Financial Instruments

12 Months Ended

Dec. 31, 2021

Disclosure of detailed information about financial instruments [abstract]

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	Financial assets measured at amortised cost	Other financial liabilities measured at amortised cost	Total	Total

2021
Financial assets measured at fair value
– Environmental trust funds	2.9	—	—	—	2.9	2.9
– Trade receivables from provisional copper sales	25.8	—	—	—	25.8	25.8
– Investments	—	30.9	—	—	30.9	30.9
– Asanko redeemable preference shares	—	94.5	—	—	94.5	94.5
– Oil derivatives contracts	5.1	—	—	—	5.1	5.1
Total	33.8	125.4	—	—	159.2	159.2
Financial assets not measured at fair value
– Environmental trust funds	—	—	85.2	—	85.2	85.2
– Loan advanced - contractor	—	—	27.3	—	27.3	27.3
– Trade and other receivables	—	—	56.5	—	56.5	56.5
– Cash and cash equivalents	—	—	524.7	—	524.7	524.7
Total	—	—	693.7	—	693.7	693.7
Financial liabilities measured at fair value
– Foreign currency derivative contracts	6.8	—	—	—	6.8	6.8
Total	6.8	—	—	—	6.8	6.8
Financial liabilities not measured at fair value
– Borrowings	—	—	—	1,078.1	1,078.1	1,191.6
– Trade and other payables	—	—	—	480.5	480.5	480.5
– Lease liabilities	—	—	—	415.5	415.5	415.5
Total	—	—	—	1,974.1	1,974.1	2,087.6

	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	Financial 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
– Oil 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
– Gold and foreign exchange 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

Notes to the Consolidated Financial Statements continued

for the year ended 31 December 2021

37. FINANCIAL INSTRUMENTS continued

Accounting classifications and fair values continued

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 volatilities.

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 five-year notes and the 10-year notes (2020: the five-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 1

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

Level 2

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 3

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 years ended 31 December 2021 and 2020.

37. FINANCIAL INSTRUMENTS continued

Fair value hierarchy continued

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
	2021				2020
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	2.9	—	2.9	—	7.4	—	7.4	—
Trade receivables from provisional copper sales	25.8	—	25.8	—	23.7	—	23.7	—
Investments – listed	30.9	30.9	—	—	42.4	42.4	—	—
Asanko redeemable preference shares	94.5	—	—	94.5	92.6	—	—	92.6
Warrants	—	—	—	—	12.9	—	12.9	—
Gold derivative contracts	—	—	—	—	27.3	—	27.3	—
Foreign currency derivative contracts	—	—	—	—	86.0	—	86.0	—
Oil derivative contracts	5.1	—	5.1	—	—	—	—	—
Financial assets not measured at fair value
Environmental trust funds	85.2	—	85.2	—	71.9	—	71.9	—
Loan advanced – contractor	27.3	—	—	27.3	68.4		—	68.4
Financial liabilities measured at fair value
Copper derivative contracts	—	—	—	—	14.0	—	14.0	—
Oil derivative contracts	—	—	—	—	15.1	—	15.1	—
Foreign currency derivative contracts	6.8	—	6.8	—	—	—	—	—
Financial liabilities not measured at fair value
Borrowings	1,191.6	1,108.1	—	83.5	1,689.8	1,156.3	—	533.5

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 to 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.

Notes to the Consolidated Financial Statements continued

for the year ended 31 December 2021

37. FINANCIAL INSTRUMENTS continued

Fair value hierarchy continued

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, volatilities and exchange rates.

Borrowings

The 5-year notes and the 10-year notes (2020: 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.