Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good day, ladies and gentlemen, and welcome to today's Ashanti Goldfields preliminary results 2003 conference call. For your information, this call is being recorded. At this time, I would like to hand the call over to your host today, Dr. Sam Jonah. Please go ahead, sir.
SAM JONAH, CEO, GROUP MANAGING DIRECTOR, ASHANTI GOLDFIELDS COMPANY: Thank you very much. Good morning or good afternoon, ladies and gentlemen and welcome to our conference call. At the start of the year 2003, we did announce that we will be facing a pretty challenging year at our operations regarding production and cash operating costs. We targeted production at approximately (ph) 1.6 million ounces and estimated that cash operating costs were expected to increase by approximately 10 percent. Now, we did achieve 1.6 million ounces in production, but the increase in cash operating costs of 11.5 percent exceeded our expectations.
I'll start off with safety, then giving you the overview. In 2002, we reported a strong safety record performance with lost time/injury frequency rate of .37 injuries per 200,000 hours worked. Given the high emphasis that we place on the safety and health of our employees, I'm extremely pleased to announce that we have improved further upon our 2002 performance and indeed we did achieve long-term -- longtime injury frequency rate of 0.3 (indiscernible) injuries per 200,000 hours worked in the year under review.
Now, with the resolution of the plant expansion difficulties at Iduapriem, which we brought to your attention, and the progress achieved at the Nyankanga pit cut back Geita, we have increased production during the second half of the year. Again, we did promise you that. Total production of around 1.604 million ounces was marginally lower than the 1.622 million ounces we produced in 2002. Both Iduapriem and Geita mines achieved record annual production of 243,533,000 (ph) ounces as against 2002 figure of 185,199 ounces and 661,045 ounces respectively. Obuasi and Siguiri mines, on the other hand, performed below expectations due to lower grade and recovery difficulties. Operating difficulties continue to impact on Freda-Rebecca's production. (indiscernible) about the challenging task we face there.
Cash operating costs for 2003 was $222 per ounce, and this was 11.5 percent higher than the $199 an ounce recorded in the previous year. This was due primarily to higher fuel prices, increases in power costs and wages, and appreciation in curries of countries from which source our major imports, and rising cost of reagents -- South Africa, and of course we are talking about (indiscernible) here. These operating results, together with the lower release of deferred hedging income reduced our earnings before exceptional items to 54.8 million ounces as compared to the previous years of 79.7 million ounces -- sorry, million dollars.
Earnings per share before and after exceptional items for the year was $0.41. That's against a 2002 figure $0.6 and $.39 as against a figure of 0.47 for the previous year, respectively. Earnings after net exceptional charges of $5.6 million were $49.2 million as compared to $56.2 million in the previous year.
During the year, our hedge portfolio was restructured further and our group net debt level as at 31 December was reduced to $169.5 million, as against the previous year's figure of $215.6 million. Now this followed the repayment of shareholder loans of $30 million received from the Geita mine and the Group's debt repayments.
Exploration. On that front, we continue to obtain further encouraging results from our focused mine site exploration certainly (ph). At Obuasi, we have opened up a number of drilling sites at the 50 level in order to gain access for further deep drilling. During the year, we continued to obtain high-grade intercepts along the Obuasi trend.
At Geita, our objective or increasing the resource base was successfully achieved with the mine's total resources increasing to 11 -- 18.6 million ounces. Fifty percent of this, as you know, is attributable to Ashanti. At Siguiri, we are very encouraged by the delineation of new saprolite resources, which will be processed more efficiently through the new CIP plant, when completed.
Now I would like to talk about the proposed merger. On the 16th of May last year, AngloGold and Ashanti confirmed that they were in discussions regarding a proposed merger of the two companies, and on 4 August 2003 the companies announced that they had agreed to terms of the recommended merger at an exchange ratio of 26 new Anglo Shares for every Ashanti -- for .26 new Anglo shares for Ashanti share, and that they had entered into a transaction agreement. On the same date, AngloGold entered into a Lonmin Support Deed, pursuant to which Lonmin agree, amongst other things, to vote its shares in favor of the merger.
Now, following the announcement of these agreements, Ashanti received a major proposal from Randgold, and further discussions with AngloGold and detailed, careful consideration of the Randgold proposal, and following the increase by AngloGold in the offer consideration to 0.29 new AngloGold Ashanti share for every Ashanti share, the Ashanti Board announced on the 14th of October that it was recommending an improved final merger offer from AngloGold. Following receipt of a revised proposal from Randgold on the 24th of October, the Ashanti Board announced on the 27th that it had unanimously resolved to continue to recommend AngloGold's improved final merger offer. The merger is to be effected by means of Ghanaian Scheme of Arrangement under section 231 of the Companies Code, which requires the approval of Ashanti shareholders and confirmation of the High Court of Ghana.
On the 28th of October, the Ghanian Government announced its support for the merger and the principal terms of a stability undertaking which the Government intended to enter to with AngloGold. On the 12th of December, AngloGold and the Government entered into the Government Support Deed, pursuant to which the Government agreed, among other things, to vote its Ashanti shares in favor of the merger. The Stability Agreement requires the approval of Parliament of Ghana and is currently being considered by the Members of Parliament.
On January 12, the U.S. Securities and Exchange Commission granted a new action letter confirming the availability of a redemption pursuant to section 3(a)(10) of the U.S. Securities Act 133 (ph), as amended, from the registration requirements under that Act. From a competition perspective, the European (ph) Commission granted its clearance to the merger on the 29th of January, 2004. AngloGold has also obtained South …