Quarter ended 30 June 2011 compared with quarter ended 30 June 2010

Group attributable equivalent gold production decreased by 3 per cent from 898,000 ounces for the quarter ended June 2010 to 872,000 ounces for the quarter ended June 2011.

At the South African operations gold production decreased from 488,000 ounces to 447,000 ounces. KDC’s gold production decreased from 326,000 ounces to 273,000 ounces due to a decrease in volumes mined. Beatrix’s gold production increased from 92,000 ounces to 98,000 ounces mainly due to higher volumes mined and processed. South Deep’s gold production increased from 70,000 ounces to 76,000 ounces in line with the build-up plan.

At the West African operations, total managed gold production decreased from 257,000 ounces for the quarter ended June 2010 to 237,000 ounces for the quarter ended June 2011. At Tarkwa, gold production decreased by 10 per cent from 200,000 ounces to 181,000 ounces due to a decrease in CIL throughput head grades. At Damang, gold production decreased marginally from 57,000 ounces to 56,000 ounces.

In South America, gold equivalent production at Cerro Corona increased from 97,000 ounces in the June 2010 quarter to 101,000 ounces in the June 2011 quarter, mainly due to an increase in ore mined and processed as well as higher copper prices relative to gold prices in the June 2011 quarter.

At the Australasia operations gold production increased by 7 per cent from 149,000 ounces in the June 2010 quarter to 159,000 ounces in the June 2011 quarter. St Ives decreased from 118,000 ounces to 109,000 ounces. This was mainly due to a decrease in tonnes mined from both surface and underground, exacerbated by lower grades. Production at Agnew increased from 32,000 ounces to 50,000 ounces due to increased stope availability at Kim following the rehabilitation of poor ground conditions as well as additional ounces from Songvang.

Revenue increased by 9 per cent from R8,803 million (US$1,169 million) to R9,581 million (US$1,411 million). The average gold price increased by 13 per cent from R287,454 per kilogram (US$1,191 per ounce) in the quarter ended June 2010 to R326,206 per kilogram (US$1,496 per ounce) in the June 2011 quarter. The Rand strengthened from US$1 = R7.51 to US$1 = R6.78 or 10 per cent, while the Rand/Australian Dollar weakened by 8 per cent from A$1 = R6.66 to A$1 = R7.18. The Australian Dollar strengthened 19 per cent from 89 cents to 106 cents to the US Dollar.

Net operating costs increased by only 1 per cent from R5,065 million (US$673 million) to R5,124 million (US$755 million). At the South Africa region, the increase in costs was mainly due to annual wage and electricity tariff increases. At the West Africa region, the increase in costs was due to electricity tariff increases, fuel price increases and annual wage increases, while in South America increased statutory workers’ participation in profits contributed to the increase in costs.Total cash cost for the Group increased from R166,215 per kilogram (US$688 per ounce) to R177,934 per kilogram (US$816 per ounce) due to decreased gold production and increased operating costs.

At the South African operations operating costs increased by 6 per cent from R2,905 million (US$386 million) for the June 2010 quarter to R3,074 million (US$453 million) for the June 2011 quarter. This was due to annual wage increases and increased electricity tariffs, partly offset by cost saving initiatives and fewer employees at all the operations. Total cash cost at the South African operations increased from R187,770 per kilogram to R220,261 per kilogram as a result of the above and the decrease in production.

At the West African operations, net operating costs decreased from US$151 million in the June 2010 quarter to US$122 million in the June 2011 quarter. This was due to a higher gold-in-process credit, a decrease in production and operating cost as a result of the conversion to owner maintenance. These decreases were partly offset by annual wage increases, fuel increases and power increases.

At Cerro Corona in South America, net operating costs increased from US$32 million in the June 2010 quarter to US$38 million in the June 2011 quarter, in line with the increase in production and the increase in workers’ statutory participation in profit.

At the Australasia operations, net operating costs increased from A$117 million in the June 2010 quarter to A$135 million in the June 2011 quarter. At St Ives, net operating costs increased from A$89 million to A$103 million mainly due to increased waste normalisation charges and increased contractor mining costs. At Agnew, net operating costs increased from A$27 million to A$32 million due to the fuel price and salary increases together with the increase in production.

Operating profit increased from R3,738 million (US$496 million) to R4,457 million (US$656 million).

Non-recurring costs of R101 million (US$15 million) for the June 2011 quarter compare with non-recurring costs of R144 million (US$19 million) for the June 2010 quarter. The non-recurring items for the June 2011 quarter include voluntary separation packages and business process re-engineering costs at all the operations. The non-recurring items for the June 2010 quarter were mainly as a result of an impairment on our investment in Rusoro of R197 million (US$26 million), partly offset by profit on the disposal of Eldorado shares of R49 million (US$6 million).

Government royalties increased from R221 million (US$29 million) in the June 2010 quarter to R236 million (US$35 million) in the June 2011 quarter.

Taxation increased from R644 million (US$86 million) in the June 2010 quarter to R866 million (US$128 million) in the June 2011 quarter in line with the higher taxable income.

Net earnings attributable to owners of the parent amounted to R1,267 million (US$186 million), compared with earnings of R900 million (US$120 million) for the quarter ended June 2010.

Earnings excluding non-recurring items, gains and losses on foreign exchange, financial instruments and gains or losses of associates after taxation, amounted to R1,326 million (US$195 million) for the quarter ended June 2011, compared with R945 million (US$125 million) for the quarter ended June 2010.