Argentina

AngloGold Ashanti has one gold mine in Argentina, Cerro Vanguardia, which produced 204,000 attributable ounces of gold in 2007, equivalent to 4% of group production.

Cerro Vanguardia

Description: AngloGold Ashanti has an interest of 92.5% in Cerro Vanguardia and the province of Santa Cruz, 7.5%. Located to the north-west of Puerto San Julian in the province of Santa Cruz, Cerro Vanguardia consists of multiple small open pits with high stripping ratios. The orebodies comprise a series of hydrothermal vein deposits containing vast quantities of silver which is produced as a by-product.

Ore is processed at a metallurgical plant located at the mine and has a capacity of 2,800 tonnes per day and includes a cyanide recovery plant. Technology at the plant is based on carbon-inleach processes with the tailings dam incorporated in a closed circuit with plant process so that there is no final discharge.

Safety: There was a deterioration in safety during the year. The LTIFR for 2007 was 3.34 compared to 3.13 in 2006. As in 2006, there were no fatalities in 2007. Corrective action has been taken including safety awareness workshops for the managers responsible for operational safety, supervisors and contractors.

Operating review: Attributable production decreased in line with expectations to 204,000 ounces for the year, mostly as a result of the lower grade mined in the first three quarters of the year. The highlights for the year were the higher stripping ratio achieved with the extraction of 1.5Mt of additional waste and an increase in silver production to 420,000 ounces.

The recovered grade decreased year-on-year from 7.29g/t in 2006 to 6.88g/t in 2007 as a result of the lower grade material supplied to the plant.

Total cash costs increased by 16% to $261/oz as compared to $225/oz in 2006. Increases in the cost of mining supplies, a function of the inflationary impact of higher commodity prices and higher maintenance costs (due to an extension on the useful life of some mine equipment), as well as an increase in workforce and contractor costs, were partially offset by greater silver by-product revenue.

Adjusted gross profit for the year rose by 29% to $45 million, mainly as a result of the higher prices received for both gold and silver which offset the increase in costs.

Capital expenditure for the year amounted to $18 million, spent largely on mine equipment and mine and plant infrastructure.

Growth prospects: The four-year brownfields exploration programme entered its second year in 2007. The focus of the programme is to determine the extent of and to delineate the shallow, high-grade mineral resources. Regarding mineral resources, 350,000 ounces of gold were added during the year 2007.

Outlook: Attributable gold production for 2008 is projected to be maintained at levels similar to that of 2007 of between 200,000 and 205,000 ounces, at a total cash cost of between $329/oz and $339/oz. The recovered grade is also predicted to be similar to the corresponding value achieved in 2007. Attributable capital expenditure of $22 million is scheduled for 2008, to be spent mostly on the construction of the heap-leach facilities and mine and plant infrastructure.