AFRICAN BARRICK GOLD PLC: Prelim Results for the 12 months ended 31 Dec 2013 12 February 2014 Preliminary Results for the 12 months ended 31 December 2013 (Unaudited) Based on IFRS and expressed in US Dollars (US$) African Barrick Gold plc ("ABG'') reports full year 2013 results "2013 was a year of significant change within ABG as we undertook a major Operational Review to ensure the business was set up to deliver increasing value in a lower gold price environment," said Brad Gordon, Chief Executive Officer of African Barrick Gold. "We achieved production ahead of guidance and cash costs 10% below guidance with a US$500 per ounce reduction in our all-in sustaining cost ("AISC") compared to Q4 2012. As a result of mine planning changes and lower gold price assumptions we have incurred non-cash impairment charges at a number of our assets, but we expect positive cash flow generation at each of our sites going forward. For 2014 we expect increased production of 650,000 to 690,000 ounces of gold at reduced cash costs of US$740 to US$790 per ounce sold and reduced AISC of US$1,100 to US$1,175 per ounce sold driven by sustainable cost savings and updated mine plans." Full Year Operational 2013 Highlights Production of 641,931 ounces with full year sales of 649,742 ounces, 3% and 7% respectively, higher than 2012 Cash costs2 of US$827 per ounce sold, 12% below 2012 All-in sustaining costs2 of US$1,362 per ounce sold, down 14% on 2012 Operational Review delivered US$129 million in cost reductions by the end of 2013 Rescheduled Buzwagi life of mine plan to enable positive cash flow generation Deferred Gokona Cut 3 at North Mara whilst investigating opportunity to mine underground Bulyanhulu CIL Expansion project construction close to completion, commissioning continuing through Q2 2014 As a result of revised life of mine plans and lower future gold price assumptions our total reserve base has reduced by 3.9 million ounces to 12.7 million ounces Full Year Financial Highlights Revenue of US$929 million and EBITDA2 of US$240 million Deferral of Gokona Cut 3 to drive cash flow led to a year-end non-cash impairment charge of US$96 million at North Mara Total impairment charges of US$823 million for 2013 leading to a net loss of US$781 million for the year Adjusted net earnings2 of US$106 million (US25.9 cents per share) Cash position of US$282 million as at 31 December 2013 Proposed final dividend of US2.0 cents per share; total dividend for 2013 of US3.0 cents per share Three months ended 31 December (Unaudited, in US$'000 unless otherwise stated) 2013 20124 Revenue 221,603 275,281 EBITDA2 44,866 75,139 Adjusted EBITDA2 58,460 81,815 Net (loss)/ earnings (97,700) (34,753) Basic (loss)/ earnings per share (EPS) (cents) (23.8) (8.5) Adjusted net earnings2 27,891 11,260 Adjusted net earnings per share (AEPS) (cents)2 6.8 2.7 Dividend per share (cents) 2.0 12.3 Cash and cash equivalents 282,409 401,348 Cash generated from operating activities 48,193 96,372 Operating cash flow per share (cents)2 11.7 23.5 Capital expenditure5 91,190 114,876 Drawdown of long term debt (Borrowings) 32,000 - Equity 1,927,362 2,778,290 Year ended 31 December (Unaudited, in US$'000 unless otherwise stated) 2013 20124 Revenue 929,004 1,011,738 EBITDA2 240,407 336,282 Adjusted EBITDA2 275,874 342,958 Net (loss)/ earnings (781,101) 62,780 Basic (loss)/ earnings per share (EPS) (cents) (190.4) 15.3 Adjusted net earnings2 106,277 108,793 Adjusted net earnings per share (AEPS) (cents)2 25.9 26.5 Dividend per share (cents) 3.0 16.3 Cash and cash equivalents 282,409 401,348 Cash generated from operating activities 187,115 268,733 Operating cash flow per share (cents)2 45.6 65.5 Capital expenditure5 385,069 331,885 Drawdown of long term debt (Borrowings) 142,000 - Equity 1,927,362 2,778,290 CEO Statement I joined ABG in August 2013 as I saw a significant opportunity at the company. From the outside I believed that the company had great assets, talented people and that Tanzania was a stable place to operate. Since joining, I have immersed myself in the business and now believe I underestimated how big an opportunity we have within the company. We have a portfolio of exceptional assets, with Bulyanhulu being a truly world class deposit. North Mara continues to provide positive results and is a high grade open pit mine with excellent potential to go underground. Buzwagi, which historically has had a number of challenges, has been rescheduled and will generate cash flow for us going forward. I have also been impressed by the knowledge and experience we have within the organisation and the pool of skilled labour available in Tanzania. As a result, during the year we have been able to further increase the proportion of Tanzanians in our workforce to over 93%. We have also enhanced the leadership group with additional operational expertise to drive continued operational efficiencies while increasing our production base. I have operated in a number of jurisdictions across the world and believe that Tanzania compares well to many of them. In this regard, I have enjoyed fruitful initial dialogues with the Government, something which I will continue to progress throughout 2014, as I seek to ensure that ABG receives the recognition and support it requires given our position as the largest investor and private sector employer in the country. Year in Review 2013 was a year of significant change within ABG as we undertook a major Operational Review to ensure the business was set up to thrive in a lower gold price environment. Under the leadership of our now Chief Financial Officer Andrew Wray, we identified over US$185 million of cost savings across the business ranging from reductions in capital spend, exploration, corporate overheads and organisational structures. The Operational Review has been a great success and we had removed US$129 million of cost from the business by the end of 2013. This enabled us to deliver a year-on-year reduction in all-in sustaining costs ("AISC") of 14% to US$1,362, with fourth quarter AISC of US$1,171 per ounce, representing a 30% reduction on the same period 12 months ago. Our traditional measure of cash costs reduced by 12% to US$827 per ounce for the full year, and our exit rate was 19% lower than the previous year at US$774 per ounce. On the production front, 2013 marked a turning point as we saw production increase year-on-year by 3% to 641,931 ounces, 7% ahead of the top of our guidance range. If we exclude Tulawaka, which stopped operating early in the year, our three core mines increased production by 7%, when compared to 2012. This was driven by strong performances at North Mara and Buzwagi, up 33% and 10% respectively year-on-year, as a result of improved grade at North Mara and increased throughput at Buzwagi. This more than offset the weaker first half performance from Bulyanhulu as a result of both labour shortages and equipment availabilities. The dramatic drop in the gold price over the year meant that the stronger production and cost performance against 2012 did not fully translate into improved financial performance with our average realised gold price of US$1,379 per ounce being 17% lower than the 2012 average of US$1,668 per ounce. As a result, revenues from ongoing operations dropped to US$929 million (down 8%), with EBITDA of US$240 million. Earnings were further impacted by total non-cash impairment charges of US$1,061 million as a result of the impact of a lower gold price assumption and significant changes to mine plans, which led to a loss of 190.4 cents per share. On an adjusted basis, earnings were 25.9 cents per share. Operational Review We achieved total Operational Review savings of US$129 million against a target of over US$100 million by the end of 2013.The delivery on the cost savings is highlighted by the consistent reduction in our AISC over the year and improved cash flow generation from our sustaining operations quarter on quarter supported by delivering a strong production profile throughout the year. We remain committed and on track to deliver against the US$185 million target set out earlier in the year, as our guidance reflects. We are simultaneously intensifying the ongoing review in our core mining areas, which were largely outside the scope of the Operational Review, and we are confident that this will deliver further efficiencies and cost savings throughout 2014 and beyond. Progress against each of the key areas of the Operational Review is detailed below: Capital discipline We achieved US$58 million of sustaining capital expenditure savings in 2013 inclusive of land purchases. We continue to assess all future capital expenditure to identify further opportunities to deploy our capital more effectively and improve the capital intensity of the business. We have planned for a further US$10-15 million savings in 2014 in respect of sustaining capital as reflected in our guidance. Corporate overhead cost reductions We have made excellent progress simplifying the corporate structure and the reduction in size of our support offices as confirmed by savings of US$18 million achieved in 2013. Headcount in our corporate offices has already been reduced by 39%, and this will rise to 52% by the end of 2014, which has driven lower travel and associated costs. We are in the process of transitioning specific support functions from our Johannesburg office to Tanzania in order to achieve improved operational efficiencies and further localisation in our main country of operation. A further reduction of US$3 million is expected to be achieved in 2014. Exploration We achieved a total saving of US$25 million in 2013. We have focused our exploration programme on potential high return programmes at Bulyanhulu and on two targets in the North Mara region while we undertook extensive low cost sampling and anomaly testing in Kenya in order to prepare for future programmes. In 2014 our main focus areas will be at Bulyanhulu and in Kenya. We expect 2014 expenditure to be in line with 2013. Operating Cost Reductions We achieved US$28 million of savings on an annualised, like for like basis. Major savings to date have been in camp services, consumables and security, as well as in the reduction of our overall workforce which, excluding Tulawaka, has reduced by 12%. This includes a 29% reduction of international workers from 411 to 290 employees as part of our efforts to increase localisation in Tanzania. 2014 will see an increased focus on maintenance and external services while delivering increased labour savings on the back of our existing restructuring plans. As a result we expect our savings over 2014 to be in line with our previous guidance. Mine Planning Key to the improvements made over the year were the decisions we took regarding mine planning at each of the assets. We have reviewed each of the mine plans in light of a reduced reserve price of US$1,300 per ounce and re-designed the plans to ensure that each of the mines are able to generate positive cash flows. At Buzwagi, in June 2013 we re-engineered the life of mine plan to substantially reduce the amount of waste movement required and optimise the grade of the mine. This resulted in a reduction of reserve life, together with a reduction in carrying value to US$253 million as at 31 December 2013, but which also drives a significant improvement in AISC and has positioned the mine to deliver positive cash flows for the next five years. At North Mara, during the year we made several changes to the life of mine plan which will substantially reduce the strip ratio, volume of material to be moved and ultimate footprint of the asset. Part of this was the decision in October to defer Gokona Cut 3, which contains 628koz of North Mara's reserve base, while we finalise a feasibility study into the alternative of mining out this reserve by underground methods. This deferral, together with our final reserve calculations, has resulted in a year-end non- cash post tax impairment of US$96 million which, together with the mid-year impairment of US$128 million, leaves North Mara with a carrying value of US$367 million. We are confident that the outcome of the underground study will be positive, and together with the other changes made, will ensure strong free cash flow generation together with an optimised footprint to alleviate some of the social pressures and land access issues experienced at the mine. At Bulyanhulu, we reviewed the mining methods for the future life of mine plan and believe that greater efficiencies and value will be generated by moving to a much higher proportion of mechanised mining. Specifically, this involves changing the predominant stoping method from "cut and fill" to "long hole". This change, together with the revised gold price assumptions, has resulted in a reduction in reserve ounces and overall grade whilst improving both the cost and safety profile of the mine. Notwithstanding the reduction in reserve base, Bulyanhulu remains a long life, high grade asset, as demonstrated by recently released exploration results, and we are confident it will deliver an increasing production profile at lower costs. The priority at Bulyanhulu is to turn what is undoubtedly a world class deposit into a truly world class mine. The carrying value of the asset remains at US$1.1 billion. Senior Leadership Team Changes During 2013 there were a number of changes to the Senior Leadership team at ABG. I joined as Chief Executive Officer in August and, with my primary focus to ensure that the mines deliver consistent and improved operational performance, I took on direct responsibility for operations in September. In the same month I appointed Andrew Wray as Chief Financial Officer, who prior to this had been Head of Corporate Development and Investor Relations at ABG and instrumental in transitioning ABG to a public company. More recently he led the company-wide Operational Review and with his skills and experience he will add significant value as CFO at what is a critical time for us as we continue to focus on cost containment. In December 2013, Michelle Ash joined as Executive General Manager Planning and Business Improvement from BHP Mitsubishi. Michelle will utilise her 20 years of experience in the Mining and Manufacturing sectors to identify and drive business improvement projects across the company. She will take direct responsibility for leading the next phase of the Operational Review and co-ordinating integrated business planning across all functions and sites. Following these changes, I believe we now have the leadership team in place to drive this company forward. Transfer of Tulawaka We took the decision to close the Tulawaka mine in early 2013 and as part of this process we commenced discussions with STAMICO, the Tanzanian State Mining Corporation, regarding the ultimate use of the site. In November we reached agreement with STAMICO whereby it would acquire Tulawaka and certain exploration licenses surrounding the mine for consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at US$500,000. In addition, as part of the terms of sale, STAMICO has agreed to assume the remaining closure fund and all remaining past and future closure and rehabilitation liabilities for Tulawaka. In February 2014 the transaction completed resulting in a cash payment of US$11.6 million by ABG to STAMICO, this being equal to the amount of the remaining closure fund, less transaction consideration payable. Taxation During 2013 we saw a build up in the indirect tax receivable driven by the abolition of VAT Relief in Q4 2012 in contravention of our Mineral Development Agreements. Following positive discussions an escrow arrangement for VAT on imports was agreed in Q3 2013 to ensure quicker and more regular refunds to us. We saw the first payments from this account during Q4 2013 as well as an increase in the level of outstanding refunds, which meant that overall refunds to us in the quarter totalled US$26.7 million, which exceeded VAT incurred in the same period by US$3.4 million. In addition, we are continuing discussions with respect to instigating a similar mechanism for VAT on domestic goods. This is a key priority for us as are our efforts to recover outstanding amounts owing to ensure that we do not see further outflows in 2014 while starting to recover the balance outstanding. As at 31 December 2013, outstanding amounts stood at US$95.0 million. In addition, the remaining balance subject to the Memorandum of Settlement in 2011, after discounting adjustments, amounts to US$64.8 million and will be offset against future corporate taxes. Corporate Responsibility Maintaining our social licence to operate remains critical to the business, and we made good progress on this in 2013. At North Mara the impact of the infrastructure projects for the provision of clean water, medical care, schools and roads are being felt across the communities and our positive impact is being recognised both locally and nationally. The Maendeleo Fund continues to support projects around each of our mines and has been especially active in 2013 in providing support to in excess of 40 projects. Overall we made an investment of US$15.5 million in corporate responsibility projects during the year (2012: US$14.4 million). From a safety perspective we saw a reduction of 18% in our total reportable injury frequency rate and zero fatalities, which is encouraging, but we are determined to continue to reduce injuries to zero and ensure each of our employees goes home safe and healthy every day. Final dividend for 2013 The Directors are pleased to recommend the payment of a final dividend of US2.0 cents per Ordinary Share for 2013. In accordance with our policy, this represents two thirds of the total dividend of US3.0 cents for 2013, which we feel is appropriate in order to maintain the strength of our balance sheet whilst maintaining the discipline of paying a dividend. Subject to shareholders approving this recommendation at the AGM on 24 April 2014, the final dividend will be paid on 23 May 2014 to shareholders on the register on 2 May 2014. The ex-dividend date is 30 April 2014. Outlook ABG enters 2014 with a single focus - operational delivery. We have a portfolio of high quality assets and our plan is to deliver a continued and sustainable reduction in costs together with production growth. Our balance sheet remains strong and we will continue to take the steps required to ensure we are able to deliver free cash flow from the operations, which can then be appropriately applied between exploration, capital projects and returns to shareholders. For 2014 we expect to see increased production of between 650,000 and 690,000 ounces of gold. At the mine level, at Bulyanhulu our expectation is for increased production quarter-on-quarter as we move through the year due to increased throughput and grade, together with the additional ounces from the CIL Expansion in the second half of the year. At Buzwagi, production will also increase due to improved grades as a result of the mine planning changes. North Mara will see higher throughput, although with the planned head grade returning to levels close to the reserve grade at the mine we expect to see a corresponding reduction in production. As a result of the Operational Review and further ongoing improvements to the business we are targeting further reductions to our unit costs and we estimate the cash cost per ounce for the year, including royalties, will be between US$740-US$790 per ounce sold, a reduction of up to 10% on 2013. For 2014 we have further reduced the sustaining capital budget with sustaining capital expected to be down up to 20% on 2013 at US$90-US$100 million and capital development inclusive of deferred stripping down by up to 47% to US$90-US$100 million. The reduction in capital expenditure, together with reduced corporate overheads, means that we estimate AISC per ounce for the year will be between US$1,100-US$1,175 per ounce sold, a reduction of up to 19% on 2013. Expansionary capital will consist of US$50 million of remaining spend to complete construction of the Bulyanhulu CIL Expansion project, which will all be incurred in the first half of 2014. In addition, as noted above, the completion of the transfer of Tulawaka to STAMICO in Q1 2014 has resulted in an upfront one-off payment of US$11.6 million. Overall, our key objectives for 2014 are: achieving Group production of between 650,000-690,000 ounces reducing total cash cost, including royalties, to between US$740-US$790 per ounce sold reducing AISC to between US$1,100-US$1,175 per ounce sold reducing total capital expenditure to US$230-US$250 million, comprising US$90-US$100 million of sustaining capital including land, US$90-US$100 million of capital development inclusive of deferred stripping and US$50 million of expansion capital reducing total inventory levels delivering on and expanding the stated objectives and targets of the Operational Review commissioning the Bulyanhulu CIL Expansion completing positive feasibility studies at Gokona Underground and Bulyanhulu Upper East optimising Group throughput and recoveries further improving our safety record continuing the development of our sustainability practices attracting and retaining the best people in Africa Finally, I would like to thank all of my colleagues for their commitment, enthusiasm and hard work throughout what has been a year of considerable change. I am excited by what I have seen at ABG and believe we have a great opportunity to make this company a leader in Africa. I would also like to thank our Board for their support, guidance and commitment through the year and I am very much looking forward to 2014 and beyond. Brad Gordon, Chief Executive Officer Key statistics Three months ended 31 December Year ended 31 December (Unaudited) 2013 20124 2013 20124 Tonnes mined (thousands of tonnes) 11,570 13,942 54,100 48,301 Ore tonnes mined (thousands of tonnes) 2,151 2,266 7,250 7,070 Ore tonnes processed (thousands of tonnes) 1,817 2,067 7,979 7,698 Process recovery rate (percent) 88.5% 90.0% 88.5% 88.3% Head grade (grams per tonne) 3.2 3.0 2.8 2.9 Attributable gold production (ounces)1 165,374 180,684 641,931 626,212 Attributable gold sold (ounces)1 168,177 159,585 649,742 609,252 Copper production (thousands of pounds) 3,548 4,266 11,970 12,875 Copper sold (thousands of pounds) 3,010 3,239 11,570 11,523 Cash cost per tonne milled2 (US$) 72 74 67 74 Per ounce data (US$) Average spot gold price3 1,276 1,722 1,411 1,669 Average realised gold price2 1,251 1,700 1,379 1,668 Total cash cost2 774 958 827 941 All-in sustaining cost2 1,171 1,675 1,362 1,585 Average realised copper price (US$/lb) 3.31 3.42 3.24 3.57 Financial results - restated to reflect Tulawaka as a discontinued operation Three months ended Year ended 31 31 December December (Unaudited) 2013 20124 2013 20124 (US$'000) Revenue 221,603 275,281 929,004 1,011,738 Cost of sales (169,770) (198,415) (713,806) (720,036) Gross profit 51,833 76,866 215,198 291,702 Corporate administration (8,898) (12,731) (32,157) (47,640) Exploration and evaluation costs (5,979) (9,217) (16,927) (26,752) Corporate social responsibility expenses (3,667) (4,107) (12,237) (13,051) Impairment charges (133,320) - (1,044,310) - Other charges (8,995) (12,527) (30,424) (17,071) (Loss)/profit before net finance cost (109,026) 38,284 (920,857) 187,188 Finance income 598 418 1,670 2,056 Finance expense (2,462) (2,516) (9,552) (10,079) (Loss)/ profit before taxation (110,890) 36,186 (928,739) 179,165 Tax credit/ (expense) 19,232 (33,231) 187,959 (78,693) Net (loss)/ profit from continuing operations (91,658) 2,955 (740,780) 100,472 Discontinued operations: Net loss from discontinued operations (8,684) (48,998) (57,653) (48,979) Net (Loss)/ profit for the period (100,342) (46,043) (798,443) 51,493 Attributed to: Owners of the parent (net (loss)/ earnings) (97,700) (34,753) (781,101) 62,780 - Continuing operations (91,658) 2,955 (740,780) 100,472 - Discontinued operations (6,042) (37,708) (40,321) (37,692) Non-controlling interests (2,642) (11,290) (17,332) (11,287) - Discontinued operations (2,642) (11,290) (17,332) (11,287) Reconciliation of Group Financial Performance split by Continuing and Discontinued Operations Year ended 31 December 2013 Continuing Discontinued operations operations Total Revenue 929,004 13,514 942,518 Cost of sales (713,806) (30,368) (744,174) Gross profit/(loss) 215,198 (16,854) 198,344 Corporate administration (32,157) (1,311) (33,468) Exploration and evaluation costs (16,927) - (16,927) Corporate social responsibility expenses (12,237) (3,259) (15,496) Impairment charges (1,044,310) (16,701) (1,061,011) Other charges (30,424) (19,442) (49,866) (Loss)/profit before net finance expense and taxation (920,857) (57,567) (978,424) Finance income 1,670 30 1,700 Finance expense (9,552) (116) (9,668) (Loss)/ profit before taxation (928,739) (57,653) (986,392) Tax credit/ (expense) 187,959 - 187,959 Net (loss)/profit for the year (740,780) (57,653) (798,433) Year ended 31 December 20124 Continuing Discontinued operations operations Total Revenue 1,011,738 75,601 1,087,339 Cost of sales (720,036) (77,823) (797,859) Gross profit/(loss) 291,702 (2,222) 289,480 Corporate administration (47,640) (3,928) (51,568) Exploration and evaluation costs (26,752) (2,208) (28,960) Corporate social responsibility expenses (13,051) (1,394) (14,445) Impairment charges - (44,536) (44,536) Other charges (17,071) (600) (17,671) (Loss)/profit before net finance expense and taxation 187,188 (54,888) 132,300 Finance income 2,056 46 2,102 Finance expense (10,079) (226) (10,305) (Loss)/ profit before taxation 179,165 (55,068) 124,097 Tax credit/ (expense) (78,693) 6,089 (72,604) Net (loss)/profit for the year 100,472 (48,979) 51,493 1 Production and sold ounces reflect equity ounces which exclude 30% of Tulawaka's production and sales base. 2 Average realised gold price, total cash cost per ounce, all-in sustaining cost per ounce, cash cost per tonne milled, EBITDA, adjusted EBITDA, adjusted net earnings, adjusted net earnings per share and operating cash flow per share are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to "Non IFRS measures"' on page 28 for definitions. 3 Reflect the London PM fix price. 4 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the reclassification of Tulawaka as a discontinued operation. 5 Excludes non-cash reclamation asset adjustments and includes finance lease purchases. For further information, please visit our website: www.africanbarrickgold.com, or contact: African Barrick Gold plc +44 (0) 207 129 7150 Brad Gordon, Chief Executive Officer Andrew Wray, Chief Financial Officer Giles Blackham, Investor Relations Manager Bell Pottinger +44 (0) 207 861 3232 Daniel Thöle About ABG ABG is Tanzania's largest gold producer and one of the largest gold producers in Africa. We have three producing mines, all located in Northwest Tanzania, and several exploration projects at various stages of development in Tanzania and Kenya. We have a high-quality asset base, solid growth opportunities and a clear strategy of optimising, expanding and growing our business. Maintaining our licence to operate through acting responsibly in relation to our people, the environment and the communities in which we operate is central to achieving our objectives. ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ABG and have a secondary listing on the Dar es Salaam Stock Exchange. Historically, and prior to our initial public offering (IPO), our operations comprised the Tanzanian gold mining business of Barrick Gold Corporation, our majority shareholder. ABG reports in US dollars in accordance with IFRS as adopted by the European Union, unless otherwise stated in this report. Conference call A conference call will be held for analysts and investors on 12 February 2014 at Noon London time. The access details for the conference call are as follows: Participant dial in: +44 (0) 203 003 2666 / +1 646 843 4608 Password: ABG A recording of the conference call will be made available at www.africanbarrickgold.com after the call. FORWARD- LOOKING STATEMENTS This report includes "forward-looking statements" that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, projects, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expects," "anticipates," "believes," "intends," "estimates" and other similar expressions. All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, changes or developments in political, economic or business conditions or national or local legislation or regulation in countries in which ABG conducts - or may in the future conduct - business, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices (such as copper and diesel), currency fluctuations (including the US dollar, South African rand, Kenyan shilling and Tanzanian shilling exchange rates), ABG's ability to successfully integrate acquisitions, ABG's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to process its mineral reserves successfully and in a timely manner, ABG's ability to complete land acquisitions required to support its mining activities, operational or technical difficulties which may occur in the context of mining activities, delays and technical challenges associated with the completion of projects, risk of trespass, theft and vandalism, changes in ABG's business strategy including, ABG's further implementation of the Operational Review, as well as risks and hazards associated with the business of mineral exploration, development, mining and production and risks and factors affecting the gold mining industry in general. Although ABG's management believes that the expectations reflected in such forward-looking statements are reasonable, ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward-looking statements contained in this report. Any forward-looking statements in this report only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to update or revise any forward-looking statements in this report, whether as a result of new information, future events or otherwise. Nothing in this report should be construed as a profit forecast or estimate and no statement made should be interpreted to mean that ABG's profits or earnings per share for any future period will necessarily match or exceed the historical published profits or earnings per share of ABG. AFRICAN BARRICK GOLD LSE: ABG TABLE OF CONTENTS 2013 Operating Overview 10 Exploration and Development Review 14 Financial Review 17 Non-IFRS measures 28 Risk Review 30 Directors 31 Condensed financial information: - Consolidated Income Statement and Consolidated Statement of 32/ Comprehensive Income 33 - Consolidated Balance Sheet 34 - Consolidated Statement of Changes in Equity 35 - Consolidated Statement of Cash Flows 36 - Notes to the condensed financial information 37 Reserves and Resources 55 2013 Operating Overview We made excellent progress across our assets in 2013, delivering total production of 641,931 ounces, a year-on-year increase of 3% and 7% ahead of guidance as well as reducing cash costs by 12% against 2012, 10% below the bottom of our guidance range. Production at North Mara of 256,732 ounces was 33% higher than that of the prior year. Head grade and mill recovery were positively impacted by an increase both in ore tonnes mined and in grade, predominantly driven by mining from the Gokona pit due to a change in the mine plan incorporating positive grade reconciliations. At Bulyanhulu, gold production of 198,286 ounces was 16% lower than the prior year mainly due to lower tonnes mined as a result of reduced equipment availability and staff shortages in the first half of the year. This was further impacted by a 3% decrease in grade due to paste fill delays in H1 2013 impacting on the availability of high grade stopes. This has since been addressed and paste filling has recovered to expected levels. At Buzwagi, gold production for the full year of 181,984 ounces was 10% higher than the prior year driven by increased throughput as a result of improved plant reliability as it operated at nameplate capacity during 2013. The impact of the revised mine plan was evident in the second half of the year as we saw a significant reduction in total tonnes mined. At Tulawaka, we produced 4,929 ounces on an attributable basis with production ceasing in the first half of the year as a result of our decision to close the mine. In June 2013 we commenced closure of the site before agreeing its transfer to STAMICO, the Tanzanian state mining company in November 2013. This transfer has subsequently been completed during February 2014. Total tonnes mined amounted to 54.1 million tonnes, an increase of 12% from 48.3 million in 2012. This was predominantly H1 weighted prior to the impact of the changes to the Buzwagi and North Mara mine plans which reduced material movement. Ore tonnes mined from open pits amounted to 6.4 million tonnes compared to 6.0 million in 2012. Increased ore tonnes from North Mara due to positive reserve model reconciliations were partially offset by a reduction of tonnes mined at Buzwagi. Underground tonnes hoisted were negatively impacted by operational issues at Bulyanhulu and amounted to 0.9 million tonnes compared to 1.0 million tonnes in 2012. Ore tonnes processed amounted to 7.9 million tonnes, an improvement of 4% from 2012 driven by increased throughput at Buzwagi due to process plant improvements. Head grade for the year of 2.8 grams per tonne (g/t) was 3% lower than 2.9 g/t in 2012. This was due to a reduction in grade at Bulyanhulu due to limited availability of high grade stopes, an increased proportion of group throughput coming from Buzwagi, our lowest grade mine, partially offset by an increase of 40% in the grade at North Mara. Our cash costs for the year were 12% lower than 2012, and amounted to US$827 per ounce sold. The decrease was primarily due to: increased capitalised mining expenditure at Buzwagi and North Mara (US$73/oz); reduced labour costs driven by a reduction in expat labour (US$26/oz); and the impact of the increased production base (US$14/oz). This was partially offset by increased contracted services, maintenance and consumable usage as a result of increased activity at each of the mines. Our all-in sustaining cost for the year was 14% lower than 2012, and amounted to US$1,362 per ounce sold. The decrease was predominantly due to the lower cash costs as explained above together with lower sustaining capital and corporate costs. Cash costs of US$67 per tonne milled for the year have reduced by 9% on 2012 (US$74 per tonne), primarily as a result of the above factors. Gold sales amounted to 649,742 ounces, 1% ahead of production due to the sales of ounces held over from 2012. Our copper production for the year of 12.0 million pounds was 7% lower than 2012 (12.9 million pounds), which reflected the lower production base at Bulyanhulu but which was partially offset by higher production at Buzwagi. We made further improvements in the Group Total Reportable Injury Frequency Rate ("TRIFR") which reduced by 18% to 0.68. We suffered zero fatalities in the year. Bulyanhulu Key statistics Three months ended 31 December (Unaudited) 2013 2012 Underground ore tonnes hoisted Kt 222 214 Ore milled Kt 229 230 Head grade g/t 7.9 7.2 Mill recovery % 91.2% 89.8% Ounces produced oz 53,186 47,684 Ounces sold oz 56,735 46,306 Cash cost per ounce sold US$/oz 776 971 AISC per ounce sold US$/oz 1,118 1,596 Cash cost per tonne milled US$/t 193 196 Copper production Klbs 1,348 1,206 Copper sold Klbs 1,304 1,293 Breakdown of Capital expenditure - Sustaining capital US$('000) 4,333 10,936 - Capitalised development US$('000) 10,750 12,235 - Expansionary capital US$('000) 41,581 30,185 56,664 53,356 - Non-cash reclamation asset adjustments US$('000) (5) (2,950) Capital expenditure US$('000) 56,659 50,406 Year ended 31 December (Unaudited) 2013 2012 Underground ore tonnes hoisted Kt 872 959 Ore milled Kt 871 1,012 Head grade g/t 7.8 8.0 Mill recovery % 90.9% 90.6% Ounces produced oz 198,286 236,183 Ounces sold oz 195,304 235,410 Cash cost per ounce sold US$/oz 890 803 AISC per ounce sold US$/oz 1,344 1,245 Cash cost per tonne milled US$/t 200 187 Copper production Klbs 4,855 6,102 Copper sold Klbs 4,508 5,895 Breakdown of Capital expenditure - Sustaining capital US$('000) 25,193 35,193 - Capitalised development US$('000) 45,428 45,605 - Expansionary capital US$('000) 114,912 36,814 185,533 117,612 - Non-cash reclamation asset adjustments US$('000) (10,044) (43) Capital expenditure US$('000) 175,489 117,569 Operating performance For the full year 2013, gold production of 198,286 ounces at Bulyanhulu was 16% lower than the prior year mainly due to lower tonnes mined as a result of reduced equipment availability and staff shortages noted in the first half of the year. This was further impacted by a 3% decrease in grade due to paste fill delays in H1 2013 impacting on the availability of high grade stopes. This has since been addressed and paste filling has recovered to expected levels. Gold ounces sold for the year of 195,304 ounces were 17% below that of the prior year primarily due to the lower production base. For the full year, copper production of 4.9 million pounds was 20% lower than the prior year's production of 6.1 million due to the reduced throughput and grade profile. Cash costs for the year of US$890 per ounce sold were 11% higher than the prior year of US$803. Cash costs were negatively impacted by lower production levels and the resultant lower co-product revenue. This was partially offset by lower maintenance, consumable usage and labour costs and lower sales related costs due to lower sales volumes and a lower realised gold price. Cash costs per tonne milled increased to US$200 in 2013 (US$187 in 2012) as a result of the lower throughput and costs outlined above. AISC per ounce sold for the year of US$1,344 was 8% higher than 2012 of US$1,245. This was driven by the higher cash cost base, and increased capital expenditures per ounce as a result of reduced production, which more than offset the 28% reduction in sustaining capital expenditure. Capital expenditure for the year, excluding reclamation asset adjustments, of US$185.5 million was 58% higher than the prior year of US$117.6 million mainly driven by the expansionary capital spend on the CIL expansion project (US$104.9 million) and investment in equipment (US$5.2 million) and capitalised evaluation costs (US$2.3 million) relating to the Upper East project. Key capital expenditure also included capitalised underground development (US$45.4 million), mining equipment related to critical underground equipment (US$10.2 million) and investments in tailings and infrastructure (US$10.7 million). Total capital expenditure of US$175.5 million was positively impacted by a negative non-cash reclamation adjustment of US$10.0 million, due to the increase in risk-free interest rates. The CIL Expansion project, which is expected to add approximately 40,000 ounces of gold per annum for the first six years of operation, remains on track for completion at the end of Q1 2014 with commissioning continuing through Q2 2014. There is approximately US$50 million of remaining capital expenditure to be incurred in 2014. In addition, there are approximately US$15 million of payments to be made in H1 2014 which were accrued during 2013. In addition, the revised feasibility study for the Upper East Zone will be completed shortly and presented to the Board. Following the changes to the mine plan as a result of moving to a higher proportion of mechanised mining and a revised gold price assumption the underground reserves base at Bulyanhulu now stands at 9.0 million ounces at a grade of 9.5 grams per tonne, with another 0.3 million ounces at a grade of 1.23 grams per tonne attributable to surface tailings. Buzwagi Key statistics Three months ended 31 Year ended 31 December December (Unaudited) 2013 20121 2013 20121 Tonnes mined Kt 7,244 7,906 32,177 28,563 Ore tonnes mined Kt 1,250 1,325 3,753 4,233 Ore milled Kt 945 1,062 4,400 3,715 Head grade g/t 1.9 2.1 1.5 1.6 Mill recovery % 88.8% 90.9% 88.2% 87.3% Ounces produced oz 51,830 64,829 181,984 165,770 Ounces sold oz 50,382 51,264 187,348 155,322 Cash cost per ounce sold US$/oz 941 853 945 1,066 AISC per ounce sold US$/oz 1,300 1,539 1,506 1,798 Cash cost per tonne milled US$/t 50 41 40 45 Copper production Klbs 2,200 3,059 7,115 6,773 Copper sold Klbs 1,706 1,945 7,062 5,628 Breakdown of Capital Expenditure - Sustaining capital US$('000) 4,309 19,893 31,589 56,441 - Capitalised development US$('000) 10,812 10,492 60,136 39,455 - Expansionary capital US$('000) - 62 - 62 15,121 30,447 91,725 95,958 - Non-cash reclamation asset adjustments US$('000) (2,318) 7,498 (9,230) 10,494 Capital expenditure US$('000) 12,803 37,945 82,495 106,452 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Operating performance Gold production for the full year of 181,984 ounces was 10% higher than the prior year driven by increased throughput as a result of improved plant reliability as it operated at nameplate capacity during 2013. Gold sold for the year amounted to 187,348 ounces, 21% above that of the prior year period due to the increased production base and the sale of concentrate on hand from Q4 2012. For the full year, copper production of 7.1 million pounds was 5% higher than in 2012 driven by the increased throughput, slightly offset by lower copper grades. Cash costs for the year of US$945 per ounce sold were 11% lower than the prior year of US$1,066. Cash costs were positively impacted by increased production levels and resultant co-product revenue, lower labour costs, due to a significant reduction in the international workforce and increased capitalised stripping costs in H1 2013. This was partially offset by higher consumables, energy and fuel costs and contracted services due to the increased mining activity and throughput in H1 2013, and higher cost overheads as a result of warehouse related costs driven by inventory drawdowns. Cash costs per tonne milled decreased to US$40 in 2013 (US$45 in 2012) as a result of the costs outlined above. AISC per ounce sold for the year of US$1,506 was 16% lower than 2012 of US$1,798. This was driven by the lower cash cost base, lower sustaining capital expenditure and lower corporate administration costs, partly offset by higher capitalised development costs. Capital expenditure for the year, before reclamation asset adjustments, of US$91.7 million was 4% lower than the prior year of US$95.9 million, with increased capitalised stripping in H1 2013 more than offset by lower sustaining capital expenditure over the year. The significant change to the mine plan reduced the levels of waste movement and therefore capitalised stripping in H2 2013. Key capital expenditure included capitalised stripping costs (US$60.1 million), investments in tailings and infrastructure (US$15.7 million) and mining equipment driven by component change outs (US$13.9 million). Total capital expenditure of US$82.5 million was positively impacted by a negative non-cash reclamation adjustment of US$9.2 million, due to the increase in risk-free interest rates combined with a reduction in closure costs estimates. Following the changes to the mine plan made in July 2013 at Buzwagi, the reserve base of the asset now stands at 1.1 million ounces at a grade of 1.45 grams per tonne. North Mara Key statistics Three months ended 31 Year ended 31 December December (Unaudited) 2013 20121 2013 20121 Tonnes mined Kt 4,104 5,788 21,027 18,391 Ore tonnes mined Kt 678 694 2,601 1,711 Ore milled Kt 643 740 2,643 2,786 Head grade g/t 3.4 3.0 3.5 2.5 Mill recovery % 86.0% 88.7% 86.8% 85.4% Ounces produced oz 60,358 63,236 256,732 193,231 Ounces sold oz 61,050 56,800 260,945 186,600 Cash cost per ounce sold US$/oz 636 949 659 953 AISC per ounce sold US$/oz 1,075 1,671 1,227 1,693 Cash cost per tonne milled US$/t 60 73 65 64 Breakdown of Capital Expenditure - Sustaining capital US$('000) 3,562 17,176 38,386 47,759 - Capitalised development US$('000) 13,651 3,955 65,594 28,139 - Expansionary capital US$('000) 445 5,534 949 10,091 17,658 26,665 104,929 85,989 - Non-cash reclamation asset adjustments US$('000) (4,506) 5,805 (11,271) 7,540 Capital Expenditure US$('000) 13,152 32,470 93,658 93,529 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Operating performance Production for the full year of 256,732 ounces was 33% higher than that of the prior year. Head grade and mill recovery were positively impacted by an increase in ore tonnes mined and grade, predominantly driven by mining from the Gokona pit due to a change in the mine plan. Gold ounces sold for the full year of 260,945 ounces were 2% higher than production due to the sale of ounces on hand from Q4 2012, and 40% higher than that of 2012 due to the increased production base. Cash costs for the year of US$659 per ounce sold were 31% lower than the prior year of US$953. Cash costs were positively impacted by increased production levels and increased capitalised stripping costs. This was partially offset by higher contracted services and maintenance costs due to planned equipment and plant maintenance. Cash costs per tonne milled for the year were in line with 2012 at US$65 (US$64 in 2012). AISC per ounce sold for the year of US$1,227 was 28% lower than 2012 of US$1,693 due to the reasons outlined above combined with a reduction in capital expenditure per ounce due to the increased production base. Capital expenditure for the year, before reclamation asset adjustments, of US$104.9 million was 22% higher than the prior year of US$86.0 million, due to increased capitalised development offset by lower sustaining capital expenditure and lower expansionary expenditure (2012 included capitalised drilling costs related to Gokona and Nyabirama underground projects). The deferral of Cut 3 at Gokona in Q4 2013 led to a reduction in tonnes moved and an associated reduction in capitalised development for the fourth quarter. Key capital expenditure included capitalised stripping costs (US$65.6 million), investments in tailings and infrastructure (US$14.7 million) and investment in mining equipment driven by component change outs (US$13.6 million). Total capital expenditure of US$93.7 million was positively impacted by a negative non-cash reclamation adjustment of US$11.3 million, due to the increase in risk-free interest rates. We have completed all the conditions required for the lifting of the Environmental Protection Order at North Mara and have received a formal discharge permit from the Lake Victoria Water Board. The removal of the EPO allows ABG to discharge clean water once it has been treated in the water treatment plant at the mine. Following the changes to the mine plan made in July 2013 at North Mara, the reserve base of the asset now stands at 2.2 million ounces at a grade of 3.17 grams per tonne. Exploration and Development Review Overall, 2013 was a successful year of execution and delivery across our greenfield and brownfield exploration projects. During the year, US$16.9 million of exploration activities were expensed, with a further amount of US$4.0 million relating to exploration and evaluation activities being capitalised. Key highlights include the successful drilling results from brownfield exploration projects at Bulyanhulu from both surface and underground drilling and from greenfield exploration programmes at our Kenyan joint venture properties in western Kenya. At the Bulyanhulu mine, during the year we commenced surface and underground brownfield exploration drilling programmes. Surface drilling is targeting resource extensions of the Bulyanhulu system between 400 metres and 1.2 kilometres west of the mine, while underground drilling is targeting resource expansion of the East Zone on the Reef 2 system. By year end the drilling programmes on the targets at Bulyanhulu had already delivered positive results from both surface and underground drill holes. The focus for 2014 will be to complete the surface and underground drill programmes according to plan and budget by Q3 2014 and assess the success of the programmes and any requirement for further drilling. In Kenya, throughout the year we have continued extensive regional mapping, soil sampling and reconnaissance Aircore geochemical drilling across our two joint venture projects, the Advance Gold JV Properties and the West Kenya JV Properties. These programmes will continue into 2014 and seek to identify and advance the best targets within our large land package, so as to be positioned to commence drill testing in 2015. Soil sampling to date has delineated and expanded more than 50 existing and new kilometer-scale gold-in-soil anomalies. On the Advance Gold JV Properties we have completed drilling of Aircore holes with over 20% of the holes assayed to date returning anomalous gold intercepts of greater than 0.1 g/t gold. Additionally, in recognition of the increasing maturity of some of our exploration properties, reduced exploration budgets, and regulatory requirements we have embarked on a process of rationalising our exploration portfolio in both Tanzania and Kenya. During 2013, we reduced our land holdings in Tanzania from 2,534sq km to 1,808 sq km, and handed over management of several joint ventures to our partners. In Kenya, we expect to reduce our current land holding on completion of the current regional soil sampling programmes. We believe that through this process we will continue to focus on the best projects within our portfolio, while at the same time free up exploration funds to diversify our portfolio outside our current operating areas. Brownfield Exploration In 2013, near-mine brownfield exploration successfully identified extensions to known resources. The brownfield exploration programme was entirely focused on the Bulyanhulu ore body where initial surface and underground diamond core drilling has returned excellent results from step-out resource drilling on both Reef 1 and Reef 2 mineralised systems. Bulyanhulu Deeps West In Q4 2013, we commenced drilling of three deep diamond core holes west of the Bulyanhulu mine, targeting the extension of Reef 1 gold mineralisation. The ongoing programme is comprised of approximately 20,000 metres of diamond core from three parent holes with up to 25 daughter holes utilising directional wedging and navigational drilling. The holes are predominantly testing the extensions of the Reef 1 structure from 400 metres to 1,200 metres west of the current Bulyanhulu resource where historic drilling has shown indications of further gold mineralisation. The drilling is targeting a potential new economic zone and plunge extensions of the Main Zone of Reef 1 at depths of between 1km and 2.5km vertical. As at year end 2013, a total of 4,652 metres of diamond core had been drilled from the surface holes. Two rigs are involved in this surface drilling program, which will continue well into 2014. Encouragingly, the results from the first two holes to intersect Reef 1, located approximately 400m west of the current resource area, both returned significant intersections including: BGMDD0054W1: 1.64m @ 11.7g/t Au from 1,434m incl. 0.68m @ 23.8g/t Au from 1,435m BGMDD0054W2: 4.00m @ 8.42g/t from 1,637m incl. 1.0m @ 24.3g/t Au from 1,638m Additionally, these surface holes also intersected the Reef 2 structure, which consists of multiple narrow reefs, and BGMDD0054W2 returned several significant intersections including: BGMDD0054W2: 1.95m @ 26.58g/t Au from 1,033m incl. 0.57m @ 48.2g/t Au from 1,033m BGMDD0054W2: 1.45m @ 12.39g/t Au from 1,070m These holes are potentially significant in demonstrating that reserve grade gold mineralisation and average reef widths continue west of the mine which would open the potential for a significant expansion of the footprint of Bulyanhulu on both Reef 1 and Reef 2. The drilling programme will continue through 2014 and will comprise a further 15,000 metres of diamond core drilling from the three planned drill sites. This programme will form an important part of our assessment of how to most effectively develop the mine over the long term. Bulyanhulu East Deeps Underground Drilling - Reef 2 The East Deeps drilling programme is targeting down dip mineralisation of the Bulyanhulu Reef 2 system which is outside the current resource model. The programme is being drilled from several underground drill platforms and is aimed at adding high grade gold resources on the East Zone. Drilling commenced in Q3 2013 with a total of 2,725 metres of diamond core completed from two holes by year end, and with the results received from one hole returning the following significant intersections: UX4700-407: 1.28m @ 76.7g/t Au from 1,203m including 0.71m @ 108g/t Au from 1,204m Whilst the ultimate target was Reef 2 mineralisation, due to the location of the drill pad, the hole also intersected Reef 1, returning 0.50m @ 62.8g/t Au from 134.7m. The Reef 2 significant intersection has proved continuity at depth of the mineralisation with high grade. Should this be confirmed by further results, this has the potential to add significantly to the mine resource and increase the life of mine. An additional 3 holes are targeted for completion during early 2014 at which time the programme will be reviewed before more drilling is undertaken. Greenfield Exploration Throughout 2013, we have continued our focus on identifying new greenfields exploration opportunities to complement our existing exploration portfolio. Collectively, the greenfield exploration programmes we have undertaken have further strengthened our portfolio of exploration projects, with the potential for new discoveries in the short to medium term. At the same time we continue to look throughout Africa for opportunities to further enhance and diversify our exploration portfolio through low cost joint ventures or option agreements.. In Tanzania, during the year, we continued to intersect wide zones of low grade gold mineralisation, including several zones of higher grade mineralisation (> 2g/t Au) at the Ochuna prospect (formerly the Dett prospect) west of the North Mara mine, and scout drilling at the Tagota prospect northwest of the North Mara mine also intersected significant gold mineralisation. We have made good progress on our Kenyan joint venture projects (Advance Gold JV and West Kenya JV) throughout the year with more than 50 gold-in-soil anomalies generated from an extensive soil sampling programme. In addition, initial Aircore drilling across several gold-in-soil anomalies on the Advance Gold JV properties has returned significant gold mineralisation, requiring infill and follow-up drilling. In 2014, we will continue our focus on advancing the best early stage prospects and targets on the Kenyan joint venture properties ready for drill testing. Tanzania Ochuna Ochuna is a large gold system hosted in granitic and sedimentary rocks located approximately 45 kilometres west of the North Mara gold mine. Historic drilling programmes intersected very wide zones of low grade mineralization (0.6-0.9g/t gold) extending from the surface to depths greater than 300 metres. The 2013 drilling programmes targeted higher-grade zones within this anomalous gold system. Two phases of drilling were completed during the year, with 17 reverse circulation and diamond core holes completed for 3,280 metres. Broad zones of > 1g/t Au, including discrete, structurally controlled, higher grade zones (>1.5g /t gold), were intersected by this drilling including: DTD0014 - 95m @ 1.08g/t Au from 67m, including 41m @ 1.52g/t Au from 68m DTD0017 - 85m @ 1.44g/t Au from 140m, including 56m @ 1.67g/t Au from 144m DTD0018 - 73m @ 1.84g/t Au from 181m, including 43m @ 2.46g/t Au from 198m DTD0019 - 111m @ 1.16g/t Au from 72m, including 36m @ 1.51g/t Au from 94m DTD0020 - 134m @ 1.00g/t Au from 111m, including 26m @ 2.21g/t Au from 159m DTD0025 - 78m @ 1.60g/t Au from 163m, including 48m @ 2.29g/t Au from 193m DTRCD0142 - 52m @ 1.05g/t Au from 174m, including 23m @ 1.45g/t Au from 203m DTRCD0143 - 45m @ 1.25g/t Au from 244m, including 18m @ 1.71g/t Au from 244m Geology and mineralisation models were being updated at year end in order to complete a preliminary global resource estimate and decide on future targeting and drilling. In addition to positive drill results for 2013, preliminary metallurgical test work was carried out by ALS Ammtec in Perth and returned encouraging results. Two composite samples obtained from purpose drilled HQ diamond core holes, DTDM0021 and DTDM0022, were submitted to ALS Ammtec for gravity/leach test work. All samples were of primary (not oxidised) mineralisation. Leach tests were carried out in bottle with roll agitation, and were carried out on -150, -106, -75 and -53µm (micron) grinds. As expected, the -75µm grind produced optimal results including: Sample #1 returned a calculated head grade of 2.47g/t Au, gravity recovery of 58.2% Au, 24hr NaCN leach of 93.5% Au and tail grade of 0.16g/t Au Sample #2 returned a calculated head grade of 1.35g/t Au, gravity recovery 24.9% Au, 24hrs NaCN leach of 88.8% Au and tail grade of 0.16g/t Au. Recovery for Samples 1 and 2 after two hours were 87.4% Au and 81.2% Au respectively, indicating that the bulk of the leachable gold is liberated very quickly. Additionally, further test work included heap leach test work on low grade material, however this work showed that the low grade (<1g/t Au) Ochuna mineralisation is not amenable to heap leach processes. Tagota At the Tagota Project, approximately 35km northwest of the Gokona open pit, initial scout drilling has returned positive drill results targeting gold mineralisation in basement rocks beneath a varying thickness of younger volcanic cover rocks (phonolite). Given the "blind" nature of this target beneath up to 40 metres of cover rocks, this outcome is extremely encouraging. The drill programme consisted of eight reverse circulation (RC) drill holes, and two diamond core drill holes were completed for a total of 1,477 metres. The target is a large circular magnetic feature interpreted to be a 2.5km x 2.5km intrusive complex with artisanal mines around the exposed outer perimeter, and thought to be a similar setting to the Ochuna gold system. Drilling encountered the interpreted geology, being predominantly an altered felsic-to-intermediate intrusion (syenite) with disseminated sulphides and interpreted stock-work style quartz veining. Gold mineralisation was intersected in four holes close to the interpreted centre of the intrusion adjacent to an interpreted northeast trending lineament in geophysical data, with results including: TGRC0006: 63m @ 1.01g/t Au from 44m TGRC0007: 34m @ 1.08g/t Au from 81m TGRCD0009: 49m @ 0.89g/t Au from 92m including 10m @ 1.48g/t Au from 109m TGRCD0010: 9m @ 1.03g/t Au from 80m, including 3m @ 2.25g/t Au from 85m Given the limited number of holes, the very broad spaced nature of the drilling, and the fact beneath 10-60 metres of phonolite cover was being targeted, these results are very encouraging. Completion of several follow-up diamond core holes adjacent to the current intersections is planned, to investigate the potential for higher grade extensions to the mineralisation identified to date. Kenya West Kenya Joint Venture Projects Exploration activities in Kenya during 2013 focused on grassroots target generation with mapping, soil sampling, rock chip sampling and Aircore drilling throughout the Kakamega and Lake Zone gold camps. Key highlights include the delineation of more than 50 gold-in-soil anomalies and the confirmation of significant gold mineralisation in Aircore drill holes which were testing some of the gold-in-soil anomalies. Advanced drilling on several historic prospects intersected mineralisation but confirmed they were not of an economic size and grade targeted by ABG. A total of 15,656 soil samples were collected in 2013 focussing on prospective lithologies and structures. Broad (400 metre and 800 metre) spaced grids were undertaken with over 50 (≥ 40ppb) gold-in-soil anomalies now identified. Follow up Aircore drill testing of selected soil anomalies in Kakamega Dome Gold Camp on broad spacing (400 metre and 800 metre) commenced in the second half of 2013 with a total of 325 holes completed for 12,494 metres. Results received during 2013 included 68 significant intercepts (≥0.1 g/t Au) from composite sampling.Notable intersections included: KDAC0074 3m @ 2.46 g/t Au from 5m. KDAC0125 3m @ 3.35 g/t Au from 29m KDAC0152 6m @ 30.9 g/t Au from 29m KDAC0161 3.5m @ 4.20 g/t Au from 47m During the first half of 2014 we will continue to focus on the completion of the regional soil sampling and first-pass Aircore drilling programmes, and with the integration of ongoing geological mapping, litho-geochemistry and ground geophysical surveys we plan to develop priority targets for drill testing. The highest potential targets that evolve from this process will be selected for drill testing using reverse circulation and diamond core drilling. Financial Review The positive impact of the Operational Review and the challenging gold price environment in 2013 is reflected in the ABG Group's financial results for the year which are also restated to exclude Tulawaka as it is now a discontinued operation: Revenue of US$929.0 million was US$82.7 million lower than 2012 driven by a 17% decrease in the average realised gold price to US$1,377 per ounce sold (US$1,669 per ounce sold in the prior year period), which more than offset an increase of 66,265 ounces (11%) in sales volumes. Cash costs decreased to US$827 per ounce sold from US$941 in 2012, driven by higher production, lower labour costs and higher capitalised development costs. This was driven by the Operational Review process. All-in sustaining costs decreased to US$1,362 per ounce sold from US$1,585 in 2012 due to lower cash costs, sustaining capital expenditures, corporate administration costs and partially offset by increased capitalised development costs. EBITDA decreased by 29% to US$240.4 million, driven by lower revenue and increase in other charges, partly offset by lower direct mining costs, corporate administration costs and exploration costs. Adjusted net earnings of US$106.3 million, were 2% lower than 2012. Adjusted earnings per share, mainly excluding a US$1,061.0 million non-cash impairment adjustment, Operational Review costs and Tulawaka non-operational costs, amounted to US25.9 cents, down from US26.5 cents in 2012. Operational cash flow of US$187.1 million was 30% lower than 2012, mainly due to lower EBITDA and increased working capital investment, including the impact of VAT relief abolishment in Q4 2012. The following review provides a detailed analysis of our consolidated 2013 results and the main factors affecting financial performance. It should be read in conjunction with the condensed financial information and accompanying notes on pages 32 to 54, which have been prepared in accordance with International Financial Reporting Standards as adopted for use in the European Union (IFRS). Prior year comparative financial information has been restated for the impact of capitalised stripping due to the adoption of IFRIC 20, 'Stripping costs in the production phase of a surface mine' and the classification of Tulawaka as a discontinued operation. Refer to note 5 of the consolidated financial information for further details. Market overview Our financial results are impacted by external drivers in the form of commodity prices, exchange rates and the cost of energy. Their impact in 2013 and our positioning going into 2014 are set out below. The market price of gold has a significant impact on ABG's operating earnings and its ability to generate cash flows. Gold price volatility was elevated during 2013 with gold declining from a high of US$1,694 per ounce on 2nd January to a low of US$1,192 per ounce on 28th June and closing the year at US$1,205. Market gold prices averaged US$1,411 per ounce in 2013, a 15% decline from the prior year average of US$1,669. The price of gold has been influenced by low interest rates worldwide, investment demand and the monetary policies implemented by major world central banks, in particular the United States. Significant Exchange traded fund ("ETF") outflows were the key directional driver in 2013 with circa 28Moz sold out of ETFs, representing around 30% of annual mine supply. This was in part met by strong physical demand in Asia with jewellery demand in China contributing to one third of the world market. Gold is still viewed as a portfolio diversifier by central banks, which now hold approximately 11% of global bullion reserves. As the US economy improved during 2013, bond yields climbed, equities performed well and the dollar appreciated which together with short-termspeculation on how the US Federal Reserve will adjust its monetary policy, caused gold prices to be extremely volatile during 2013. This culminated in the decision of the US Federal Reserve to taper its bond purchase programme by US$10 billion per month from January 2014. We continued our policy of no gold hedging during 2013. Copper ABG also produces copper as a co-product which is recognised as a part of revenue. Copper traded between US$3.01 and US$3.74 per pound in 2013. The average market copper price for 2013 was US$3.32 compared with US$3.61 per pound in 2012. Key external drivers of the copper prices include consumption by China, the world's largest consumer, the US growth outlook, existing stock levels and supply growth which is expected to peak in 2014. During 2013 we utilised a forward strategy whereby 75% of our estimated copper production was hedged at an average of US$3.72 per pound, resulting in a realised gain of US$3.3 million for the year. Utilising option collar strategies, we have put in place floor protection on 75% of our expected copper production for 2014 at an average floor price of US$3.12 per pound and an average ceiling price of US$3.41 per pound. Fuel Brent Crude oil traded between US$98 and US$119 per barrel and averaged US$109 per barrel (2012: US$112 per barrel). We consumed approximately 610,000 barrels of diesel in 2013 (2012: 625,000). Diesel fuel is refined from crude oil and is therefore subject to the same price volatility affecting crude oil prices and has a significant impact on our production costs. Crude oil has been impacted by political instability which has resulted in supply outages most notably in Iran and Northern Africa which was in part offset by increased US production and OPEC's ability to balance supply through Saudi Arabia. Our overall oil exposure is heavily impacted by grid power reliability across all three operations and mining activity at our open pit mines. During 2013 we utilised an option collar strategy to hedge 75% of our estimated diesel consumption at an average floor price of US$89 per barrel and average capped price of US$109 per barrel. In 2014 we have continued this strategy and put in place protection on approximately 33% of our expected 2014 consumption with an average floor and capped price of US$88 and US$105 per barrel respectively. Currency Exchange rates A portion of ABG's expenditure is incurred in currencies other than US dollars. The exposure relating to other currencies is approximately 28% of the company's total expenditure, of which the main contributing currencies are the Tanzanian shilling and the South African rand. In 2013, the rand declined significantly against the US dollar as the US dollar strengthened, domestic factors persisted and investors shunned riskier rand-denominated assets. The Tanzanian shilling remained relatively unchanged as the Bank of Tanzania imposed exchange controls throughout the year. We have put in place floor protection on approximately 75% and 20% of our expected rand operating expenditures for 2014 and 2015 respectively, with average floors of ZAR9.60 and ZAR10.43. In light of potential rand weakness we have average ceilings of ZAR11.03 and ZAR12.80 for 2014 and 2015 respectively. Hedges in relation to the Bulyanhulu CIL Expansion project for 2014 have an average floor protection of ZAR8.90 and ceiling protection of ZAR9.80. These hedges are in place until April 2014. Financial performance Discontinued operation - Tulawaka On 15 November 2013, ABG announced that an agreement was reached with STAMICO, the Tanzanian State Mining Corporation, whereby STAMICO will acquire the Tulawaka Gold Mine ("Tulawaka") and certain exploration licenses surrounding Tulawaka for a consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at US$500,000. As part of the agreement, STAMICO will take ownership and management of the rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future closure and rehabilitation liabilities for Tulawaka, and will indemnify the other parties to the agreement in relation to these liabilities. This resulted in a cash payment by ABG to STAMICO of the balance of the rehabilitation fund, less the transaction consideration on completion. Tulawaka is 100% owned by the Tulawaka Joint Venture, in which ABG holds a 70% economic interest through a wholly owned subsidiary, with MDN Inc holding the remaining 30% of the Joint Venture. Production at Tulawaka ceased in Q2 2013. The transaction completed on 4 February 2014, resulting in a cash payment of US$11.6 million to STAMICO. The financial results of Tulawaka have been presented as discontinued operations in the consolidated financial statements. The comparative results in the consolidated income statement have been presented as if Tulawaka had been discontinued from the start of the comparative period, effectively excluding the net result relating to Tulawaka from individual income statement lines and aggregating it in one line called "Loss from discontinued operation". The assets and liabilities that are to be sold to STAMICO have been presented as held for sale. Below is a reconciliation showing Group financial performance on a line by line basis. Year ended 31 December 2013 Continuing Discontinued operations operations Total Revenue 929,004 13,514 942,518 Cost of sales (713,806) (30,368) (744,174) Gross profit/(loss) 215,198 (16,854) 198,344 Corporate administration (32,157) (1,311) (33,468) Exploration and evaluation costs (16,927) - (16,927) Corporate social responsibility expenses (12,237) (3,259) (15,496) Impairment charges (1,044,310) (16,701) (1,061,011) Other charges (30,424) (19,442) (49,866) (Loss)/profit before net finance expense and taxation (920,857) (57,567) (978,424) Finance income 1,670 30 1,700 Finance expense (9,552) (116) (9,668) (Loss)/ profit before taxation (928,739) (57,653) (986,392) Tax credit/ (expense) 187,959 - 187,959 Net (loss)/ profit for the year (740,780) (57,653) (798,433) Year ended 31 December 20121 Continuing Discontinued operations operations Total Revenue 1,011,738 75,601 1,087,339 Cost of sales (720,036) (77,823) (797,859) Gross profit/(loss) 291,702 (2,222) 289,480 Corporate administration (47,640) (3,928) (51,568) Exploration and evaluation costs (26,752) (2,208) (28,960) Corporate social responsibility expenses (13,051) (1,394) (14,445) Impairment charges - (44,536) (44,536) Other charges (17,071) (600) (17,671) (Loss)/profit before net finance expense and taxation 187,188 (54,888) 132,300 Finance income 2,056 46 2,102 Finance expense (10,079) (226) (10,305) (Loss)/ profit before taxation 179,165 (55,068) 124,097 Tax credit/ (expense) (78,693) 6,089 (72,604) Net (loss)/ profit for the year 100,472 (48,979) 51,493 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the classification of Tulawaka as a discontinued operation. The financial performance below is stated for continuing operations. Revenue Revenue for the year of US$929.0 million was 8% lower than the prior year period of US$1,011.7 million. Year-on-year realised gold prices decreased by 18% to US$1,377 per ounce sold from US$1,669 in 2012, which more than offset the higher sales volumes of 66,265 ounces. The increase in sales ounces was primarily due to the higher production base and sale of opening stock on hand from 2012. Included in total revenue was co-product revenue of US$43.0 million for the year, which decreased by 10% from the prior year (US$48.0 million) due to the lower copper prices as similar volumes were sold than in 2012 . The 2013 average realised copper price of US$3.24 per pound compared unfavourably to the prior year of US$3.57 per pound, and was driven by global market factors regarding supply and demand. Cost of sales Cost of sales was US$713.8 million for the year ended 31 December 2013, representing a decrease of 1% on the prior year period (US$720.0 million). The key aspects impacting the cost of sales during the year were: Lower direct mining costs as a result of: Increased capitalised development costs as Buzwagi and North Mara focused on the removal of waste in order to access higher grade zones in the first half of the year; Lower labour costs due to the impact of the Operational Review; Lower shared services costs back charges, lower travel costs and lower camp costs all as a result of savings materialised through the Operational Review; This was partially offset by: Increased warehouse related costs driven by inventory drawdown, mainly at Buzwagi, and increased inventory obsolescence provisions at North Mara and Bulyanhulu; and Increased contracted services costs at North Mara due to the increased mining activity, and at Buzwagi due to increased mining activity in H1 2013; and Lower third party smelting and refining fees at Bulyanhulu due to the lower concentrate production in combination with lower negotiated costs, partly offset by an increase in concentrate production at Buzwagi. The table below provides a breakdown of cost of sales: Three months ended 31 (US$'000) December (Unaudited) 2013 20121 Cost of Sales Direct mining costs 126,826 138,251 Third party smelting and refining fees 5,160 4,437 Royalty expense 9,396 12,695 Depreciation and amortisation 28,388 43,032 Total 169,770 198,415 Year ended 31 (US$'000) December (Unaudited) 2013 20121 Cost of Sales Direct mining costs 508,166 521,338 Third party smelting and refining fees 16,790 18,005 Royalty expense 40,871 41,078 Depreciation and amortisation 147,979 139,615 Total 713,806 720,036 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the classification of Tulawaka as a discontinued operation. A detailed breakdown of direct mining expenses is shown in the table below: (US$'000) Three months ended 31 December Year ended 31 December (Unaudited) 2013 20121 2013 20121 Direct mining costs Labour 36,757 41,042 152,870 158,658 Energy and fuel 30,565 35,930 133,797 129,992 Consumables 24,612 26,187 104,188 101,151 Maintenance 21,970 22,436 90,926 89,120 Contracted services 24,723 22,545 96,957 83,134 General administration costs 27,842 20,609 92,902 77,947 Capitalised mining costs (39,643) (30,498) (163,474) (118,664) Total direct mining costs 126,826 138,251 508,166 521,338 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the classification of Tulawaka as a discontinued operation. Direct mining costs of US$508.2 million were 3% lower than 2012 of US$521.3 million. Individual cost components comprised: Labour costs were 4% lower in 2013, mainly as a result of the lower headcount, specifically international employees, at Buzwagi driven by localisation efforts and the impact of the Operational Review, and lower overtime costs at Bulyanhulu driven by labour optimisation. Energy and fuel expenses increased by 3% from 2012, driven primarily by increased mining activity at North Mara and Buzwagi and increased throughput at Buzwagi. Consumables costs increased by 3% primarily due to increased reagents and chemicals consumption as a result of higher throughput at Buzwagi, and mining consumables costs at North Mara driven by the increased mining activity, partly offset by lower consumables usage as a result of the lower development activity at Bulyanhulu and lower unit costs negotiated. Maintenance costs increased by 2% primarily driven by increased mining activity at North Mara partly offset by lower development activity at Bulyanhulu. Contracted services increased by 17%, mainly driven by increased MARC charges at North Mara, as a result of the increased mining activity, and increased MARC costs at Buzwagi due to the increased mining activity in H1 2013. A saving was, however, achieved in H2 2013 at Buzwagi due to the reduced mine plan and the renegotiated maintenance rates associated with MARC contracts. General administration costs increased by 19%, mainly at Buzwagi driven mainly by freight costs associated with inventory consumed and at North Mara and Bulyanhulu due to the aging of supplies resulting in an increase in the stock obsolescence provision. This was partially offset by lower shared services cost back charges, lower travel and aviation costs and lower camp costs driven by savings materialised from the Operational Review. Capitalised direct mining costs, which consists of capitalised development costs and the change in inventory charge, is made up as follows: (US$'000) Three months ended 31 December Year ended 31 December (Unaudited) 2013 20121 2013 2012 Capitalised direct mining costs Capitalised development costs (35,254) (27,751) (173,245) (116,994) (Investment in)/ drawdown of inventory (4,389) (2,747) 9,771 (1,670) Total capitalised direct mining costs (39,643) (30,498) (163,474) (118,664) 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the classification of Tulawaka as a discontinued operation.. Capitalised development costs were 48% higher than 2012, as North Mara, and Buzwagi focused on the removal of waste in order to access higher grade zones in the first part of the year. This was partly offset by lower waste stripping at Buzwagi in the second half of the year as a result of the implementation of the reduced mine plan; this resulted in a reduction in the strip ratio. The drawdown in inventory was US$11.4 million higher than in 2012 due to the lower average cost valuation as a result of lower direct mining costs in 2013, and the drawdown of ore and gold in circuit ounces at Buzwagi due to the higher throughput in H1 2013. Corporate administration costs Corporate administration expenses totalled US$32.2 million for the year ended 31 December 2013. This equated to a 33% decrease from the prior year period of US$47.6 million. The decrease is predominantly due to the impact of the Operational Review which led to corporate offices and lower share based payment expenses given the overall lower share price performance as shown in the table below. Three months ended 31 December Year ended 31 December (US$'000) 2013 20121 2013 20121 (Unaudited) Corporate administration costs 8,178 10,669 33,705 44,514 Stock based compensation 625 1,860 (1,813) 2,359 World Gold Council fees 95 202 265 767 Total corporate administration 8,898 12,731 32,157 47,640 1 Restated for the classification of Tulawaka as a discontinued operation. Exploration and evaluation costs For 2013, US$16.9 million was incurred, 37% lower than the US$26.8 million spent in 2012. The decrease reflects an overall reduction in exploration spend and a focus on key projects. The key focus areas for the year were exploration programmes at the West Kenya Joint Venture project (US$4.4 million), drilling at North Mara focusing on the Ochuna projects (US$2.7 million), drilling at Bulyanhulu deep central reefs 1 and 2 (US$3.0 million), Nyanzaga (US$0.8 million) and project feasibility study costs (US$1.3 million). In addition, exploration and evaluation costs of US$4.0 million have been capitalised in 2013 (2012: US$13.7 million). Corporate social responsibility expenses Corporate social responsibility expenses costs incurred amounted to US$12.2 million for the year compared to the prior year of US$13.1 million. During the year we have seen increased investment in site focused projects specifically related to Village Benefit Implementation Agreements ("VBIAs") at North Mara and larger contributions to general community projects funded from the ABG Maendeleo Fund. Of the total spend for 2013, US$8.6 million was spent on ABG Maendeleo Fund projects (US$3.6 million in 2012) and US$4.3 million was spent on VBIA's at North Mara (US$3.5 million in 2012). Included in the loss from discontinued operations is US$3.3 million relating to Tulawaka, mainly as a result of ABG Maendeleo Fund projects (US$1.4 million in 2012). This was incurred through the construction of dams and water facilities, school facilities and roads. In total, corporate social responsibility expenses amount to US$15.5 million (2012: US$14.4 million), of which US$11.3 million (2012: US$3.6 million) relates to ABG Maendeleo Fund projects. Other charges Other charges amounted to US$30.4 million for the year, 78% higher than 2012 (US$17.1 million). The main contributors to the charge were: (i) costs relating to the Operational Review, including external services and retrenchment costs of US$13.3 million; (ii) residual expenses incurred as a part of the CNG offer process totalling US$3.2 million, the bulk of which were incurred in H1 2013; (iii) disallowed indirect tax claims and other indirect tax related expenses of US$1.5 million as part of the continued reconciliation process with the TRA and retrospective legislation changes; (v) ABG's entry into zero cost collar contracts as part of a programme to protect it against copper, silver, rand and fuel cost market volatility and, due to the fact that these do not qualify for hedge accounting, resulted in a combined mark-to-market revaluation loss of US$7.2 million, mainly due to the devaluation of the Rand; (vi) legal costs of US$3.1 million; and (vii) discounting adjustments of long term indirect taxes of US$1.4 million. The impact of the hedge loss above was partially offset by cost savings on certain Rand denominated cost elements due to the weakening of the Rand. Included in the loss from discontinued operations are other charges of US$19.4 million relating mainly to non-operational costs of US$15.1 million and retrenchment costs of US$3.0 million, both relating to Tulawaka. Refer to note 10 of the consolidated financial statements. Finance expense and income Finance expense of US$9.6 million was 5% lower than 2012 (US$10.1 million) due to lower volumes of discounted concentrate shipments. The key drivers were US$3.1 million (US$3.0 million in 2012) relating to the servicing of the US$150 million undrawn revolving credit facility, and accretion expenses relating to the discounting of the environmental reclamation liability (US$4.5 million). Other costs include bank charges and interest on finance leases. Interest costs relating to the project financing on the CIL Expansion project are capitalised to the cost of the asset due to the facility being directly attributable to the asset. During 2013 US$2.4 million of borrowing costs have been capitalised to the project. Finance income relates predominantly to interest charged on non-current receivables and interest received on money market funds. Refer to note 11 of the consolidated financial statements for details. Impairment charges As a result of the substantial decrease in the gold price during 2013, the gold price used to calculate the carrying value of our assets as well as the reserves and resources estimations was reduced to US$1,300 per ounce sold. In addition, we also made changes to the mine plans at each of our assets, resulting in reduced mine lives at both Buzwagi and North Mara. This required us to review each of our cash generating units (CGUs) for any impairment trigger and to reassess the operating performance of each CGU in order to ensure optimised returns and cash flows in the lower gold price environment. Each of the operating mines and the exploration business are classified as separate CGUs. The impairment review resulted in a post tax impairment to the long-lived assets at Buzwagi of US$529.7 million and supplies inventory of US$13.0 million (2012: no impairment charge) and at North Mara in a post-tax impairment to goodwill of US$21.0 million, long lived assets of US$193.4 million and supplies of US$10.0 million (2012: no impairment charge). In addition, the goodwill and acquired exploration potential intangible asset that arose on the acquisition of Tusker Gold Ltd, and subsequent investment in the asset, has been impaired by US$22.0 million and US$24.6 million respectively. On a gross basis, and before taking into account the impact of deferred tax, the total impairment charge amounted to US$690.5 million at Buzwagi, US$307.3 million at North Mara and US$46.6 million relating to Nyanzaga. Refer to note 8 of the consolidated financial statements for details. Taxation matters The taxation credit increased to US$188.0 million for the year, compared to a charge of US$78.7 million in 2012. The 2013 credit consists predominantly of deferred tax. The increased tax credit was driven by the tax impact of US$238.0 million relating to impairment charges as discussed above. This was partially offset by net deferred tax charges of US$50.0 million. The effective tax rate in 2013 amounted to 20% compared to 44% in 2012. The decrease is mainly driven by temporary differences (including tax losses) of US$84.9 million for which no deferred income tax assets were recognised, primarily relating to Buzwagi, ABG Exploration Ltd and ABG Plc stand alone assessed losses. Net earnings from continuing operations As a result of the factors discussed above, the net loss from continuing operations for the year was US$740.8 million, against the prior year period profit of US$100.5 million. Decreased revenue and increased impairment and other charges as explained above contributed to the variance. This was offset by lower corporate administration and exploration and evaluation costs. Adjusted earnings, after excluding impairment and other one-off type charges, amounted to US$106.3 million, in line with the prior year period. The net loss from discontinued operations amounted to US$57.7 million (US$17.3 million relating to non-controlling interests) for the year ended 31 December 2013, against the prior year net loss of US$49.0 million (US$11.3 million relating to non-controlling interests). This resulted in a total net loss for the Group of US$781.1 million (US$62.8 million profit in 2012). Loss per share The loss per share for the year ended 31 December 2013 from continuing operations amounted to US180.6 cents, a decrease of US205.1 cents from the prior year period earnings of US24.5 cents. The decrease was driven by an increased net loss with no change in the underlying issued shares. Adjusted net earnings of US25.9 cents per share, after excluding impairment and other one-off type charges, was 2% lower than the prior year period. Key financial performance indicators and reconciliations Cash costs With respect to cash costs per ounce sold in the year ended 31 December 2013, there was a 12% decrease from the comparable period in 2012 from US$941 per ounce sold to US$827 per ounce sold. Refer to the operating overview on page10 and cost of sales explanations as part of the financial review detailing the year-on-year change. The table below provides a reconciliation between cost of sales and total cash cost to calculate the cash cost per ounce sold. Three months Year ended 31 (US$'000) ended 31 December December (Unaudited) 2013 20121 2013 20121 Total cost of sales 169,770 198,415 713,806 720,036 Deduct: depreciation and amortisation (28,388) (43,032) (147,979) (139,615) Deduct: co-product revenue (11,181) (12,801) (43,014) (47,888) Total cash cost 130,201 142,582 522,813 532,533 Total ounces sold2 168,167 154,370 643,597 577,332 Cash cost per ounce 774 924 812 922 Additional contribution from discontinued operations - 34 15 19 Attributable cash cost per ounce3 774 958 827 941 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20 and the classification of Tulawaka as a discontinued operation. 2 Reflects 100% of ounces sold from continuing operations. 3 Cash cost per ounce is a non-IFRS financial performance measure with no standard meaning under IFRS. Refer to "Non IFRS measures"' on page 28 for definitions. Refer to note 6 to the consolidated financial information for a reconciliation to all-in sustaining costs per ounce sold. EBITDA EBITDA for the year ended 31 December 2013 decreased by 29% to US$240.4 million compared to the prior year period of US$336.3 million as a result of the lower revenue base and increased other charges. A reconciliation between net profit for the period and EBITDA is presented below: Three months ended 31 (US$'000) December Year ended 31 December (Unaudited) 2013 20121 2013 20121 Net(loss)/ profit for the period (100,342) (46,043) (798,433) 51,493 Plus income tax (credit)/ expense (19,232) 27,146 (187,959) 72,604 Plus depreciation and amortisation 29,258 47,676 157,820 159,446 Plus: Impairment charges/write-offs 133,320 44,223 1,061,011 44,536 Plus finance expense 2,476 2,565 9,668 10,305 Less finance income (614) (428) (1,700) (2,102) EBITDA2 44,866 75,139 240,407 336,282 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. 2 EBITDA is a non-IFRS financial performance measures with no standard meaning under IFRS. Refer to "Non IFRS measures"' on page 28 for definitions. Adjusted net earnings In 2013 ABG has calculated adjusted net earnings by excluding one-off costs or credits relating to non-routine transactions from net profit attributed to owners of the parent. Adjusted net earnings and adjusted earnings per share have been calculated by excluding the following: (US$'000) Three months ended 31 December (Unaudited) 2013 20121 Net (loss)/ earnings (97,700) (34,753) Adjusted for: Impairment charges 133,320 44,536 Operational review charges 6,132 - Tulawaka non-operational costs, including de-recognition of deferred tax 9,469 - CNG related costs 614 6,676 Discounting of indirect taxes - 4,185 Prior year Bulyanhulu tax positions recognised - 8,855 Tax impact of the above (23,944) (18,239) Adjusted net earnings 27,891 11,260 (US$'000) Year ended 31 December (Unaudited) 2013 20121 Net (loss)/ earnings (781,101) 62,780 Adjusted for: Impairment charges 1,061,011 44,536 Operational review charges 13,251 - Tulawaka non-operational costs, including de-recognition of deferred tax 35,418 - CNG related costs 4,145 6,676 Discounting of indirect taxes 1,375 4,185 Prior year Bulyanhulu tax positions recognised - 8,855 Tax impact of the above (227,822) (18,239) Adjusted net earnings 106,277 108,793 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. 2 Adjusted net earnings is a non-IFRS financial performance measures with no standard meaning under IFRS. Refer to "Non IFRS measures"' on page 28 for definitions. Adjusted net earnings per share for the Group for the full year 2013 amounted to US25.9 cents compared to US26.5 cents in 2012. Financial position ABG had year-end cash and cash equivalents of US$282.4 million (US$401.3 million in 2012). The Group's cash and cash equivalents are with counterparties whom the Group considers to have an appropriate credit rating. Location of credit risk is determined by physical location of the bank branch or counterparty. Investments are held mainly in United States dollars and cash and cash equivalents in other foreign currencies are maintained for operational requirements. In January 2013 we concluded negotiations with a group of commercial banks (Standard Bank, Standard Chartered, and ABSA) for the provision of an export credit backed term loan facility ("Facility") for an amount of US$142 million. The Facility has been put in place to fund a substantial portion of the construction costs of the new Bulyanhulu CIL Expansion project ("Project"). The Facility is collateralised by the Project, has a term of seven years and, the spread over Libor is 250 basis points. The Facility is repayable in equal instalments over the term of the Facility after a two year repayment holiday period. The interest rate has been fixed at an effective rate of 3.6% through the use of an interest rate swap. The interest charged on the facility is capitalised to the project until the project has been successfully commissioned. The full value of the Facility has been drawn as at year end. Net cash amounted to US$140.4 million, after deducting the CIL finance facility. The above compliments the existing undrawn revolving credit facility of US$150 million which runs until November 2016. Goodwill and intangible assets decreased by US$67.6 million from December 2012 due to impairment charges relating to Nyanzaga and North Mara. The net book value of property, plant and equipment decreased from US$2.0 billion in December 2012 to US$1.3 billion in December 2013. The main capital expenditure drivers have been explained in the cash flow used in the investing activities section below, and have been offset by depreciation charges of US$141.2 million and pre-tax impairment charges of US$906.8 million at Buzwagi, North Mara and Tulawaka. Refer to notes 8 and 14 to the consolidated financial statements for detail. Total indirect tax receivables, net of a discount provision applied to the non-current portion, increased from US$98.8 million at 31 December 2012 to US$159.8 million at 31 December 2013. The increase was mainly due to the impact of VAT relief abolishment in Q4 2012 resulting in a build-up of indirect tax receivables of about US$61.0million (after offsetting refunds of US$32.4 million). The net deferred tax position decreased from a liability of US$172.7 million as at 31 December 2012 to an asset of US$14.9 million. This was mainly driven by the reduction in deferred tax liabilities as a result of the impairments at North Mara, Buzwagi and Tusker/Nyanzaga which decreased the net asset base. The tax effect on the tax losses carried forward is an increase from US$319.5 million as at 31 December 2012 to US$355.8 million. US$84.9 million of deferred tax assets were not recognised as at 31 December 2013 of which US$59.4 million relates to Buzwagi as a result of the change in the life of mine plan which reduced taxable income. Net assets attributable to owners of the parent decreased from US$2.8 billion in December 2012 to US$1.9 billion in December 2013. The decrease reflects the current year loss attributable to owners of the parent of US$781.1 million and the payment of the final 2012 and 2013 interim dividends of US$54.5 million to shareholders during 2013. Cash flow generation and capital management Cash flow - continuing and discontinued operations For the three months ended 31 For the year ended December 31 December (US$'000) (Unaudited) 2013 20121 2013 20121 Cash flow from operating activities 48,193 96,372 187,115 268,733 Cash used in investing activities (84,865) (144,655) (386,850) (371,485) Cash provided by/(used in) financing activities 30,487 (2,611) 82,322 (79,439) Decrease in cash (6,185) (50,894) (117,413) (182,191) Foreign exchange difference on cash (69) (205) (1,526) (615) Opening cash balance 288,663 452,447 401,348 584,154 Closing cash balance 282,409 401,348 282,409 401,348 1 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Cash flow from operating activities was US$187.1 million for the year, a decrease of US$81.6 million, when compared to the prior year (2012: US$ 268,733 million). The decrease primarily related to decreased EBITDA combined with an outflow associated with working capital of US$41.2 million. The working capital movement related to an increase in other current assets of US$34.5 million mainly driven by high VAT receivables owed from the Tanzanian government and a decrease in trade payables of US$32.1 million due to the lower overall cost base and the payment of Tulawaka related payables. This was offset by a decrease in gold inventory on hand of US$23.7 million, excluding the non-cash impairment, mainly due to the lower average cost valuation as a result of lower direct mining costs; a decrease in trade receivables of US$20.0 million mainly due to the lower gold price and the timing of concentrate shipments; and a drawdown on supplies US$10.8 million driven by the inventory optimisation process. Cash flow used in investing activities was US$386.9 million for the year. Total cash capital expenditure for the year of US$373.1 million increased by 15% from the prior year (2012: US$323.5 million), driven by both increased expansion capital expenditure related to the Bulyanhulu CIL Expansion project and increased capitalised development expenditure, slightly offset by lower sustaining capital expenditure. A breakdown of total capital and other investing capital activities for the year ended is provided below: (US$'000) For the year ended 31 December (Unaudited) 2013 20124 Sustaining capital 84,474 153,158 Expansionary capital 117,469 49,889 Capitalised development 171,158 120,458 Total cash capital 373,101 323,505 Non-cash rehabilitation asset adjustment (30,740) 19,242 Non-cash sustaining capital3 11,967 8,380 Total capital expenditure 354,328 351,127 Other investing capital - AMKL acquisition1 - 22,039 - Non-current asset movement2 13,749 25,941 1 The AMKL acquisition relates to the acquisition of the subsidiary, net of cash for US$22.0 million (inclusive of exploration funding US$1.3 million). 2 Non-current asset movements relates to the investment in the land acquisitions reflected as prepaid operating leases and Tanzania government receivables. 3 Total non-cash sustaining capital relates to the capital finance leases at Buzwagi for drill rigs and also includes capital accruals excluded from cash sustaining capital. 4 Restated for the impact of capitalised stripping due to the adoption of IFRIC 20. Sustaining capital Sustaining capital expenditure included the investment in mine equipment of US$37.7 million, which mainly related to component change outs at North Mara and Buzwagi, critical underground equipment at Bulyanhulu, and investment in tailings and infrastructure at Bulyanhulu (US$10.7 million), North Mara (US$14.7 million) and Buzwagi (US$15.7 million). Expansionary capital Expansionary capital expenditure consisted of the Bulyanhulu CIL Expansion project of (US$104.9 million), investment in equipment (US$5.2 million) and capitalised exploration and evaluation costs (US$4.2 million) mainly relating to the Bulyanhulu. Capitalised development Capitalised development capital includes capitalised stripping for North Mara (US$65.6 million) and Buzwagi (US$60.1 million) and Bulyanhulu capitalised underground development of US$45.4 million. Non-cash capital Non-cash capital for the year was a credit of US$18.8 million and consisted of negative reclamation asset adjustments (US$30.7 million), offset by the year-on-year increase in capital accruals (US$10.0 million) and capital finance leases related to drill rigs at Buzwagi (US$1.9 million). The reclamation adjustments were driven by lower US risk free rates driving lower discount rates, and lower closure cost estimates, and was slightly offset by additional disturbance as a result of mining activity during the year. Other investing capital During the year North Mara incurred land purchases totalling US$15.5 million and Bulyanhulu incurred land purchases of US$1.0 million. This was offset by a reduction in other long term assets of US$2.8 million. Cash flow from financing activities for the year ended 31 December 2013 was US$82.3 million, an increase of US$161.7 million on the prior year (US$79.4 million outflow). The inflow primarily relates to the drawdown on the Bulyanhulu CIL Expansion project debt facility of US$142.0 million, offset by the payment of the 2012 final and 2013 interim dividends of US$54.5 million and finance lease payments of US$5.1 million. Dividend An interim dividend of US1.0 cents per share was paid to shareholders on 23 September 2013. The Directors recommend the payment of a final dividend of US2.0 cents per share, subject to the shareholders approving this recommendation at the AGM. Significant judgements in applying accounting policies and key sources of estimation uncertainty Many of the amounts included in the consolidated financial statements require management to make judgements and/or estimates. These judgements and estimates are continuously evaluated and are based on management's experience and best knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the consolidated financial information included in this release. Information about such judgements and estimation is included in the accounting policies and/or notes to the consolidated financial statements, and the key areas are summarised below. Areas of judgement and key sources of estimation uncertainty that have the most significant effect on the amounts recognised in the consolidated financial statements include: Estimates of the quantities of proven and probable gold reserves; The capitalisation of production stripping costs; The capitalisation of exploration and evaluation expenditures; Review of goodwill, tangible and intangible assets' carrying value, the determination of whether these assets are impaired and the measurement of impairment charges or reversals; The estimated fair values of cash generating units for impairment tests, including estimates of future costs to produce proven and probable reserves, future commodity prices, foreign exchange rates and discount rates; The estimated useful lives of tangible and long-lived assets and the measurement of depreciation expense; Property, plant and equipment held under finance leases; Recognition of a provision for environmental rehabilitation and the estimation of the rehabilitation costs and timing of expenditure; Whether to recognise a liability for loss contingencies and the amount of any such provision; Whether to recognise a provision for accounts receivable and the impact of discounting the non-current element; Recognition of deferred income tax assets, amounts recorded for uncertain tax positions, the measurement of income tax expense and indirect taxes; Determination of the cost incurred in the productive process of ore stockpiles, gold in process, gold doré/bullion and concentrate, as well as the associated net realisable value and the split between the long term and short term portions; Determination of fair value of derivative instruments; and Determination of fair value of stock options and cash-settled share based payments. Going concern statement The ABG Group's business activities, together with factors likely to affect its future development, performance and position are set out in the operational and financial review sections of this report. The financial position of the ABG Group, its cash flows, liquidity position and borrowing facilities are described in the preceding paragraphs of this financial review. At 31 December 2013, the Group had cash and cash equivalents of US$282.4 million with a further US$150 million available under the undrawn revolving credit facility which has been further extended until November 2016. Total borrowings at the end of the year amounted to US$142 million, of which the first repayment is only repayable from 2015. Included in other receivables are amounts due to the Group relating to indirect taxes of US$95.0 million which are expected to be received within 12 months, but these will be offset to an extent by new claims submitted for input taxes incurred during 2014. The refunds remain dependent on processing and payments of refunds by the Government of Tanzania. We expect that the above, in combination with the expected operational cash flow generated during the year, will be sufficient to cover the capital requirements and other commitments for the foreseeable future. In assessing the ABG Group's going concern status the Directors have taken into account the above factors, including the financial position of the ABG Group and in particular its significant cash position, the current gold and copper price and market expectations for the same in the medium term, and the ABG Group's capital expenditure and financing plans. After making appropriate enquiries, the Directors consider that ABG and the ABG Group as a whole has adequate resources to continue in operational existence for the foreseeable future and that it is appropriate to adopt the going concern basis in preparing the financial statements. Non-IFRS Measures ABG has identified certain measures in this report that are not measures defined under IFRS. Non-IFRS financial measures disclosed by management are provided as additional information to investors in order to provide them with an alternative method for assessing ABG's financial condition and operating results. These measures are not in accordance with, or a substitute for, IFRS, and may be different from or inconsistent with non-IFRS financial measures used by other companies. These measures are explained further below. Average realised gold price per ounce sold is a non-IFRS financial measure which excludes from gold revenue: Unrealised mark-to-market gains and losses on provisional pricing from copper and gold sales contracts; and Export duties. Cash costs per ounce sold is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties, and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. Refer to page 19 for a reconciliation to cost of sales. The presentation of these statistics in this manner allows ABG to monitor and manage those factors that impact production costs on a monthly basis. ABG calculates cash costs based on its equity interest in production from its mines. Cash costs per ounce sold are calculated by dividing the aggregate of these costs by gold ounces sold. Cash costs and cash costs per ounce sold are calculated on a consistent basis for the periods presented. All-in sustaining cost (AISC) is a non-IFRS financial measure. The measure is in accordance with the World Gold Council's guidance issued in June 2013. It is calculated by taking cash costs per ounce sold and adding corporate administration costs, reclamation and remediation costs for operating mines, corporate social responsibility expenses, mine exploration and study costs, capitalised stripping and underground development costs and sustaining capital expenditure. This is then divided by the total ounces sold. A reconciliation between cash cost per ounce sold and AISC is presented below: (Unaudited) Three months ended 31 December 2013 Three months ended 31 December 2012 ABG Group ABG Group ongoing ongoing (US$/oz sold) Bulyanhulu North Mara Buzwagi operations Bulyanhulu North Mara Buzwagi operations Cash cost per ounce sold 776 636 941 774 971 949 853 924 Corporate administration 68 41 46 53 84 53 53 82 Rehabilitation 4 24 8 12 13 48 26 30 Mine exploration 2 8 1 4 20 58 7 30 CSR expenses 2 46 4 22 7 48 6 27 Capitalised development 189 224 215 209 264 75 205 175 Sustaining capital 77 96 85 89 237 440 389 354 Total continuing operations 1,118 1,075 1,300 1,163 1,596 1,671 1,539 1,622 Discontinued operations 8 53 Total 1,171 1,675 (Unaudited) Year ended 31 December 2013 Year ended 31 December 2012 ABG Group ABG Group ongoing ongoing (US$/oz sold) Bulyanhulu North Mara Buzwagi operations Bulyanhulu North Mara Buzwagi operations Cash cost per ounce sold 890 659 945 812 803 953 1,066 922 Corporate administration 72 38 51 50 75 78 78 83 Rehabilitation 7 29 15 18 10 48 23 26 Mine exploration 3 12 2 6 9 31 6 16 CSR expenses 6 31 4 19 5 39 8 23 Capitalised development 233 251 321 266 194 151 254 196 Sustaining capital 133 207 168 175 149 393 363 296 Total continuing operations 1,344 1,227 1,506 1,346 1,245 1,693 1,798 1,561 Discontinued operations 16 24 Total 1,362 1,585 AISC is intended to provide additional information on the total sustaining cost for each ounce sold, taking into account expenditure incurred in addition to direct mining costs, depreciation and selling costs. EBITDA is a non-IFRS financial measure. ABG calculates EBITDA as net profit or loss for the period excluding: Income tax expense; Finance expense; Finance income; Depreciation and amortisation; Impairment charges of goodwill and other long-lived assets; and Discontinued operations. EBITDA is intended to provide additional information to investors and analysts. It does not have any standardised meaning prescribed by IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other companies may calculate EBITDA differently. Adjusted EBITDA is a non-IFRS financial measure. It is calculated by excluding one-off costs or credits relating to non-routine transactions from EBITDA. It excludes other credits and charges that, individually or in aggregate, if of a similar type, are of a nature or size that requires explanation in order to provide additional insight into the underlying business performance. EBIT is a non-IFRS financial measure and reflects EBITDA adjusted for depreciation and amortisation and goodwill impairment charges. Adjusted net earnings is a non-IFRS financial measure. It is calculated by excluding one-off costs or credits relating to non-routine transactions from net profit attributed to owners of the parent. It includes other credit and charges that, individually or in aggregate, if of a similar type, are of a nature or size that requires explanation in order to provide additional insight into the underlying business performance. Refer to page 23 for a reconciliation to net earnings. Adjusted net earnings per share is a non-IFRS financial measure and is calculated by dividing adjusted net earnings by the weighted average number of Ordinary Shares in issue. Cash cost per tonne milled is a non-IFRS financial measure. Cash costs include all costs absorbed into inventory, as well as royalties and production taxes, and exclude capitalised production stripping costs, inventory purchase accounting adjustments, unrealised gains/losses from non-hedge currency and commodity contracts, depreciation and amortisation and corporate social responsibility charges. Cash cost is calculated net of co-product revenue. ABG calculates cash costs based on its equity interest in production from its mines. Cash costs per tonne milled are calculated by dividing the aggregate of these costs by total tonnes milled. Cash margin is a non-IFRS financial measure. The cash cost margin is the average realised gold price per ounce less the cash cost per ounce sold. Operating cash flow per share is a non-IFRS financial measure and is calculated by dividing Net cash generated by operating activities by the weighted average number of Ordinary Shares in issue. Mining statistical information The following describes certain line items used in the ABG Group's discussion of key performance indicators: Open pit material mined - measures in tonnes the total amount of open pit ore and waste mined. Underground ore tonnes hoisted - measures in tonnes the total amount of underground ore mined and hoisted. Total tonnes mined includes open pit material plus underground ore tonnes hoisted. Strip ratio - measures the ratio of waste–to–ore for open pit material mined. Ore milled - measures in tonnes the amount of ore material processed through the mill. Head grade - measures the metal content of mined ore going into a mill for processing. Milled recovery - measures the proportion of valuable metal physically recovered in the processing of ore. It is generally stated as a percentage of the metal recovered compared to the total metal originally present. Total production costs - measures the total cost of production and is an aggregate of total cash costs as well as production specific depreciation and amortisation. Risk Review We have made a number of further developments in the identification and management of our risk profile throughout 2013. While the overall makeup of our principal risks has not significantly changed from 2012, there have been changes in certain risk profiles as a result of developments in our operating environment and continuing uncertainties and trends within the wider global economy and/or the mining industry. Where appropriate, risk ratings have been reviewed against risk management controls and other mitigating factors. Our principal risks fall within four broad categories: strategic risks, financial risks, external risks and operational risks and can be further summarised as follows: Single country risk: whilst ABG's focus remains on our current operations within Tanzania, we continue to assess potential growth opportunities in other territories to enhance our existing portfolio and strengthen the business through geographic diversification in order to mitigate the effects that significant in-country developments could have on our operations and business. Reserves and resources estimates: ABG's reserves and resources statements are estimates based on a range of assumptions, including geological, metallurgical and technical factors, such that no assurances can be given that anticipated tonnages or grades will be achieved. We seek to manage the varying nature of estimates through our life of mine planning procedures, periodic reviews of such estimates and by ensuring that our reserves and resources estimates are calculated and reported in accordance with the requirements of NI 43-101 of the Canadian Institute of Mining and Metallurgy and Petroleum. Commodity prices: ABG's financial performance is highly dependent on the price of gold and, to a lesser extent, the price of copper and silver. Fluctuations in the pricing of these commodities, which are largely attributable to factors beyond ABG's control, may have a corresponding impact on ABG's financial position, particularly in the context of rapid pricing fluctuations. We seek to mitigate the impact of such pricing fluctuations via hedging arrangements for certain operating cost exposures (copper, silver and diesel) and through continuous monitoring of our exposure to commodity price fluctuations as part of financial and treasury planning and controls procedures. Costs and capital expenditure: continued industry cost pressures, particularly as regards labour, capital equipment and energy costs affect ABG's ability to manage operating costs and capital expenditure. We seek to manage factors which could impact costs and capital expenditure levels through the ongoing implementation of cost controls, particularly in the context of our Operational Review, and by maintaining a conservative balance sheet and strict cash flow planning processes to mitigate liquidity risks. Political, legal and regulatory developments: ABG's ability to conduct its business is dependent on stable and consistent interpretation and application of laws and regulations applicable to mining activities, particularly in Tanzania. Changes to existing laws and regulations, a more stringent application or interpretation of regulations or inconsistencies and irregularities in regulatory interpretation by relevant government authorities could adversely affect the progression of ABG's operations and development projects. For this reason, we actively monitor legal and regulatory developments in countries in which we have operational or development interests and we maintain open channels of dialogue with government and legal policy makers in our host countries, particularly in Tanzania. Taxation reviews: ABG's financial position could be adversely affected if revisions to royalty or corporate tax regimes were introduced in Tanzania that go beyond the fiscal stability agreements contained in our Mineral Development Agreements. In addition, ABG has a number of ongoing discussions with the Tanzanian Revenue Authority and Ministry of Finance as regards certain outstanding tax assessments and unresolved tax disputes, particularly in the context of VAT relief. ABG's financial condition continues to be impacted as a result of the ongoing nature of these discussions and may be further adversely affected if we do not achieve a successful resolution to these discussions. To date, we have negotiated and agreed a memorandum of understanding for the treatment of certain outstanding indirect tax refunds in respect of fuel levies and VAT and, more recently, we have agreed to the use of an escrow arrangement in order to safeguard the recoverability VAT payments on imports. Utilities supply: power stoppages, fluctuations and disruptions in electrical power supply or other utilities impact our ability to operate continuously and can also result in increased costs, particularly as regards power supply costs, due to the need to use alternative power sources in order to mitigate the impact of electricity shortages. We have made a number of investments in power generation capabilities, such that we have capacity for the self generation of power to maintain critical systems across sites and we seek to employ practices to alternative power use that provide for cost saving efficiencies whenever possible. Community relations: a failure to adequately engage or manage relations with local communities and stakeholders affects our social licence to operate and can have a direct and negative impact on our ability to operate. For this reason we look to progress a range of community relations initiatives, notably through the investments made by the ABG Maendeleo Fund, in order to foster relationships with our local communities. Land acquisition: the progression of mining activities at certain ABG operations is dependent upon ABG's ability to complete land acquisitions to support life of mine plans successfully and in a timely manner. Increases in the cost of such land acquisitions and/or delays in completing such activities could have a material adverse effect on operating conditions, particularly at North Mara. We seek to address issues relating to land acquisition in collaboration with the Tanzanian Government and monitor land footprint requirements as part of life of mine planning activities. Loss of critical processes: failures or unavailability of operational infrastructure, for example as a result of equipment failure or disruption or deficiencies in core supply chain availability, could adversely affect production output and/or impact exploration and development activities. For this reason, part of the Operational Review has examined opportunities to enhance existing supply chain management practices in the context of improving overall management of inventory levels. Environmental hazards and rehabilitation: ABG's operations are subject to environmental hazards as a result of the processes and chemicals used in its extraction and production methods. ABG may be liable for losses and costs associated with environmental hazards at its operations, have its licences and permits withdrawn or suspended as a result of such hazards, or may be forced to undertake extensive clean-up and remediation action. We use a number of environmental management systems and controls across the business to provide for appropriate environmental practices, including the adoption of specific environmental management plans for each of our operations and the use of environmental and social impact assessments for potential projects. We also monitor our activities against key international standards, such as the International Cyanide Code. Employer, contractor and industrial relations: ABG's business depends on our ability to attract and retain skilled employees and to maintain good relations generally with its employees and employee representative groups, such as trade unions. A loss in skilled employees and/or a breakdown in employee relations could result in a decrease in production levels and/or increased costs and/or general disruptions to operations. As part of ongoing employer commitments, ABG looks for opportunities to expand its existing vocational training programmes and is committed to furthering the nationalisation of its workforce in order to strengthen and build capacity within the Tanzanian mining industry. Security, trespass and vandalism: ABG faces certain risks in dealing with fraud and corruption and wider security-related matters relating to trespass, theft and vandalism and unauthorised small-scale mining in proximity to its operations and on specific areas covered by ABG's exploration and mining licences, all of which may have an adverse effect upon ABG's operations and financial condition. As part of strategic reviews we are looking to enhance and progress our security management procedures for improved alignment with operational requirements. Where appropriate, we also work in collaboration with local law enforcement to address security-related threats and concerns. Organisational restructuring: ABG's organisational restructuring (including the transfer of certain support functions from South Africa to Tanzania) and related transitional periods may negatively impact the delivery of key operational support services and could also result in deteriorations in certain financial and operational controls. To mitigate this, we are establishing specific change management procedures for use in implementing the restructuring and will also maintain our current management structures for financial reporting, treasury, planning and internal audit, these being key elements of our internal controls and risk management framework. Directors The Directors serving on the Board during the year will be listed in ABG's annual report. A list of current Directors is maintained on ABG's website: www.africanbarrickgold.com Condensed Financial Information Consolidated income statement For the For the year year ended ended (Unaudited) 31 December 31 December (in thousands of United States dollars, except per share amounts) Notes 2013 2012 (Restated) CONTINUING OPERATIONS Revenue 7 929,004 1,011,738 Cost of sales (713,806) (720,036) Gross profit 215,198 291,702 Corporate administration (32,157) (47,640) Exploration and evaluation costs 9 (16,927) (26,752) Corporate social responsibility expenses (12,237) (13,051) Impairment charges 8 (1,044,310) - Other charges 10 (30,424) (17,071) (Loss)/profit before net finance expense and taxation (920,857) 187,188 Finance income 11 1,670 2,056 Finance expense 11 (9,552) (10,079) (Loss)/profit before taxation (928,739) 179,165 Tax credit/(expense) 12 187,959 (78,693) Net (loss)/profit from continuing operations (740,780) 100,472 DISCONTINUED OPERATIONS Net loss from discontinued operations 5 (57,653) (48,979) Net (loss)/profit for the year (798,433) 51,493 Net (loss)/profit attributable to: Owners of the parent (net (loss)/ earnings) - Continuing operations (740,780) 100,472 - Discontinued operations (40,321) (37,692) Non-controlling interests - Discontinued operations (17,332) (11,287) (Loss)/earnings per share: - Basic and dilutive (loss)/earnings per share (cents) from continuing operations 13 (180.6) 24.5 - Basic and dilutive (loss)/earnings per share (cents) from discontinued operations 13 (9.8) (9.2) The notes on pages 37 to 54 are an integral part of this financial information. Consolidated statement of comprehensive income For the year For the ended year ended 31 31 (Unaudited) December December 2012 (in thousands of United States dollars) 2013 (Restated) Net (loss)/profit for the year (798,433) 51,493 Other comprehensive income: Items that may be subsequently reclassified to profit or loss: Changes in fair value of cash flow hedges 1,570 363 Total comprehensive (loss)/income for the year (796,863) 51,856 Attributed to: - Owners of the parent (779,531) 63,143 - Non-controlling interests (17,332) (11,287) The notes on pages 37 to 54 are an integral part of this financial information. Consolidated balance sheet As at 31 As at (Unaudited) December 31 December (in thousands of United States dollars) Notes 2013 2012 (Restated) ASSETS Non-current assets Goodwill and intangible assets 15 211,190 278,221 Property, plant and equipment 14 1,280,671 1,975,040 Deferred tax assets 16 50,787 2,399 Non-current portion of inventory 72,689 115,553 Derivative financial instruments 3,253 467 Other assets 137,191 137,565 1,755,781 2,509,245 Current assets Inventories 253,676 332,232 Trade and other receivables 17 24,210 44,227 Derivative financial instruments 1,366 2,207 Other current assets 17 113,945 44,314 Cash and cash equivalents 282,409 401,348 675,606 824,328 Assets of disposal group classified as held for sale 596 - Total assets 2,431,983 3,333,573 EQUITY AND LIABILITIES Share capital and share premium 929,199 929,199 Other reserves 992,915 1,826,511 Total owners' equity 1,922,114 2,755,710 Non-controlling interests 5,248 22,580 Total equity 1,927,362 2,778,290 Non-current liabilities Borrowings 18 142,000 - Deferred tax liabilities 16 35,862 175,115 Derivative financial instruments 1,207 294 Provisions 19 132,237 180,548 Other non-current liabilities 10,101 21,064 321,407 377,021 Current liabilities Trade and other payables 147,896 169,904 Derivative financial instruments 5,074 429 Provisions 19 1,028 1,040 Other current liabilities 12,456 6,889 166,454 178,262 Liabilities of disposal group classified as held for sale 16,760 - Total liabilities 504,621 555,283 Total equity and liabilities 2,431,983 3,333,573 The notes on pages 37 to 54 are an integral part of this financial information. Consolidated statement of changes in equity Cash flow Share Share Contributed surplus hedging (Unaudited) Notes capital premium /Other reserve reserve (in thousands of United States dollars) Balance at 1 January 2012 62,097 867,102 1,368,713 - Total comprehensive income/(loss) for the year 4 - - - 363 Dividends to equity holders of the Company - - - - Stock option grants - - - - Distributions to non-controlling interests - - - - Balance at 31 December 2012 62,097 867,102 1,368,713 363 Total comprehensive income/(loss) for the year - - - 1,570 Dividends to equity holders of the Company - - - - Stock option grants - - - - Balance at 31 December 2013 62,097 867,102 1,368,713 1,933 Consolidated statement of changes in equity Stock Retained earnings Total Total non- option / (Accumulated owners' controlling Total (Unaudited) reserve losses) equity interests equity (in thousands of United States dollars) Balance at 1 January 2012 2,041 461,278 2,761,231 37,473 2,798,704 Total comprehensive income/(loss) for the year - 62,780 63,143 (11,287) 51,856 Dividends to equity holders of the Company - (70,125) (70,125) - (70,125) Stock option grants 1,461 - 1,461 - 1,461 Distributions to non-controlling interests - - - (3,606) (3,606) Balance at 31 December 2012 3,502 453,933 2,755,710 22,580 2,778,290 Total comprehensive income/(loss) for the year - (781,101) (779,531) (17,332) (796,863) Dividends to equity holders of the Company - (54,541) (54,541) - (54,541) Stock option grants 476 - 476 - 476 Balance at 31 December 2013 3,978 (381,709) 1,922,114 5,248 1,927,362 The notes on pages 37 to 54 are an integral part of this financial information. Consolidated cash flow statement For the For the year year ended ended (Unaudited) 31 December 31 December (in thousands of United States dollars) 2013 2012 (Restated) Cash flows from operating activities Net (loss)/profit for the year (798,433) 51,493 Adjustments for: Tax (credit)/ expense (187,959) 72,604 Depreciation and amortisation 141,159 168,228 Finance items 7,968 8,203 Impairment charges 1,061,011 44,536 Profit on disposal of property, plant and equipment (175) (616) Working capital adjustments (41,165) (74,070) Other non-cash items 8,181 3,088 Cash generated from operations before interest and tax 190,587 273,466 Finance income 1,700 2,102 Finance expenses (5,172) (6,284) Income tax paid - (551) Net cash generated by operating activities 187,115 268,733 Cash flows from investing activities Purchase of property, plant and equipment (373,101) (323,505) Investments in other assets (8,289) (24,473) Acquisition of subsidiary, net of cash acquired (588) (22,039) Other investing activities (4,872) (1,468) Net cash used in investing activities (386,850) (371,485) Cash flows from financing activities Loans received 142,000 - Dividends paid (54,541) (70,125) Distributions to non-controlling interest holders - (3,606) Finance lease instalments (5,137) (5,708) Net cash generated by/(used in) financing activities 82,322 (79,439) Net decrease in cash and cash equivalents (117,413) (182,191) Net foreign exchange difference (1,526) (615) Cash and cash equivalents at 1 January 401,348 584,154 Cash and cash equivalents at 31 December 282,409 401,348 The notes on pages 37 to 54 are an integral part of this financial information. Notes to the condensed financial information General Information African Barrick Gold plc (the "Company", "ABG" or collectively with its subsidiaries the "Group") was incorporated on 12 January 2010 and re-registered as a public limited company on 12 March 2010 under the Companies Act 2006. It is registered in England and Wales with registered number 7123187. On 24 March 2010 the Company's shares were admitted to the Official List of the United Kingdom Listing Authority ("UKLA") and to trading on the Main Market of the London Stock Exchange, hereafter referred to as the Initial Public Offering ("IPO"). The address of its registered office is No.1 Cavendish Place, London, W1G 0QF. Barrick Gold Corporation ("BGC") currently owns approximately 73.9% of the shares of the Company and is the ultimate parent and controlling party of the Group. The financial statements of BGC can be obtained from www.barrick.com. The condensed consolidated financial information for the year ended 31 December 2013 was approved for issue by the Board of Directors of the Company on 11 February 2014. The condensed consolidated financial information does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The condensed consolidated financial information is unaudited. The Group's primary business is the mining, processing and sale of gold. The Group has three operating mines located in Tanzania. The Group also has a portfolio of exploration projects located in Kenya. Basis of Preparation of the condensed financial information The financial information set out above does not constitute the Group's statutory accounts for the year ended 31 December 2013, but is derived from the Group's full financial accounts, which are in the process of being audited. The Group's full financial accounts will be prepared under International Financial Reporting Standards as adopted by the European Union. The financial statements are prepared on a going concern basis. The condensed consolidated financial information has been prepared under the historical cost convention basis, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit and loss. The financial statements are presented in US dollars (US$) and all monetary results are rounded to the nearest thousand dollars (US) except when otherwise indicated. Where a change in the presentational format between the prior year and current year condensed consolidated financial information has been made during the period, comparative figures have been restated accordingly. The following presentational changes were made during the current year: Application of IFRIC 20 "Stripping costs in the production phase of a surface mine". Refer to note 4 for a discussion of the change in accounting policy. Presentation of the results of discontinued operations due to the agreement to transfer Tulawaka mine to STAMICO, the Tanzanian State Mining Corporation. Refer to note 5 for a discussion of the transaction. Accounting Policies Accounting policies have remained consistent with the prior year except for the adoption of new standards. New and amended standards adopted by the Group The following new standards and amendments to standards are applicable and were adopted by the Group for the first time for the financial year beginning 1 January 2013. IAS 1, 'Financial statement presentation' regarding other comprehensive income. The main change resulting from these amendments is a requirement for entities to group items presented in 'other comprehensive income' (OCI) on the basis of whether they are potentially subsequently reclassifiable to profit or loss. Refer to the statement of comprehensive income for disclosure of the required classification. The accounting policy for stripping costs has been updated to reflect the impact of IFRIC 20, 'Stripping costs in the production phase of a surface mine'. Refer to note 4 for details on the change in accounting policy. IFRS 13, 'Fair value measurement', aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. Annual improvements 2011 - effective for periods beginning on or after 1 January 2013. Amendment to IFRS 7, Financial instruments: Disclosures' - effective for periods beginning on or after 1 January 2013. Amendment to IAS 12, 'Income tax' - effective for periods beginning on or after 1 January 2013. New and amended standards, and interpretations not yet adopted The following standards and amendments to existing standards have been published and are mandatory for the Group's accounting periods beginning on or after 1 January 2013 or later periods, but are currently not relevant to the Group: IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010 and replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those measured at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that in cases where the fair value option is taken for financial liabilities, the comprehensive income rather than the income statement is affected, unless this creates an accounting mismatch. The impact of IFRS 9 is not expected to be material to the Group. IFRS 9 is not yet endorsed by the European Union. The effective date is after 1 January 2015. IFRIC 21, 'Levies', sets out the accounting for an obligation to pay a levy that is not income tax. The interpretation addresses the obligating event that gives rise to pay a levy and when a liability should be recognised. The impact is not expected to be material to the group. IFRIC 21 is not yet endorsed by the European Union. IFRS 10, 'Consolidated financial statements' builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The standard is not mandatory for the Group until 1 January 2014, and the impact is not expected to be material. IFRS 11, 'Joint arrangements' focuses on rights and obligations of the parties to the arrangement rather than its legal form. Proportional consolidation of joint arrangements is no longer permitted. The standard is not mandatory for the Group until 1 January 2014 and is not expected to have an impact on the Group. IFRS 12, 'Disclosures of interests in other entities' includes the disclosure requirements for all forms of interests in other entities including joint arrangements, associates, structured entities and other off-balance sheet vehicles. The standard is not mandatory for the Group until 1 January 2014. The standard is expected to impact the Group with regards disclosure of restrictions on its ability to access assets. Change in Accounting Policy During October 2011, the International Accounting Standards Board issued IFRIC 20, "Stripping costs in the production phase of a surface mine". The interpretation applies to waste removal costs incurred in surface mining activity during the production phase of a mine and addresses the recognition of production stripping costs as an asset, initial measurement of the stripping activity asset and the subsequent measurement of the stripping activity asset. The stripping cost accounting policy has been changed to align with the requirements of IFRIC 20. Stripping costs are now capitalised if the stripping activity provides economic benefit to an identifiable component of the ore body. Depreciation of capitalised costs for the components is calculated over the reserves of the ore body that have been made accessible through the stripping activity. The previous accounting policies required accounting for stripping costs by reference to ore reserves from each separate pit, where the revised policy requires accounting for each identifiable component of the ore body. IFRIC 20 is applicable for annual periods beginning on or after 1 January 2013. The application of IFRIC 20 resulted in the restatement of 2012 results. The impact on the Consolidated Income Statement, Consolidated Statement of Financial Position and Consolidated Statements of Cash Flows for the year ended 31 December 2012 is set out below: (in thousands of United States dollars) Restated1 Previously reported Variance Consolidated Income Statement Net adjustments: Direct mining costs 576,070 581,483 (5,413) Depreciation and amortisation2 159,446 158,883 563 Tax expense 72,604 71,063 1,541 Total 808,120 811,429 (3,309) Consolidated Balance Sheet Net adjustments: Mineral properties and mine development costs 819,063 807,947 11,116 Inventory 447,785 454,051 (6,266) Deferred tax liabilities 175,114 173,574 1,540 Consolidated Cash Flow Statement Cash flows provided by operating activities 268,733 257,903 10,830 Cash flows used in investing activities (371,485) (360,655) (10,830) 1 Represents values for the total Group including discontinued operations. 2 Depreciation and amortisation includes the depreciation component of the cost of inventory sold. Discontinued Operations and disposal group assets and liabilities held for sale On 15 November 2013 ABG announced that an agreement was reached with STAMICO, the Tanzanian State Mining Corporation, whereby STAMICO will acquire the Tulawaka Gold Mine ("Tulawaka") and certain exploration licenses surrounding Tulawaka for consideration of US$4.5 million and the grant of a 2% net smelter royalty on future production in excess of 500,000 ounces, capped at US$500,000. As part of the agreement, STAMICO will take ownership and management of the rehabilitation fund established as part of the closure plan for the mine, in return for the assumption of all remaining past and future closure and rehabilitation liabilities for Tulawaka, and will indemnify the other parties to the agreement in relation to these liabilities. This has resulted in a cash payment of US$11.6 million in February 2014 by ABG to STAMICO for the balance of the rehabilitation fund, less the transaction consideration. Tulawaka is 100% owned by the Tulawaka Joint Venture, in which ABG holds a 70% economic interest through a wholly owned subsidiary, with MDN Inc holding the remaining 30% of the Joint Venture. Production at Tulawaka ceased in Q2 2013. The financial results of Tulawaka have been presented as discontinued operations in the condensed consolidated financial statements. The comparative results in the condensed consolidated income statement have been presented as if Tulawaka had been discontinued from the start of the comparative period. The assets and liabilities that are to be sold to STAMICO have been presented as held for sale. Below is a summary of the results of Tulawaka for the year ended 31 December: (in thousands of United States dollars) 2013 2012 Results of discontinued operations Revenue 13,514 75,601 Cost of sales (30,368) (77,823) Gross loss (16,854) (2,222) Corporate administration (1,311) (3,928) Exploration and evaluation costs - (2,208) Corporate social responsibility expenses1 (3,259) (1,394) Impairment charges (16,701) (44,536) Other charges2 (19,442) (600) Loss before net finance expense and taxation (57,567) (54,888) Finance income 30 46 Finance expense (116) (226) Loss before taxation (57,653) (55,068) Tax credit - 6,089 Net loss for the year (57,653) (48,979) Below is a summary of cash flows from discontinued operations for year ended 31 December: (in thousands of United States dollars) 2013 2012 Operating cash flows (31,811) 5,104 Investing cash flows (8,702) (22,400) Financing cash flows - - Total cash flows (40,513) (17,296) 1 Corporate social responsibility expenses relate to projects supported from the ABG Maendeleo Fund. 2 Included in other charges are non-operational costs incurred since the cessation of operations of US$18.1 million. Below is a summary of Tulawaka's assets and liabilities at 31 December classified as disposal group held for sale: (in thousands of United States dollars) 2013 Property, plant and equipment 239 Inventories 357 Disposal group assets held for sale 596 Provisions 16,760 Disposal group liabilities held for sale 16,760 Net assets and liabilities of disposal group held for sale (16,164) Segment Reporting The Group has only one primary product produced in a single geographic location, being gold produced in Tanzania. In addition the Group produces copper and silver as a co-product. Reportable operating segments are based on the internal reports provided to the Chief Operating Decision Maker ("CODM") to evaluate segment performance, decide how to allocate resources and make other operating decisions. After applying the aggregation criteria and quantitative thresholds contained in IFRS 8, the Group's reportable operating segments were determined to be: North Mara gold mine; Bulyanhulu gold mine; Buzwagi gold mine; a separate Corporate and Exploration segment, which primarily consists of costs related to other charges and corporate social responsibility expenses, as well as discontinued operations (Tulawaka gold mine). Segment results and carrying values include items directly attributable to the segment as well as those that can be allocated on a reasonable basis. Segment carrying values are disclosed and calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets. Capital expenditures comprise of additions to property, plant and equipment. The Group has also included segment cash costs and all-in sustaining cost per ounce sold. Segment information for the reportable operating segments of the Group for the periods ended 31 December 2013 and 31 December 2012 is set out below. For the year ended 31 December 2013 North Continuing Discontinued (in thousands of United States dollars) Mara Bulyanhulu Buzwagi Other operations operations7 Total Gold revenue 364,574 262,539 258,879 - 885,992 13,483 899,475 Co-product revenue 819 16,882 25,311 - 43,012 31 43,043 Total segment revenue 365,393 279,421 284,190 - 929,004 13,514 942,518 Segment cash operating cost1 (172,894) (190,647) (202,286) - (565,827) (20,527) (586,354) Corporate administration and exploration (13,026) (14,661) (20,976) (421) (49,084) (1,311) (50,395) Other charges and corporate social responsibility expenses (11,961) (5,827) (4,730) (20,143) (42,661) (22,701) (65,362) EBITDA2 167,512 68,286 56,198 (20,564) 271,432 (31,025) 240,407 Impairment charges (307,259) - (690,478) (46,573) (1,044,310) (16,701) (1,061,011) Depreciation and amortisation8 (68,565) (35,867) (39,906) (3,641) (147,979) (9,841) (157,820) EBIT2 (208,312) 32,419 (674,186) (70,778) (920,857) (57,567) (978,424) Finance income 327 662 406 275 1,670 30 1,700 Finance expense (2,501) (1,482) (2,446) (3,123) (9,552) (116) (9,668) Loss before taxation (210,486) 31,599 (676,226) (73,626) (928,739) (57,653) (986,392) Tax credit 44,283 (13,977) 146,990 10,663 187,959 - 187,959 Net loss for the year (166,203) 17,622 (529,236) (62,963) (740,780) (57,653) (798,433) Capital expenditure: Sustaining 38,386 25,193 31,589 690 95,858 583 96,441 Expansionary 949 114,912 - 1,608 117,469 - 117,469 Capitalised development 65,594 45,428 60,136 171,158 - 171,158 Reclamation asset reduction (11,271) (10,044) (9,230) - (30,545) (195) (30,740) Total capital expenditure 93,658 175,489 82,495 2,298 353,940 388 354,328 Segmental cash operating cost 172,894 190,647 202,286 - 565,827 20,527 586,354 Deduct: co-product revenue (819) (16,882) (25,311) - (43,012) (31) (43,043) Total cash costs 172,075 173,765 176,975 - 522,815 20,496 543,311 Sold ounces3 260,945 195,304 187,348 - 643,597 8,778 652,375 Cash cost per ounce sold2 659 890 945 - 812 2,335 833 Attributable to outside interests4 (6) Total attributable cash cost per ounce sold2 827 Cash costs per ounce sold2 659 890 945 - 812 2,335 833 Corporate administration charges 38 72 51 (2) 50 149 51 Rehabilitation - accretion and depreciation 29 7 15 - 18 86 19 Mine site exploration costs 12 3 2 - 6 6 6 Corporate social responsibility expenses 31 6 4 3 19 371 24 Capitalised stripping/ UG development 251 233 321 - 266 - 262 Sustaining capital expenditure 207 133 168 1 175 66 173 Attributable to outside interests4 (6) All-in sustaining cost per ounce sold2 1,227 1,344 1,506 2 1,346 3,013 1,362 Segment carrying value6 367,326 1,116,142 253,344 81,005 1,817,817 10,489 1,828,306 For the year ended 31 December 2012 (restated) North Continuing Discontinued (in thousands of United States dollars) Mara Bulyanhulu Buzwagi Other operations operations7 Total Gold revenue 310,549 393,347 259,954 - 963,850 75,458 1,039,308 Co-product revenue 549 24,311 23,028 - 47,888 143 48,031 Total segment revenue 311,098 417,658 282,982 - 1,011,738 75,601 1,087,339 Segment cash operating cost1,5 (178,419) (213,350) (188,652) - (580,421) (57,992) (638,413) Corporate administration and exploration (20,276) (19,848) (33,906) (361) (74,391) (6,136) (80,527) Other charges and corporate social responsibility expenses (12,920) 40 (4,944) (12,299) (30,123) (1,994) (32,117) EBITDA2 99,483 184,500 55,480 (12,660) 326,803 9,479 336,282 Impairment charges - - - - - (44,536) (44,536) Depreciation and amortisation5,8 (55,272) (33,064) (47,636) (3,643) (139,615) (19,831) (159,446) EBIT2 44,211 151,436 7,844 (16,303) 187,188 (54,888) 132,300 Finance income 415 684 457 500 2,056 46 2,102 Finance expense (2,036) (2,304) (2,558) (3,181) (10,079) (226) (10,305) Profit/(loss) before taxation 42,590 149,816 5,743 (18,984) 179,165 (55,068) 124,097 Tax (credit)/ expense5 (17,977) (54,591) (9,429) 3,304 (78,693) 6,089 (72,604) Net profit/(loss) for the year 24,613 95,225 (3,686) (15,680) 100,472 (48,979) 51,493 Capital expenditure: Sustaining 47,759 35,193 56,441 8,988 148,381 13,157 161,538 Expansionary 10,091 36,814 62 - 46,967 2,922 49,889 Capitalised development5 28,139 45,605 39,456 - 113,200 7,258 120,458 Reclamation asset addition/(reduction) 7,540 (43) 10,494 - 17,991 1,251 19,242 Total capital expenditure 93,529 117,569 106,453 8,988 326,539 24,588 351,127 Segmental cash operating cost 178,419 213,350 188,652 - 580,421 57,992 638,413 Deduct: co-product revenue (549) (24,311) (23,028) - (47,888) (143) (48,031) Total cash costs 177,870 189,039 165,624 - 532,533 57,849 590,382 Sold ounces3 186,600 235,410 155,322 - 577,332 45,600 622,932 Cash cost per ounce sold2 953 803 1,066 - 922 1,269 948 Attributable to outside interests4 (7) Total attributable cash cost per ounce sold2 941 Cash costs per ounce sold2 953 803 1,066 - 922 1,269 948 Corporate administration charges 78 75 78 6 83 86 85 Rehabilitation - accretion and depreciation 48 10 23 - 26 134 34 Mine site exploration costs 31 9 6 - 16 48 18 Corporate social responsibility expenses 39 5 8 6 23 31 24 Capitalised stripping/ UG development 151 194 254 - 196 159 198 Sustaining capital expenditure 393 149 363 10 295 289 302 Attributable to outside interests4 (24) All-in sustaining cost per ounce sold2 1,693 1,245 1,798 22 1,561 2,016 1,585 Segment carrying value6 573,980 978,045 721,296 119,086 2,392,407 11,043 2,403,450 1 The CODM reviews cash operating costs for the four operating mine sites separately from corporate administration costs and exploration costs. Consequently, the Group has reported these costs in this manner. 2 These are non-IFRS financial performance measures with no standard meaning under IFRS. Refer to 'Non IFRS measures' on page 28 for definitions. 3 Reflects 100% of ounces sold. 4 Reflects the adjustment for non-controlling interest at Tulawaka. 5 2012 Restated due to the adoption of IFRIC 20. 6 Segment carrying values are calculated as shareholders equity after adding back debt and intercompany liabilities, and subtracting cash and intercompany assets and include outside shareholders' interests. 7 Represents Tulawaka, which has been discontinued. 8 Depreciation and amortisation includes the depreciation component of the cost of inventory sold. Revenue For the year ended 31 For the year ended 31 December December (in thousands of United States 2013 dollars) 2012 (Restated)3 Gold doré sales 659,760 634,363 Gold concentrate sales¹ 226,231 329,487 Copper concentrate sales¹ 37,539 41,123 Silver sales 5,474 6,765 Total 929,004 1,011,738 Concentrate sales includes provisional price adjustments to the accounts receivable balance due to changes in market gold, silver and copper prices prior to final settlement as follows: US$12.2 million for the year ended 31 December 2013 (US$3.7 million for the year ended 31 December 2012). For the year ended 31 For the year ended 31 (in thousands of United States dollars) December December Revenue by Location of Customer2 2013 2012 (Restated)3 Europe Switzerland 257,914 492,460 Germany 73,126 114,471 Asia India 403,956 143,796 China 117,099 162,140 Japan 76,909 98,871 Total revenue 929,004 1,011,738 Revenue by location of customer is determined based on the country to which the gold is delivered. 2012 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5 for a discussion. Included in revenues for the year ended 31 December 2013 are revenues of approximately US$681 million (2012: US$856 million) which arose from sales to four of the Group's largest customers. No other customers individually account for more than 10% of the Group's revenues. Impairment charges In accordance with IAS 36 "Impairment of assets" and IAS 38 "Intangible Assets" a review for impairment of goodwill is undertaken annually, or at any time an indicator of impairment is considered to exist, and in accordance with IAS 16 "Property, plant and equipment" a review for impairment of long-lived assets is undertaken at any time an indicator of impairment is considered to exist. The prevailing gold price fell significantly during the second quarter of 2013 due to macro-economic factors, mainly as a result of positive economic news from the United States of America. This forced a review of the gold price outlook used for long term planning and reserve estimation. Management expect weak investment demand to drive continued volatility and hold gold prices to an average of US$1,300 per ounce, a price we consider a market participant would use to calculate the carrying value of our assets. Given the impact of the lower gold price outlook and the impact on the reserves, LOM plans and margins of the operating mines, operating performance was reassessed in order to ensure optimised returns and cash flows for each cash generating unit. Cash generating units are determined on the same basis as operating segments. Refer to note 6 for further details. At Bulyanhulu, goodwill and property, plant and equipment was reviewed for impairment due to a reduction in total reserves. The impairment review did not indicate a need for impairment because the recoverable amount was calculated as higher than the carrying values. As reported in the consolidated financial statements for the year ended 31 December 2012, Buzwagi's cost structure combined with the grade profile made it most susceptible to changes in the gold price. At Buzwagi, in June 2013 the mine plan was re-engineered to substantially reduce the amount of waste movement required and optimise the grade of the mine. This resulted in a reduction of reserve life, but drove a significant improvement in all-in sustaining cost and set the mine up to deliver positive cash flows for the next five years. As a result of the changes we recorded a mid year post-tax impairment to the long-lived assets at Buzwagi of US$677.5 million and supplies inventory of US$13.0 million (2012: no impairment charge). At North Mara, several changes were made to the plan during the year which will substantially reduce the strip ratio, volume of material to be moved and ultimate footprint of the asset. In June 2013, the mine plan was re-engineered to remove uneconomic ounces from Nyabirama Stage 5 and Gokona Stage 4 and to improve the overall return from the mine. Further to this, in October it was decided to defer Gokona Cut 3, which contains 628koz of North Mara's reserve base, whilst an underground feasibility study into the alternative of mining out this reserve is finalised. ABG is confident that the outcome of the underground study will be positive and together with the other changes made will ensure strong free cash flow generation for North Mara together with an optimised footprint to alleviate some of the other pressures encountered at the mine. The reserve base has also been adjusted in line with the lower gold price assumption at 31 December 2013. The impact of the deferral of Gokona Stage 3 combined with the updated reserve estimates resulted in a year end post tax impairment of US$96.3 million in addition to the mid year post-tax impairment to goodwill of US$21.0 million and long-lived assets of US$152.9 million (2012: no impairment charge). At Tulawaka, a review of the supplies balance on hand at the end of June 2013 prompted a supplies inventory impairment of US$16.7 million. At 30 June 2013, the recoverable amount for Nyanzaga was calculated on a fair value less cost to dispose basis, using a comparable enterprise value for companies holding similar assets to arrive at a value per ounce. Given the volatility in the market and the lack of comparable transactions in the current gold price environment, the value of this exploration asset is highly judgemental. Due to the valuation being below the carrying value, we recorded mid year impairments relating to the goodwill and acquired exploration potential intangible asset that arose on the acquisition of Tusker Gold Ltd of US$22.0 million and subsequent investment in the asset of US$24.6 million. The review compared the recoverable amount of assets for the cash generating units ("CGU") to the carrying value of the CGU's including goodwill. The recoverable amount of an asset is assessed by reference to the higher of value in use ("VIU"), being the net present value ("NPV") of future cash flows expected to be generated by the asset, and fair value less costs to dispose ("FVLCD"). The FVLCD of a CGU is based on an estimate of the amount that the Group may obtain in a sale transaction on an arm's length basis. There is no active market for the Group's CGUs. Consequently, FVLCD is derived using discounted cash flow techniques (NPV of expected future cash flows of a CGU), which incorporate market participant assumptions. Cost to dispose is based on management's best estimates of future selling costs at the time of calculating FVLCD. Costs attributable to the disposal of a CGU are not considered significant. The expected future cash flows utilised in the NPV model are derived from estimates of projected future revenues, future cash costs of production and capital expenditures contained in the LOM plan for each CGU. The Group's LOM plans reflect proven and probable reserves and are based on detailed research, analysis and modeling to optimise the internal rate of return for each CGU. The discount rate applied to calculate the present value is based upon the real weighted average cost of capital applicable to the CGU. The discount rate reflects equity risk premiums over the risk-free rate, the impact of the remaining economic life of the CGU and the risks associated with the relevant cash flows based on the country in which the CGU is located. These risk adjustments are based on observed equity risk premiums, historical country risk premiums and average credit default swap spreads for the period. The VIU of a CGU is generally lower than its FVLCD, due primarily to the fact that the optimisation of the mine plans has been taken into account when determining its FVLCD. Consequently, the recoverable amount of a CGU for impairment testing purposes is determined based on its FVLCD. The key economic assumptions used in the reviews at 30 June and 31 December 2013 were: For the year ended 31 For the year ended 31 December December 2013 2012 Gold price per ounce (applied to all periods) US$1,300 US$1,700 South African Rand (US$:ZAR) 9.50 8.00 Tanzanian Shilling (US$:TZS) 1,300 1,600 Long-term oil price per barrel US$120 US$110 Discount rate 5% 4.16%-5.66% NPV multiples 1.00 0.90-1.30 On a gross basis, and before taking into account the impact of deferred tax, the total impairment charge for 2013 amounted to US$690.5 million at Buzwagi, US$307.3 million at North Mara, US$46.6 million relating to Nyanzaga and US$16.7 million at Tulawaka. For the year ended 31 For the year ended 31 December December (in thousands of United States dollars) 2013 2012 Buzwagi 690,478 - North Mara 307,258 - Tulawaka1 16,701 44,536 Tusker/Nyanzaga 46,573 - Gross impairment charge 1,061,010 44,536 Comprising: Impairment of goodwill 43,069 13,805 Impairment of intangible assets 24,550 - Impairment of property, plant and equipment 906,822 30,731 Impairment of non-current inventory 47,830 - Impairment of supplies inventory 38,739 - Gross impairment charge 1,061,010 44,536 Deferred income tax (238,008) - Impairment charge, net of tax 823,002 44,536 1 Included in the loss from discontinued operations For purposes of testing for impairment of non-current assets, a reasonably possible change in the key assumptions used to estimate the recoverable amount for CGU's could result in an additional impairment charge. The carrying value of the net assets relating to North Mara are most sensitive to changes in key assumptions in respect of gold price and a US$100 per ounce decrease in isolation, would lead to an additional impairment at North Mara of US$99.0 million. At the same time, a similar decrease would not result in an impairment at Buzwagi. However, should the gold price decline further, the mine plans would again be reassessed in order to optimise returns and cash flows. Exploration and Evaluation costs The following represents a summary of exploration and evaluation expenditures incurred at each mine site and significant exploration targets (if applicable). For the year ended 31 For the year ended 31 December December (in thousands of United States dollars) 2013 2012 (Restated)2 Expensed during the year: North Mara 3,099 5,814 Buzwagi 366 967 Bulyanhulu 656 2,215 Other1 12,806 17,756 Total expensed 16,927 26,752 Capitalised during the year: North Mara 410 5,259 Bulyanhulu 1,945 5,191 Nyanzaga 1,608 3,241 Total capitalised 3,963 13,691 Total 20,890 40,443 1 - Included in "other" are the exploration activities conducted through ABG Exploration Africa Limited and ABG Exploration Kenya Limited. All primary greenfield exploration and evaluation activities are conducted in this Company. 2 - 2012 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5 for a discussion. Previously, total exploration and evaluation for 2012 amounted to U$45.5 million. Other Charges For the year For the year ended ended 31 December 31 December (in thousands of United States dollars) 2013 2012 (Restated)3 Other expenses Operational Review costs (including restructuring cost) 13,305 - Discounting of indirect tax receivables 1,375 4,185 Unrealised non-hedge derivative losses 7,203 1,719 Bad debt expense 1,369 65 Disallowed indirect taxes 1,463 2,952 Legal costs 3,138 1,655 CNG related costs (residual) 3,246 6,378 Government levies and charges 2,387 - Other 3,617 4,547 Total 37,103 21,501 Other income Profit on disposal of property, plant and equipment (99) (660) Foreign exchange gains (3,622) (3,770) Insurance theft claim (2,958) - Total (6,679) (4,430) Total other charges 30,424 17,071 Finance, Income and Expenses Finance income For the year ended For the year ended 31 December 31 December (in thousands of United States dollars) 2013 2012 (Restated)3 Interest on time deposits 937 1,185 Other 733 871 Total 1,670 2,056 Finance expense For the year ended For the year ended 31 December 31 December (in thousands of United States dollars) 2013 2012 (Restated)3 Unwinding of discount1 4,468 3,949 Revolving credit facility charges2 3,050 3,014 Interest on CIL facility 2,413 - Interest on finance leases 658 841 Bank charges 756 1,062 Other 620 1,213 11,965 10,079 Capitalised during the year (2,413) - Total 9,552 10,079 The unwinding of discount is calculated on the environmental rehabilitation provision. Included in credit facility charges are the amortisation of the fees related to the revolving credit facility as well as the monthly interest and facility fees. 2012 Restated due to the classification of Tulawaka as a discontinued operation. Refer to note 5 for a discussion. Tax (Credit)/ Expense For the year ended For the year ended 31 December 31 December (in thousands of United States dollars) 2013 2012 (Restated)1 Current tax: Current tax on profits for the year - - Adjustments in respect of prior years 40 120 Total current tax 40 120 Deferred tax: Origination and reversal of temporary differences (187,999) 78,573 Total deferred tax (187,999) 78,573 Income tax expense (187,959) 78,693 1 - 2012 Restated due to the application of IFRIC 20. Refer to note 4 for a discussion of the change in accounting policy. The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the profits of the consolidated entities as follows: For the year For the year ended 31 ended 31 December December (in thousands of United States dollars) 2013 2012 (Restated)1 (Loss)/profit before tax (928,739) 179,165 Tax calculated at domestic tax rates applicable to profits in the respective countries (292,917) 55,025 Tax effects of: (Non-taxable income) / Expenses not deductible for tax purposes 13,111 1,333 Tax losses for which no deferred income tax asset was recognised 84,904 18,831 Prior year adjustments 5,572 6,691 Effect of tax rates in foreign jurisdictions 1,371 (3,187) Tax charge (187,959) 78,693 1 - 2012 Restated due to the application of IFRIC 20. Refer to note 4 for a discussion of the change in accounting policy. Tax periods remain open to review by the Tanzanian Revenue Authority (TRA) in respect of income taxes for five years following the date of the filing of the corporate tax return, during which time the authorities have the right to raise additional tax assessments including penalties and interest. Under certain circumstances the reviews may cover longer periods. Because a number of tax periods remain open to review by tax authorities, there is a risk that transactions that have not been challenged in the past by the authorities may be challenged by them in the future, and this may result in the raising of additional tax assessments plus penalties and interest. (Loss)/ Earnings Per Share (EPS) Basic EPS is calculated by dividing the net profit for the year attributable to owners of the Company by the weighted average number of Ordinary Shares in issue during the year. Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume conversion of all dilutive potential Ordinary Shares. The Company has dilutive potential Ordinary Shares in the form of stock options. The weighted average number of shares is adjusted for the number of shares granted assuming the exercise of stock options. At 31 December 2013 and 31 December 2012, earnings per share have been calculated as follows: For the For the year year ended ended 31 December 31 December (in thousands of United States dollars except per share amounts) 2013 2012 (Restated)1 (Loss)/earnings Net (loss)/profit from continuing operations attributable to owners of the parent (740,780) 100,472 Net (loss)/profit from discontinued operations attributable to owners of the parent (40,321) (37,692) Weighted average number of Ordinary Shares in issue 410,085,499 410,085,499 Adjusted for dilutive effect of stock options - - Weighted average number of Ordinary Shares for diluted earnings per share 410,085,499 410,085,499 (Loss)/earnings per share Basic and dilutive (loss)/earnings per share from continuing operations (cents) (180.6) 24.5 Basic and dilutive (loss)/earnings per share from discontinued operations (cents) (9.8) (9.2) 1 - 2012 Restated due to the application of IFRIC 20. Refer to note 4 for a discussion of the change in accounting policy. Property, Plant and Equipment Mineral properties and mine Assets under For the year ended 31 December 2013 Plant and development construction (in thousands of United States dollars) equipment costs ¹ Total At 1 January 2013, net of accumulated depreciation 945,118 819,063 210,859 1,975,040 Additions - - 354,328 354,328 Disposals/write-downs (477) - - (477) Impairments2 (582,669) (287,276) (36,877) (906,822) Depreciation (84,350) (56,809) - (141,159) Transfers between categories 18,677 121,427 (140,104) - Reclassification to disposal group assets held for sale - (239) - (239) At 31 December 2013 296,299 596,166 388,206 1,280,671 At 1 January 2013 Cost 1,475,374 1,250,088 210,859 2,936,321 Accumulated depreciation (530,256) (431,025) - (961,281) Net carrying amount 945,118 819,063 210,859 1,975,040 At 31 December 2013 Cost 1,397,456 1,315,918 425,083 3,138,457 Accumulated depreciation and impairment (1,101,157) (719,752) (36,877) (1,857,786) Net carrying amount 296,299 596,166 388,206 1,280,671 Mineral properties and For the year ended 31 December 2012 mine Assets under (Restated) Plant and development construction (in thousands of United States dollars) equipment costs ¹ Total At 1 January 2012, net of accumulated depreciation 894,869 765,519 162,859 1,823,247 Additions - - 351,127 351,127 Disposals/write-downs (4,028) - - (4,028) Impairments2 (16,714) (14,017) - (30,731) Depreciation (99,359) (65,216) - (164,575) Transfers between categories 170,350 132,777 (303,127) - At 31 December 2012 945,118 819,063 210,859 1,975,040 At 1 January 2012 Cost 1,316,602 1,117,311 162,859 2,596,772 Accumulated depreciation (421,733) (351,792) - (773,525) Net carrying amount 894,869 765,519 162,859 1,823,247 At 31 December 2012 Cost 1,475,374 1,250,088 210,859 2,936,321 Accumulated depreciation and impairment (530,256) (431,025) - (961,281) Net carrying amount 945,118 819,063 210,859 1,975,040 1 Assets under construction represents (a) sustaining capital expenditures incurred constructing property, plant and equipment related to operating mines and advance deposits made towards the purchase of property, plant and equipment; and (b) expansionary expenditure allocated to a project on a business combination or asset acquisition, and the subsequent costs incurred to develop the mine. Once these assets are ready for their intended use, the balance is transferred to plant and equipment and/or mineral properties and mine development costs. 2 The impairment relates to long lived assets at Buzwagi, North Mara and Tulawaka. Refer to note 8 for further details. Leases Property, plant and equipment includes assets relating to the design and construction costs of power transmission lines and related infrastructure. At completion, ownership was transferred to TANESCO in exchange for amortised repayment in the form of reduced electricity supply charges. No future lease payment obligations are payable under these finance leases. Property, plant and equipment also includes emergency back-up generators leased at the Buzwagi mine under a three-year lease agreement, with an option to purchase the equipment at the end of the lease term, and spinning power generators leased under a one-year lease agreement, with an option to extend the lease for 36 months and an option to purchase the equipment at the end of the lease term. These leases have been classified as finance leases. Property, plant and equipment also includes five drill rigs purchased under short-term finance leases. The following amounts were included in property, plant and equipment where the Group is a lessee under a finance lease: As at As at 31 December 31 December (in thousands of United States dollars) 2013 2012 Cost - capitalised finance leases 70,764 68,846 Accumulated depreciation (16,430) (14,603) Net carrying amount 54,334 54,243 Goodwill and Intangible Assets For the year ended 31 December 2013 Acquired exploration and (in thousands of United States dollars) Goodwill evaluation properties Total At 1 January, net of accumulated impairment 170,831 107,390 278,221 Additions1 136 452 588 Impairment2 (43,069) (24,550) (67,619) At 31 December 2013 127,898 83,292 211,190 At 31 December 2013 Cost 401,250 107,842 509,092 Accumulated impairment (273,352) (24,550) (297,902) Net carrying amount 127,898 83,292 211,190 For the year ended 31 December 2012 Acquired exploration and (in thousands of United States dollars) Goodwill evaluation properties Total At 1 January, net of accumulated impairment 178,420 80,093 258,513 Additions 6,216 27,297 33,513 Impairment (13,805) - (13,805) At 31 December 2012 170,831 107,390 278,221 At 31 December 2012 Cost 401,114 107,390 508,504 Accumulated impairment (230,283) - (230,283) Net carrying amount 170,831 107,390 278,221 1 Additions to acquired exploration and evaluation properties and goodwill relate to additional costs related to the final valuation of the acquisition of African Barrick Gold Exploration (Kenya) Ltd. 2 The annual impairment review resulted in an impairment of US$21 million to goodwill in North Mara and US$22 million and US$24.6 million to goodwill and acquired exploration and evaluation properties in Tusker/Nyanzaga respectively (2012: US$13.8 million impairment to goodwill in Tulawaka). The key assumptions to which the calculation of fair value less costs to dispose for all CGUs are most sensitive are described in note 8. Refer to note 8 for further details. Goodwill and accumulated impairment losses by operating segments: For the year ended 31 December 2013 (in thousands of United States dollars) North Mara Bulyanhulu Discontinued operation Other Total At 1 January 2013 21,046 121,546 - 28,239 170,831 Impairments (21,046) - - (22,023) (43,069) Additions - - - 136 136 At 31 December 2013 - 121,546 - 6,352 127,898 Cost 237,524 121,546 13,805 28,375 401,250 Accumulated impairments (237,524) - (13,805) (22,023) (273,352) For the year ended 31 December 2012 (in thousands of United States dollars) North Mara Bulyanhulu Discontinued operation Other Total At 1 January 2012 21,046 121,546 13,805 22,023 178,420 Additions - - - 6,216 6,216 Impairments - - (13,805) - (13,805) At 31 December 2012 21,046 121,546 - 28,239 170,831 Cost 237,524 121,546 13,805 28,239 401,114 Accumulated impairments (216,478) - (13,805) - (230,283) Deferred Tax Assets and Liabilities Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: As at As at 31 December 31 December (in thousands of United States dollars) 2013 2012 Tax losses 254,711 335,677 Total 254,711 335,677 The above tax losses, which translate into deferred tax assets of approximately US$85 million (2012: US$98 million), have not been recognised in respect of these items due to uncertainties regarding availability of tax losses, or there being uncertainty regarding future taxable income against which these assets can be utilised. Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Balance sheet classifications Balance sheet classification Assets Liabilities Net (in thousands of United States 2013 2012 2013 2012 2013 2012 dollars) Property, plant and equipment1 - - 297,421 500,331 297,421 500,331 Provisions (11,756) (11,244) - - (11,756) (11,244) Interest deferrals (22,960) (19,494) 286 562 (22,674) (18,932) Tusker acquisition - - 7,340 17,313 7,340 17,313 Aviva acquisition - - 4,565 6,216 4,565 6,216 Tax loss carry-forwards (289,821) (320,968) - - (289,821) (320,968) Net deferred tax (assets)/ liabilities (324,537) (351,706) 309,612 524,422 (14,925) 172,716 Legal entities Legal entities Assets Liabilities Net (in thousands of United States dollars) 2013 2012 2013 2012 2013 2012 North Mara Gold Mine Ltd1 - - 10,098 54,381 10,098 54,381 Bulyanhulu Gold Mine Ltd - (383) 13,594 - 13,594 (383) Pangea Minerals Ltd1 (48,066) - - 98,925 (48,066) 98,924 Other (2,721) (2,016) 12,170 21,809 9,449 19,794 Net deferred tax (assets)/liabilities (50,787) (2,399) 35,862 175,115 (14,925) 172,716 1 - 2012 Restated due to the application of IFRIC 20. Refer to note 4 for a discussion of the change in accounting policy. Uncertainties regarding availability of tax losses in respect of enquiries raised and additional tax assessments issued by the TRA, have been measured using the single best estimate of likely outcome approach resulting in the recognition of substantially all the related deferred tax assets and liabilities. Alternative acceptable measurement policies (e.g. on a weighted average expected outcome basis) could result in a change to deferred tax assets and liabilities being recognised, and the deferred tax charge in the income statement. No deferred tax has been recognised in respect of temporary differences associated with investments in subsidiaries where the Group is in a position to control the timing of the reversal of the temporary differences, and it is probable that such differences will not reverse in the foreseeable future. The aggregate amount of temporary differences associated with such investments in subsidiaries is represented by the contribution of those investments to the Group's retained earnings and amounted to US$327 million (2012: US$134 million). Trade Receivables and other Current Assets As at As at 31 December 31 December (in thousands of United States dollars) 2013 2012 Trade and other receivables: Amounts due from doré and concentrate sales 16,204 33,103 Other receivables¹ 10,102 12,079 Due from related parties 37 393 Less: Provision for doubtful debt on other receivables (2,133) (1,348) Total trade receivables 24,210 44,227 1 Other receivables relates to employee and supplier backcharge-related receivables. Trade receivables other than concentrate receivables are non-interest bearing and are generally on 30-90 day terms. Concentrate receivables are generally on 60-120 day terms depending on the terms per contract. Trade receivables are amounts due from customers in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets; if not, they are presented as non-current assets. The carrying value of trade receivables recorded in the financial statements represents the maximum exposure to credit risk. The Group does not hold any collateral as security. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any provisions for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. As at As at 31 December 31 December (in thousands of United States dollars) 2013 2012 Indirect taxes receivable2 159,824 98,678 Other receivables and advance payments³ 18,912 18,291 178,736 116,969 Less: Indirect taxes receivable classified as non-current (64,791) (72,655) Other current assets 113,945 44,314 2 To reflect the time value of money the long-term portion of this receivable has been discounted at a rate of 5% (2012: 5%). 3 Other receivables and advance payments relate to prepayments for insurance and income taxes offset against outstanding refunds for VAT and fuel levies and current amounts receivable from the NSSF of US$7.0 million (2012: US$6.4 million). Borrowings At the beginning of the year a US$142 million facility was put in place to fund the bulk of the costs of the construction of one of ABG's key growth projects, the Bulyanhulu CIL Expansion project ("Project"). The Facility is collateralised by the Project, has a term of seven years with a spread over Libor of 250 basis points. The interest rate has been fixed at 3.6% through the use of an interest rate swap. The 7 year Facility is repayable in equal instalments over the term of the Facility, after a two year repayments holiday period. The full facility of $142 million was drawn at the end of the year. Interest accrued to the value of $0.7 million was included in accounts payable at year end. Interest incurred on the borrowings as well as hedging losses on the interest rate swap have been capitalised as an asset. Provisions Rehabilitation¹ Other² Total (in thousands of United States dollars) 2013 2012 2013 2012 2013 2012 At 1 January 180,548 157,582 1,040 1,034 181,588 158,616 Change in estimate (30,740) 19,242 524 6 (30,216) 19,248 Utilised during the year (5,843) (297) - - (5,843) (297) Unwinding of discount 4,496 4,021 - - 4,496 4,021 Reclassification to disposal group liabilities held for sale (16,760) - (16,760) - At 31 December 131,701 180,548 1,564 1,040 133,265 181,588 Current portion - - (1,028) (1,040) (1,028) (1,040) Non-current portion 131,701 180,548 536 - 132,237 180,548 1 Rehabilitation provisions relate to the decommissioning costs expected to be incurred for the operating mines. This expenditure arises at different times over the LOM for the different mine sites and is expected to be utilised in terms of cash outflows between years 2014 and 2050 and beyond, varying from mine site to mine site. 2 Other provisions relate to provisions for legal and tax-related liabilities where the outcome is not yet certain but it is expected that it will lead to a probable outflow of economic benefits in future. Rehabilitation obligations arise from the acquisition, development, construction and normal operation of mining property, plant and equipment, due to government controls and regulations that protect the environment on the closure and reclamation of mining properties. The major parts of the carrying amount of the obligation relate to tailings and heap leach pad closure/ rehabilitation; demolition of buildings/mine facilities; ongoing water treatment; and ongoing care and maintenance of closed mines. The fair values of rehabilitation provisions are measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk-free rate of interest. ABG prepares estimates of the timing and amount of expected cash flows when an obligation is incurred and updates expected cash flows to reflect changes in facts and circumstances. The principal factors that can cause expected cash flows to change are: the construction of new processing facilities; changes in the quantities of material in reserves and a corresponding change in the LOM plan; changing ore characteristics that impact required environmental protection measures and related costs; changes in water quality that impact the extent of water treatment required; and changes in laws and regulations governing the protection of the environment. Each year ABG assesses cost estimates and other assumptions used in the valuation of the rehabilitation provision at each mineral property to reflect events, changes in circumstances and new information available. Changes in these cost estimates and assumptions are recorded as an adjustment to the carrying amount of the corresponding asset. Rehabilitation provisions are adjusted to reflect the passage of time (accretion) calculated by applying the discount factor implicit in the initial fair-value measurement to the beginning-of-period carrying amount of the provision. Settlement gains/losses will be recorded in other (income) expense. Other environmental remediation costs that are not rehabilitation provisions are expensed as incurred. Commitments and Contingencies The Group is subject to various laws and regulations which, if not observed, could give rise to penalties. As at 31 December 2013, the Group has the following commitments and/ or contingencies Legal contingencies As at 31 December 2013, the Group was a defendant in approximately 333 lawsuits. The plaintiffs are claiming damages and interest thereon for the loss caused by the Group due to one or more of the following: unlawful eviction, termination of services, wrongful termination of contracts of service, non-payment for services, defamation, negligence by act or omission in failing to provide a safe working environment, unpaid overtime and public holiday compensation. The total amounts claimed from lawsuits in which specific monetary damages are sought amounted to US$142.8 million. The Group's Legal Counsel is defending the Group's current position, and the outcome of the lawsuits cannot presently be determined. However, in the opinion of the Directors and Group's Legal Counsel, no material liabilities are expected to materialise from these lawsuits. Consequently no provision has been set aside against the claims in the books of account. Included in the total amounts claimed is an appeal by the TRA intended for a tax assessment of US$21.3 million in respect of the acquisition of Tusker Gold Limited. The case was awarded in favour of ABG however the TRA has served a notice of appeal. The calculated tax assessment is based on the sales price of the Nyanzaga property of US$71 million multiplied by the tax rate of 30%. Management is of the opinion that the assessment is invalid due to the fact that the acquisition was for Tusker Gold Limited, a company incorporated in Australia. The shareholding of the Tanzanian related entities did not change and the Tusker Gold Limited group structure remains the same as prior to the acquisition. Also included in the total amounts claimed are TRA claims to the value of $41.3 million for withholding tax on historic offshore dividend payments paid by ABG plc to its shareholders. In addition to the claim, there are six other withholding tax claims which have not been quantified. These claims are made on the basis that ABG is resident in Tanzania for tax purposes. Management are of the opinion that the claims do not have substance and that it will be successfully defended. Tax-related contingencies i. On 26 October 2009 the TRA issued a demand notice against the Group for an amount relating to withholding tax on technical services provided to Bulyanhulu Gold Mine Ltd. The claim amounts to US$5.4 million. Management is of the opinion that the Group complied with all of the withholding tax requirements, and that there will be no amount payable, therefore no provision has been raised. ii. The TRA has issued a number of tax assessments to the Group relating to past taxation years from 2002 onwards. The Group believes that these assessments are incorrect and has filed objections to each of them. The Group is attempting to resolve these matters by means of discussions with the TRA or through the Tanzanian Appeals process. During the year under review the Board ruled in favour of BGML in relation to 7 of 10 issues raised by the TRA in final assessments for 2000 - 2006 years under review. The TRA filed a notice of intention to appeal against the ruling of the Board, while ABG has filed a counter appeal in respect of BGML to the Appeals Tribunal for all 3 items that were lost. The positions that were ruled against BGML were sufficiently provided for in prior year results and management is of the opinion that open issues will not result in any material liabilities to the Group. Exploration and development agreements - Mining Licences Pursuant to agreements with the Government of the United Republic of Tanzania, the Group was issued special mining licences for Bulyanhulu, Buzwagi, North Mara and Tulawaka mines and mining licences for building materials at Bulyanhulu and Buzwagi Mines. The agreement requires the Group to pay to the government of Tanzania annual rents of US$5,000 per annum per square kilometre for as long as the Group holds the special mining licences and US$2,000 per annum per square kilometre for so long as the Group holds the mining licences for building materials. The total commitment for 2014 for the remaining special mining licences and mining licences for building materials amount to US$0.65 million (2012: US$0.8 million). Subsequent to year-end, the transferral of the Tulawaka Special Mining License to STAMICO was approved. Purchase commitments At 31 December 2013, the Group had purchase obligations for supplies and consumables of approximately US$48 million (2012: US$65 million). Capital commitments In addition to entering into various operational commitments in the normal course of business, the Group entered into contracts for capital expenditure of approximately US$6 million in 2013 (2012: US$51 million). Post Balance Sheet Events A final dividend of US2.0 cents per share has been proposed, which will result in a total dividend of US2.0 cents per share for 2013. The final dividend is to be proposed at the Annual General Meeting on 24 April 2014. These financial statements do not reflect this dividend payable. ABG will declare the final dividend in US dollars. Unless a shareholder has elected or elects to receive dividends in US dollars, dividends will be paid in pounds sterling with the US dollar amount being converted into pounds sterling at exchange rates prevailing on or around 9 May 2014. Currency elections must be made by return of currency election forms. The deadline for the return of currency election forms is 6 May 2014. Reserves and Resources Mineral reserves and mineral resources estimates contained in this report have been calculated as at 31 December 2013 in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities, unless otherwise stated. Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for mineral reserves and resources. Calculations have been reviewed, verified (including estimation methodology, sampling, analytical and test data) and compiled by ABG personnel under the supervision of ABG Qualified Persons: Nic Schoeman, General Manager Technical Services, Ray Swanson, Mineral Resource Manager, and Samuel Eshun, Chief Mine Planning Engineer. However, the figures stated are estimates and no assurances can be given that the indicated quantities of metal will be produced. In addition, totals stated may not add up due to rounding. Mineral reserves have been calculated using an assumed long-term average gold price of US$1,300.00 per ounce, a silver price of US$21.00 per ounce and a copper price of US$3.00 per pound. Reserve calculations incorporate current and /or expected mine plans and cost levels at each property. Mineral resources at ABG mines have been calculated using an assumed long-term average gold price of US$1,500.00 per ounce, a silver price of US$24.00 per ounce and a copper price of US$3.50 per pound. Resources have been estimated using varying cut-off grades, depending on the type of mine or project, its maturity and ore types at each property. Reserve estimates are dynamic and are influenced by changing economic conditions, technical issues, environmental regulations and any other relevant new information and therefore these can vary from year to year. Resource estimates can also change and tend to be influenced mostly by new information pertaining to the understanding of the deposit and secondly the conversion to ore reserves. In addition, estimates of inferred mineral resources may not form the basis of an economic analysis and it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves. Tulawaka mineral reserves and resources are stated as ABG's 70% attributable portion. See www.africanbarrickgold.com for Mine Gold Reserves & Resources Contained Copper Reported within Gold Reserves & Resources Contained Silver Reported within Gold Reserves & Resources Mine Gold Reserves, Mine Resources (Measured & Indicated, exclusive of Reserves) END
AFRICAN BARRICK GOLD PLC: Prelim Results for the 12 months ended 31 Dec 2013
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