Although it is not a requirement of Jersey company law, the report is in compliance with Schedule 8 of the UK Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008.

Letter from the chairman of the remuneration committee

Dear Shareholder

The remuneration committee has critically reviewed our remuneration structure in the light of our remuneration history, the company business strategy, the desire to ensure the retention and motivation of our top talent and good governance practice. We have also undertaken a review of the structure and quantum of non-executive remuneration.

Following this review, we propose to make several changes to the way in which the company's remuneration is structured. These proposals are outlined in this Report. The remuneration committee is committed to engagement with stakeholders in respect of remuneration design and application and welcomes views from investors. As part of the changes in remuneration policy proposed this year the remuneration committee proactively informed and consulted with investors and key institutional bodies in advance of any decisions on policy changes.

Our business has been highly successful – growing operationally, reaching strategic milestones, delivering value to shareholders and remaining true to its core values and mission. This is an evolving journey for the company and its executive directors, and we believe that the proposals make significant strides in the alignment of remuneration with good practice.

Yours sincerely

Norborne P Cole Jr
Chairman of the Remuneration Committee

Remuneration principles

The committee's overriding objective is to ensure that the company's remuneration policy encourages, reinforces and rewards the delivery of sustainable shareholder value. The company has outperformed the FTSE-350 and the HSBC Global Gold Mining Index (the 'HSBC Index') over the last five years. £100 invested on 1 January 2005 in the company would have resulted in a shareholding worth £575 on 31 December 2010, compared to £129 if invested in the FTSE-350. US$100 invested in the company on 1 January 2005 would have resulted in a shareholding worth US$516 on 31 December 2010, compared with US$185 if invested in the HSBC Index. As a result of its very significant growth in value over this period, the company is now a constituent of the FTSE-100.

• The company competes for management skills and talent in an international market place in the global mining industry. Competitive reward attracts executives of the highest calibre, to reflect the flexibility and mobility required to work in the company's key operational jurisdictions (West, Central and East Africa). The company benchmarks each element of its remuneration and the total remuneration package in comparison to FTSE-100, FTSE mining and comparable international gold mining companies. Variable performance-linked pay will be a major element of the executive director total remuneration package.
• Variable pay will be a combination of annual cash bonuses and longer term incentives based on performance over 3-5 years and payable over 4-6 years. This is to balance the management's orientation between the achievement of short term key business measures within the year and long term sustainable business growth.
• Performance criteria will be strategically significant and demanding, including both financial and non- financial measures, to encourage and reward superior performance.
• The interests of executive directors will be aligned with those of shareholders through a significant proportion of the total remuneration package being delivered in company shares. Executive directors will be encouraged to build up and retain a share holding through a new company share ownership policy.
• Remuneration arrangements are internally equitable to support the company's culture and the deployment of executives around our business.

The remuneration committee

THE ROLE AND COMPOSITION OF THE COMMITTEE

The remuneration committee is committed to the principles of accountability and transparency, and ensuring that remuneration arrangements align reward with performance. The committee's responsibilities are set out in its terms of reference, which can be found on the company's website. These include:

• Remuneration policy and its specific application to the executive directors and general application to the senior executives below the main board;
• The determination of levels of reward for the executive directors;
• Providing guidance to the chairman of the board on evaluating the performance of the CEO, management development plans and succession planning;
• Responsibility for awards made under the Restricted Share Scheme; and
• Effective communication with shareholders on the remuneration policy and the committee's work on behalf of the board.

During the financial year 2010, the members of the committee were Mr Norborne P Cole Jr (Chairman), Mr Christopher L Coleman and Dr Karl Voltaire.

The current members of the committee are independent non-executive directors in line with the independence requirements of the Combined Code and UK Corporate Governance Code.

REMUNERATION COMMITTEE MEETINGS

The committee met four times formally during 2010, and attendance is set out in the table below. At the invitation of the chairman of the committee, the chairman of the board attended all four meetings. The CEO also attended except where matters associated with his own remuneration were considered.

The remuneration committee meetings were also attended by the company secretary and the human capital executive.

During the year, the committee also received independent external advice from remuneration consultants Towers Watson and Deloitte. Towers Watson does not provide any other services to the company. Deloitte provides tax advice. The company's lawyers; Ashurst in the United Kingdom, Fulbright & Jaworski in the United States and Ogiers in Jersey, also provided advice to the committee.

Executive remuneration

THE STRUCTURE OF EXECUTIVE DIRECTOR REMUNERATION

Total executive director remuneration is benchmarked against a comparator group of the company benchmarks each element of its remuneration and the total remuneration package in comparison to FTSE-100, FTSE mining and comparable international gold mining companies.

The total executive directors' remuneration for the year ended 31 December 2010 was US$10 284 745 (2009: US$9 271 980).

The combined effect of making the proposed changes will be to;

• Increase the proportion of the total remuneration package that is linked to the achievement of demanding performance criteria, and
• Extend the period over which remuneration will be earned and paid.

The mix of short and long term performance linked remuneration under target and maximum performance scenarios is illustrated below:

REMUNERATION FOR OTHER SENIOR EXECUTIVES

The committee has oversight of remuneration policies for the senior executives below the main board, and applies the same principles of transparency, clarity and alignment of reward with performance.

The company does not operate an annual cash bonus for the senior executives below the main board.

It is considered important to support alignment with shareholders. The company has operated a policy of granting share options rather than paying cash bonuses to senior executives. Consequently, the level of share option grants to this population has been higher than in other organisations.

Having recognised the size and growth of the company, the committee has extended the Restricted Share Scheme to the senior executives below the main board with effect from 2010. Restricted shares will not be issued annually, but rather as and when new projects or key events require or deserve the issue of long term rewards.

Fixed remuneration

Fixed remuneration comprises a base salary. No pension contributions are funded by the company. Fixed remuneration normally represents less than 50% of the individual's remuneration package (based on target performance and expected values of share awards).

BASE SALARY

Base salaries are determined by the committee, taking into account the performance of the individual. The company benchmarks each element of its remuneration and the total remuneration package in comparison to FTSE-100, FTSE mining and comparable international gold mining companies.

When setting base salaries, the committee also takes into consideration the requirement for extensive travel and time spent at the company's operations overseas. This is considered critical in effective management of the company's business

As at 31 December 2010, the base salaries of the executive directors were as follows:

• CEO – Dr DM Bristow US$1 500 000 per annum
• CFO – Mr GP Shuttleworth £330 212 per annum.

Following a review of all aspects of the remuneration packages of the executive directors and as an integral aspect of the proposed changes, it has been decided that there will be no increase in the base salary of the CEO for 2011. The base salary of the CFO will increase to £390 000 per annum with effect from 1 January 2011 to recognise his contribution, value to the company and growth in his role.

RETIREMENT BENEFITS

Executive directors can elect to sacrifice up to 20% of their base salary to contribute to a defined contribution provident fund. The company does not make any further contribution to the fund.

OTHER BENEFITS

Executive directors can elect to receive other benefits including, medical aid and group life insurance, funded out of their base salary. Where appropriate, executive directors may be provided with other benefits such as security services while travelling for work and the cost of membership of professional associations.

Variable remuneration

Variable remuneration represents the major proportion of the individual's remuneration package.

For 2010, the variable remuneration of the executive directors comprised:

• an annual bonus opportunity; and
• participation in the Restricted Share Scheme, measuring performance over the long term.

For 2011, it is proposed that the variable remuneration of the executive directors will comprise:

• an annual bonus opportunity;
• a deferred bonus;
• participation in a Co-Investment Plan rewarding performance over three years; and
• performance shares awarded under the Restricted Share Scheme, rewarding performance over 3, 4 and 5 years, with a further one year post-vesting retention requirement.

ANNUAL BONUS

Encourages and rewards superior performance on an annual basis.

Executive directors are eligible to receive an annual bonus, subject to the achievement of stretching performance criteria.

The performance metrics are intended to reward the achievement challenging strategic and financial targets that contribute to the creation of sustainable shareholder value. The committee may make adjustments to the criteria used for measuring performance on an annual basis taking into account the strategic objectives of the company for the year.

Annual bonus for the CEO for 2010

Dr DM Bristow's annual bonus for 2010 was based on the achievement of the following performance criteria:

An annual bonus of 150% of base salary was payable for achieving 'target' performance. The maximum bonus payable was 300% of base salary for outperformance.

The committee measures performance against each of the metrics in the round including whether one or more are significantly above or below the target level.

Annual bonus for the CFO for 2010

Mr GP Shuttleworth's annual bonus for 2010 was based on the achievement of the following performance metrics:

An annual bonus of 75% of base salary was payable for achieving 'target' performance. The maximum bonus payable was 150% of base salary for outperformance.

The committee measures performance against each of the metrics in the round including whether one or more are significantly above or below the target level.

Bonus payments in respect of 2010

Based on performance achieved against targets during the 2010 financial year, the remuneration committee determined that Dr DM Bristow and Mr GP Shuttleworth should receive bonus payments of US$4 500 000 and US$800 000 respectively.

CEO

The determination of the bonus for the CEO for 2010 took account of the following performance metrics:

• EBITDA growth in the year was 34%;
• the increase in reserves to depletion was 6.77;
• production volume was 440 000 ounces; and
• performance against strategic output measures was 83% of maximum.

CFO

The determination of the bonus for the CFO for 2010 took account of the following performance metrics:

• earnings per share rose by 33%;
• cost of production was US$699 per ounce; and
• performance against strategic output measures was 75% of maximum.

Annual bonuses for the executive directors for 2011

The annual bonuses for 2011 will be based on the achievement of the following performance criteria:

The annual bonus payable to the CEO for achieving 'target' performance will remain unchanged at 150% of base salary. The maximum bonus payable to the CEO for achieving outperformance will also remain unchanged at 300% of base salary.

The maximum bonus payable to the CFO for achieving 'target' performance will remain unchanged at 75% of base salary. The maximum bonus payable to the CFO for achieving outperformance will also remain unchanged at 150% of base salary.

It is proposed that the one third of annual bonuses payable to executive directors will be subject to a mandatory deferral for the first time in 2011, as described below.

Deferred annual bonuses

Encourages and rewards superior performance on a sustained basis.

In 2011, part of any annual bonus earned will be compulsorily deferred and paid in shares after three years. For the CEO and the CFO, one third of any bonus will be deferred.

Deferred bonuses may be matched under the proposed Co- Investment Plan (see section below).

Deferred bonuses will be subject to clawback in the event of a misstatement of the report and accounts on which they were based.

Long term incentives for 2010

The company has incentivised executives over the long term by awarding shares under the Restricted Share Scheme which was approved by shareholders on 28 July 2008. Awards have been made periodically, generally not every year, at the discretion of the committee. Shares awarded have been expressed as a specific number of shares, rather than a percentage of salary. Shares awarded under the scheme vest in equal tranches as specified at the date of award.

The vesting profile for executive directors is in line with the policy for senior executives below the main board. It reflects the fact that awards are not necessarily made on an annual basis, and therefore staggered vesting supports the phasing of payments.

Awards outstanding are detailed in the table on page 91.

Performance measures for awards made under the Restricted Share Scheme

The gold mining industry is capital intensive, cyclical and long term. Outstanding performance comes from finding and accessing high quality resources, successfully developing new projects and maintaining efficient and safe operations.

The committee believes that, against that background, success may be measured by the company's total shareholder return performance against the HSBC Index. The HSBC Index is a capitalisation-weighted index calculated in US Dollars, representing mining companies in 21 countries.

Performance is measured against the HSBC Index for each tranche of restricted share awards. Awards to executive directors vest in full provided the company's performance is better than that of the index over the performance period. No vesting occurs where the company's performance falls below that of the index. The committee considers this target to be challenging in the context of the company's historical sustained out-performance of the market.

The company's performance compared with the performance of this index over the past five years is shown in the graph on the previous page.

In addition, the vesting of any restricted share award is subject to the employee being employed and achieving a satisfactory individual performance rating for the year preceding the vesting date.

No vesting occurred on 1 January 2011 in respect of Dr Bristow's shares over the past 12 month period, as the company's performance fell below that of the HSBC Index over the performance period.

Long term incentives from 2011

From 2011 it is proposed that long term incentives for executive directors will comprise:

• participation in a Co-Investment Plan rewarding performance over three years; and
• performance shares awarded under the Restricted Share Scheme, rewarding performance over 3, 4 and 5 years, with a further one year post-vesting retention requirement.

Proposed new Co-Investment Plan

Rewards sustained performance relative to global peers over a three year period

Following consultation with shareholders, a new Co- Investment Plan will be put to shareholders for approval in 2011.

Each year, one third of any annual bonus earned will be compulsorily deferred and an executive director may also choose to commit further shares to a Co-Investment Plan. The maximum commitment which may be made in the Co- Investment Plan will be 200% of base salary by the CEO and 100% of base salary by the CFO. Committed shares must be retained for three years and may be matched, depending on relative TSR performance over three years against the HSBC Index. Both the CEO and the CFO will be given the opportunity to make the maximum commitment for 2011 if shareholder approval is received.

If after three years the TSR performance of the company equals the performance of the HSBC Index, then the committed shares may be matched on a stepped scale, as shown in the table below. The maximum level of matching is 1 for 1.

Proposed new awards under the Restricted Share Scheme

Rewards sustained long term performance over a five year period.

Each year, awards of shares are to be made under the Restricted Share Scheme, determined as a percentage of base salary. The maximum annual award will be 200% of base salary for the CEO and 100% of base salary by the CFO. There will also be a maximum number of shares which may be awarded in any one year.

The awards will be made under the terms of the existing Restricted Share Scheme, approved by shareholders on 28 July 2008.

Awards will vest after three, four and five years subject to the achievement of stretching operational and financial targets. Four separate measures of business growth will be used:

• Additional reserves in ounces, weighted 25%
• Absolute reserve growth in ounces, weighted 25%
• Absolute TSR, weighted 25%
• EPS growth, weighted 25%.

The committee believes that the performance necessary for awards to vest towards the upper end of these ranges is stretching. They should not, therefore, be interpreted as providing guidance on the group's expected performance over the relevant periods.

EPS growth will be measured on an average annualised growth basis. TSR will be measured over the three months before the start and before the end of each performance period. Awards will vest on a straight-line sliding scale for performance between these points.

A post-vesting retention period will require that at least 50% of the after tax value of any part of an award vesting must be held for a minimum period of one year.

Service contracts

Executive directors' service contracts outline the components of remuneration paid, but do not prescribe how remuneration levels are to be modified from year to year.

Dr DM Bristow signed a contract in April 2008. Mr GP Shuttleworth agreed a service contract when he joined the company on 1 July 2007, and agreed updated contracts on 1 July 2008 and on 1 January 2010. Both the CEO and the CFO will sign new service contracts with six months notice periods following the AGM, subject to receiving shareholder approval for the proposed changes to the remuneration arrangements.

The company and the executive directors can terminate the contract by giving six months' notice in writing. The employment relationship can be ended immediately by either party making a payment in lieu of notice, equivalent to the base salary payable for the notice period.

Any retirement benefit due from contributions made by the executive director to the company's provident fund may also be paid on termination.

External directorships

Executive directors may accept external appointments, subject to the board's consent, as non-executive directors of other companies and would normally retain any fees received.

In 2010 Dr DM Bristow received fees of US$19 995 (2009: US$26 702) in relation to his role as non-executive director of Rockwell Resources International.

Shareholding requirements

Ensures that the interests of executive directors are aligned with shareholders.

With effect from 2011, there is a requirement for executive directors to build up a holding in shares in the company at least equal in value to two times base salary from the value of vested long term incentive awards. This is an increase in the previous requirement to hold US$50 000. As at 31 December 2010 both Dr DM Bristow and Mr GP Shuttleworth held shares at least equal in value to US$50 000 and to two times base salary.

New directors are allowed three years in which to acquire the required shareholding and this period may be extended at the discretion of the remuneration committee.

Non-executive directors' remuneration

REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS

The company's policy on non-executive directors' fees takes into account the need to attract individuals of the right calibre and experience, their responsibilities and time commitment.

FEES

Non-executive director remuneration levels were last reviewed in April 2008 and have been reviewed in 2011.

The chairman and the senior independent director do not receive any additional fees for acting as chairman or a member of a board committee.

The annual award of restricted shares vests over a three year period in three equal instalments from the date of the award.

NON-EXECUTIVE DIRECTORS' FEES FROM 2011

From 2011 it is proposed that:

• the chairman's fee will be increased from US$170 000 to US$200 000;
• there will be an additional award of restricted shares to the chairman of 2 400 shares which vest over a three year period in three equal instalments from 1 January 2012; and
• there will be no change to the annual retainer fee or the board committee fees or the award of restricted shares for the non-executive directors.

NON–EXECUTIVE DIRECTORS' SHAREHOLDING REQUIREMENT

A non-executive director must build up and hold shares at least equal in value (as at the beginning of the year) to the annual retainer fee, from the value of vested awards of restricted shares. Save for Dr Dagdelen, who was appointed to the board in January 2010 and will only obtain his first restricted shares with effect from 1 January 2011, the remaining non-executive directors held shares equal to the value of the annual retainer fee at 31 December 2010.