 1 Jan 2001 US$m

Cash flow US$m

2001

2000

US$m

US$m

– –

230.8 (0.5)

230.3

2001 US$m

2000 US$m

(33.8) – (6.8)

(251.0) 75.0 (10.3)

(40.6)

(186.3)

Other non-cash movements US$m

At 31 Dec 2001 US$m

32.8 (3.5)

(8.7) (1.7)

– –

24.1 (5.2)

Cash Gold in transit and collateralised cash (liquid resources) Borrowings

29.3 40.8 (362.2)

(10.4) (9.7) 40.6

– – 0.9

18.9 31.1 (320.7)

Net debt

(292.1)

20.5

0.9

(270.7)

28 Related party transactions The Company’s principal shareholder is Lonmin (32 per cent) which provides technical services and the services of Mr S E Jonah to the Group for which it received US$0.7 million (2000: US$1.8 million) for the year. Another major shareholder is the Government of Ghana (20 per cent). The Group pays royalties, corporate and other taxes and utility charges in the normal course of business to the Government and associated authorities. Amounts paid during the year totalled approximately US$51 million (2000: US$58 million). 29 Contingent liabilities US Class Actions The consolidated class action which was commenced in the year 2000, is pending against the Company and one officer and director and one former director under United States Federal Securities laws in the United States District Court for the Eastern District of New York. The complaint alleges non-disclosures and misstatements regarding Ashanti’s hedging position and hedging programme. The plaintiffs contend that the Company and the individual defendants’ actions violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated under that Act. The plaintiffs seek unspecified damages, attorneys’ and experts’ fees and other reliefs. The Court has rendered a ruling to the effect that the matter would be determined by document discovery and assessment of evidence. The Company continues to vigorously defend the action, and although the Company cannot make any assurances regarding the ultimate result of the litigation at this stage, it believes that the outcome will have no material adverse effect on the Company’s financial position. Kimin – Employee Actions In November 1999, the Brussels Labour Court upheld the claims for arrears of salary and severance payments in proceedings instituted by certain ex-Kimin expatriate employee against Kimin and Ashanti. An appeal filed by Kimin and Ashanti against the judgement has now been determined with the award granted in favour of some of the ex-employees confirmed but certain further claims made were disallowed.


Notes to the Financial Statements

29 Contingent liabilities (continued) Although the Company cannot make any assurances regarding the ultimate outcome of all of the Kimin ex-employee actions, it is of the view, based on information currently available, that any expected liability that might arise has been provided for in the financial statements. Pangea/Ashanti Joint Venture – Arbitration With regard to the arbitration proceedings at the International Court of Arbitration of the International Chamber of Commerce between Pangea Goldfields Inc. and the Company, the parties have entered into settlement discussions and have agreed the key elements for an amicable settlement of the dispute that would obviate any further arbitral proceedings and which would not have any material adverse effect on the Company’s financial position.

53


54

Hedging Appendix

The following table sets out Ashanti’s hedge portfolio as at 31 December 2001 2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

607,500 335.14

718,746 351.14

529,996 355.18

464,996 353.14

248,000 349.35

190,000 345.93

205,000 349.80

180,000 345.33

140,000 346.86

140,000 346.86

120,000 348.00

270,000 349.54

50,000 354.00

79,200 377.50

79,200 377.50

79,200 377.50

79,200 377.50

79,200 377.50

79,200 377.50

79,200 377.50

– –

– –

– –

874,400 367.52

Sold (ounces) (US$/ounce)

50,000 270.00

50,000 270.00

50,000 270.00

– –

– –

– –

– –

– –

– –

– –

– –

– –

150,000 270.00

Subtotal (ounces)

220,000

29,200

79,200

79,200

79,200

79,200

79,200

79,200

724,400

Calls: Sold (ounces) (US$/ounce)

712,700 336.39

665,092 338.72

628,972 342.44

425,528 344.19

212,056 365.58

291,076 362.74

274,660 364.70

96,220 362.38

56,500 350.00

56,500 350.00

56,500 350.00

60,000 380.00

240,000 429.13

280,000 444.43

60,000 380.00

173,000 418.44

173,000 418.44

– –

– –

– –

– –

– –

Forward Sales (ounces)

(US$/ounce) Puts: Bought (ounces) (US$/ounce)

Bought (ounces) (US$/ounce) Subtotal (ounces)

2013

Total

120,000 3,664,238 348.00 348.04

56,500 3,532,304 350.00 346.55 – –

986,000 423.74

652,700

425,092

348,972

365,528

39,056

118,076

274,660

96,220

56,500

56,500

56,500

Convertible Structures: Put Protection (ounces) (US$/ounce)

– –

– –

– –

– –

100,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

50,000 401.00

Forward Commitment (ounces) (US$/ounce)

– –

– –

– –

– –

200,000 400.75

200,000 400.75

189,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

100,000 400.75

50,000 1,039,000 401.00 400.76

Call Commitment (ounces) (US$/ounce)

– –

– –

– –

– –

– –

– –

– –

56,000 400.75

56,000 400.75

56,000 400.75

56,000 400.75

28,000 401.00

252,000 400.78

2,085

2,085

Lease Rate ounces due Summary: Protected

56,500 2,546,304 750,000 400.77

(ounces)

825,415

718,746

559,196

544,196

427,200

369,200

384,200

359,200

319,200

240,000

220,000

170,000 5,136,553

Committed (ounces)

1,258,115

1,143,838

878,968

830,524

487,056

508,076

668,660

432,220

352,500

352,500

332,500

254,500 7,499,457

1,941,675 1,427,650 1,014,470

695,250

408,750

161,000 5,044,125

Lease Rate Swap (ounces) 4,981,625

5,044,125 4,466,400 3,765,200 3,089,400 2,470,375

Total committed ounces as a percentage of total forecast production (excluding Geita production for the period of the project finance ie 2001 – 2007) Deferred Hedging Income (US$m)

35

16

15

61% –

66

Details of Hedging Contracts outstanding at 31 December 2001 Forward Sales: A total of 3.66 million ounces have been sold forward at an average price of US$348 per ounce. Put Options: Ashanti has purchased 874,400 ounces of put options that give Ashanti the right, but not the obligation, to sell gold at certain strike prices. The average strike price is US$368 per ounce. Ashanti has also sold 150,000 ounces of put options at an average strike price of US$270 per ounce. Call Options: Ashanti has sold 3.53 million ounces of call options at an average strike price of US$347 per ounce. As a partial offset, Ashanti has bought 986,000 ounces of call options at an average strike price of US$424 per ounce which start maturing in 2002. Convertible Structures: The portfolio contains two types of convertible structures: 1. Ashanti owns 300,000 ounces of put options for the period March 2006 to December 2008 with strike prices of US$401 per ounce. Each option has a conversion level and a strip of conversion dates associated with it. If the conversion occurs the put options convert into 589,000 ounces of forward sales at the same strike price. 2. Ashanti owns 450,000 ounces of put options for the period March 2009 to December 2013 with strike prices of US$401 per ounce. Each option has a conversion level and a strip of conversion dates associated with it. If the conversion occurs each put option converts into 1 ounce of forward sales and 0.56 ounces of (sold) call options. The average conversion level for convertibles 1 and 2 is US$363 per ounce. The hedge table breaks the above structures into protected and committed ounces. The “Put Protection” represents the amount of ounces that may be sold should gold continue trading at current levels. Under certain conditions (given above) these puts may cease to exist and may be replaced by forward sales and/or calls sold (“Forward Commitment” and “Call Commitment”).


Hedging Appendix

55

Gold Lease Rate Swaps: As of 31 December 2001, a maximum of 5.0 million ounces of Ashanti’s hedged production will be exposed to the floating one, three and six month lease rate at any one time. The lease rate swaps can be broken down into the following types (under all of these contracts Ashanti receives a certain lease rate income, which can be regarded as compensation for the lease rate exposure that Ashanti takes on). Fixed Rate (%)

Volume (ounces)

Ashanti pays a monthly floating rate and receives a monthly fixed rate of 2.00%

2.00

25,625

Ashanti pays a semi-annual floating rate and receives a semi-annual fixed rate of 1.90%

1.90

1,546,000

Ashanti pays a quarterly floating rate and receives a quarterly fixed rate of 1.80%. The fixed amount of ounces is converted to dollars at a fixed spot price of US$300

1.80

1,920,000

Ashanti pays a quarterly floating rate and receives a fixed amount of dollars at maturity. The quarterly amount is rolled until maturity of each forward contract. The fixed amount for each contract is calculated using the formula: Volume*YearsToMaturity*302*2.00%. The next rate set is in 2002.

2.00

920,000

Ashanti pays a quarterly floating rate and receives a fixed rate of 1.75%.

1.75

880,000

Description

Total

5,291,625

Mark-to-Market Valuations On 31 December 2001, the portfolio had a positive mark-to-market value of US$88.8 million. This valuation was based on a spot price of US$277 per ounce and the then prevailing applicable US interest rates, gold forward rates, volatilities and guidelines provided by the Risk Management Committee. The delta at that time was 6 million ounces. This implies that a US$1 increase in the price of gold would have a US$6 million negative impact (approximate) on the mark-to-market valuation of the hedge book. Movements in US interest rates, gold lease rates, volatilities and time will also have a sizeable impact on the mark-tomarket. All these variables can change significantly over short time periods and can consequently materially affect the mark-tomarket valuation. The approximate breakdown by type of the mark-to-market valuation at 31 December, 2001 was as follows: US$m

Forward contracts European Put options (net bought) European Call options (net sold) Convertible structures Lease rate swaps

117.6 51.0 (48.3) 10.5 (42.0) 88.8


56

Hedging Appendix

Hedge Book Sensitivities All of the projections set out below are forward looking statements and have been prepared for illustrative purposes only, based on the assumptions and sensitivities set out below and the hedge book as at 31 December 2001. Accordingly, the actual realised prices, cash flows, mark-to-market values and portfolio sensitivities could differ materially from those set out below as a result of a number of factors including active management of the hedge book. Projected Realised Prices The following summary table shows, as at 31 December 2001, the ounces delivered and average prices at the assumed spot price indicated. A quarterly lease rate of 2 per cent is assumed throughout. Spot Price

Ounces delivered million

Average Price US$ per Ounce

US$250 US$300 US$350 US$400

5.2 5.4 7.1 8.1

359 353 349 348

The number of ounces delivered in this table indicates how many ounces Ashanti would sell through forward sales, as well as calls and puts, bought and sold, which would be exercised under the various assumed spot prices. The effects of all lease rate swap rate-sets have been included in the average price. Mark-to-Market Projections The following table shows projected mark-to-markets of the portfolio for specified dates at specified spot gold prices. These mark-to-markets are calculated based on current market conditions using mid-rates and no volatility skew for options is assumed. Note also that there is one lease rate swap that is not paid out immediately but is paid out in line with forward sales – for this a fixing rate of 2 per cent is assumed. All amounts are in US$ millions. Spot

Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec

02 03 04 05 06 07 08 09 10 11 12 13

US$250/oz

US$275/oz

US$300/oz

247.79 225.62 206.17 185.01 166.00 147.77 121.49 93.10 63.90 41.06 17.35 –

129.51 128.97 125.96 119.56 112.03 103.47 86.93 67.65 46.67 30.21 12.51 –

4.04 27.58 42.97 52.23 56.70 58.44 52.00 41.94 29.24 19.22 7.61 –

US$325/oz

(130.08) (80.00) (43.96) (17.55) (0.66) 12.21 16.52 15.88 11.55 7.98 2.57 –

US$350/oz

(273.01) (194.80) (135.43) (90.03) (60.63) (35.80) (19.71) (10.62) (6.47) (3.55) (2.73) –

US$375/oz

US$400/oz

(422.35) (316.96) (234.45) (169.17) (127.08) (88.93) (59.41) (39.56) (26.01) (15.71) (8.33) –

(575.38) (442.75) (336.24) (251.71) (197.58) (146.55) (103.07) (73.08) (50.30) (30.82) (14.97) –

Cash Flow Projections The following table shows a breakdown of the cash flows that would be received or paid under specified spot and lease rate assumptions. The specified lease rates are used for all resets, i.e. one month, three month and six month. The specified spot price is used to cash-settle all contracts. All amounts are in US$ millions. Spot Lease Rate

1%

US$250/oz 2%

3%

1%

US$275/oz 2%

3%

1%

US$300/oz 2%

3%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

83.79 87.55 74.57 66.55 56.96 49.37 50.55 46.23 41.88 31.20 28.90 20.91

79.33 76.81 64.80 57.99 49.69 43.17 45.22 41.72 37.84 27.47 25.34 17.43

74.88 66.06 55.02 49.44 42.41 36.97 39.90 37.20 33.81 23.74 21.77 13.96

62.73 69.33 60.32 52.91 46.22 40.05 40.83 37.12 33.73 24.98 23.14 16.34

57.84 57.51 49.57 43.50 38.22 33.23 34.98 32.15 29.30 20.88 19.22 12.52

52.94 45.69 38.82 34.10 30.22 26.41 29.12 27.18 24.86 16.87 15.30 8.70

40.68 50.11 45.07 39.27 35.48 30.73 31.12 28.00 25.59 18.77 17.38 11.78

35.34 37.22 33.34 29.01 26.75 23.29 24.73 22.58 20.75 14.30 13.10 7.61

30.00 24.32 21.61 18.75 18.03 15.85 18.35 17.16 15.92 9.82 8.82 3.44

Total

638.46

566.81

495.16

507.70

428.92

350.21

373.98

288.02

202.07


Hedging Appendix

57

Portfolio Sensitivities The following table shows the sensitivity of the portfolio to certain market rate movements as at 31 December 2001. A description of each sensitivity is given below. Delta Gold Rho US Rho Gold Vega Theta (per day)

(6.0) 0.9 (17.6) (3.9) 0.4

(Ounces (US$ (US$ (US$ (US$

million) million) million) million) million)

Delta

The delta shows the gold ounces that Ashanti would have to buy to neutralise the Hedge Book position. The delta could also be interpreted as the change in mark-to-market for a US$1 move in the spot gold price, i.e. a US$1 increase in spot would reduce the mark-to-market by US$6.0 million.

Gold Rho

The gold rho figure shows the change in mark-to-market for a 25 basis point parallel shift in the gold interest rate curve, i.e. a 0.25 per cent rise in gold interest rate across the gold curve would increase the mark-to-market by US$0.9 million.

US Rho

The US rho figure shows the change in the mark-to-market for a 25 basis point parallel shift in US interest rates, i.e. a 0.25 per cent rise in US interest rates across the US interest rate curve would decrease the mark-to-market by US$17.6 million.

Gold Vega

The Gold vega figure shows the change in mark-to-market for a 1 per cent parallel shift in the gold volatility curve, i.e. a 1 per cent rise in the gold volatility curve would decrease the mark-to-market by US$3.9 million.

Theta

The theta figure shows the change in mark-to-market owing to the passing of one day, with everything else remaining constant, i.e. if all market parameters stay the same, the mark-to-market would increase by US$0.4 million for the next day.

Geita Hedging The table below shows Ashanti's portion of hedging commitments for Geita as at 31 December 2001. The table represents half of Geita’s hedge commitments. 2002

2003

2004

2005

2006

2007

Total

225,350 282.07

238,681 285.78

195,558 288.53

125,744 294.33

94,576 296.05

120,938 298.49

1,000,847 289.06

Puts: Bought (ounces) (US$/ounce)

25,170 291.03

26,735 291.19

25,586 291.29

24,350 291.19

18,115 291.03

23,390 291.66

143,346 291.23

Summary: Protected (ounces)

250,520

265,416

221,144

150,094

112,691

144,328

1,144,193

Committed (ounces)

225,350

238,681

195,558

125,744

94,576

120,938

1,000,847

233,316

200,964

156,301

116,774

76,301

41,420

233,316

Forward Sales (ounces) (US$/ounce)

Total committed ounces as a percentage of total forecast production Lease Rate Swap (ounces)

60%

Mark-to-Market Valuation On 31 December 2001 the Geita portfolio had a negative mark-to-market value of US$4.7 million (Ashanti’s portion: US$2.4 million). This valuation was based on a spot price of US$277 and the then prevailing US interest rates, gold forward rates, volatilities and guidelines provided by the Risk Management Committee.

Spot Lease Rate

Total

1%

US$325/oz 2%

3%

1%

US$350/oz 2%

3%

1%

US$375/oz 2%

3%

1%

US$400/oz 2%

3%

17.88 28.93 28.56 25.63 24.74 21.41 21.41 18.88 17.45 12.55 11.62 7.22

12.09 14.96 15.85 14.52 15.28 13.35 14.49 13.01 12.21 7.71 6.98 2.70

6.31 0.99 3.15 3.40 5.83 5.29 7.57 7.13 6.97 2.86 2.35 (1.82)

(12.83) 1.81 7.46 7.16 13.75 11.06 10.99 9.76 9.31 6.34 5.86 2.66

(19.06) (13.23) (6.23) (4.81) 3.57 2.38 3.54 3.43 3.67 1.12 0.86 (2.21)

(25.29) (28.28) (19.91) (16.78) (6.61) (6.30) (3.92) (2.89) (1.98) (4.10) (4.13) (7.08)

(47.40) (30.63) (21.15) (14.75) 3.64 1.38 1.05 (0.77) (0.24) (1.29) (1.32) (3.32)

(54.07) (46.75) (35.82) (27.58) (7.27) (7.92) (6.94) (7.55) (6.29) (6.88) (6.67) (8.53)

(60.75) (62.87) (50.48) (40.40) (18.18) (17.22) (14.92) (14.32) (12.34) (12.47) (12.01) (13.75)

(80.57) (64.02) (49.15) (36.05) (12.13) (14.73) (15.58) (10.32) (8.02) (8.92) (8.49) (9.30)

(87.69) (81.22) (64.79) (49.73) (23.76) (24.65) (24.10) (17.54) (14.47) (14.88) (14.20) (14.86)

(94.81) (98.41) (80.43) (63.41) (35.40) (34.57) (32.61) (24.77) (20.92) (20.84) (19.90) (20.42)

236.28

143.15

50.03

73.33

(26.97)

(127.27)

(114.80)

(222.27)

(329.71)

(317.28)

(431.89)

(546.49)


58

Five Year Financial Summary

Year to 31 Dec 1997 US$m

Year to 31 Dec 1998 US$m

Year to 31 Dec 1999 US$m

Year to 31 Dec 2000 US$m

Year to 31 Dec 2001 US$m

531.3

600.3

582.1

582.2

554.4

(447.7)

(500.8)

(485.8)

(493.1)

(457.6)

Operating profit before exceptional items Share of operating profit of joint venture

83.6 –

99.5 –

96.3 –

89.1 –

76.6 20.2

Profit before taxation and exceptional items

60.4

76.3

66.4

37.8

67.4

(4.7) (2.4)

(33.2) –

(250.0) (2.7)

(168.6) (8.8)

– (6.8)

53.3

43.1

(186.3)

(139.6)

60.6

53.7 (21.8)

40.7 (10.9)

(183.9) –

(141.1) –

62.7 –

31.9

29.8

(183.9)

(141.1)

62.7

Earnings per share before exceptional items (US$) 0.54

0.68

0.59

0.27

0.56

31 Dec 1997 US$m

31 Dec 1998 US$m

31 Dec 1999 US$m

31 Dec 2000 US$m

31 Dec 2001 US$m

1,101.2

1,213.1

1,139.5

769.2

746.0

258.1

276.2

197.9

167.0

144.8

Creditors: Amounts due within one year

(206.3)

(282.4)

(341.0)

(176.2)

(180.3)

Net current assets/(liabilities)

51.8

(6.2)

(143.1)

(9.2)

(35.5)

Profit and Loss Turnover Total costs before exceptional items

Exceptional items Taxation Profit/(loss) after taxation and exceptional items Profit/(loss) attributable to shareholders Dividend Retained profit/(loss) for the year

Balance Sheet Fixed assets Current assets

Total assets less current liabilities Creditors: Amounts due over one year

1,153.0

1,206.9

996.4

760.0

710.5

(614.4)

(632.2)

(578.6)

(456.7)

(350.4)

Capital and reserves Stated capital Reserves

515.6 4.6

518.6 30.8

544.3 (153.1)

544.3 (269.6)

545.2 (206.9)

Shareholders’ funds

520.2

549.4

391.2

274.7

338.3


Shareholder Information

59

Shareholder Profile as at 28 February 2002 Number of shareholders

Per cent of total shareholders

Number of shares

Per cent of issued shares

Private individuals Pension funds Insurance companies Private/investment trusts Other corporate holders

27,441 4 16 70 859

96.68 0.01 0.06 0.25 3.00

1,908,542 180,510 12,936 861,899 109,750,335

1.68 0.16 0.01 0.76 97.39

Total

28,390

100.00

112,714,222*

100.00

25,897 1,825 292 298 31 47

91.22 6.43 1.03 1.05 0.11 0.16

342,678 387,864 207,100 634,659 230,124 110,911,797

0.30 0.35 0.18 0.56 0.20 98.41

28,390

100.00

112,714,222*

100.00

Category

Size of Shareholding

1 101 501 1,001 5,001 10,001

– 100 – 500 – 1,000 – 5,000 – 10,000 and over

Total *Excluding 559,405 ordinary shares held in Treasury

Twenty largest shareholders as at 28 February 2002

(representing 98 per cent of issued ordinary shares of 112,714,222) Name of Company/Individual

Number of shares held

Number of shares held

Name of Company/Individual

Depositary Nominee, Inc.*

47,510,281

Merrill Lynch (Australia)

170,795

Lonmin Plc

36,000,000

Temple Assets Executor and Trust Co. (PVT) Ltd

127,353

Government of Ghana

21,978,104

ANZ Nominees Limited

120,993

Libyan Arab African Investment Co. Ltd.

1,601,309

Roytor & Co.

107,129

Vidacos Nominees Limited

1,212,110

Ghana Cocoa Coffee & Sheanut Farmers Assoc.

100,593

AGC Share Scheme Trustee Limited

462,164

Gold Crest Securities Limited

87,181

AGC Share Incentive Trustee Limited

239,606

Ashanti Goldfields Zimbabwe Employees

73,340

National Nominees Limited

210,998

James Capel (Nominees) Limited

55,151

James Capel (Second Nominees) Limited

179,630

EBG Stockbrokers/Adansi Development Fund

53,485

Social Security and National Insurance Trust

178,876

Sam Jonah

45,302 110,514,400

*Depository for Global Depositary Receipts


60

Shareholder Information

Shareholder Enquiries:

Listing of Ordinary Shares The Company’s ordinary shares are listed on the following international stock exchanges and trade under the symbols shown: Australia Ghana London New York Zimbabwe

AHA AGC ASHGq.L ASL (CUSIP # 043743202) –

On the Australian Stock Exchange, the shares also trade as CHESS Units of Foreign Securities (CUFS). The Company’s shares are also traded on the London and New York stock exchanges by way of a sponsored Global Depositary Receipt (GDR) facility with The Bank of New York as Depositary. The ratio of GDRs to ordinary shares is 1:1. The securities are also traded as ordinary shares on the Ghana and London stock exchanges. On the Zimbabwe Stock Exchange, the Company’s securities are traded by way of a sponsored Zimbabwe Depositary Receipt (ZDR) facility with Temple Assets Executor and Trust Company (Private) Limited as Depositary and are also traded as ordinary shares. The ratio of ZDRs to ordinary shares is 100:1. Dividend Payments The Company’s ordinary dividends are declared and paid in US dollars to shareholders on the International Register unless they elect to receive them in pounds sterling. Shareholders on the Australian Register receive their dividends in Australian dollars unless they elect to receive them in US dollars or pounds sterling. Shareholders on the Ghana Register receive their dividends in Cedis unless they are non-resident and elect to receive them in US dollars or pounds sterling. Shareholders on the Zimbabwe Register receive their dividends in Zimbabwe dollars. The exchange rates used to determine the payments in other currencies are as at the dividend record date. Dividend Mandates Shareholders who wish to have their dividends paid directly into a bank or building society account should contact their Registrars for a dividend mandate form. Share Dividend Plan Shareholders are normally offered the opportunity under the Ashanti Share Dividend Plan to reinvest their cash dividends in the Company’s shares. To date, the Ashanti Share Dividend Plan has not been offered to shareholders on the Zimbabwe Register because they would be disadvantaged by the significant share price differential between the London and Zimbabwe stock exchanges. The Company is monitoring the share price differential and will offer a share alternative once the differential is considered to be immaterial.

International Registrars’ UK Transfer Office Capita IRG Plc Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU Telephone: (+44-20) 8639 2000 Fax: (+44-20) 8639 2487 Australian Registrars ASX Perpetual Registrars GPO Box 1736P Melbourne, Victoria 3001 Telephone: (+61-3) 9205 4999 Fax: (+61-3) 9205 4900 Ghana Registrars Barclays Bank of Ghana Limited Registrar’s Department High Street P O Box 2949 Accra Telephone: (+233-21) 669404 Fax: (+233-21) 667420 Zimbabwe Registrars Syfrets Corporate and Merchant Bank P O Box 2540 Zimbank House 46 Speke Avenue Harare, Zimbabwe Telephone: (+263-4) 757471 Fax: (+263-4) 738844

GDR Holder Enquiries: The Bank of New York ADR Department 101 Barclay Street, 22nd Floor New York, NY 10286 Telephone: (+1-212) 815 5133 Fax: (+1-212) 571 3050


Officers

Corporate Office S E Jonah * Chief Executive and Group Managing Director Mrs M Botsio-Phillips * General Counsel S Venkatakrishnan * Chief Financial Officer Mrs E D Ofori Atta * Executive Director, Corporate Relations T S Schultz * Chief Operating Officer E Abankroh * Company Secretary J K Anaman * Managing Director, Public Affairs M. Arnesen Managing Director, International Treasury K Awotwi * Managing Director, Strategic Planning & New Business Development A Darko * Managing Director, Information Systems & Telecoms M Ahorney General Manager, Budgeting & Planning K Akosah-Bempah General Manager, Corporate Finance E Dwomoh-Appiah General Manager, Properties A de Freitas Group Mining Engineer E Harlley * Group Manager, Internal Audit G Townsend Group Financial Controller K Tshribi General Manager, Legal

Group Projects G Potter * Managing Director

Ashanti Exploration P N Cowley * Managing Director *Member of the Chief Executive’s Committee

61

Ashanti Zimbabwe A Ntini Managing Director N A Armar Finance Director

Bibiani Mine B Horochuk Managing Director

Iduapriem Mine D Renner Managing Director

Obuasi Mine A Dods Managing Director G Kessie Financial Controller J A Amanor Senior Manager, Geology Mrs E Kwami General Manager, Human Resources S Oti-Attakorah General Manager, Processing S Oti-Brako General Manager, Mining J Y Timbilla General Manager, Projects

Siguiri, Guinea D M A Owiredu Directeur Générale and Managing Director, Société Ashanti Goldfields de Guinée Ben Aheto Mine Manager, Siguiri

Geita, Tanzania P Turner Chief Executive Officer P Louw Finance Director

Kimin, D.R.C. I Danso Managing Director


62

Notice of Annual General Meeting

Ashanti Goldfields Company Limited (Registered in Ghana No. 7094) (ARBN 074 370 862)

Notice is hereby given that the twenty-ninth Annual General Meeting of Ashanti Goldfields Company Limited will be held at the Len Clay Stadium, Obuasi, Ghana on Tuesday 28 May 2002 at 11.00 a.m. to transact the following business: Ordinary Resolutions Ordinary Business 1. To receive and consider the reports of the directors and auditors and the accounts for the year ended 31 December 2001. 2. To re-elect as a director The Rt. Hon. The Baroness Chalker of Wallasey PC who is retiring by rotation. 3. To re-elect as a director Dr Chester Arthur Crocker who is retiring by rotation. 4. To re-elect as a director Mr Thomas Richard Gibian who is retiring by rotation. 5. To re-elect as a director Dr Michael Peter Martineau who is retiring by rotation. 6. To elect as a director Mr Theophilus Ernest Anin who was appointed by the Board since the last Annual General Meeting. 7. To elect as a director Mr Gordon Edward Haslam who was appointed by the Board since the last Annual General Meeting. 8. To authorise the directors to determine the fees of the Company’s auditors, Deloitte & Touche. Special Business To pass the following as ordinary resolutions: 9.

THAT the service agreement between the Company and Mr T S Schultz dated 27 March 2002, a copy of which has been signed for the purpose of identification by the Chairman of the Meeting, and the terms of the appointment of Mr T S Schultz to his office as an executive director contained therein be and are hereby approved for the purposes of Section 194(4) of the Companies Code, 1963 (Act 179).

10. THAT the directors be and are hereby generally and unconditionally authorised pursuant to Section 202(1) of the Companies Code, 1963 (Act 179) to exercise all the powers of the Company to allot and issue: (a) ordinary shares in connection with any option scheme or share scheme for directors and/or employees approved by the members in General Meeting, (b) up to 38,000,000 ordinary shares without offering such shares to existing shareholders in accordance with the provisions of sub-paragraph (b) of the said Section 202(1) PROVIDED that this authority shall be limited so that, otherwise than pursuant to the authority referred to above and a rights issue or similar offer where shares or other securities are offered to ordinary shareholders and such holders of other securities of the Company as the directors may determine on a fixed record date in proportion (as nearly as may be) to their then holdings of securities or in accordance with the rights attached thereto (subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions, obligations or practical problems arising from or under the laws or the requirements of any territory or of any recognised regulatory body or stock exchange or otherwise howsoever) the aggregate number of shares to be issued for cash by the directors pursuant to the authority contained in this sub-paragraph (b) shall not in aggregate exceed 5,600,000 ordinary shares and such authority (unless previously revoked or renewed) shall expire on 28 August 2003 or the conclusion of the next Annual General Meeting of the Company (whichever is the earlier) save that the Company may before such expiry make an offer or agreement which would or might require shares to be allotted after such expiry and the directors may allot and issue shares in pursuance of such offer or agreement as if the said authority had not expired; and 11. THAT subject to the passing of Resolution 10 above the provisions of Section 202(2) of the Companies Code, 1963 (Act 179) be and are hereby disapplied in connection with: (i) any issue of shares pursuant to the authorities conferred by Resolution 10 above; and (ii) any issue of treasury shares. To pass the following as a Special Resolution: Special Resolution 12. THAT the Company be and is hereby unconditionally authorised to exercise all the powers of the Company to make market or off market purchases of the Company’s ordinary shares up to an aggregate of 13,000,000 ordinary shares at a price per share (exclusive of expenses) of not more than 5 per cent above the average of the respective middle market quotations for the shares as derived from the Daily Official List of the London Stock Exchange for the five business days before the purchase is made, such authority (unless previously revoked or renewed) shall expire on 28 August 2003 or at the conclusion of the next Annual General Meeting of the Company (whichever is the earlier) save that the Company may before such expiry enter into a contract to purchase shares which would or might require to be executed wholly or partly after such expiry and may make a purchase of shares pursuant to such contract as if the said authority had not expired. By order of the Board

Ernest Abankroh Secretary

Registered Office Gold House Patrice Lumumba Road Roman Ridge PO Box 2665 Accra 28 March 2002


Notice of Annual General Meeting

Notes: 1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him. A proxy need not be a member. Completion and return of an instrument appointing a proxy will not preclude a member from attending and voting in person at the meeting. 2.

In order to be valid, the instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a copy of such authority certified notarially or in some other way approved by the Board, must be deposited at the offices of the Company’s Registrars in Ghana, Barclays Bank of Ghana Limited, High Street, PO Box 2949, Accra, Ghana or at the UK Transfer Office of the Company’s International Registrars, Capita IRG Plc, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU, UK or at the offices of the Company’s Registrars in Australia, ASX Perpetual Registrars GPO Box 1736P, Melbourne, Victoria 3001, Australia or at the offices of the Company’s Registrars in Zimbabwe, Syfrets Corporate and Merchant Bank, PO Box 2540, Zimbank House, 46 Speke Avenue, Harare, Zimbabwe, not less than 48 hours before the time appointed for holding the meeting. FAILURE TO DEPOSIT THE FORM OF PROXY AS REQUIRED WILL RESULT IN THE PROXY NOT BEING ADMITTED TO, OR PARTICIPATING IN THE MEETING.

3.

In the case of joint registered holders of any share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote of the other joint holders. For this purpose seniority shall be determined by the order in which the names of the holders stand in the register.

4.

Copies of the directors’ service agreement of more than one year’s duration will be available for inspection during business hours at the Company’s registered office and the UK Transfer Office referred to in Note 2 above from the date of this Notice and at the Len Clay Stadium, Obuasi, Ghana from 10.00 a.m. on 28 May 2002 until the conclusion of the Annual General Meeting.

5. Under Section 194 of the Companies Code of Ghana, the terms of appointment of the office of Directors of the Company need to be approved by the shareholders of the Company by way of an ordinary resolution. Resolution 9 above has been included to approve the contract between the Company and Mr T S Schultz for the period 1 January 2003 to 31 December 2003. 6. It is proposed by Resolution 10 to enable the directors to allot unissued and uncommitted share capital of the Company amounting to 38,000,000 Ashanti shares (representing approximately one-third of the current issued share capital of the Company) until 28 May 2003 or the conclusion of the next Annual General Meeting (whichever is the earlier). This Resolution is proposed so as to give the directors the necessary flexibility to take advantage of business opportunities as they arise. The directors, other than in connection with option schemes or share plans, have no present intention of using this authority which renews an existing authority given to them each year. This is without prejudice to the formal request which will be made separately in respect of the Company’s debt restructuring. It is also proposed by Resolution 10 to empower the directors to allot equity securities for cash without first offering them to existing shareholders in proportion to their holdings, subject to a maximum of 5,600,000 Ashanti shares representing approximately 5 per cent of the current issued share capital. The directors, other than in connection with option schemes or share plans, have no present intention of using this authority which replaces the equivalent resolution passed at the last Annual General Meeting and will expire on 28 August 2003 or at the conclusion of next year’s Annual General Meeting (whichever is the earlier). This Resolution is proposed so as to give the directors the necessary flexibility to take advantage of business opportunities as they arise and the 5,600,000 ordinary shares limit for issues of shares for cash ensures that existing shareholders’ interests are protected. 7.

It is proposed by Resolution 12 to renew the Company’s authority to purchase its own issued shares at a price which is not more than 5 per cent (exclusive of expenses) above the average of the market values of Ashanti shares taken from the London Stock Exchange Daily Official List for the five business days before the purchase is made. The authority will be for the purchase of a maximum of 13,000,000 Ashanti shares (approximately 10 per cent of the Company’s current issued share capital) and will expire on 28 August 2003 or at the conclusion of next year’s Annual General Meeting (whichever is the earlier). It is presently intended that a resolution for its renewal will be proposed at each succeeding Annual General Meeting. The Company will continue to make purchases when it considers appropriate although no purchases will be made unless the effect will be to increase expected earnings per share and such purchases would be in the best interests of shareholders generally.

63


64

Forward Looking Statements

This report contains a number of statements relating to plans, forecasts, and future results of Ashanti Goldfields Company Limited (“Ashanti”) that are considered “forward looking statements” as defined in the Private Securities Litigation Reform Act 1995 of the United States of America including but not limited to the restructuring of the Exchangeable Notes, the restructuring of Ashanti’s hedge book and negotiations to extend margin-free trading arrangements, the negotiation of a new Revolving Credit Facility, future production levels and operating costs, plans for diversification, and the removal of the Golden Share. Ashanti may also make written or oral forward looking statements in its presentation, in its periodic reports and filings with the various regulatory authorities, in its annual report to shareholders, in its offering circulars and prospectuses, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. These forward looking statements include statements about our beliefs, hopes, projections and expectations, and may include statements regarding future plans, objectives or goals, anticipated production or construction commencement dates, construction completion dates, expected costs, production output, the anticipated productive life of mines, projected cashflows, debt levels, and mark-to-market values of and cashflows from the hedgebook. Such statements are based on current plans, information, intentions, estimates and projections and certain external factors which may be beyond the control of Ashanti and, therefore, undue reliance should not be placed on them. Forward looking statements speak only as of the date they are made, and Ashanti undertakes no obligation to update publicly any of them in light of new information or future events. These statements are subject to risks and uncertainties that could cause actual occurrences to differ materially from the forward looking statements, such as the risks that conditions to the Restructuring of the Exchangeable Notes may not be satisfied, fulfilled or waived, the Scheme of Arrangement might not be approved by the holders of the Exchangeable Notes or by the relevant Court, the restructuring of Ashanti’s hedge book may not be able to proceed as hoped, Ashanti may not be able to achieve the levels of production and operating costs it has projected, the Government of Ghana may refuse to relinquish the Golden Share. Additional risk factors affecting Ashanti are set out in Ashanti’s filing with the US Securities and Exchange Commission. Ashanti can give no assurances that such results, including the actual production or commencement dates, construction completion dates, costs or production output or anticipated life of the projects and mines, projected cashflows, debt levels, and mark-to-market values of and cashflows from the hedgebook, and projections of the conditions under which a particular hedge counterparty might be permitted to make margin calls discussed will not differ materially from the statements contained in this report. Such forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors collectively referred to as “Risk Factors”, many of which are beyond the control of Ashanti, which may cause actual results to differ materially from those expressed in the statements contained in this report. These Risk Factors include liquidity, gold price volatility, hedging operations, reserves estimates, exploration and development, mining, yearly output, infrastructure, Ghanaian political risks, environmental regulation, labour relations, general political risks, control by principal shareholders, Ghanaian Statutory provisions, dividend and litigation. For example, future revenues from projects or mines described herein will be based in part upon the market price of gold, which may vary significantly from current levels. Such variations, if materially adverse, may impact the timing or feasibility of the developments of a particular project or the expansion of specified mines. Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated life of mines include the ability to profitably produce and transport gold extracted therefrom to applicable markets, the impact of foreign currency exchange rates, the impact of any increase in the costs of inputs, and activities by governmental authorities where such projects or mines are being explored or developed, including increases in taxes, changes in environmental and other regulations and political uncertainty. Likewise the cashflows from and mark-to-market values of the hedgebook can be affected by, inter alia, gold price volatility, US interest rates, gold lease rates and active management of the hedgebook. Forward looking statements speak only as of the date they are made, and Ashanti undertakes no obligation to update publicly any of them in light of new information or future events.


Corporate Information

Contents Chairman’s Statement Highlights Chief Executive’s Review Operations Review Financial Review Production Ore Reserves and Mineral Resources Financial Statements and Corporate Information

Financial Calendar Annual General Meeting First Quarter Results Second Quarter Results Third Quarter Results Full Year Results

28 May May July October February

2 3 4 8 17 20 22 25

2002 2002 2002 2002 2003

2001

1.66

Ashanti Goldfields Company Limited

2000

1.74

Registered in Ghana No. 7094 ARBN 074 370 862

1999

1.56

1998

1.55

1997

1.17

Registered Office Gold House Patrice Lumumba Road PO Box 2665 Accra, Ghana Telephones:

Total Gold Production (millions of ounces)

2001

335.0

2000

335.0

1999

372.0

1998

385.0

1997

450.0

Total Gold Price Realised (US$ per ounce)

2001

190.0

2000

187.0

1999

205.0

1998

218.0

1997

254.0

Total Cash Operating Costs before exceptional items (US$ per ounce)

2001

158.9

2000

203.9

1999

211.2

1998

208.1

1997

171.4

Group Operating Cash Flow before exceptional items (US$ millions)

2001

62.7

2000

30.5

1999

66.1

1998

73.9

1997

58.4

Earnings before exceptional items (US$ millions)

(Satellite) Fax: (Satellite) Website

65

Bibiani Mine PO Box 98, Bibiani, Ghana Telephone: Satellite Fax:

(+233-51) 20118 873 761314865

Freda-Rebecca Mine PO Box 70, Bindura, Zimbabwe Telephone: (+263-71) 7300/1 Fax: (+263-71) 6919

(+233-21) 772190 (+233-21) 772235 (+233-21) 778160 (+233-21) 778167 (+233-21) 761311 874 1562524 (+233-21) 775947 874 1562525 www.ashantigold.com

Geita Mine PO Box 532 Geita, Tanzania Telephone: Fax:

Ernest Abankroh Company Secretary Telephone: (+233-21) 774977 Fax: (+233-21) 778155 E-Mail Address ernest.abankroh@ashantigold.com London Office 3rd Floor, Roman House Wood Street London EC2Y 5BA United Kingdom Telephone: (+44-20) 7256 9938 Fax: (+44-20) 7256 9939 Investor Relations Corporate Office James Anaman Managing Director, Public Affairs Telephones: (+233-21) 778178 (+233-21) 772190 Fax: (+233-21) 778156 E-Mail Address james.anaman@ashantigold.com London Office Corinne Gaisie UK Representative Telephone: (+44-20) 7256 9938 Fax: (+44-20) 7256 9939 E-Mail Address corinne.gaisie@ashanti.co.uk Golin Harris Allan Jordan (New York) Telephone: (+1-212) 697 9191 Fax: (+1-212) 697 3720 E-Mail Address ajordan@golinharris.com

(+255-28) 2520 500 (+255-28) 2520 502

Iduapriem Mine PO Box 283, Tarkwa, Ghana Telephone: (+233-362) 505 (Satellite) 873 1627111 Fax: (+233-362) 479 (Satellite) 873 1627112 Obuasi Mine PO Box 10, Obuasi, Ghana Telephones: (+233-582) 494–8 (+233-582) 475 Fax: (+233-582) 268 Siguiri Mine c/o Société Ashanti Goldfields de Guinée KM4, Cameroun B.P. 1006 Conakry, Guinée Telephone: (+1-301) 916 53 87 Satellite 873 761333884 873 685-51881 Fax: (+1-301) 916 53 79 Satellite 873 76333885 Ashanti Exploration 4, Nortei Ababio Street Roman Ridge PO Box 2665, Accra, Ghana Telephones: (+233-21) 774377 (+233-21) 767335/6 Fax: (+233-21) 778739

Cover picture: Mrs Kallo Maimouna Maga, Headmistress of the Siguiri Primary School and some of her pupils in an outdoor play session during school vacation

Photography by Norman Childs. Designed and produced by THE

& FACTOR. Printed in England by royle corporate print



Gh aga ashanti 2001