REG-Anglogold Ld: Report for the quarter & 6 months ended 30 June 2008 - Part 1

REG-Anglogold Ld: Report for the quarter & 6 months ended 30 June 2008 - Part 1
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AngloGold Ashanti Limited

Registration No. 1944/017354/06

Incorporated in the Republic of South Africa

Report to shareholders

for the quarter and six months ended 30 June 2008

Group results for the quarter and six months ended 30 June 2008 .

Significant progress on safety on all fronts continues, including 110 fatality
free days achieved.

Gold production at 1.25Moz, 5% higher than prior quarter and 3% above guidance.

Total cash costs at $434/oz, better than guidance and marginally higher than
March quarter.

Highly successful execution of rights issue with $1.7bn raised and an
exceptional 98% take up from rights holders.

Hedge book commitments reduced by 3.15Moz during the quarter, 3 months ahead of
schedule, with commitments down to 6.88Moz.

1m pounds of uranium contracts cancelled, providing increased exposure to spot
uranium prices from 2009.

Following hedge book reductions, adjusted headline loss at $946m. Adjusted
headline earnings, normalised for hedge reduction and other once-off items at
$50m.

Interim dividend of 50 South African cents per share and 6.7 US cents per share
declared for the six months ended 30 June 2008.

Quarter Six months Quarter Six months
ended ended ended ended ended ended ended ended
Jun Mar Jun Jun Jun Mar Jun Jun
2008 2008 2008 2007 2008 2008 2008 2007
SA rand / Metric US dollar / Imperial

Operating review
Gold Produced - kg / oz (000) 38,984 37,210 76,194 83,198 1,253 1,196 2,450 2,675

Price received - R/kg / $/oz (44,303) 183,945 67,390 138,807 (157) 755 289 604
Price received normalised for
accelerated settlement of
non-hedge
derivatives - R/kg / $/oz 178,796 183,945 181,303 138,807 717 755 736 604
Total cash costs - R/kg / $/oz 108,195 104,461 106,429 76,406 434 430 433 333
Total production
costs - R/kg / $/oz 138,115 136,200 137,238 99,872 554 561 558 435

Financial review
Gross profit (loss)- Rm / $m 787 (3,359) (2,573) 2,708 36 (77) (41) 378
Gross (loss) profit adjusted
for the gain (loss)
on unrealised non-hedge derivatives
and other commodity
contracts- Rm / $m (6,909) 2,095 (4,814) 3,520 (866) 274 (592) 492
Adjusted gross profit normalised
for accelerated settlement of non-hedge
derivatives - Rm / $m 1,726 2,095 3,821 3,520 223 274 497 492

(Loss) profit attributable to equity
shareholders - Rm / $m (817) (3,812) (4,630) 933 (168) (142) (310) 131

Headline (loss)
earnings 1 - Rm / $m (1,354) (3,880) (5,234) 930 (237) (151) (388) 130
Headline (loss) earnings adjusted
for the gain (loss) on unrealised
non-hedge derivatives, other commodity
contracts and fair value adjustments on
convertible bond - Rm / $m (7,518) 813 (6,705) 1,280 (946) 105 (842) 179

Capital expenditure - Rm / $m 2,357 1,930 4,287 3,396 304 257 561 476
(Loss) profit per ordinary
share - cents/share
Basic (289) (1,351) (1,639) 332 (59) (50) (110) 47
Diluted (289) (1,351) (1,639) 331 (59) (50) (110) 46
Headline 1 (479) (1,376) (1,853) 331 (84) (54) (137) 46

Headline (loss) earnings adjusted
for the gain (loss) on unrealised non-hedge
derivatives, other commodity contracts and
fair value adjustments on convertible bond
- cents/share (2,661) 288 (2,374) 455 (335) 37 (298) 64
Notes: 1. Refer to note 9 "Notes" for the definition.

$ represents US dollar, unless otherwise stated.
Rounding of figures may result in computational discrepancies.

Operations at a glance
for the quarter ended 30 June 2008

Gross
(loss)
profit Adjusted
adjusted gross
for profit (loss)
Total the gain normalised
Production cash (loss) for
costs on accelerated
unrealised settlement
non-hedge of non-hedge
derivatives derivatives
and other
commodity
contracts

oz % % %
(000) Variance $/oz Variance $m $m Variance
1 1 1

Mponeng 160 21 227 (10) (75) 65 25

AngloGold Ashanti 82 14 323 2 (58) 24 (4)
Brasil Minera��o

TauTona 91 23 339 (12) (58) 20 18

Cripple Creek & Victor 59 2 301 6 (37) 19 (14)
J.V.

Siguiri 2 86 (8) 434 - (31) 17 (19)

Kopanang 96 7 316 (10) (73) 12 (37)

Morila 2 46 15 426 4 (30) 12 9

Sunrise Dam 114 (4) 553 22 (83) 10 (57)

Great Noligwa 96 (10) 432 8 (86) 7 (73)

Iduapriem 46 (2) 493 9 (33) 7 (30)

Sadiola 2 45 25 408 1 (43) 7 (36)

Serra Grande 2 22 5 307 6 (11) 6 (14)

Yatela 2 15 (12) 573 10 (14) 3 (25)

Tau Lekoa 35 - 554 5 (33) 3 -

Savuka 18 29 440 20 (12) 2 (33)

Navachab 16 7 599 22 (8) - (100)

Geita 74 16 630 (12) (66) (4) 69

Moab Khotsong 28 12 512 (11) (30) (5) (600)

Cerro Vanguardia 2 27 (4) 870 57 (24) (6) (186)

Obuasi 79 (9) 612 18 (72) (8) (500)

Other 18 (18) 12 31 72

AngloGold Ashanti 1,253 5 434 1 (866) 223 (19)

1 Variance June 2008 quarter on March 2008 quarter - increase (decrease).

2 Attributable.

Rounding of figures may result in computational discrepancies.

Financial and operating review

OVERVIEW FOR THE QUARTER

The encouraging safety trend from the first quarter continued, with the company
recording significant improvements in injury frequency rates. For the first
time in its history, the company achieved 110 days without a fatality, with no
fatalities recorded during the second quarter. Immediately after the quarter
close, however, TauTona experienced a seismic event, resulting in one fatality.
While we are saddened by our most recent loss, we are encouraged with progress
and the commitment of all our employees on this important aspect of our
business. Since launching "Safety is our first value" campaign on 8 November
2007, the company has reported a 75% decrease in fatal incidents.

The South African operations reported a 13% reduction in the lost time injury
frequency rate, driven by an 11% improvement in stope risk assessments.
Seismicity related fall of ground accidents have now declined for the sixth
consecutive quarter.

For the quarter, seven operations remained injury free; Navachab, Sadiola,
Yatela, Morila, CC&V, Serra Grande and Sunrise Dam. Mponeng was awarded the
Mine Health and Safety Council's award for surpassing the 1 million
fatality-free shifts milestone. This is the second time in this deep level
South African mine's history that this accomplishment has been achieved.

The company once again delivered on its production forecast for the quarter.
Gold production was 5% higher at 1.25Moz, reflecting higher production in South
Africa, Brazil, Mali and Tanzania. Total cash costs for the group increased
marginally from $430/oz to $434/oz, driven primarily by input cost inflation,
partially offset by the higher gold production and stockpile movements. Gold
production exceeded guidance for the second quarter, in part due to improved
performances from Mponeng, TauTona and Geita. Improved production positively
impacted reported costs for the second consecutive quarter.

The South African operations had a solid quarter, with gold production 9%
higher at 16,867kg, led by an increase in gold production of 22% from both
Mponeng and TauTona. Mponeng increased gold production as a result of improved
face length availability, higher face advance, treatment of additional surface
stockpile and increased vamping activities; while TauTona benefited from higher
face advance and increased reef development. Great Noligwa saw gold production
reduce by 10% to 2,997kg, following a ten-day stoppage resulting from safety
interventions. Total cash costs for the South African operations reduced
marginally to R87,459/kg ($352/oz), following the improved gold production and
improved by-product contribution, partially offset by the higher inflationary
impact.

In Brazil, AngloGold Ashanti Brasil Minera��o had a strong quarter with gold
production 14% higher at 82,000oz, through the mining of an increased
proportion of higher grade ore from the Cuiab� operation. Total cash costs for
the Brazil operations were marginally higher at $341/oz, principally due to the
impact of the stronger local currency.

The Mali assets had a strong performance with gold production increasing 13% to
106,000oz, with Morila 15% higher on the back of improved throughput and grade,
while Sadiola was 25% higher due to an increase in yield following improved
performance of the gravity circuit which resulted in a higher overall recovery.
Total cash costs for the Mali operations was 4% higher at $432/oz, following
inflationary pressures on fuel in particular, combined with the effect of a
stronger US dollar.

Geita in Tanzania showed an improvement from the prior quarter, as grades
stabilised and gold production increased 16% to 74,000oz. Consequently, total
cash costs reduced 12% to $630/oz. Progress on the performance turnaround was
promising for the quarter, and the recovery plan which was presented to the
Executive Management team has been endorsed for implementation.

In Ghana, Obuasi had a difficult quarter with gold production declining 9%,
following lower delivered grades and lower throughput resulting from
unscheduled plant stoppages for maintenance and the negative impact of power
shortages. Total cash costs for Obuasi increased by 18% to $612/oz. Performance
at Obuasi this quarter was unacceptable. While good progress was made in
identifying the steps necessary to effect the targeted performance turnaround,
actual control in key areas was below expectations. Additional steps are being
taken to support the operating team, with the establishment of a dedicated
project recovery team.

The company's rights offer was completed in early July 2008, raising $1.7bn.
The transaction was highly successful, with a 98% take up from rights holders
to acquire rights offer shares. Applications for additional rights shares
representing nearly six times the number of rights offer shares were received.
The strong reception for the rights offer saw the company's share price
actually increasing between announcement and completion of the rights offer,
despite difficult market conditions.

This encouraged the company to make substantial progress ahead of schedule in
the reduction of the hedge book. The company capitalised on a weaker gold
market during the quarter to execute a combination of delivery into and early
settlement of non-hedge derivatives, and the number of committed ounces reduced
from 10.03Moz at the end of the March 2008 quarter to 6.88Moz at 30 June 2008.
The restructuring resulted in the received price being negative and adjusted
headline earnings impacted by a corresponding after tax charge of $977m.

In addition, the company also cancelled 1.0 million pounds of uranium contracts
during the quarter, which represents a reduction of 30% of uranium contracts
outstanding as at 1 January 2008, at an after tax charge of $11m. This will
position AngloGold Ashanti to begin to participate in the spot uranium market
from 2009, which in turn will provide by-product revenue, to the benefit of
total cash costs.

As a result of the reduction in gold non-hedge derivatives ($977m) and uranium
commodity contracts ($11m), an adjusted headline loss of $946m was recorded for
the quarter. Excluding the impact of these adjustments, adjusted headline
earnings would have been $50m against the $105m recorded in the prior quarter.
The reduced earnings is the result of once-off tax credits received in the
prior quarter and the impact of a $38/oz lower received price.

On 16 May 2008 the sale of various exploration interests in Colombia to B2Gold
Corporation (B2Gold) was completed, with the company receiving 25m common
shares and 21.4m share purchase warrants in B2Gold, which could result in a
fully diluted interest in B2Gold of approximately 26%. This transaction allows
AngloGold Ashanti to build on its strategy in Colombia of continuing to
leverage its first mover advantage and developing its exploration portfolio,
which includes its initial Inferred Resource of 12.9Moz at its 100% owned La
Colosa project.

On 1 July 2008, shareholders of Golden Cycle Gold Corporation approved the
acquisition by AngloGold Ashanti, in an all share transaction that has resulted
in CC&V being fully owned by the company.

AngloGold Ashanti also sold its 50% interest in Nufcor International Limited, a
London based uranium marketing, trading and advisory business, to Constellation
Energy Commodities Group for gross proceeds of $50m. This transaction enables
the company to focus on its core gold and uranium mining business, while
retaining its 100% interest in Nuclear Fuels Corporation of South Africa (Pty)
Limited, its local uranium calcining business.

In relation to power management in South Africa, Eskom, the national provider,
has maintained a steady power supply of 96.5% during the second quarter. The
company successfully operated at full production utilising less than 94% of
power supply, following continuing the implementation of energy saving
initiatives.

Eskom has also undertaken to continue to provide consistent power throughout
the winter period and subject to this stable power supply, production for 2008
is expected to be between 4.9Moz to 5.1Moz. Given the higher inflationary
trends currently being experienced, higher power tariffs in South Africa and
Ghana, total cash costs are anticipated to be between $450/oz and $460/oz,
based on the following average exchange rate assumptions: R7.73/$, A$/$0.94,
BRL1.66/$ and Argentinean peso 3.15/$.

Production for the third quarter of 2008, based on a 96.5% stabilised power in
South Africa, is estimated to be 1.27Moz. Given winter power tariffs in South
Africa, the treatment of lower grade stockpiles at Geita, Siguiri and Sunrise
Dam and an inventory movement at CC&V, and inflationary trends currently being
experienced, total cash costs for the third quarter are expected to be
unusually high at around $490/oz. This assumes the following exchange rates:
R7.80/$, A$/$0.96, BRL1.60/$ and Argentinean peso 3.12/$.

An interim dividend of 50 South African cents (6.7 US cents) per share has been
declared for the six months ended 30 June 2008.

Notes:

All references to price received includes realised non-hedge derivatives.

In the case of joint venture and operations with minority holdings, all
production and financial results are attributable to AngloGold Ashanti.

Rounding of figures may result in computational discrepancies.

Review of the gold market

The gold price again traded strongly during the second quarter, albeit in a
similarly volatile pattern to that in the first quarter, which is partly a
reflection of continuing uncertainty in financial markets. The direction of
the gold price remains closely linked to the movement of the US dollar, but
more recently has also shown a strong correlation to the oil price.

The first half of April 2008 saw strong dollar gold prices, reaching some $946/
oz towards the middle of the month, the highest price recorded during the
quarter, as the US dollar edged towards an all-time low of Euro/US$1.60. Since
then, the price fell by $100/oz to reach a low of $845/oz in the opening days
of May 2008, primarily on profit taking.

From the middle of May, however, gold resumed an upward trend as a consequence
of a steadily rising oil price and predictions by analysts of higher prices to
come. The gold price continued to be volatile for the balance of the quarter
reflecting uncertainty surrounding the outlook for the global economy and
inflation, and amidst fears of further write-downs in the banking sector.

At $898/oz, the average dollar gold spot price for the quarter was slightly
lower than the strong average price attained during the first quarter of $925/
oz. The rand gold price reached highs of R234,551/kg during the quarter, and
the spot price averaged R216,742/kg for the quarter, some 3% lower than the
previous quarter's average of R224,308/kg.

JEWELLERY DEMAND

All the major markets experienced some slowdown in jewellery consumption over
the quarter. In the US, the mass-market segment was the worst affected, with
this group of consumers facing increased pressure on spending due to
inflationary trends in that economy. In emerging markets, gold price
volatility was a more significant factor in dampening demand. Seasonal factors
also impacted negatively on gold consumption and a return to buying can be
expected towards the end of the third quarter of the year, given a favourable
price environment.

In India, the world's largest gold market, high rupee gold prices dampened
demand during the second quarter, continuing from the trend set in the first
quarter of the year. There were, however, some significant fluctuations in
demand during the period, with good levels of consumption being seen during the
festival of Akshaya Thritiya, a traditional gold-buying occasion. Although
demand during the festival was lower than in 2007 by some 11%, when record
levels of gold sales were registered, significant purchases still took place.
During May 2008 and June 2008, however, when price volatility became a
significant feature of the market, demand again receded.

Price volatility has an important impact on gold demand in India, while the
continued weakening of the rupee against the dollar has also increased the
absolute price level of gold to the consumer. With the metal breaching the
R12,000/100g level during the quarter, and moving above R13,000/100g in the
early part of July 2008, the Indian consumer is experiencing record high gold
prices. As a result of higher gold prices there is some evidence that retail
formats for jewellery in the Indian market are starting to shift. Wedding
jewellery is becoming lighter and jewellery designs are emerging which enable
consumers to wear one piece of jewellery in different ways and for different
occasions. Efforts are also underway to attract younger consumers to the
market, taking advantage of the disposable income available in this target
group.

Looking forward to the second half of the year, the wedding season which gets
underway in September/October and the Hindu festival of 'Diwali' is likely to
act as a catalyst for a recovery in gold demand. This will be somewhat
dependent on gold prices stabilising and short-term price volatility reducing.

In the Middle East, price volatility also impacted on demand, as did
inflationary pressure, which limited the level of disposable income available
for discretionary purchases. The quarter started slowly with relatively low
levels of jewellery sales during the first part of April 2008, but picked up
during the balance of the period as the wedding and holiday season stimulated
sales.

Continued political uncertainty in Turkey and the weakening of the Turkish lira
against the dollar both impacted negatively on demand in this market. In the
Egyptian market, however, where the local currency appreciated against the
dollar, demand remained relatively strong, building on that market's good
performance in the first quarter of the year.

In the US, mass-market jewellery outlets pulled back significantly on sales of
14 carat gold, and tended to substitute gold items with gold-clad or
lower-caratage jewellery. The high end of the market, though relatively small
in tonnage terms, showed some strength. Overall gold jewellery sales are
however expected to show a decline when figures for the quarter are released.

In China, the second quarter is traditionally a slower time for jewellery sales
and the market data received to date appears to reflect this. It also suggests
a significant slowdown in consumer demand following the earthquake on 12 May
2008. Inflationary concerns, however, remain significant and gold purchases in
China have historically been strong in times of high inflation. Looking
forward to the second half of the year, the Olympic Games are expected to lift
consumer sentiment in the country and tourist purchases may also boost demand.

CENTRAL BANK SALES

In the current year of the Central Bank Agreement (which runs from October 2007
to September 2008), member signatories have sold only 251t of the allotted 500t
quota for the period. If the signatories to the accord do not utilise their
full quota during the current year, it will be the third consecutive year in
which they have failed to do so.

Countries such as Russia, Philippines and Kazakhstan have bought 38.3, 7.88 and
6.2t of gold respectively since September 2007.

INVESTMENT MARKET

The seven major Exchange Traded Funds (ETFs) did not repeat the impressive
growth that they exhibited in the first quarter of 2008, although post quarter
there has been significant renewed interest in investing into gold ETFs. From a
peak of some 29Moz in the beginning of April 2008, these funds sold off almost
2Moz, before stabilising around 27Moz for the remainder of the quarter.

During the third quarter it is anticipated that the Dubai-based ETF will come
into operation, serving both the Middle East market and Islamic communities
globally through the provision of a Sharia-compliant exchange traded investment
product.

In the Indian context, ETFs account for only a small portion of investment
demand; the majority of gold purchased purely for investment purposes is in
either coin or bar format. However, new formats of gold investment vehicles
are being piloted in India which, if successful, could impact positively on
this market sector. These take the form of either consignment purchasing
schemes or gold savings schemes whereby individuals set aside a portion of
their monthly wages to purchase gold. These schemes are operated by local
banks specialising in micro-finance.

PRODUCER HEDGING

The main item of news in this respect, although not entirely unexpected, was
the statement from Newcrest that they had completed the close out of their last
remaining hedges. This amounted to buying of some 600,000oz in total.

During the quarter, AngloGold Ashanti reduced its hedge commitments from
10.03Moz to 6.88Moz, through deliveries into maturing contracts, combined with
select buy-backs, in respect of its non-hedge derivative contracts.

CURRENCIES

The rand opened the quarter at R8.09/$ and closed at R7.83/$, 3% stronger.

The rand started the quarter in a strengthening trend as it continued to
recover from the previous quarter, where confidence was strained following the
power shortages and political changes in South Africa. However, the
announcement of a 9% current account deficit for the first quarter re-inforced
the vulnerability of the rand and curtailed any further appreciation of the
currency. Although there is currently potential for fixed investment into South
Africa, specifically in the telecoms sector, the size of the current account
deficit will continue to hamper real appreciation of the currency.

The Australian dollar opened the quarter at A$/$0.9147 and closed at A$/
$0.9619, strengthening 5%.

The forces at play in the Australian dollar are much the same as those faced
globally, balancing the risks of growth against those of inflation. More recent
price increases, in particular iron ore and coal, have added support to the
currency and are likely to keep underpinning the strength of the Australian
dollar.

Despite showing unusual levels of volatility during the quarter, the Brazilian
real continued its strong appreciation trend, ending the quarter at BRL1.60/$,
an appreciation of 8% on its opening rate of BRL1.74/$.

Hedge position

As at 30 June 2008, the net delta hedge position was 6.54Moz or 204t (at 31
March 2008: 9.25Moz or 288t). Despite a higher gold price, the delta of the
hedge book was reduced by 2.71Moz to 6.54Moz, and total commitments reduced
from 10.03Moz to 6.88Moz, as a result of delivery into maturing contracts and
hedge buy-backs that were effected during the quarter.

The marked-to-market value of all hedge transactions making up the hedge
positions was a negative $3.53bn (negative R27.67bn), decreasing by $1.25bn
(R11.1bn) during the quarter. This value was based on a gold price of $922.90/
oz, exchange rates of R7.83/$ and A$/$0.95 and the prevailing market interest
rates and volatilities at that date.

The table below reflects the hedge position as at 30 June 2008 and includes the
effect of all hedge close outs undertaken during the second quarter. The second
half of the year will see the continued reduction of the hedge book through the
delivery into maturing short hedge positions.

Before taking the effects of the recent hedge close out into account, the
company's received price for the second quarter would have been $734/oz, or 18%
lower than the average spot price of $898/oz. Looking at the third and fourth
quarter, the discount to spot price is likely to be between 17% and 19%,
assuming that gold trades between $900/oz and $950/oz. For 2009, the discount
to spot is expected to be around 6%, based on a $900/oz price assumption.

As at 30 July 2008, the marked-to-market value of the hedge book was a negative
$3.42bn (negative R25.18bn), based on a gold price of $915.50/oz and exchange
rates of R7.36/$ and A$/$0.95 and the prevailing market interest rates and
volatilities at the time.

These marked-to-market valuations are in no way predictive of the future value
of the hedge position, nor of future impact on the revenue of the company. The
valuation represents the theoretical cost of buying all hedge contracts at the
time of valuation, at market prices and rates available at that time.

Year 2008 2009 2010 2011 2012 2013-2016 Total

DOLLAR
GOLD

Forward Amount 7,823 12,917 12,580 12,931 11,944 12,364 70,559
contracts (kg)

US$/oz $104 $218 $327 $397 $404 $432 $326

Put Amount 933 1,882 1,882 3,763 8,460
options (kg)
sold

US$/oz $660 $420 $430 $445 $460

Call Amount 4,284 4,284
options (kg)
purchased

US$/oz $428 $428

Call Amount 6,096 11,695 29,168 37,146 24,461 39,924 148,490
options (kg)
sold

US$/oz $348 $357 $498 $521 $622 $604 $535

RAND GOLD

Forward Amount 933 *1,866 *933
contracts (kg)

Rand R127,944 R157,213 R147,456
per kg

A DOLLAR
GOLD

Forward Amount 1,555 1,835 3,111 6,501
contracts (kg)

A$ per A$591 A$569 A$685 A$630
oz

Call Amount 1,555 1,244 3,111 5,910
options (kg)
purchased

A$ per A$682 A$694 A$712 A$701
oz

Delta (10,591) (23,390) (40,491) (47,467) (33,520) (48,066) (203,525)
** Total (kg)
net gold:
Delta (340,510) (752,020) (1,301,820) (1,526,100) (1,077,690) (1,545,320) (6,543,460)
(oz)

* Indicates a long position resulting from forward purchase contracts.
The group enters into forward purchase contracts as part of its strategy to
actively manage and reduce the size of the hedge book.

** The Delta of the hedge position indicated above is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price. This is calculated using the Black-Scholes option
formula with the ruling market prices, interest rates and volatilities as at 30
June 2008.

Rounding of figures may result in computational discrepancies.

Year 2008 2009 2010 2011 2012 2013-2016 Total

DOLLAR SILVER

Put options purchased Amount (kg) 21,772 21,772

$ per oz $7.66 $7.66

Put options sold Amount (kg) 21,772 21,772

$ per oz $6.19 $6.19

Call options sold Amount (kg) 21,772 21,772

$ per oz $8.64 $8.64

The following table indicates the group's currency hedge position at 30 June
2008

Year 2008 2009 2010 2011 2012 2013-2016 Total

RAND DOLLAR (000)

Forward contracts Amount *420,000 *
($) 420,000

US$/R R7.85 R7.85

Put options Amount 50,000 50,000
purchased ($)

US$/R R7.41 R7.41

Put options sold Amount 50,000 50,000
($)

US$/R R6.94 R6.94

Call options sold Amount 50,000 50,000
($)

US$/R R8.06 R8.06

A DOLLAR (000)

Forward contracts Amount 5,000 5,000
($)

A$/US$ $0.73 $0.73

Put options Amount 30,000 30,000
purchased ($)

A$/US$ $0.84 $0.84

Put options sold Amount 30,000 30,000
($)

A$/US$ $0.88 $0.88

Call options sold Amount 30,000 30,000
($)

A$/US$ $0.81 $0.81

BRAZILIAN REAL (000)

Forward contracts Amount 15,000 1,000 16,000
($)

US$/BRL BRL BRL BRL
1.87 1.84 1.87

Put options Amount 24,000 500 24,500
purchased ($)

US$/BRL BRL BRL BRL
1.78 1.76 1.78

Call options sold Amount 78,000 1,000 79,000
($)

US$/BRL BRL BRL BRL
1.80 1.76 1.80

* Indicates a long position established as part of the hedge close out
transaction.

Derivative analysis by accounting designation as at 30 June 2008

Normal sale Cash flow Non-hedge
exempted hedge accounted Total
accounted

US Dollars (millions)

Commodity option contracts (719) - (1,409) (2,128)

Foreign exchange option contracts - - (4) (4)

Forward sale commodity contracts (1,086) (273) (93) (1,452)

Forward foreign exchange contracts - - 4 4

Interest rate swaps (27) - 30 3

Total derivatives (1,832) (273) (1,472) (3,577)

Rounding of figures may result in computational discrepancies.

Exploration

Total exploration expenditure amounted to $52m ($27m brownfields, $25m
greenfields) during the second quarter of 2008, compared to $46m ($19m
brownfields, $27m greenfields) in the previous quarter.

BROWNFIELDS EXPLORATION

In South Africa, surface drilling continued in the Project Zaaiplaats area,
with borehole MZA9 and MMB5 advancing 288m and 581m, respectively.

Surface drilling in the Moab North area continued with a long deflection of
borehole MCY4 reaching a depth of 2,386m and borehole MCY5 advancing a further
890m.

At Tau Lekoa, borehole G55 was stopped at a depth of 1,513m after intersecting
a large fault and passing into deep footwall quartzite and further drilling is
being considered.

At Iduapriem in Ghana, preparation for Mineral Resource conversion drilling at
Ajopa continued, but was hampered by rugged terrain and heavy rains. Diamond
(DDH) and reverse circulation (RC) drilling is planned to start in mid-July. At
Obuasi, exploration continued with 4,005m of DDH drilling below 50 level and
1,212m of DDH drilling.

In Argentina at Cerro Vanguardia, the 2008 exploration programme continued with
7,594m of DDH drilling and 16,689m of RC drilling being completed. The
interpretation of the hyper-spectral survey will be completed in July 2008.
Exploration rights over 10 new claims were confirmed by the provincial
authorities and geophysical surveys over these areas are being planed for 2009.

In Australia, at Boddington five rigs were employed on the Mineral Resource
conversion and near mine exploration DDH drilling programmes. During the
quarter, approximately 30,049m were drilled from 43 holes.

At Sunrise Dam, exploration continued to focus on the deep-seated
mineralisation towards the Carey Shear Zone (1km vertical) and the extensions
of known mineralisation in the Astro, GQ and Dolly lodes. During the quarter,
12,249m of diamond core was drilled from 81 holes. Economic gold intercepts
were returned from the deep targets below the mine and further delineation of
these deep mineralised zones remains the priority for 2008/2009.

In Brazil, at the C�rrego do S�tio Sulphide Project, drilling continued with
11,448m being drilled from surface, 2,632m drilled from underground and 1,042m
of underground development. At the Lamego project, 8,660m of surface drilling,
4,381m underground drilling and 1,067m of underground development were
completed.

At Siguiri in Guinea, exploration activities continued to focus on conversion
drilling at Sintroko South (situated 8km south of the mine). Depth extensions
to the high grade oxide mineralisation in the Sintroko pit were tested by DDH
drilling, with encouraging results.

Results from reconnaissance air core drilling of the Setiguia anomaly were
negative. Geochemical soil sampling covering the northwest extensions of
Kintinian produced positive results and will require follow up aircore (AC)
drilling. Reconnaissance AC drilling was completed on the Manguity geochemical
anomaly, in the south-eastern corner of Block 2. Results from infill and
extension drilling at Saraya in Block 2 is being awaited.

The individual resource models in the current mining area have been remodelled
to create a larger, combined single model. This model indicates upside on the
known mineralisation in the current mining area and a study is being conducted
to optimise the current mining area based on this new model.

Conversion drilling will be completed at Sintroko South early in the third
quarter, and efforts will then refocus on drill testing the combined pits
model, together with conversion drilling along the perimeters of Kintinian
village.

At Geita in Tanzania, exploration activities concentrated in three areas,
namely, Area 3 (1,870m RC and 550m DDH); Kalondwa Hill (800m RC and 426m DDH)
and Star and Comet, where drilling commenced on the southern extension and
sterilisation of the proposed waste dump site. AC drilling on the
Nyakabale-Prospect 30 area was completed.

At Morila in Mali, pitting and trenching was completed, and although no
anomalous mineralisation was intersected, important structural and lithological
data was collected and is being interpreted.

At Sadiola, resource definition drilling was carried out at Sekokoto Main where
an infill RC drill programme was started with 1,552m drilled. No major
mineralised intersections were obtained from the drilling of Lakanfla East,
which was completed in February 2008.

The Phase 9 diamond core drill programme for deep sulphide ore in the northern
part of the Sadiola Main Pit was completed early in the quarter. A total of 11
diamond drill holes amounting to 4,420m were drilled along four fence lines,
approximately 300m apart.

Air Core drilling of the following anomalies continued during the quarter: S3
(3,879m); S5 (1,480m); S6a (3,272m), S6b (2,997m), S7 and S9 (2,630m).

A diamond drill programme was completed around the FE4 pit, with the objective
to collect geological and structural information to be correlated with the pit
mapping and update the geological model for FE4, and test for sulphide
mineralisation. A total of 7 holes were drilled along three fence lines
amounting to 2,125m.

At Yatela, a RC drill programme at Donguera was completed and a total of 77 RC
holes (4,632m) were drilled. A RC drill program was laid out at Dinguilou to
cover two areas that have potential for oxide mineralisation, and a total
3,660m were drilled in these two areas.

At Alamoutala, an infill RC drill programme is in progress to the east and
south of the current pit, with the intention to close off the mineralisation.

The core logging and sampling for the 2007 Deep Sulphide drill programme was
completed and final results are being awaited.

At Navachab in Namibia, RC drilling at Gecko continued with an additional
5,000m being drilled, and the drilling programme is expected to be completed by
mid quarter.

At Steenbok-Starling, 2,840m of follow up RC was drilled. Results from the
extension of the soil grid towards Bulbul have been disappointing, and no
follow-up work is being planned. An extension of the soil grid towards Ostrich
and Giraffe is currently underway.

At Anomaly 16, 2,920m of exploration, infill and advanced grade control holes
were completed.

Results from the 195 sample BLEG stream sediment survey over the Okondura
EPL3276 were disappointing and the EPL was therefore significantly reduced.
Initial remote sensing work commenced on the two EPL's to the northeast of
Okahandja.

A total of 1,666m of DDH drilling was undertaken in the area to the immediate
north of the main pit, where drilling the northerly plunge extension of the MDM
/US sheeted veins is in progress. RC drilling of 5,276m was done to the
immediate north of the North Pit2, where a northerly vein plunge extension was
confirmed and encouraging intersections were achieved.

At Cripple Creek & Victor in the United States, follow-up work with encouraging
intercepts continues in the North Cresson area, while in-fill drilling has
started in the Wild Horse and Cresson areas. Drilling for the High Grade Study
was completed in Cresson and South Cresson and further work, including a
test-mining case, is planned.

GREENFIELDS EXPLORATION

Greenfields exploration activities continued in six countries, namely
Australia, Colombia, the DRC, China, the Philippines, and Russia. A total of
80,676m of diamond drilling (DDH), reverse circulation (RC), and aircore (AC)
drilling was completed during the second quarter, at existing priority targets
while also delineating new targets in Australia, the DRC, and Colombia.

In Australia, exploration drilling of the Tropicana Prospect (AngloGold Ashanti
70%, Independence Gold 30%) continued during the quarter, and focused on infill
drilling of the resource to increase confidence in the estimate, to a level
required for reserve reporting and feasibility level assessment. It is
anticipated that the resource drilling programme will be largely completed by
mid-year. Prefeasibility studies are continuing with metallurgical test work
programmes, while engineering and mining studies have been substantially
completed. Key work programmes to be completed, prior to making a
recommendation on the project, include process water supply, exploration,
optimal scale of operation and economic modelling.

Regional AC exploration drilling returned encouraging results from the
Screaming Lizard prospect, 10km to the east of the Tropicana Prospect. Field
mapping at the Black Dragon and Voodoo Child Prospects located approximately
30km northeast of the Tropicana identified outcropping gold mineralisation.
Diamond drilling at the Beachcomber prospect intersected visible gold
mineralisation, and the regional exploration effort will be accelerated in the
second half of the year, as drill rigs and personnel become available from the
resource drilling at the Tropicana prospect.

The Viking project (AngloGold Ashanti 100%) is located along the southeast
Yilgarn margin in an equivalent geological setting to the Tropicana project. A
number of tenements in the Viking project area were granted during the quarter
and exploration will commence in the third quarter.

In Colombia, regional exploration focused on 41 targets, with three new targets
brought to drill ready stage. Anglogold Ashanti and its partners are actively
exploring 294 targets, generated by systematic exploration in an area of 4.2m
hectares, for precious and base metal deposits. At La Colosa it is anticipated
that the necessary environmental permits will be issued during the fourth
quarter of 2008, after which pre-feasibility stage work, including drilling,
will continue.

Anglogold Ashanti and JV partners drilled on four new projects and continued
drilling at Gramalote during the quarter. Significant results were released
from the Quebradona project (JV with B2Gold), as per the table below.

Metres Silver Copper
Location at Hole drilled Gold
La Aurora no. (m) (ppm) (ppm) (%)

La Mama 1 161.87 0.97 2.5 .154

La Mama 2 52.70 1.36 2.1 .144

La Mama 3 86.15 0.99 2.1 .134

La Mama Incl. 32.90 1.67 2.6 .167

La Mama 4 86.30 2.08 2.6 .166

La Mama 5 65.80 0.94 2.5 .162

La Mama 6 228.90 0.80 2.0 .154

La Mama Incl. 125.00 1.07 2.0 .153

Exploration activities in the DRC continued over Concession 40, which covers
most of the Kilo greenstone belt. A second regional aeromagnetic survey is
being planned to collectively provide coverage over approximately 70% of the
area, which remains virtually unexplored by modern methods. This programme,
combined with regional geochemistry programmes, will provide the platform from
which to fast-track regional exploration over the concession. Field work has
concentrated on detailed mapping, soil sampling and trenching. At the Issuru
prospect, located approximately 4km north of the Mongbwalu resource, a total of
2,972m was drilled, defining potentially economic mineralisation over a strike
length of approximately 800m and a width of up to 450m. A further 14,000m of
planned drilling will focus on defining the underground resource. The findings
of the DRC Minerals Review Commission have resulted in AngloGold Ashanti and
the AGK joint venture engaging the DRC government to seek resolution and secure
our rights to Concession 40. It is envisaged that formal discussions will
commence early in the third quarter 2008.

In the Philippines, all required documentation has been submitted and final
grant of the Mapawa tenement application is being awaited

- More to follow, for following part double click [ID:nPRrVB2C8b]
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