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Financial Instruments

12 Months Ended

Dec. 31, 2020

37.	FINANCIAL INSTRUMENTS

Accounting classifications and fair values

The following tables show the carrying amounts and fair values of financial assets and financial liabilities.


	United States Dollar
	Carrying amount								Carrying Amount		Fair value
Figures in millions unless otherwise stated	Fair value through profit or loss		Fair value through OCI		Financal assets measured at amortised cost		Other financial liabilities measured at amortised cost		Total		Total
2020
Financial assets measured at fair value
- Environmental trust funds		7.4		—		—		—		7.4		7.4
- Trade receivables from provisional copper sales		23.7		—		—		—		23.7		23.7
- Investments		—		42.4		—		—		42.4		42.4
- Asanko redeemable preference shares		—		92.6		—		—		92.6		92.6
- Warrants		12.9		—		—		—		12.9		12.9
- Gold and foreign currency derivatives contracts		113.3		—		—		—		113.3		113.3

Total		157.3		135.0		—		—		292.3		292.3

Financial assets not measured at fair value
- Environmental trust funds		—		—		71.9		—		71.9		71.9
- Loan advanced - contractor		—		—		68.4		—		68.4		68.4
- Trade and other receivables		—		—		29.5		—		29.5		29.5
- Cash and cash equivalents		—		—		886.8		—		886.8		886.8

Total		—		—		1,056.6		—		1,056.6		1,056.6

Financial liabilities measured at fair value
- Copper and oil derivative contracts		29.1		—		—		—		29.1		29.1

Total		29.1		—		—		—		29.1		29.1

Financial liabilities not measured at fair value
- Borrowings		—		—		—		1,526.9		1,526.9		1,689.8
- Trade and other payables		—		—		—		452.0		452.0		452.0
- Lease liabilities		—		—		—		429.0		429.0		429.0

Total		—		—		—		2,407.9		2,407.9		2,570.8

2019
Financial assets measured at fair value
- Environmental trust funds		7.2		—		—		—		7.2		7.2
- Trade receivables from provisional copper sales		22.8		—		—		—		22.8		22.8
- Investments		—		47.9		—		—		47.9		47.9
- Asanko redeemable preference shares		—		95.5		—		—		95.5		95.5
- Warrants		11.7		—		—		—		11.7		11.7
- Oil derivatives contracts		1.1		—		—		—		1.1		1.1

Total		42.8		143.4		—		—		186.2		186.2

Financial assets not measured at fair value
- Environmental trust funds		—		—		62.3		—		62.3		62.3
- Trade and other receivables		—		—		51.4		—		51.4		51.4
- Cash and cash equivalents		—		—		515.0		—		515.0		515.0

Total		—		—		628.7		—		628.7		628.7

Financial liabilities measured at fair value
- Gold and foreign exchange derivative contracts		127.6		—		—		—		127.6		127.6

Total		127.6		—		—		—		127.6		127.6

Financial liabilities not measured at fair value
- Borrowings		—		—		—		1,845.8		1,845.8		1,952.4
- Trade and other payables		—		—		—		385.3		385.3		385.3
- Lease liabilities		—		—		—		332.9		332.9		332.9

Total		—		—		—		2,564.0		2,564.0		2,670.6

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trade and other receivables, trade and other payables and cash and cash equivalents

The carrying amounts approximate fair values due to the short maturity of these instruments.

Loan advanced - contractor

The fair value of the loan advanced to contractor approximates the carrying amount, determined using the discounted cash flow method using market related interest rates.

Investments and redeemable preference shares

The fair value of publicly traded instruments (listed investments) is based on quoted market values. Asanko redeemable preference shares are accounted for at fair value based on the expected cash flows as set out in note 17.

Warrants

Warrants are measured at fair value, using a standard European call option format based on a standard option theory model, with adjustments to the fair value being recognised in profit or loss.

Oil, gold, copper and foreign exchange derivative contracts

The fair values of these contracts are determined by using the applicable valuation models for each instrument type with the key inputs being forward prices, interest rates and volatilties.

Environmental trust funds

The environmental trust funds are measured at fair value through profit or loss and amortised cost which approximates fair value based on the nature of the fund’s underlying investments.

Borrowings

The

5-year

notes and the

10-year

notes (2019: 2020 notes, the

5-year

notes and the

10-year

notes) are issued at a fixed interest rate. The fair values of these notes are based on listed market prices. The fair value of the remaining borrowings approximates their carrying amount, determined using the discounted cash flow method using market related interest rates.

Fair value hierarchy

The Group has the following hierarchy for measuring the fair value of assets and liabilities at the reporting date:

Level

Unadjusted quoted prices in active markets for identical assets or liabilities;

Level

Inputs other than quoted prices in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

Level

Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. There were no transfers during the year ended 31 December 2020 and 2019.

The following table sets out the Group’s financial assets and financial liabilities by level within the fair value hierarchy at the reporting date:


	United States Dollar
	2020								2019
Figures in millions unless otherwise stated	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Financial assets measured at fair value
Environmental trust funds		7.4		—		7.4		—		7.2		—		7.2		—
Trade receivables from provisional copper sales		23.7		—		23.7		—		22.8		—		22.8		—
Investments - listed		42.4		42.4		—		—		47.9		47.9		—		—
Asanko redeemable preference shares		92.6		—		—		92.6		95.5		—		—		95.5
Warrants		12.9		—		12.9		—		11.7		—		11.7		—
Gold derivative contracts		27.3		—		27.3		—		—		—		—		—
Foreign currency derivative contracts		86.0		—		86.0		—		—		—		—		—
Oil derivative contracts		—		—		—		—		1.1		—		1.1		—
Financial assets not measured at fair value
Environmental trust funds		71.9		—		71.9		—		62.3		—		62.3		—
Loan advanced - contractor		68.4				—		68.4
Financial liabilities measured at fair value
Copper derivative contracts		14.0		—		14.0		—		—		—		—		—
Oil derivative contracts		15.1		—		15.1		—		—		—		—		—
Gold derivative contracts		—		—		—		—		127.3		—		127.3		—
Foreign currency derivative contracts		—		—		—		—		0.3		—		0.3		—
Financial liabilities not measured at fair value
Borrowings		1,689.8		1,156.3		—		533.5		1,952.4		1,700.4		—		252.0

Environmental trust funds

The environmental trust funds are measured at fair value through profit or loss and amortised cost which approximates fair value based on the nature of the fund’s underlying investments.

Trade receivables from provisional copper sales

Valued using quoted market prices based on the forward London Metal Exchange (“LME”) and, as such, is classified within Level 2 of the fair value hierarchy.

Listed investments

Comprise equity investments in listed entities and are therefore valued using quoted market prices in active markets.

Asanko redeemable preference shares

The fair value is based on the expected cash flows of the Asanko Gold Mine based on the

life-of-mine

model. Refer note 17 for key inputs.

Warrants

Warrants are measured at fair value through profit or loss. The fair value is determined using a standard European call option format based on a standard option theory model.

Oil, gold, copper and foreign exchange derivative contracts

The fair values of these contracts are determined by using the applicable valuation models for each instrument type with the key inputs being forward prices, interest rates, volatilties and exchange rates.

Borrowings

The

5-year

notes and the

10-year

notes (2019: 2020 notes, the

5-year

notes and the

10-year

notes) are issued at a fixed interest rate. The fair values of these notes are based on listed market prices and are classified within level 1 of the fair value hierarchy. The fair value of the remaining borrowings approximates their carrying amount, determined using the discounted cash flow method and market related interest rates and are classified within level 3 of the fair value hierarchy.

Loan advanced - contractor

The fair value of the contractor loan approximates its carrying amount, determined using the discounted cash flow method and market related interest rates and is classified within level 3 of the fair value hierarchy.