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AngloGold Limited Annual Report 2001 AngloGold Limited Annual Report 2001


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1 Key features – 2001 2 Corporate profile 4 Chairman and Deputy Chairman’s letter to shareholders 7 One-year forecast – 2002 8 Review of gold market 10 Financial review 14 Review of operations 37 Gold marketing 40 Exploration 42 Mineral Resources and Ore Reserves 44 Directors and executive management 46 Directors’ approval 46 Secretary’s certificate 47 Report of the independent auditors 48 Corporate governance 54 Directors’ report 64 Group income statement 65 Group balance sheet 66 Group cash flow statement 67 Group statement of changes in shareholders’ equity 68 Notes to the group financial statements 98 Company income statement 99 Company balance sheet 100 Company cash flow statement 101 Company statement of changes in shareholders’ equity 102 Notes to company financial statements 118 Investment in principal subsidiaries and joint ventures 119 Shareholders’ information 122 Directorate and administration 123 Glossary of terms Back cover – Contact information


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– 2001

A good year characterised by sound operational performance, supported by new, low-cost production in Africa and the disposal of low-margin assets in South Africa.

Headline earnings ($/share)

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■ Headline earnings (before unrealised hedging activities) increased 13% to $286m or $2.67 per share.

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■ Return on capital up from 11% to 14%.

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■ Return on equity increased from 11% to 16%. Cash costs ($/oz)

■ Continued high dividend of $1.81 (R18) per share.

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■ Cash costs decreased by 16% to $178/oz.

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■ Operating profit up 12% to $522m. 100 98

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Throughout this document, $ refers to US dollars, unless otherwise stated.

Certain forward-looking statements Certain statements contained in this document including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding gold prices and production, the completion and commencement of commercial operations of certain of AngloGold’s exploration and production projects, and its liquidity and capital resources and expenditure, contain certain forward-looking statements regarding AngloGold’s operations, economic performance and financial condition. Although AngloGold believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in gold prices and exchange rates, and business and operational risk management.

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ngloGold’s primary objective is to grow the company into the global gold equity of choice through the continual enhancement of shareholder value. The company consistently produces high rates of return on equity and capital, healthy profits and strong cash flows, resulting in substantial dividends, after providing for long-term growth. Going forward: ■ Production of around 6Moz/annum. ■ Reserves of 59Moz and resources of 282Moz (excluding the Free State). ■ A combination of underground and open-pit operations on four continents. ■ Extensive, focused exploration programmes in ten countries. ■ Listings on security exchanges in major trading time zones, including Johannesburg (ANG), New York (AU) and Australia (AGG). ■ Market capitalisation of $3.8bn (R45bn) as at 31 December 2001, with some 108m ordinary shares in issue. As at 15 February 2002, market capitalisation had risen to $5.5bn (R63bn). ■ Aggressive international gold marketing initiatives to sustain and grow the market for gold.

Canada

USA

Jerritt Canyon CC&V

Sadiola Yatela

Mali

Morila

Peru

Geita Tanzania

Brazil

Morro Velho Serra Grande

Union Reefs

Navachab Namibia SA Operations South Africa

Australia Boddington

Argentina Cerro Vanguardia

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Sunrise Dam

Operations


Belinda Bastow, Environmental Adviser at Sunrise Dam mine in Australia at the old waste dump, where rehabilitation has been ongoing since 1997 to return the dump to its natural state. Belinda is well qualified for the job with a BSc (Hons) and has a number of years of experience in the field of mining rehabilitation. She is a member of a dedicated and well-recognised team of environmental scientists who are committed to establishing stable, self-sustaining rehabilitated landforms in line with world-class environmental standards. AngloGold is currently negotiating with the local indigenous population for the collection of material suitable for revegetation requirements in the area, as part of its commitment to sustainable development.

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D Bobby Godsell Chairman and Chief Executive Officer

Russell Edey Deputy Chairman

uring 2001, AngloGold’s headline earnings (before unrealised hedging activities) increased by 13% to $286m or US267 cents per share (cps). Gold production declined by 4%, largely as a result of the sale of the Elandsrand and Deelkraal mines. However, improvements in cost control and productivity and the devaluation of the rand led to a 16% improvement in total cash costs from $213/oz to $178/oz, lifting operating profit by 12% to $522m. The company declared interim and final dividends totalling $1.81 per share (R18 per share) for the year. This is consistent with AngloGold’s established practice of paying most of the company’s earnings back to shareholders, after allowing for organic growth. A significant feature of the year was our unsuccessful bid for Normandy. Our disappointment at the outcome of this bid is strongly tempered by a total commitment to only doing deals which grow rather than dilute both the present and future value of AngloGold. AngloGold carries out its business in a way that reflects awareness of and concern for our employees, their communities and the environment in which we live and work. The company’s continuing focus on workplace safety has again led to improvements, illustrated by the further reduction in 2001 of the lost time injury frequency rate. We remain committed to our long-term target of eliminating all fatal accidents at work. At the end of 2001 we were pleased to learn that AngloGold was recognised as the sustainability leader in the precious metals sector by the Dow Jones Sustainability World Index. Focused strategy The objective of the board and management is to grow this company into the global gold equity of choice, and an investment that offers its shareholders competitive returns. In pursuit of this objective, we will continue to seek growing value through a focused six-part strategy. ■ DRIVING THE COMPANY DOWN THE COST CURVE

Through a combination of changes to the asset base, productivity improvements and the benefits of currency movements, the cash cost of production has reduced from $250/oz in the March quarter of 1998 (the first quarter in which we reported as AngloGold)

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to $159/oz for the December quarter 2001. The sale of the Free State assets, announced in November 2001, will see a further reduction in our costs. In South Africa, we are 80% complete with our literacy programme and about 50% complete with our multi-skilled production team programme. Both of these initiatives are aimed at ensuring that all production workers have the ability to perform a set of diverse tasks appropriate to a 21st century mining workplace. We are also well advanced with testing incremental new production technologies. All of these should contribute to lower costs, improved safety and better margins, thereby growing earnings. ■ ORGANIC GROWTH AngloGold continues to enhance the value of the company through organic growth. The company currently has five major capital projects in development in South Africa, Australia and the United States. These will be coming into production over the next three years, and will produce around 15Moz of gold over the life of mine (LOM) at an average cash cost of approximately $150/oz. In addition there are two potential projects – the Cuiabá Deepening Project in Brazil and the Boddington Expansion Project in Australia – which together have the capacity to add some 5Moz. ■ NEAR-MINE OR BROWNFIELDS EXPLORATION

Over the last two years we have generated some five million new reserve ounces from brownfields exploration at a discovery cost of below $9/oz, thereby growing our existing operations. There are exploration projects under way at present in Mali, Tanzania, the USA, Brazil and in Australia. ■ NEW PROJECT OR GREENFIELDS EXPLORATION

From our now highly focused greenfields exploration activities we are targeting some 13 million new production ounces between now and 2015, at a discovery cost of below $30/oz from projects in southern Mali, Canada and Peru. ■ A DISCIPLINED ACQUISITION STRATEGY Since the creation of AngloGold in its present form in 1998, the company has acquired assets which last year produced 2.3 million low-cost ounces, and


Lepula Ramapulane (Driller) at the rockdrill trial area on 59 level at AngloGold’s Kopanang mine. This world-first electric rockdrill developed specifically for use in the mining industry is being tested in a collaborative effort between AngloGold and Hilti Corporation. The electric rockdrill uses a cheaper source of energy and is more environmentally and worker-friendly than traditional pneumatic drills, and has the potential to revolutionise the mining industry worldwide. AngloGold and Hilti have agreed to test the product extensively before its release on a wider front. In all, 45 rockdrills are being deployed at Kopanang, 45 at TauTona and ten at Moab Khotsong during 2002 to test the product under rigorous conditions underground.

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contributed 37% of the company’s operating profit and 49% of EBITDA. We will continue to pursue acquisitions of both orebodies and companies, where these acquisitions add value to AngloGold. ■ SEEKING VALUE DOWN THE GOLD VALUE CHAIN

As important as value-adding consolidation is in the mining of gold, so too is consolidation downstream of the smelthouse gate. The gold jewellery industry, from refining through to retail, is fragmented, under-capitalised and, in many areas, inefficient. AngloGold has made two modest investments downstream, from which we have learnt a great deal about bullion trading, manufacturing and retailing. We will continue to examine investment opportunities of scale where these present a compelling commercial case. Well-supported gold price After an eventful and volatile year in the gold market, the gold price remained well-supported in the closing months of 2001, with firm prices for the metal into the new year. The spot price, having averaged around $271/oz for the year, briefly traded above $290/oz during the final quarter, following on the attacks on the USA in September. The average price of $278/oz for the last quarter was the highest quarterly average spot price in the past 18 months and, while we continue to exercise caution in our price assumptions for planning purposes, we are optimistic

about the short-term prospects for the price of our product, particularly following the stronger price levels achieved since the end of January 2002. The final quarter of the year was also marked by the rapid and unanticipated decline in the value of the South African currency, with substantial consequences for the gold industry locally. At its weakest point in December, the rand fell to R13.81 against the US dollar. The local currency subsequently steadied, closing the year at around R12.00 to the dollar. This produced record high South African spot gold prices of just under R123,000/kg on 21 December 2001. Over the years of maintaining forward price cover, AngloGold has always actively managed its hedge. The need for active management is inevitably greatest in times of major market change, such as the very sharp loss of value in the rand. In at least some respects, the immediate results of active management can be seen in AngloGold’s received prices during the year where we are pleased to report that we continue to show improving prices in a changing environment. During the year, our changing production profile and the strengthening price permitted the reduction of net hedge commitments by some 105t or 3.4Moz. Going forward in this price environment, we will continue to reduce the level of rand-priced cover by restructuring our hedge. Outlook for 2002 For the year 2002, we forecast gold production of 5.8Moz at a total cash cost of $154/oz and capital expenditure of $268m.

Share price – JSE Securities Exchange (SA rand)

600

BOBBY GODSELL Chairman and Chief Executive Officer

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RUSSELL EDEY Deputy Chairman

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29/01/02

15/01/02

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18/12/01

04/12/01

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06/11/01

23/10/01

09/10/01

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28/08/01

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20 February 2002


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– 2002

South

North

South

Africa

Africa

Australia

America

America

Total

23,166

Dollar Imperial Underground, surface and dump reclamation Area mined

– ft2 – 000

23,166

Tons milled

– 000

56,988

1,079

1,331

59,398

Yield

– oz/t (underground)

0.245

0.241

0.209

0.242

Production

– oz – 000

3,394

261

278

3,933

Open-pit operations Tons milled/treated

– 000

9,110

6,324

17,457

595

33,486

Yield

– oz/t

0.101

0.072

0.018

0.256

0.055

Production

– oz – 000

921

456

318

153

1,848

Production

– oz – 000

3,394

921

456

579

431

5,781

Total cash costs

– $/oz produced

146

143

178

181

130

154

Capital expenditure

– $m

101

26

21

79

41

268

7.31

55.71

59.35

79.97

19.19

11.15

2,152

2,152

51,699

979

1,207

53,885

Total

Productivity index oz/employee Rand Metric Underground, surface and dump reclamation Area mined

– m2 – 000

Tonnes milled

– 000

Yield

– g/t (underground)

Production

– kg

8.41

8.28

7.17

8.29

105,563

8,107

8,655

122,325

Open-pit operations Tonnes milled/treated

– 000

8,265

5,737

15,837

539

30,378

Yield

– g/t

3.47

2.47

0.63

8.78

1.89

Production

– kg

28,656

14,176

9,906

4,738

57,476

Production

– kg

105,563

28,656

14,176

18,013

13,393

179,801

Total cash costs

– R/kg produced

51,722

50,480

62,860

63,865

45,976

54,374

Capital expenditure

– Rm

1,115

290

225

871

448

2,949

227

1,733

1,846

2,487

597

347

Total

Productivity index g/employee Rand/US dollar exchange rate: R11.00: $1

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he year 2001 proved to be another eventful year for the gold market, with considerable price volatility. Although the market tended to be weak during the first quarter, trading between $255/oz and $270/oz, the market has firmed steadily since the beginning of the second quarter. Two price rallies during the year took the spot price to over $290, the first on the back of a sharp loss in confidence in global stock markets in May, and the second following the attacks in the USA in September. The overall price range of $44 for the year reflects the volatility in the market. In Japan, a combination of equity market and banking sector weakness, with the withdrawal of a government guarantee of cash deposits at Japanese banks, has seen Japanese consumers moving cash savings increasingly into gold investment products since the beginning of 2002. In addition, new investor and speculator interest in gold has been evident on both the New York and Tokyo commodity exchanges, and buying on these exchanges has contributed to the spot price moving to above $300/oz since the first week of February.

Kelvin Williams Executive Director: Marketing

Encouraging market conditions for gold Market conditions for gold today are significantly more positive and encouraging than they have been for some years. The end of the record economic boom of the 1990s has seen both a sharp correction in equity market values and an erosion of consumer confidence in the super-profits promised. This has led to a favourable consideration of gold as a store

Spot gold price ($/oz)

310 300 290 280

of value investment in uncertain times and this renewed interest is reflected in the rising spot price for gold. Investor interest has been reinforced by other elements in the market itself. We have seen for some time the benefits of the Washington Agreement on central bank sales of gold. This has given the market an important degree of certainty regarding physical flows from the official sector. A high degree of confidence now attaches to the probability of renewal of this agreement, which would extend the pattern of orderly behaviour from that sector. Supply to decline The growth in new production from gold mining has all but stopped and it is widely expected that the supply of gold on to the market from gold producers will decline materially over the next five years. A further positive impact on the supply side is already being experienced in the absence of significant new hedging of future production by gold mining companies. This is accompanied by a process now well under way amongst a number of gold producers of running down existing gold price hedges by delivering current production into these contracts. This process is the equivalent of reducing supply onto the market as new production is delivered into such contracts rather than being sold currently on the spot market. One final element in favour in the market been a reduction in net physical disinvestment of gold, particularly from European holders of the metal, but also in respect of the post1999 flow-back of coins in the US market. Not all of the circumstances in the physical market for gold have been favourable. The economic downturn, particularly in the developed markets, has had a negative impact on gold offtake for jewellery fabrication. Gold demand in certain developing markets also slipped during the year for reasons relating to local currencies and the higher dollar gold price. However, overall, this fall in physical demand for the metal has been matched by the lower levels of supply.

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29/01/02

15/01/02

01/01/02

18/12/01

04/12/01

20/11/01

06/11/01

23/10/01

09/10/01

25/09/01

11/09/01

28/08/01

14/08/01

31/07/01

17/07/01

03/07/01

19/06/01

05/06/01

22/05/01

08/05/01

24/04/01

10/04/01

27/03/01

13/03/01

27/02/01

13/02/01

30/01/01

16/01/01

02/01/01

250

Looking ahead Looking to the year ahead, we believe that market circumstances will remain favourable for gold and that this will lead to further interest in our market.


Gaoussou Dembele has taught the art of goldsmithing at the Bamako Jewellery School, in Mali, for seven years, having trained and graduated as a goldsmith at the same school. The people of Mali have a long and cherished history of goldsmithing and it was to this country – and to the Bamako school – that AngloGold turned when it organised and sponsored a visit to Mali by a team of South African lecturers training in traditional African goldsmithing techniques. AngloGold has donated tools to the school as a token of its appreciation of the enthusiasm with which they have shared their expertise and knowledge in this age-old craft.

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he 2001 financial year was characterised by sound operational performance, supported by new, low-cost production in Africa and the disposal of low-margin assets in South Africa.

Results for the year ■ Headline earnings before unrealised hedging activities increased by 13% to $286m or 267 US cps (2000: $254m or 237 US cps). ■ Net profit for the year of $245m is a 48% improvement on the previous year. ■ Return on capital improved from 11% to 14%. ■ Return on equity improved from 11% to 16%. Dividends The board declared a final dividend of R11 per share (illustrative $0.96 per share), bringing the total dividend for the year to R18 per share (illustrative $1.81 per share). The dividend for the year represents a continuation of the policy of paying a high dividend as well as ensuring sustainable growth and offering investors long-term value.

Jonathan Best Executive Director: Finance

Headline earnings before unrealised hedging and dividends declared (US cps-illustrative)

Gold income ■ The average gold price received decreased to $286/oz in 2001 from $308/oz in the previous year. See Review of Gold Market on page 8. ■ Gold income declined by $167m during the 2001 financial year to $2,041m, in line with lower production and lower price received. Contributions to gold income by region were as follows: Gold income ($m)

2001

2000

Variance %

South Africa Africa Australia North America South America

1,298 250 155 161 177

1,587 111 172 165 173

(18) 125 (10) (2) 2

Total

2,041

2,208

(8)

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100

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Headline earnings Dividends

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Cost of sales Cost of sales, comprising total cash costs, retrenchment and rehabilitation costs, change in gold inventories and amortisation of mining

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assets, decreased from $1,740m in 2000 to $1,519m in 2001, a decrease of 13%, analysed as follows: – Total cash costs decreased from $1,521m in 2000 to $1,255m in 2001, following the reduction in gold produced from 7.243Moz in 2000 to 6.983Moz in 2001. This decline is largely attributable to the sale of Elandsrand and Deelkraal, the closures of some of the shafts at Matjhabeng and downsizing of the Joel operations. – The total cash costs per ounce improved from $213/oz to $178/oz. – Retrenchment and rehabilitation costs increased from $19m in 2000 to $35m in 2001, mainly owing to retrenchments at the Matjhabeng and Joel mines. – Gold inventory movement was $9m in 2001. This is partially attributable to the sale of Elandsrand and Deelkraal, the impending closure of shafts at Matjhabeng and the downsizing of the Joel operations. – Amortisation of mining assets increased from $217m in 2000 to $220m in 2001, as a result of the inclusion of Geita’s amortisation charge for the full year and Morila’s charge now being included for a full year as opposed to two months in the previous year. Operating profit ■ Despite a lower gold price received, operating profit for 2001 increased by 12% to $522m, $54m higher than the previous year. This is due to improvements in cost control and productivity and the effects of the devaluation of the rand. ■ The operating margin for the AngloGold group was 26% for 2001 and 21% for 2000. The margin varies from operation to operation and is summarised in the table on page 11. Net profit Net profit of $245m (2000: $166m) is arrived at after making the following adjustments to operating profit: ■ Total exploration expenditure was $32m (2000: $63m) of which $6m (2000: $19m) was capitalised. ■ Interest received decreased to $20m, mainly as a result of the funds required for the acquisition of Geita and Morila in 2000. ■ Finance costs increased by $3m to $72m, attributable to the additional borrowings required to acquire Geita and Morila. This was partially offset by decreases in interest rates.


The funds generated were further adjusted by: – $109m which was received for the sale of Elandsrand and Deelkraal; and – $43m which was received from the repayment of loans advanced. The net cash inflow after investment activities amounted to $185m.

Cash flow ■ OPERATING ACTIVITIES Cash generated from operations was derived from profits from operations of $458m per the income statement, adjusted for changes in working capital and non-cash flow items. The most significant noncash flow item was the amortisation of mining assets of $220m. Cash generated from operations of $673m was increased by interest receivable of $20m, but reduced by various payments to outside stakeholders detailed as follows: – Finance costs of $73m; – Mining and normal taxes of $111m; and – Dividends of $167m, resulting in a net cash inflow of $333m.

■ FINANCING ACTIVITIES – A three-year $400m syndicated loan facility was signed in May 2001. By year-end, $215m had been drawn. – Major loans repaid were the Dresdner Bank Gold loan of $150m and Dresdner Bank loan of $110m.

■ INVESTING ACTIVITIES The funds generated from operating activities of $333m were utilised to grow the group by investing in capital projects amounting to $298m. Major project expenditure in 2001 comprised: – Moab Khotsong $43m; – Sunrise Dam Project $31m; and – Cripple Creek & Victor Expansion $78m.

Richard Duffy Executive Officer: Business Planning

The net result of the operating, investing and financing activities and translation for 2001 amounted to an outflow of $4m which, when deducted from the cash balance at 31 December 2000 of $195m, resulted in cash on hand of $191m at 31 December 2001. Balance sheet ■ AngloGold sold Elandsrand and Deelkraal mines to Harmony Gold Mining Company Limited. The effective date of this transaction was 1 February 2001. ■ With the first-time adoption of IAS 39, financial derivatives have been raised as current assets and current liabilities. Shareholders’ equity was also affected by other comprehensive income. ■ All debentures were redeemed during the year. ■ Net debt to capital employed is 34%. This will reduce to 26% after the sale of the Free State assets and the Normandy shares.

2001

Steve Lenahan Executive Officer: Corporate Affairs

Capex ($m) 400

2000

Operating profit $m

Gold income $m

Margin %

Operating profit $m

Gold income $m

Margin %

South Africa Africa Australia North America South America

331 87 25 16 63

1,298 250 155 161 177

26 35 16 10 35

298 48 34 19 69

1,587 111 172 165 173

19 43 20 11 40

Total

522

2,041

26

468

2,208

21

forecast

■ With the adoption of IAS 39, an unrealised loss on hedging activities of $10m was recognised. ■ Asset impairments effected during the year amounted to $1m compared with $93m in 2000. ■ The taxation charge increased by $38m to $111m in 2001, owing mainly to an increase in earnings for the year. During the 2000 financial year, the tax charge included a deferred tax credit of $26m on impairment of mining assets.

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100

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R O U P

O P E R AT I N G

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Dollar Imperial 2001

2000

1999

1998

32,757 19,764 28 19,792 0.240 – 0.239 4,734 – 4,734

41,985 23,287 184 23,471 0.234 0.016 0.232 5,448 3 5,451

41,764 23,209 715 23,924 0.242 0.024 0.236 5,626 17 5,643

46,026 24,422 265 24,687 0.238 0.026 0.236 5,814 7 5,821

7.05 6.87

6.71 6.21

7.14 6.75

5.59 5.92

Surface and dump reclamation Tons treated – 000 Yield – oz/t Gold produced – oz 000

55,506 0.009 514

55,436 0.009 510

59,915 0.009 520

63,395 0.009 547

Open-pit operations Tons mined Stripping ratio Tons treated Yield Gold produced

– – – – –

000 t (mined-treated)/t treated 000 oz/t oz 000

94,567 2.17 29,808 0.058 1,735

54,146 1.08 26,016 0.049 1,282

52,779 2.51 15,024 0.050 755

8,297 1.63 3,156 0.074 234

Total Gold produced Revenue Total cash costs Total production costs

– – – –

oz 000 $/oz sold $/oz produced $/oz produced

6,983 286 178 213

7,243 308 213 245

6,918 315 213 244

6,602 333 225 259

Rand/US dollar average exchange rate

8.62

6.78

6.11

5.53

Financial results Dollar million Operating profit Net profit EBITDA Headline earnings Headline earnings before unrealised hedging activities Capital expenditure

522 245 673 281 286 298

468 166 611 254 254 304

505 434 616 325 325 220

469 318 438 277 277 174

2,359 14 1,559 16 987 191 796 34 9 26

2,924 11 2,006 11 1,156 195 961 33 9 21

2,861 18 2,576 16 828 493 335 12 12 23

1,895 15 2,058 13 814 254 (70) (4) 23 21

Underground operations Area mined – ft2 Tons milled – 000 Yield

– oz/t

Gold produced

– oz 000

Productivity oz/employee

Glossary of terms on page 123.

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000 reef waste total reef waste average reef waste total

– target – actual

Financial ratios Capital employed Return on capital Equity Return on equity Debt Cash Net debt (cash) Net debt (cash) to capital employed Interest cover Operating margin

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– – – – – – – – – –

– $m – % – $m – % – $m – $m – $m – % – times –%


Rand Metric 2001

2000

1999

1998

3,043 17,929 25 17,954 8.21 0.08 8.20 147,248 2 147,250

3,900 21,126 167 21,293 8.02 0.54 7.96 169,468 91 169,559

3,880 21,055 649 21,704 8.31 0.81 8.09 174,994 527 175,521

4,275 22,155 241 22,396 8,16 0.88 8.08 180,831 212 181,043

219 214 4.69 4.42

209 193 4.62 4.45

222 210 4.62 4.21

174 184 4.31 4.07

Surface and dump reclamation Tonnes treated – 000 Yield – g/t Gold produced – kg

50,355 0.32 15,976

50,289 0.32 15,870

54,354 0.30 16,165

57,511 0.30 17,025

Open-pit operations Tonnes mined Stripping ratio Tonnes treated Yield Gold produced

– – – – –

000 t (mined-treated)/t treated 000 g/t kg

85,790 2.17 27,042 2.00 53,977

49,121 1.08 23,601 1.69 39,866

47,880 2.51 13,630 1.72 23,480

7,525 1.63 2,863 2.54 7,281

Total Gold produced Revenue Total cash costs Total production costs

– – – –

kg R/kg sold R/kg produced R/kg produced

217,203 79,384 48,828 58,579

225,295 67,158 46,404 53,334

215,166 61,830 41,979 47,842

205,349 58,830 39,944 46,060

4,617 2,180 5,905 2,476 2,536 2,567

3,273 1,116 4,262 1,773 1,773 2,063

3,088 2,654 3,761 1,986 1,986 1,345

2,609 1,711 2,378 1,534 1,534 959

28,213 13 18,642 15 11,811 2,284 9,527 34 10 26

22,151 13 15,191 13 8,762 1,477 7,285 33 9 21

17,607 18 15,852 16 5,098 3,031 2,067 12 12 23

11,142 16 12,101 13 1,081 1,492 (411) (4) 23 21

Underground operations Area mined – m2 Tonnes milled – 000 Yield

– g/t

Gold produced

– kg

Productivity g/employee m2/employee

– – – – – – – – – –

000 reef waste total reef waste average reef waste total

– – – –

target actual target actual

Financial results Rand million Operating profit Net profit EBITDA Headline earnings Headline earnings before unrealised hedging activities Capital expenditure Financial ratios Capital employed Return on capital Equity Return on equity Debt Cash Net debt (cash) Net debt (cash) to capital employed Interest cover Operating margin

– – – – – – – – – –

Rm % Rm % Rm Rm Rm % times %

Glossary of terms on page 123.

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I Dave Hodgson Chief Operating Officer

Dick Fisher Executive Officer: Technology, Safety and Health

Safety and health The safety and health of employees remains fundamental to the sustainability of AngloGold’s business. The company is committed to working with employees, trade unions and government bodies towards improving safety and health in the workplace. Considerable resources and effort are dedicated to identifying and implementing best practice across the company, as well as addressing specific problem areas as they arise. A core team of safety and health experts, located at the corporate office, reports to a board sub-committee on safety and health, and advises and assists the on-mine safety and health practitioners and mine management. Every fatal accident is subject to an executive review,

Bob Micsak Executive Officer: Environment

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n retrospect, 2001 will be seen as the year in which global gold industry consolidation gained momentum. AngloGold has been a proponent of and catalyst for consolidation as well as being an active acquirer and operator of long-life, low-cost world-class gold mining assets. In line with this strategy, the past three years have seen the company closing or selling operations approaching the end of their profitable lives to operators who are focused on – and therefore better suited to – operating and extracting value from these assets. By disposing of these assets AngloGold has generated resources – in capital and management capacity – which are more profitably applied elsewhere to the maximum benefit of shareholders. The closure of mines nearing the end of their productive lives, particularly in Australia and South Africa, the sale of Deelkraal and Elandsrand at the end of 2000 (which became effective in February 2001) and the announcement of the sale of four mines in the Free State (effective from 1 January 2002), are all indicative of AngloGold’s resolve to extract optimal value from its assets. The latter transaction also paves the way for further meaningful black empowerment in South Africa through both ownership and management of a substantial gold mining asset. AngloGold’s value-adding growth strategy remains a core focus going forward and it will continue to look for additional opportunities to develop its business through organic growth, focused exploration and a disciplined approach to opportunistic asset acquisitions and mergers.

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over and above the region-specific, regulatory and mine-based investigations, in an effort to identify the root causes of fatalities and to prevent a recurrence. Despite this effort, tragically, 45 employees lost their lives in the course of work across the company during 2001, 43 in the South Africa region where 92% of the company’s employees are based. Although in absolute terms this is an improvement on the previous year, the company’s Fatal Injury Frequency Rate (FIFR) rose slightly to 0.25 per million man hours worked. The Lost Time Injury Frequency Rate (LTIFR) on the other hand, continued its downward trend to 10.55. Overall performance From an operating perspective, the results for the year indicate a solid performance. The highlight of the year was the integration into AngloGold of the newly acquired and developed African operations – Geita, Morila and Yatela – and the excellent performance of these assets. The benefits derived from the region – which now contributes 17% to operating profit, from 12% of production – vindicate AngloGold’s strategy of increasing geographic and orebody diversification. This strategy has seen gold production from outside South Africa, principally from low-cost surface and shallow mines, grow to 37% of operating profit and 49% of EBITDA. The performance of the South American operations was on target, while the South Africa region was back on track with a good year overall. The performance of Great Noligwa, for example, indicates clearly that deep-level gold mining and high unit costs are not synonymous. This operation, which produced 21% of the South Africa region’s gold in 2001, is AngloGold’s largest and most profitable mine and, during the fourth quarter, produced 242,000oz at a cash cost of $97/oz. The North American operations had a difficult year arising from weather-related and technical problems. The Australia region performed in line with expectations and provided a solid base for both greenfields and brownfields exploration, as well as a platform for strategic growth in the region. Overall, attributable gold production decreased by 4%, as anticipated, to 6.98Moz. This was partially offset by a 137% increase in production


Almir SilvÊrio Nunes, at the Rego dos Carrapatos Ecological Park, Nova Lima, in Brazil. Almir was born in Nova Lima and has been working for Morro Velho’s Mina Velha mine for almost 17 years. He started as a Miner, became an Operations Assistant, and is currently a Geological Assistant, working in the areas of underground surveying and sampling. Almir also represents the union at Morro Velho, having recently been elected its social director.

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from the Africa region. Improvements in cost control and productivity, assisted by the devaluation of the rand, resulted in total cash costs improving by 16% from $213/oz to $178/oz, lifting operating profit to $522m. Outlook (2002) Following the disposal of its Free State operations in the South Africa region and the closure of end-of-life assets, AngloGold expects annual production to reduce to 5.8Moz, at a cash cost of $154/oz. Overall, capital expenditure is expected to be $268m. Neville Nicolau Executive Officer: South Africa Region

South Africa The South Africa region comprises seven underground operations located in two geographic areas – the Vaal River area (Great Noligwa, Kopanang, Tau Lekoa and Moab Khotsong) and the West Wits area (Mponeng, Savuka and TauTona) – and a surface metallurgical reclamation operation, Ergo. The mines in the third area – the Free State (Bambanani, Joel, Tshepong, and Matjhabeng) – were sold to an African Rainbow Minerals/ Harmony Joint Venture as announced in November 2001, with management passing to the joint venture on 1 January 2002.

Cash costs per region ($/oz) 250

Tonnes treated: underground surface (including Ergo)

15.3Mt 50.3Mt

Average grade: underground surface (including Ergo)

8.20g/t 0.32g/t

Gold production:

145,247kg 4.7Moz

Total cash cost:

$184/oz R50,065/kg

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Number of employees (including contractors):

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Capex during 2001:

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SAFETY AND HEALTH Safety and health remains a priority. During 2001, these operations – employing on average about 65,000

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employees (including contractors) during the year – achieved further improvements. Despite the considerable resources and effort dedicated to improving safety, regrettably, 43 employees lost their lives in the course of work. Falls of ground accounted for close on 70% of all fatal accidents and about 31% of lost time injuries. Eliminating falls of ground has therefore been identified as a major focus for the year ahead, with a company-wide initiative to combat falls of ground – in collaboration with unions and associations – launched in late 2001, with the roll-out of the initiative planned for 2002. Seismicity continued to have an adverse effect on the South African operations. AngloGold has embarked on a new research and development project, Hazmap, which will use multi-dimensional modelling to improve the ability to warn underground teams who may be exposed to undue risk as a result of seismic activity. ISS International, an AngloGold subsidiary, has been contracted to manage seismic monitoring. Overall, the region achieved a FIFR of 0.28 and a LTIFR of 11.58. ■ Kopanang achieved a remarkable improvement in safety performance during the year, with the first fatality-free year in the mine’s history and the achievement of two million fatality-free shifts in November. ■ The Lower Carbon Leader section at TauTona, the world’s deepest working level in a gold mine, has been free of fatal accidents for two years. The mine was awarded the Mine Health and Safety Council Safety Flag in the ultra-deep gold and platinum mine category for the second consecutive year. ■ Moab Khotsong continues to perform well, with safety rates below the Ontario benchmark. The mine achieved one million fatality-free shifts in November. ■ Great Noligwa achieved one million fatality-free shifts in August. ■ Mponeng won the AngloGold Safety Shield which recognises the best performance relative to safety statistics achieved over the past five years. ■ Savuka experienced a poor year in terms of safety, particularly in relation to falls of ground and corrective action plans have been implemented.


LTIFR – South Africa region 20

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HIV/AIDS remains a major economic, social and health care challenge in southern Africa. AngloGold’s HIV/AIDS strategy has been developed over close on two decades and is arguably one of the leading responses to the epidemic by a South African company. AngloGold’s comprehensive response comprises two thrusts: the company aims to restrict the spread of AIDS through education, promotion of condom use and the effective treatment of sexually transmitted infections. On the other hand, the company cares for those infected through Voluntary Counselling and Testing (VCT), Wellness Clinics, the treatment of opportunistic infections and a compassionate ill-health retirement system for those who are no longer able to work. Ongoing fundamental research by Aurum Health directs and underpins the company’s medical strategy.

The performance of the South African operations was pleasing during the year from a production and cost perspective, with many of the operations exceeding their targets. Gold production was down by 14% to 4.7Moz, as a result of the sale of Elandsrand and Deelkraal and continued downsizing at Matjhabeng. Operating profit increased by 11% during the year to $331m (R2,949m). Randdenominated total cash costs increased slightly to R50,065/kg, despite the production decrease, while total cash costs in dollar terms were down 15% to $184/oz, aided by the devaluation of the rand. The bi-annual wage negotiations were concluded during July and agreement was reached with the National Union of Mineworkers (NUM) for an average increase of 8% per annum for the majority of AngloGold employees. The deal locked in a two-year contract which is consistent with the company’s goals of improving skills and productivity, especially for production crews. The net effect of the wage agreement (which came into effect in the third quarter) was well within the planning and performance parameters set for the South African business operations. Productivity indices increased by 9% in terms of grams per employee (g/TEC), but decreased marginally in terms of square metres per employee (m2/TEC). ■ Gold production at Great Noligwa was 3% higher at 1,004,000oz or 31,224kg aided by an

Kopanang

HIV/AIDS

PRODUCTION

Great Noligwa

■ Occupational health services were provided to employees at three fully-equipped regional occupational health centres, each staffed by an occupational medical practitioner, professional nurses, audiologists and other support staff. In addition, each mine has an occupational health nurse on site. ■ There were 720 new cases of noise-induced hearing loss (NIHL) in 2001 (12 per 1,000 employees) and 373 employees were diagnosed as having occupational lung disease (6 per 1,000). The NIHL rate continues a downward trend and is now three times less than that recorded in 1998 – a tribute to effective noise control engineering in AngloGold. More than 90% of rockdrills are now muffled as part of a major noise reduction programme. ■ During 2001, there were 1,352 new cases of tuberculosis (TB) (23 per 1,000) which is an increase on 2000 (20 per 1,000). The increase in the incidence of TB is associated with HIV. Aurum Health Research, a subsidiary supported by the largest private sector health care service in southern Africa, Anglogold Health Service, continues to play a vital role in fine-tuning the company’s world-class TB control programmes and it is hoped that TB rates have peaked.

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improvement in grade and higher productivity. This was partially offset by a 9% lower Mine Call Factor (MCF). This reflects an excellent performance for the year, contributing more than $145m (R1,270m) to the operating profits of the company. Total cash costs decreased to $122/oz (R33,068/kg), despite higher cash operating costs arising from the replacement of major hoisting equipment in the first quarter. The mine’s ageing shaft infrastructure will be upgraded further during the year ahead. The development of the Hypermine Project, involving the rapid development to raise lines and introduction of technology such as drill rigs and pack-in-a-pipe support systems that incorporates increased team training, should reduce the number of raise lines required for production and increase productivity. ■ Gold production was up 3% to 494,000oz or 15,381kg and operating profits were well above target at Kopanang, as a result of higher mining volumes and despite a lower-than-anticipated reduction in grades. Total cash costs were down some 17% to $178/oz (R48,121/kg). Kopanang accounted for 11% of the region’s gold production and contributed $41m (R362m) to operating profits during the year. The development of a major orepass system in the centre of the mining area is currently under way, along with a focus on improving the ventilation infrastructure. In addition to the testing and development of electric drills and other new technology, Kopanang is host to AngloGold’s Projek Katleho which aims to use off-the-shelf technology and techniques for a 21st century workplace and workforce. ■ TauTona yielded an excellent performance for the year. A focus on releasing gold inventory resulted in an improvement in grade, although seismicity had an impact on mining volumes, and winder and power problems in the lower Carbon Leader sections also affected production. Gold production was up 4% to 622,000oz or 19,355kg. Total cash costs were maintained at $154/oz (R42,347/kg). This mine accounted for some 13% of the region’s gold production and contributed $68m (R593m) to operating profits during the year. ■ Tau Lekoa turned in a solid performance for the

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year. Volume mined was down slightly (2%) and gold produced declined to 286,000oz or 8,899kg as a result of a combination of a lower mined value (4%) and a lower MCF (6%), planned and unexpected yield decreases, and the need to rectify certain safety concerns. Total cash costs were well maintained at $203/oz (R55,545/kg). Management focus on grade improvement resulted in a slow but steady return to normal operating performance levels by year-end. A lack of available face length continued to have an impact on mining volumes at Mponeng. The shortfall, together with the lower-than-expected face values, kept recovered gold at low levels for the first half of the year. Planned development to improve face length availability resulted in four additional raise lines coming into production in the second half of the year, restoring production flexibility and resulting in significantly increased gold production by year-end. Overall, gold production for the year was lower-than-expected at 366,000oz or 11,386kg, while total cash costs were maintained at $223/oz (R61,221/kg). Savuka had a slow start to the year, after a tenday December break due to orepass problems and the need to address safety issues. Two seismic events in the shaft pillar area resulted in crews being moved to areas with much lower grades, with an overall impact on grade and volume mined. Production was back on track by the second quarter and performance for the year was satisfactory with gold production of 240,000oz or 7,476kg and a total cash cost of $248/oz (R68,209/kg). Gold production at Ergo was up at 332,000oz or 10,314kg, reflecting an excellent performance for the year. Higher head grades, increased clean-up activities at the Daggafontein plant (which closed in December) and improved metallurgical efficiencies resulted in an improvement in recovered grade. Total cash costs decreased to $215/oz (R58,884/kg). Development of Moab Khotsong continued as planned, with excavation of the 101 station in progress. (See Growth on page 20 for an overview of the project). Performance at Bambanani improved during the year although gold production remained at lower levels. Cost savings were achieved to offset reduced


(From front to back) Matthews Dikane (Process Team Leader), Jerry Lebona (Process Team Member) and Maja Leche (Learner Team Captain) are members of the Projek Katleho team with an incline raise climber and drill rig at Kopanang mine in South Africa. Combining the Afrikaans word (Projek) for project and the Sotho word (Katleho) for being successful, the project is aimed at developing mining structures and work practices best suited to a 21st century deep-level underground mine. Key thrusts of the project are a more safety conscious, efficient and productive management and labour structure, and the application of tried, tested and appropriate systems and technology. Matthews started his AngloGold career in 1987 as a Learner Diplomate and worked his way up to being appointed a Mine Overseer in February 2000 at Kopanang, while Jerry and Maja were selected for the project from other AngloGold mines. In addition to comprehensive and accredited technical training, process teams receive behavioural training to assist them to make decisions, thereby creating an environment where teams are responsible and accountable for their own actions. Each process team is structured around the total mining process so that the traditional functional separation between mining and engineering is broken down and employees are multiskilled to perform a variety of tasks.

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production, despite a transformer fire in April and a fire in the pillar area that resulted in lost production and the unavailability of certain working areas. Overall, the mine achieved gold production of 412,000oz or 12,816kg, at a total cash cost of $230/oz (R63,153/kg). ■ Mining values continued to drop at Joel. This, together with lower mining volumes, had a negative impact on production. The mine was scaled back to 20,000m2/month in the first quarter and full calendar operation (FULCO) was discontinued with a consequent reduction in employee numbers. Although some cost savings became evident in the second quarter, the mine continued to be uneconomic for the balance of the year. The mine produced 127,000oz or 3,959kg of gold at a total cash cost of $345/oz (R93,463/kg). In light of grade variability at South shaft, sinking of North shaft was suspended in April, pending the results from additional boreholes which were drilled from surface to verify existing grade projections. ■ Tshepong’s performance continued to improve during the year with gold production of 382,500oz or 11,898kg. Total cash costs were down to $178/oz (R48,938/kg). ■ Planned downscaling at Matjhabeng’s Eland shaft and closure of the Sable and Nyala shafts resulted in decreased production of 188,000oz or 5,800kg, in line with the revised LOM plan. As expected, costs were lower but the effects were partially offset by an increase in expenditure arising from retrenchments. Total cash costs for the year were $236/oz (R63,542/kg).

GROWTH Ongoing on-mine and near-mine exploration continued during the year. (See Exploration on page 40). Capital expenditure for the South Africa region was $106m (R915m) in 2001 and is expected to be about $101m (R1,115m) in 2002. Several capital projects are under way: ■ In the first quarter, the board approved the rationalisation of the Mponeng Shaft Deepening Project into two projects, with the prospect of a third. In the first, the deepening of the Mponeng sub-

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shaft has been stopped at the 120 level and available ore reserves from the Ventersdorp Contact Reef (VCR) on the 113, 116 and 120 levels will be developed and mined at a capital cost of R1.3bn ($109m at current year closing exchange rate). Half of this has already been spent. The project is expected to add 3Moz to production, while extending the LOM by five years to 2012. Average cash costs over the remaining LOM should be in the region of $156/oz. In terms of the previous strategy, ore reserves remaining at TauTona after 2005 would have been mined from Mponeng. The revised TauTona Project has two main areas of focus, namely accessing and mining part of the shaft pillar and accessing and mining an area east of the Bank Dyke (previously part of the Mponeng mine plan), which will extend the LOM to 2011. This will require capital expenditure of some R462m ($39m at current year’s closing exchange rate), R60m ($5m at current year closing exchange rate) of which has been spent to date. The project will add 2.3Moz of gold production, resulting in a total cash cost for the mine of $133/oz. A third possible project will involve accessing the mineral resource below 120 level as the VCR and Carbon Leader Reef (CLR) below 120 level have not been sterilised by the rationalisation decision. This revision to the original Mponeng Project into these two projects will reduce capex from R2.6bn ($217m at current year’s closing exchange rate) to R1.8bn ($150m at current year closing exchange rate). ■ The Moab Khotsong Project comprises the sinking of a new shaft down to 101 level (3,054m below surface) providing access to the Moab lease area (a resource containing 200t of gold). The shaft system has the capacity to hoist some 150,000t/month. The shaft system down to 103 level will be fully commissioned by 2003 and production will commence in the last quarter of 2003, reaching full production in 2006. The LOM extends to 2015. The total cost of the project is R3.8bn ($317m at current year closing exchange rate), with approximately R2.4bn ($201m at current year closing exchange rate) spent to date. The mine is expected to produce 4.5Moz of gold to 2015 at an average cash cost of $97/oz. Development is currently on schedule and within budget.


SUSTAINABILITY AngloGold’s South Africa region aims to create a balance between the impact on the natural and social environments in which the company operates and the benefits that its employees, their communities and the country as a whole derive from its operations. ■ Water management remains a key area of focus. All operations registered their water uses with the Department of Water Affairs in line with recent legislation governing water utilisation. AngloGold’s programme to decrease water utilisation gained momentum during the year, with water balances undertaken at all operations, and forming part of a comprehensive water use review. These will be refined during the year ahead and will become an effective tool to manage water usage. Overall, the region’s water usage decreased by 7% compared with 2000. ■ An environmental incident review system has been put in place in the same way in which the company investigates mining accidents. The newly introduced system focuses on thorough data collection and the development of remedial action plans to prevent incident recurrence. ■ Environmental Management Programme Reports for all the operations were formally updated during the year. ■ Financial provisions for the Free State assets, which were sold to the ARM/Harmony Joint Venture, were reviewed during the year and appropriate steps were taken to ensure that the Environmental Trust Funds associated with these mines were adequately provided for. ■ Rehabilitation research, pioneered by the Free State operations, continued during the year. Despite the sale of these assets, AngloGold will have access to these test sites going forward to complete monitoring of progress, in line with the overall programme. ■ The region has developed and implemented a Best Practices Guideline for cyanide usage at all operations. This includes the setting of all standards and procedures, together with an analysis of consumption and controls. An emergency cyanide treatment protocol, which includes emergency medical response and communications, has been implemented. AngloGold has also participated in and contributed to the

global debate on cyanide management through its participation in the United Nations Environmental Programmes (UNEP) Paris Working Group, in conjunction with the International Council on Mining and Metals (ICMM). The region has also participated in the development of a protocol for the use, storage, transport and handling of cyanide with the Chamber of Mines of South Africa on behalf of the industry. ■ In late 2001, an implementation guideline for the region’s Environmental Management System (EMS) was developed to assist all operations establish their own EMS. In its social investment initiatives, the company aims to deliver significant and lasting benefits to employees, communities and other stakeholders in partnership with governments, international agencies, labour, health and nongovernmental organisations. ■ In South Africa, AngloGold’s corporate social investment is directed by the AngloGold Fund and Educational Trust. During 2001, the Fund and Trust committed some $1.9m (R16.5m) to a range of initiatives. In all, some 262 projects were supported with the smallest grant of R1,000 and the largest single grant to the Ginsberg Primary School located in Zwelitsha, Eastern Cape Province, of some $139,000 (R1.2m). The Fund’s philosophy is to back and support people and organisations who make a real difference in their own communities, and who are helping themselves to improve their circumstances. In this way the company reaches those people who have been marginalised from mainstream society and access to other sources of funding, while at the same time ensuring that the projects are sustainable in the medium and longer term. The main areas of investment, reflecting the most compelling needs of the region, are education, community health, health projects specifically relating to HIV/AIDS, skills development and welfare and development projects. Although the Fund supports projects which are of regional and national significance, there is an increasing effort to reach specifically those communities in which its employees reside or are drawn from. For this reason, the Eastern Cape Province derives a great deal of benefit. During

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Social investment – SA region: Sector of investment (by value)

55% Education 16% Welfare and development 14% Skills development 8% Health – HIV 7% Community health

Social investment – SA region: Investment by provinces (by value)

38% Eastern Cape 27% Gauteng 13% Western Cape 10% KwaZulu-Natal 7% Free State 4% North West 1% Other

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the year, local area committees were set up in consultation with community leaders to address smaller and more immediate needs around the operations quickly and cost-effectively.

OUTLOOK (2002)

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Production during 2002 is expected to decrease by 27% to 3,394,000oz (105,600kg) at an average grade of 8.41g/t. Total cash costs should decrease to about $146/oz (R51,700/kg), depending on the value of the rand. ■ At Great Noligwa production is expected to decrease to 979,000oz or 30,500kg at a total cash cost of $105/oz (R37,000/kg) as grades decrease. ■ At Kopanang production should increase to 516,000oz or 16,000kg at a total cash cost of $161/oz (R56,900/kg). ■ At TauTona production is expected to increase to 629,000oz or 19,600kg at a total cash cost of $126/oz (R44,600/kg). Improving environmental conditions to enhance safety and productivity remains a priority at this deep, hot mine. The boxhole development system on the longwall mining layout will receive further attention during the year. A plan is in place to reduce the boxhole distance to the longwall by speeding up the development of the boxhole. ■ At Tau Lekoa production is expected to increase to 320,000oz or 9,900kg at a total cash cost of $169/oz (R59,900/kg). A steady, planned increase in production at this mine of 30,100oz during the year will place some pressure on the infrastructure, with a programme to improve systems, such as horizontal transport, in place. ■ At Mponeng production is expected to increase to 407,000oz or 12,700kg at a total cash cost of $171/oz (R60,400/kg) as additional face length becomes available. Ore reserves will be increased to 24 months to improve mining flexibility. ■ At Savuka production is expected to increase to 249,000oz or 7,800kg at a total cash cost of $217/oz (R76,800/kg). Closure plans at the end of 2001 were reviewed in the light of the infrastructure requirements of TauTona and Mponeng, with the study concluding that closure was not appropriate and that the operation would be able to support further mining. As a result, a development

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plan will be undertaken during the coming year to increase stoping at Savuka mine. The project meets the AngloGold investment criteria while the ongoing use of the infrastructure ensures capital savings at both TauTona and Mponeng. ■ At Ergo production is expected to decrease to 230,000oz or 7,200kg at a total cash cost of $193/oz (R68,200/kg). Ergo remains on track for closure in four years’ time, although the viability of a number of dumps is being reviewed in the context of the higher gold price. ■ The Moab Khotsong Project is expected to continue according to plan. Africa The Africa region comprises Sadiola (38%), Yatela (40%) and Morila (40%) in Mali, Geita (50%) in Tanzania and Navachab (100%) in Namibia. It excludes the South African operations. Attributable tonnes treated:

7.268Mt

Average grade:

3.71g/t

Attributable gold production: 868,000oz Total cash cost:

$129/oz

Number of employees (including contractors):

1,600

Attributable capex during 2001:

$34m

SAFETY AND HEALTH Once again, the region performed well as far as safety is concerned and, despite three of the five operations being less than two years old (a period often associated with high accident frequency rates), accelerated focus on safety at the new operations resulted in the region recording a LTIFR of 1.30. Sadiola continues to set the benchmark for safety performance, having operated without a lost time injury since November 2000. ■ Safety performance at Geita improved, with no accidents reported in the last three quarters. These continued improvements can largely be attributed to an ongoing focus on safety in the workplace along with localised safety training.


Delphinus Kaballega and Rebecca Stephen (Environmental Officers) at Geita. Part of their routine work programme is water quality monitoring across the mine lease area. Water samples are taken regularly from 66 surface and groundwater monitoring sites, including the Mtakuja River which was diverted around the main Geita pit, and at the small local port of Nungwe Bay on Lake Victoria, from which Geita draws water. All water samples are screened on site and then sent for a detailed analysis at an accredited laboratory in Johannesburg. Geita’s commitment to responsible environmental management was rewarded during the year when it became the first AngloGold mine to be certified to ISO 14001, an internationally recognised standard for environmental management. This achievement demonstrates that it is possible to implement world-class standards of environmental management in a developing world context, given sufficient management commitment and resourcing. The achievement is all the more remarkable given that certification was achieved less than a year after the start of production.

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Thys Sabbagha Head: Africa Region (with effect from March 2002)

(

C O N T I N U E D

)

Geita achieved an integrated NOSA four-star rating in the third quarter. Navachab’s safety performance was disappointing compared with the previous year, but still good by international standards. The mine was awarded the Namibian Chamber of Mines Award for Safety for the second consecutive year and retained its NOSA five-star rating. There was a marked turnaround in safety at Morila following the construction period. During the first year of production, operator training was an area of focus, while safety and health assessments were carried out in high-risk working areas. Sadiola produced another exceptional safety performance, remaining accident-free for the full year. Yatela’s safety performance showed a marked improvement of over 50% during the second half of the year.

PRODUCTION

Peter Turner Manager: Africa Region (until March 2002)

LTIFR – Africa region

3.0 2.5 2.0 1.5 1.0 0.5

24

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Yatela

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Navachab

Geita

G

Morila

Sadiola

0

Attributable production increased significantly to a record 868,000oz from 366,000oz as a result of the inclusion of Geita’s production from the first quarter and Yatela from the third quarter, as well as the incorporation of Morila for the full year. Total cash costs increased by 4% to $129/oz, primarily as a result of the inclusion of the higher cost operations, Geita and Yatela. Operating profit for the year rose 81% to $87m. ■ Production performance at Geita exceeded expectations from the first quarter with 273,000oz produced at a total cash cost of $147/oz. ■ Navachab maintained its trend of continued improvement throughout the year producing a record 87,000oz, at a total cash cost of $164/oz, reflecting a decrease of 12%. The mine achieved a record level of production of 23,000oz and total cash costs of $142/oz in the fourth quarter. ■ Malian president Alpha Konaré officially opened Morila in February. Morila exceeded its target in the first full year of operation by producing 252,000oz. Total cash costs, at $103/oz, increased by 17% owing to a reduction in the proportion of high-grade, soft oxide material treated, which was replaced with lower grade sulphide ore. Recovered grade was down by 22% to 6.87g/t.

I M I T E D

■ Planned lower mill throughput, coupled with a 12% planned decline in the recovered grade reduced attributable gold production by 12% to 204,000oz at Sadiola. The decrease in production, together with increased waste mining to obtain additional oxide ore reserves and the treatment of lower grade ores, resulted in total cash costs rising by 15% to $131/oz. ■ Construction and mining progressed exceptionally well at Yatela, with the mine being officially opened by Aboubacary Coulibary, the Malian Minister of Mines, on 8 September 2001. The ore treatment plant was commissioned in the first quarter, with mining production ahead of schedule. The first gold was produced on 9 May 2001, a month ahead of schedule and an estimated $5m below construction budget. Production buildup under operational management and a team of permanent employees commenced at the end of the second quarter. Attributable production of 52,000oz at a total cash cost of $149/oz reflects the third and fourth quarters only.

GROWTH The exploration focus in Africa has been on delivering growth opportunities near or at existing operations and lease areas. The brownfields exploration programme has been highly successful, adding significant value at a low cost per ounce. Capital expenditure for the Africa region was $34m in 2001 and is expected to be around $26m in 2002. ■ Exciting prospects have been identified in Tanzania and Mali. (See Exploration on page 40.) ■ Exploration in the oxide ores at Sadiola continues to yield good results and exploration drilling continues in the hard sulphide ore. ■ An exploration programme at Navachab has been implemented to assess upside potential.

SUSTAINABILITY In Africa, where the AngloGold operations frequently constitute major economic forces in the areas in which they are located, there is a real opportunity for substantial and permanent improvement in the lives of local communities. Localisation programmes (whereby local people are trained and developed with skills through education and on-mine training) are an imperative for the region. Targets have been


OUTLOOK (2002) Attributable production is expected to be 6% higher (at 921,000oz), while total cash costs should increase by 11% to about $143/oz. ■ At Geita attributable production is expected to reduce to 260,000oz, with total cash costs increasing by 29% to $190/oz, as a result of an increase in the LOM stripping ratio from 5.7 to 7.2 and higher treatment costs associated with the replacement of Nyankanga ore with ore from the Kukuluma pit. ■ Morila’s attributable production is budgeted to increase by 5% to 265,000oz, with total cash costs decreasing by 6% to $97/oz as plant throughput increases and economy of scale benefits are achieved. Higher grades should be accessed from the second pit after June 2002. ■ At Navachab attributable production should decrease by 18% to 71,000oz, and total cash costs will increase by 18% to $194/oz as recovered grade is expected to decline by 18%. The devaluation of the Namibian dollar has prompted an assessment of a possible extension to the mine life.

A

Attributable production – Africa region (000oz) forecast

■ In late 2001, an Environmental Impact Assessment was undertaken at Sadiola to assess the environmental impacts likely to result from development of the Saprolitic Sulphides Project. This assessment will be used to modify Sadiola’s existing Environmental Management System. ■ The SEMOS Community Development Association, established in 1999 to coordinate development initiatives in the Sadiola region, has since been expanded to include the villages close to Yatela. The Community Development Association and associated Development Fund focus on macro-projects (involving large communities, entire villages or groups of villages in larger projects aimed at addressing community needs), micro-credit facilities (involving the provision of small loans to individuals and groups for entrepreneurial activities) and initiatives aimed at capacity building in the community. The Fund also supported an adult literacy programme in eight villages near Sadiola, as the first stage of a drive to build capacity in local communities.

1,000

800

600

400

200

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00

01

02

Cash costs – Africa region ($/oz) forecast

set by the company and development plans put in place to ensure that these targets are met. ■ In June 2001, Geita received ISO 14001 certification. During the year, Geita’s Environment, Health and Safety Management System was successfully extended to cover all on-lease exploration activity as minerals exploration has the potential to affect the safety and health of employees and local communities, and the environments in which they work and live. Significant effort and funds have also been expended over the past 12 months to rehabilitate areas in the Geita district where historical exploration activity (not undertaken by AngloGold) has not complied with standards. ■ Geita has focused its community development initiatives in the areas of education, community infrastructure and health care. Since the start of mine construction in 1999, expenditure on health care (primarily upgrading of hospital/clinic facilities and equipment) has amounted to $80,000, with a further $100,000 being spent on education and training initiatives (including the building/extension of village schools and the establishment of the Nyakabale agricultural project). ■ Morila spent a total of $459,000 on community development and social initiatives during 2001. Major capital projects undertaken included the upgrading of facilities and equipment for village schools in Sanso, Domba, Morila and Fingola, the establishment of 12 boreholes for community water supply, and bridge construction over the Diaratou River. Morila also extended funds to the Malian government towards sponsorship of the Africa Cup of Nations soccer tournament. ■ In February 2001, Navachab funded the construction of five fully-equipped classrooms at the Ebenhaeser Primary School in Usab near Karibib. Navachab has fostered a constructive and co-operative relationship with local communities and has undertaken a number of community projects in conjunction with the Karibib municipality. Peer counsellors employed by the mine meet regularly with members of the local community to share information on issues such as substance abuse and HIV/AIDS, and financial assistance is provided to the counsellors.

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Nigel Unwin Executive Officer: Australia, Human Resources and Information Technology

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■ Sadiola’s attributable production should increase by 2% to 208,000oz, while total cash costs will increase by 20% to $157/oz, owing mainly to increased treatment costs associated with the processing of saprolitic sulphide ore. A project is under way to convert the process plant to treat this ore from the first quarter of 2002, enabling the mine to sustain current volumes. ■ Attributable production at Yatela should rise by 108% to 108,000oz, reflecting a full year of production. Total cash costs are likely to remain virtually unchanged at $148/oz. Australia The Australia region comprises wholly-owned mines at Sunrise Dam in Western Australia and Union Reefs in the Northern Territory, as well as joint venture operations at Boddington (33.33%) in Western Australia and Tanami (40%) in the Northern Territory. Attributable tonnes treated:

8.0Mt

Average grade:

1.97g/t

Attributable gold production: 508,000oz Total cash cost:

LTIFR – Australia region

20

15

10

5

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Tanami

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Boddington

Pine Creek

Sunrise Dam

0

A

Number of employees (including contractors):

700

Attributable capex during 2001:

$42m (A$82m)

SAFETY AND HEALTH

25

26

$194/oz (A$375/oz)

L

The region had a moderate year as far as safety and health is concerned, achieving a LTIFR of 13.47. ■ At Sunrise Dam major highlights for the year include an external safety and health audit and, the launch of the “SafeGold” risk management system. ■ The safety performance at Union Reefs has benefited from a change in culture, supported by the risk management activities. ■ As Boddington approached closure, several high potential incidents indicated a possible loss of focus on safety management. A concerted highprofile campaign successfully stemmed this

I M I T E D


Gino Sceghi, Director of Carey Mining and Relief Supervisor at Sunrise Dam. Gino, a resident of Laverton, travels from Laverton to Sunrise Dam to relieve the Mining Supervisor whilst he is on break. Carey Mining has been a contractor to Sunrise Dam since mining began five years ago. During 2001 the plant expansion cutback at Sunrise Dam was completed on schedule and within budget. Further drilling results indicate significant upside potential which could result in a doubling of the current resource base and further extensions to mine life.

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trend and the operation progressed to a safe closure at the end of November. ■ The decision to close the Tanami mine early resulted in a loss of key personnel and a fall in morale, which had a negative impact on the safety performance.

PRODUCTION Barrie Parker Operating General Manager, Australia

Attributable production – Australia region (000oz)

550

forecast

500

450

400 00

01

02

Cash costs – Australia region ($/oz)

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Attributable production decreased by 3% to 508,000oz, primarily owing to the closure of the Brocks Creek operation during late 2000, the early closure of the Tanami mine during 2001 and the abandonment of proposed underground mining to augment the Union Reefs mill feed. The Boddington mine ceased operations in the fourth quarter. Offsetting these reductions was a 31% increase in Sunrise Dam production following the commissioning of the expanded operation in May 2001. Operating profit decreased by 26% to $25m (A$48m), while total cash costs were down 14% to $194/oz (A$375/oz), mainly as a result of the decrease in production from the high-cost Tanami mine and improved performance at Union Reefs. The corporate office was restructured and relocated from Melbourne to Perth during the first quarter. Reduced staffing levels and closer proximity to the mining operations resulted in savings of some $2.2m (A$4.3m), while the refocusing of the Australian exploration effort resulted in further savings. ■ Gold production increased by 31% to 295,000oz at Sunrise Dam as the expansion to 2.5Mt/annum was completed in May, one month ahead of schedule. By year-end, with minimal capital expenditure, plant throughout had been further increased to 3Mt/annum. Total cash costs for the year fell to $153/oz (A$297/oz), despite deeper mining, processing of hard primary ore and higher diesel fuel prices. Mill throughput increased to 2.4Mt, while both headgrade and recovery declined marginally to 3.8g/t and 87% respectively. The major cutback in the Cleo pit was completed in November. The current open-pit operation will produce over 300,000oz/annum until 2008. The plant expansion project and the cutback were both completed within the respective $24m (A$46m) and $26m (A$51m) approved budgets. Production from the Megapit commenced during

I M I T E D

the fourth quarter at a total cash cost of $162/oz. Beyond this initial Megapit Expansion Project, drilling results indicate significant upside potential which could result in a doubling of the current resource base and further extensions to mine life. ■ Options for Union Reefs were evaluated during the year, taking into account the continued underperformance of some orebodies. Production declined by 10% to 114,000oz, primarily as a result of lower throughput (2.6Mt) and lower headgrades. Total cash costs were reduced by 16% to $230/oz (A$445/oz). Because of the limited future value of the mine and in line with AngloGold’s strategy of focusing on higher margin, long-life operations, various disposal options were considered and expressions of interest in the assets were sought. No meaningful offers were received. A review of the mine’s operations was undertaken to ensure a more predictable performance for the remainder of the year and a significant improvement was achieved following implementation of a revised mining plan. The mine remains in closure mode and AngloGold will continue to manage it through to closure in late 2002 or early 2003. ■ Attributable production at Boddington increased marginally to 78,000oz despite closure at the end of November. The main ore sources during the year were remnant oxide ore blocks and lowgrade stockpiles, plus small high-grade primary ore sources. The plant was placed on care and maintenance pending commencement of the expansion project. Total cash costs fell to $190/oz (A$367/oz), with the low-cost gold from the plant clean-up offsetting the increased costs associated with accessing remaining smallvolume ore blocks. ■ Operations at Tanami were severely affected by heavy rains at the beginning of the year, resulting in early closure of the operation and an annual production decline of 56% to 21,000oz. Mining was terminated at the end of June and processing ceased during the third quarter when stockpiles were exhausted. Total cash costs increased to $278/oz (A$533/oz). The Tanami process plant has now been leased for treating third party ore.


SUSTAINABILITY Environmental management and compliance, as well as social issues, remained areas of importance in the region. ■ The environmental management focus across the Australia region has been varied, with mine closure and rehabilitation plans for the Tanami and Union Reefs mines, an annual environmental management plan for Sunrise Dam and the care and maintenance plan for Boddington all being developed. ■ Other key activities during the year include contributing to an understanding of the impact of the International Cyanide Code, environmental audits by statutory bodies at Sunrise Dam and Union Reefs, completion of the annual review of the Mineral Council of Australia’s Code of Environmental

Management, rehabilitation of waste dumps, implementation of waste minimisation strategies and sponsorship of research into project dormancy mechanisms of Australian native plant species. ■ AngloGold Australia is committed to fostering long-term relationships with communities in the areas in which it operates. This frequently involves local indigenous communities. Programmes include training, employment and business support initiatives, which provide much needed employment opportunities for indigenous people living in remote areas. To heighten consciousness of indigenous traditions, many employees undergo crosscultural training. AngloGold’s leading position on indigenous relationships was demonstrated when the company was party to the first major native title consent determination handed down under the auspices of the new Western Australian government. AngloGold was also invited, as an industry representative, to participate in a parliamentary review of the State’s land management regimes in terms of their convergence with the Native Title Act.

OUTLOOK (2002) Attributable production is expected to be lower at 456,000oz from 5.7Mt at an average grade of 2.7g/t. Total cash costs should decrease further to $178/oz (A$349/oz), as a larger proportion of total production is sourced from the low-cost Sunrise Dam mine and cost improvements are made at Union Reefs. ■ AngloGold will work towards a decision in respect of the Boddington Expansion Project, which has the potential to produce 600,000oz of gold and 20,000t of copper/annum at a total cash cost below $153/oz (A$300/oz). ■ Production at Sunrise Dam should increase by 19% to 351,000oz (attributable), at a total cash cost of $157/oz (A$309/oz). ■ Union Reefs should produce 105,000oz at a total cash cost of $205/oz (A$402/oz).

LTIFR – North America region

2.0

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0

North America The North America region comprises the Jerritt Canyon Joint Venture (70%) and the Cripple Creek &

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On-mine and near-mine exploration continued around Sunrise Dam and Boddington and in the Tanami region, with the aim of discovering resources synergistic with existing mines of a suitable scale to warrant investment at greenfields sites. At Sunrise Dam and Boddington, new discoveries are progressively incorporated into the mine plan. Encouraging exploration results continue to be achieved from the Coyote region in the western Tanami. (See Exploration on page 40). Capital expenditure for the Australia region was $42m (A$82m) in 2001. Total capital expenditure is expected to be in the region of $21m (A$40m) in 2002. ■ The Boddington Expansion Project is one of the world’s largest undeveloped gold deposits. The project has total ore reserves of 390Mt at 0.87g/t, containing 10.9Moz of gold of which 33.3% is attributable to AngloGold. A feasibility study completed during 2001 indicated that the development of the deposit would yield an attractive return and it is being considered by the joint venture partners. By year-end, agreement was reached on the principles of transferring the management of the mine and the expansion, which is currently managed by Worsley Alumina, to the Boddington Gold Mine Joint Venture partners. A decision on whether the project will proceed is expected during 2002.

Jerritt Canyon

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Victor Gold Mining Company (CC&V) (67% interest, with 100% interest in gold produced).

Jim Komadina Executive Officer: North America Region

forecast

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600

550

500

450

400

350 99

00

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Cash costs – North America region ($/oz)

forecast

250

200

150

Attributable tonnes treated:

12.2Mt

Average grade:

1.27g/t

Attributable gold production:

496,000oz

Total cash cost:

$211/oz

Number of employees (including construction contractors):

850

Attributable capex during 2001:

$93m

SAFETY AND HEALTH Once again, the North American operations had an excellent year in respect of safety and health with no disabling injuries or fatalities. North America’s LTIFR remained at a low 1.6 compared to the Ontario benchmark of 6.5. ■ Jerritt Canyon’s SSX mine was selected for the Mine Safety and Health Administration’s highest award – Sentinels of Safety – as the safest underground metal group mine in the USA in 2000. The Smith and MCE mines also received Certificates of Achievement from the Mine Safety and Health Administration for achieving perfect safety records for the year 2000. The Nevada Mining Association presented numerous safety awards to Jerritt Canyon operations: first place to Murray Mine in the underground medium mine category for the second year in a row; first place to SSX Mine in the underground small mine category; second place tie to Smith and MCE in the underground small mine category; and third place to the Mine/Surface in the medium surface category. ■ The Colorado Mining Association and the Colorado Division of Minerals and Geology recognised CC&V as the safest surface mine in the State of Colorado.

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Gold production remained constant at 496,000 attributable ounces. Operating profit decreased by 16% to $16m while total cash costs increased by 6% to $211/oz.

I M I T E D

■ At Jerritt Canyon production during the first and second quarters was higher than the same periods in 2000 as a result of toll milling of Cortez ore. Production during the second half of 2001 was maintained at the 2000 level, despite a fire in the roaster gas cleaning system, which caused a production loss of seven days, and unusually high snowfall in the fourth quarter, which resulted in lower mill tonnage. As a result, production was 14% higher at 282,000 attributable ounces, with total cash costs at $223/oz. ■ Reduced crusher availability during the fourth quarter of 2000 had a negative impact on production at CC&V during the first half of 2001, while the second half of the year saw increases in tonnage mined and placed as new mining equipment was commissioned as part of the approved expansion project. Annual production was 14% lower than 2000 levels – at 214,000 attributable ounces – as irrigation and gold transport difficulties at the leach pad caused a significant growth in inventories to occur. Total cash costs rose in line with this to $187/oz. ■ Excellent progress was made with the CC&V Expansion Project and several important milestones were reached. CC&V completed the Highway 67 relocation and bridge construction ahead of schedule and 6% under budget. The truck shop was also completed ahead of schedule and 5% under budget. Construction of the crushing facility and expanded leach pad is on schedule for completion in the third quarter of 2002 and within budget.

GROWTH Capital expenditure for the North America region was $93m in 2001. Total capital expenditure is expected to be in the region of $79m in 2002. ■ Approval for the $195m CC&V Expansion Project was given during the first quarter. The project will increase average annual gold production by 40% and extend the LOM from 2008 to at least until 2013, yielding an additional 2.8Moz. Average LOM cash costs are expected to be reduced from $227/oz to $174/oz. Project construction is proceeding according to schedule, with the mining fleet in place and leach pad performance being monitored. Approximately $119m of the capital expenditure has been spent or committed to date.


Frankie Bates and Kim DiCamillo, Equipment Operators at Cripple Creek & Victor’s East Cresson mine, have just completed a 12-hour night shift. Equipment operators are trained at CC&V to safely and productively operate these large haul trucks, snow ploughs and other support equipment. Haul truck operators must be patient by nature and pay enormous attention to detail. In the background are CC&V’s 310t capacity EH4500 haul trucks, which are new additions to the fleet. This investment will allow CC&V to increase mine production to 60Mt/annum.

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SUSTAINABILITY

Roberto Carvalho Silva Executive Officer: South America Region

LTIFR – South America region

The corporate sustainability philosophy is reflected by several social investment initiatives designed to deliver significant and lasting benefits to employees, communities and other key stakeholders. ■ Education initiatives remain a top priority. Financial and manpower contributions were made to an interactive science learning centre for elementary students and teachers in Nevada. The company also provided contributions to the Colorado School of Mines and the Mackay School of Mines for undergraduate student recruitment and retention. ■ Expansion activities at CC&V included a state highway relocation. This project was cited by local and state officials as one of the best examples of a public and private co-operative effort to improve the safety of a state highway, while allowing for mine expansion. In addition, the design and construction of the new highway will encourage more tourism and economic development in the area. ■ A significant number of hours and financial support were contributed to the initial planning and design of a new regional medical facility in rural Colorado which will serve as the primary health care facility for more than 21,000 people living in a 1,800 square mile area. ■ The company continues to strongly encourage employee commitment to volunteerism and, as a result, employees volunteer more than 5,000 hours annually to many local causes and organisations.

OUTLOOK (2002) 10

9

8

7

6

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Morro Velho

Cerro Vanguardia

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Overall, production from the region is expected to increase to 579,000 attributable ounces at a total cash cost of $181/oz. ■ During the first quarter of 2002, additional high-capacity trucks should be placed in service at CC&V as part of the expansion project. Mining is likely to increase from 31Mt in 2001 to 44Mt in 2002 and gold production should increase by 49% to 319,000oz. The new crusher is expected to be placed in service and operating at full capacity of 18Mt in the third quarter of 2002. Total cash costs are expected to be in the region of $156/oz. ■ As Jerritt Canyon nears the end of its life, focus should remain on efficient operational perfor-

I M I T E D

mance and the development of effective closure plans. Cost-cutting initiatives implemented in 2001 should reduce Jerritt Canyon’s total cash costs to $204/oz in 2002 and production will be reduced by 7% to 261,000oz as toll-milling of Cortez ore is completed. South America The South America region comprises the whollyowned Morro Velho mines and the Serra Grande mine (50%) in Brazil, and the Cerro Vanguardia mine (46.25%) in southern Argentina. Attributable tonnes treated:

1.7Mt

Average grade:

7.8g/t

Attributable gold production: 441,000oz Total cash cost:

$134/oz

Number of employees (including contractors):

2,300

Attributable capex during 2001:

$20m

SAFETY AND HEALTH A fall of ground accident at Morro Velho’s Mina Velha mine claimed the lives of two employees in April. Following this, a review of risk management procedures was conducted and the plans put in place yielded some rewards. The region achieved a FIFR of 0.34 and a LTIFR of 8.16. ■ After a disappointing start at Cerro Vanguardia, improving safety trends were recorded. Cerro Vanguardia is targeting a NOSA five-star rating in 2002, having achieved a four-star rating in October 2000. ■ At Morro Velho there was a significant improvement in safety rates following the implementation of a new safety action plan, and this trend is expected to continue. The mine achieved a NOSA three-star rating in 2002. ■ Serra Grande achieved a satisfactory safety performance, and received a NOSA four-star rating in January 2002.


Domício Fidelis de Araújo, pictured in front of the Cuiabá Mine ropeway at Morro Velho. Born and raised in the nearby town of Caeté, Domício has been working at Morro Velho for 12 years where he is currently a Load Haul Dump Operator. Morro Velho is one of the main employers in the area and has contributed greatly to the improvement of living standards for neighbouring communities. Behind him is a view of the 15km Cuiabá aerial ropeway, crossing the hilly region between the Cuiabá mine and the Queiroz plant, located in the town of Nova Lima. The ropeway has the capacity to transport 115t/hour using 270 buckets and travelling at a speed of 3.6m/sec and is a novel, lowcost innovation by the mine.

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PRODUCTION

forecast

forecast

Attributable production was maintained at 441,000oz. A lower average grade was offset by a 3% increase in tonnages treated. Silver production increased by 35% to 997,000oz. Operating profit decreased by 9% at $63m, while total cash costs were down 7% to $134/oz as a result of improved production, cost-cutting initiatives, optimisation of stripping ratios, the devaluation of the Brazilian real and increased by-product sales at Cerro Vanguardia. ■ Higher gold production (135,000oz) at Cerro Vanguardia, owing to a 10% increase in capacity to reach 900,000t/annum partially offset by lower grades, resulted in a strong performance. Total cash costs decreased to $133/oz. The primary intake of the crushing plant was replaced in Attributable production – September and a washing plant will be South America region commissioned during the second quarter of 2002 (000oz) to eliminate some of the problems experienced as a result of heavy rainfall. Some $327,000 was 450 spent on a gravity circuit to improve silver recovery, with commissioning in January 2002. ■ Production at Morro Velho decreased 400 marginally to 209,000oz, while total cash costs decreased to $127/oz. Production at the Cuiabá mine improved as operating levels reached 2,270t/day by mid-year, reflecting a capacity 350 increase of 3%. A new communications system was successfully installed while a hydraulic backfill system was implemented and is being 300 optimised. Both systems will improve production 99 00 01 02 and safety. Re-planning was undertaken at the Velha mine to improve safety conditions, including the revision of operating standards in Cash costs – South America all stopes, the reassessment of the geo-mechanics region ($/oz) of each face, an increase in the operational cycles, a reduction in the production rate and an increase 150 in the number of employees. ■ At Serra Grande attributable production increased slightly to 96,000oz. The mine is operating at 100 increased capacity of 730,000t/annum a total cash cost of $107/oz. The region is supporting the development of a full-scale cyanide recovery process, based on 50 ion-exchange resin, which has the potential for application across AngloGold’s operations. The project is being undertaken at the Federal University 0 of Minas Gerais in Belo Horizonte, Brazil, and 99 00 01 02

34

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should it prove viable, will be followed by a pilot plant installation at the Queiroz plant in Nova Lima.

GROWTH On-mine and near-mine exploration as well as greenfields exploration continued, with a particular focus on Argentina, Brazil and Peru. (See Exploration on page 40.) Capital expenditure (attributable) for the South America region was $20m in 2001 and is expected to be around $37m in 2002. ■ The potential for underground mining at Cerro Vanguardia is being investigated and an initial recommendation is expected in May. ■ Work continued at Morro Velho’s Amapari Project. ■ The planned expansion of the Cuiabá mine, which would effectively increase production from 2,300 to 4,000t/day and increase gold production by 180,000oz/annum, is at the prefeasibility stage. The targeted ore reserve is about 9Mt at 7.7g/t, equivalent to 2.2Moz of gold. Capital expenditure would be in the region of $140m and, should the project proceed, production would commence by 2006. ■ Areas adjacent to the Serra Grande mine are being investigated to extend the life of this highly profitable operation. After an assessment of the area through an Airborne Electromagnetic survey in January/February, a drilling proposal for the adjacent areas will be presented.

SUSTAINABILITY Environmental and social issues continued to be an area of importance. ■ Cerro Vanguardia is currently in the process of ISO 14001 certification, only the second AngloGold mine to do so and one of the first in Argentina. ■ Morro Velho’s Engenho d’Água Project, a small oxide deposit, located in Rio Acima City, about 25km from Nova Lima, was approved in terms of all environmental legislative requirements in July, following presentations to community members, environmental agencies and other authorities. Reclamation and revegetation of the Nova Lima metallurgical plant clean-up area was concluded during the year. Ongoing water quality


monitoring of the drainage water and river (Ribeirão Cardoso) will continue in line with legislative requirements. The approval process for the Morro Velho Environmental Corrective Licence is nearing completion and it is anticipated that a licence will be granted in 2002. Revegetation of affected areas at the Itajobi Corrego do Sítio Project, located in Santa Bárbara City (about 130km from Nova Lima), is almost complete. This open-pit, heap leach project will be operating by the end of 2002. The Minas Gerais Environmental Authorities have included this project in a “best practice” video to be released in 2002. Procedures to obtain the necessary environmental licences for the Amapari project are being expedited. ■ The State Environmental Agency of Goiás Province renewed Serra Grande’s Environmental Operational Licence in November 2000. Serra Grande has initiated, in a partnership with IBAMA (the Brazilian Institute for the Environment), a programme for the breeding of native wildlife. A large proportion of the region’s community-directed social investment was made in the sectors of education (mainly environment and technical training), as well as in supporting health and leisure activities. ■ Some 5,000 children participated in an environmental education programme at the Harry Oppenheimer Environmental Centre in Nova Lima, while 300 teachers were trained in environmental education. A further 250 individuals from State environmental agencies and community members participated in the programme. ■ Amongst the community initiatives supported by the company was a “Children’s Day” (Nova Lima) involving some 10,000 needy children.

Other outreach initiatives include sponsorship of technical mining and health symposiums, donations of materials and clothing to schools and assistance to disadvantaged children as well as to sports teams. In Nova Lima, Morro Velho is supporting the city’s recycling programme and has donated a building site for the recycling of materials.

OUTLOOK (2002) Attributable production is expected to be marginally lower (431,000oz), from 1.7Mt at an average grade of 7.7g/t. Total cash costs should decrease further to about $130/oz, reflecting increasing contributions from Cerro Vanguardia and a further reduction in corporate costs. ■ At Cerro Vanguardia, a capacity increase to 900,000t/annum is envisaged, increasing gold production by 3% to 140,000oz (attributable), and total cash costs maintained at $133/oz. Initiatives to further decrease the stripping ratio are being investigated. ■ Morro Velho should produce slightly less gold during the year (down 4% to 201,000oz) as the clean-up project at the Nova Lima plant was concluded in mid-2001. A higher total cash cost (up 8% to $137/oz) reflecting a reduction in by-product credits, and higher labour and maintenance costs, is anticipated. To compensate for the closure of the Santa Cruz mine in mid-2002, the Engehno d’Água mine will come into production in March 2002. Engenho d’Água is an open-pit mine with a LOM of 22 months. ■ Serra Grande’s production is likely to decline by 6% to 90,000oz (attributable) from lower grade ore, at a 6% higher total cash cost ($114/oz) as mining from the narrower quartz veins at Mina III increases. The outcome of a trial mechanised mining exercise to improve safety and lower costs is expected by the end of the first quarter.

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for the year ended 31 December 2001

Tonnes treated (Mt)

Average grade recovered (g/t)

Gold production (kg)

Cash costs

(000oz)

(R/kg)

($/oz)

Operation South Africa Great Noligwa

2.5

12.34

31,224

1,004

33,068

122

Kopanang

2.1

7.40

15,381

494

48,121

178

TauTona

1.6

11.94

19,355

622

42,347

154

Tau Lekoa

2.0

4.42

8,899

286

55,545

203

Mponeng

1.5

7.71

11,386

366

61,221

223

Savuka

0.9

7.97

7,476

240

68,209

248

Bambanani

1.6

7.86

12,816

412

63,153

230

Joel

1.1

3.56

3,959

127

93,463

345

Tshepong

1.5

8.20

11,898

383

48,938

178

Matjhabeng

0.8

7.75

5,841

188

63,542

236

41.3

0.25

10,314

332

58,884

215

Geita (50%)

2.3

3.70

8,485

273

41,123

147

Morila (40%)

1.1

6.87

7,848

252

28,533

103

Navachab

1.3

2.04

2,694

87

45,101

164

Sadiola (38%)

2.0

3.13

6,336

204

36,356

131

Yatela (40%)

0.5

3.33

1,629

52

45,083

149

Boddington (33.33%)

2.6

0.92

2,425

78

51,119

190

Sunrise Dam

2.4

3.81

9,177

295

42,916

153

Tanami (40%)

0.4

1.81

669

21

70,894

278

Union Reefs

2.6

1.36

3,548

114

64,208

230

11.3

0.59

6,656

214

51,837

187

0.9

9.41

8,780

282

61,555

223

Cerro Vanguardia (46.25%)

0.4

10.51

4,207

136

36,799

133

Morro Velho

1.0

6.63

6,511

209

35,351

127

Serra Grande (50%)

0.4

8.08

2,991

96

29,729

107

Moab Khotsong*

Ergo Africa

Australia

North America Cripple Creek & Victor Joint Venture Jerritt Canyon Joint Venture (70%) South America

*

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Moab Khotsong is a new mine in its development phase. The mine is expected to commence production in 2003 and attain full production of 1.6Mt of ore treated per annum by 2006. LOM cash costs are expected to be $97/oz.

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ngloGold has a longstanding strategy of promoting its product and of exploring opportunities to extract value from gold throughout the value chain. The company remains committed to developing the market for gold and its marketing programme aims to increase the desirability of its product, to sustain and grow demand for gold and to deregulate the market in key economies. While the company continued to give full support to the World Gold Council as the vehicle for co-operative gold producer activities in the generic support of gold in various markets, in 2001 AngloGold’s direct marketing expenditure focused on its own commercial and developmental ventures. OroAfrica In 2000, AngloGold invested $8m (R55m) in a 25% stake in OroAfrica, the largest manufacturer of gold jewellery in South Africa, as a “reconnaissance” investment in the downstream gold value chain. During 2001, OroAfrica continued to grow its business, and has been particularly successful in expanding gold chain exports to the USA. Encouraging and improved results were assisted both by the growth in business and increasing rand revenues consequent on local currency devaluation, which has further improved the international competitiveness of this business. Besides this investment, AngloGold has cooperated actively with OroAfrica in a number of projects, including a programme of consumer research in the US market, the establishment of a new product design process and the initiation of an African gold jewellery brand. GoldAvenue In 2000, AngloGold, J P Morgan Chase and Pamp MKS of Geneva established GoldAvenue as a commercial venture to offer a wide range of gold products and services to business and consumers. In July 2001, the venture launched a business-tobusiness website for the supply of gold bullion to regional banks and their jewellery manufacturing clients, commencing first in Italy. This business will be extended to other major physical gold consumer countries in due course. The initial software for this

site is currently under further development and expansion to offer a range of physical gold trading and gold lending in its next phase. In the area of business-to-consumer activities, the partnership launched a GoldAvenue catalogue of gold jewellery in November 2001 simultaneously with the launch of their website offering gold jewellery for retail sale. This business is being developed in the USA in association with Vivre, a luxury goods catalogue business operating in the USA, in which GoldAvenue has taken a 14% equity interest. AngloGold has provided support to this venture particularly through product development, sourcing and product selection. Gold jewellery pieces developed from AngloGold’s design competitions and fashion projects proved to be popular in the first catalogue.

At the OroAfrica Jewellery Manufacturing facility in Cape Town are Wesley Beziek, Alberto Lavagna, Enslo Jennecke, André Visser, Morné Hickman and Jacques van Rooyen. OroAfrica uses world-class manufacturing technology, developed by Filk (SPA), a partner in OroAfrica and the world’s leading Italian gold chain maker.

Gold of Africa Museum AngloGold managed the restoration and renovation of the historic Martin Melck House in Cape Town which was chosen as the premises for the Gold of Africa Museum. The museum houses the Musée Barbier-Mueller collection of African gold artefacts

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which the company purchased in 1998. Opened in November 2001, the museum complex contains permanent and temporary exhibitions, a museum shop, a goldsmithing workshop and design library, a presentation suite, wine cellar and sculpture garden. The museum has been embraced by the local tourism, arts and culture communities, and has received recognition in international and local media. Innovative gold jewellery products inspired by the collection are being developed for sale at the museum. Riches of Africa The third annual Riches of Africa competition was a success, generating new gold jewellery designs that have been useful to the GoldAvenue business-toconsumer activities. The design competition was expanded during the year to reach a wider audience and to tap into other artistic disciplines, as well as to cater for previously disadvantaged individuals. The training component of the programme was more comprehensive, and proved to be beneficial in eliciting promising entries. Entrants were required to submit a suite of jewellery pieces, providing valuable learning for AngloGold’s new product development initiatives. New Product Development AngloGold continued to initiate and drive new product development activities throughout the year with varying degrees of success, resulting in much useful learning in this area. The company commissioned fashion, trend and jewellery research and worked closely with OroAfrica’s designers to establish a new product development process aimed at generating new ranges of product. Two international designers were commissioned to produce jewellery lines, while AngloGold’s own marketing team designed “diffusion” products from competition pieces, which were marketed by OroAfrica. In association with the opening of the Gold of Africa Museum, AngloGold brought a leading traditional goldsmith from Mali to South Africa both to develop product for the museum and to participate in a government-led experiment to develop new products with a group of South African traditional beadworkers. AngloGold also designed and commissioned the manufacture of the winning medals and gold souvenirs for the Two Oceans Marathon.

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Project AuTEK AngloGold and Mintek, South Africa’s national metallurgical research organisation, launched Project AuTEK in 2000 to research and develop industrial applications for gold. In 2001, the project team was instrumental in staging – on South African soil – the first conference ever held to stimulate interest in the use of gold as a catalyst. Attended by 85 delegates from 15 countries, the event has led to the establishment of an international community of researchers interested in gold catalysis. Project AuTEK was given a boost early in the year with Gold Fields joining as a third partner and it ended 2001 with the possibility of a number of exciting collaborations with different industries in the offing. Jewellery Displays and Fashion Industry Interface AngloGold hosted a number of high-profile gold jewellery shows and displays in Turkey, Italy, the United Kingdom, Switzerland, Australia, Mali and Tanzania, with the objective of promoting excellence in gold jewellery design and improving understanding of the gold jewellery industry and gold consumers. Many of these displays coincided with fashion shows where AngloGold provided fashion designers with gold jewellery for the catwalk. AngloGold’s association with the fashion world was strengthened through its sponsorship of the Face of Africa competition for the second year. World Gold Council Members’ contributions to the World Gold Council doubled in 2002 to a level of $2/oz of production. It is likely that this level of contribution will increase marginally for 2002 to support higher spending by that organisation in all areas of its activities. The company’s contribution in 2001 amounted to some $13m. While the Council’s resources are applied predominantly to gold jewellery marketing, they are undertaking important initiatives also in promoting institutional and retail demand for gold as an investment, and in the area of official sector policies towards gold. The Council has been in dialogue with a gold jewellery marketing initiative by gold producers who are not members of the World Gold Council in order to agree on joint marketing activities between the two groups.


Raymond Sitta, Drill Operator, and Pius Ndondera, Exploration Sampler, inspecting drill samples at one of the many AngloGold exploration sites in Africa. AngloGold’s exploration strategy seeks to extend the life of both existing operations and to establish new mines capable of providing double-digit returns on investment. This strategy is achieved through cost-effective, focused exploration in geological terrains most likely to host significant gold deposits.

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ngloGold’s global exploration strategy seeks both to extend the life of existing operations (brownfields exploration) and to establish new mines (greenfields exploration) capable of providing double-digit returns on investment. This strategy is achieved through costeffective, focused exploration in geological terrains most likely to host significant gold deposits. The more isolated the prospect is from existing operations, the less existing infrastructure development or the higher the country and other risks associated with the project, the more significant the deposit must be to meet AngloGold’s investment criteria. During 2001, AngloGold once again focused its exploration programme in countries where operations are already in place, namely Argentina, Australia, Brazil, Tanzania, Mali, South Africa and the USA. The exceptions were highly prospective areas in Alaska, Canada and Peru. Exploration expenditure amounted to $32m, of which $6m was spent on increasing near- and inmine mineral resources. Exploration expenditure in

2002 will be in the region of $50m (R548m). As the industry consolidation continues, and as fewer and fewer junior companies are able to finance new exploration projects, the role of the major companies in sustaining exploration activities becomes more imperative in the search for growth and replacement ounces. ■ In Australia, exploration was restructured to provide a greater focus in the Yilgarn and Tanami areas in Western Australia and the Northern Territory, with the aim of discovering mineral resources synergistic with existing mines or of a suitable scale to warrant AngloGold investment at greenfields sites. At Sunrise Dam, drilling on the Western Shear and Watu structures indicated that a further cutback is warranted at the southern end of the pit to mine additional ounces outside the existing infrastructure. To the north of the existing pit, drilling on the Mako lode returned significant intercepts of 7m at 72.2g/t and 10m at 57.6g/t. Mineral Resource increases from exploration in 2001 amounted to some 0.4Moz.

Alaska Canada

USA

Jerritt Canyon CC&V

Sadiola Yatela Amapari

Peru

Mali

Morila Geita Tanzania

Brazil

Morro Velho Serra Grande

Navachab Namibia SA operations South Africa

Australia Boddington

Argentina Cerro Vanguardia

Sunrise Dam

Brownfields exploration Greenfields exploration

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At the Sickle Project, located approximately 55km north of Sunrise Dam, a small oxide resource has been established. Drilling results during the year included 15m at 3.3g/t and 11m at 6.6g/t. At Coyote, in the Tanami region, drilling defined the high-grade Buggsy-Gonzalez structure over a strike length of 800m to a depth of 250m. Significant intercepts included 19m at 21.2g/t and 11m at 75.6g/t. In addition, the Sylvestor structure, which runs parallel to the BuggsyGonzalez structure, returned values of 11m at 5.98g/t. Greenfields exploration continued to search for satellite deposits around the Coyote Project with positive results at the Pebbles and Rabies Projects. Further drilling will take place during 2002. ■ In Africa drilling at the Sadiola mine generated an additional 0.8Moz of attributable Inferred Resource of which 0.6Moz was from sulphide drilling in the deeper ore. Drilling around the pit edges has defined additional attributable Mineral Resources of 0.3Moz. Drilling will continue in 2002. At Morila, airborne geophysics and follow-up drilling indicated positive results in the Donba Corridor, including intercepts of 33m at 3.3g/t and 23m at 1.74g/t. Further drilling will take place in 2002. Drilling around the pit edges has defined an additional attributable mineral resource of 0.3Moz. Exploration for satellite deposits within the Geita mine licence area in Tanzania delineated 0.2Moz of Indicated Resources at 2.19g/t at Chipaka at an approximate cost of $2/oz. Other encouraging results obtained in the Geita concession area were intercepts of 5m at 13.31g/t at Samena, 5m at 16g/t at Prospect 30 and 39m at 7.08g/t at Geita Hill. Greenfields exploration continued in southern Mali and around Lake Victoria in Tanzania. In Mali, airborne geophysics has generated excellent targets for follow-up work during 2002. In Tanzania, the majority of existing projects proved to be uneconomic and further work is subject to the results of desktop studies to identify prospective areas. ■ In North America, greenfields exploration in Canada intersected encouraging mineralisation at the Red Lake Joint Venture. Follow-up

drilling on targets derived from an airborne geophysical survey will continue during 2002. In Alaska, the exploration programme focused on target refinement and drill plans for 2002. Brownfields exploration at the CC&V Joint Venture focused on ore reserve development to meet the approved production expansion. Detailed technical studies are in progress to establish drill targets for future resource expansion. At Jerritt Canyon, exploration focused on resource definition drilling to meet the LOM plan. ■ In South America exploration focused on nearmine resource generation at Serra Grande and Morro Velho in Brazil. This will continue in 2002, with an additional focus on Cerro Vanguardia in Argentina. Based on existing results at Amapari in the Amapa region of Brazil, a feasibility study will be completed in 2002. At Corrego do Sítio in the Iron Quadrangle, situated about 40km east of Morro Velho, 0.1Moz of oxide was delineated and the potential for significant sulphide ore at depth will be tested by ramp development during 2002. Greenfields exploration in South America was restricted to Peru where three of the four target areas yielded positive results from rock sampling and drill programmes. Exploration will continue during 2002. ■ In South Africa drilling focused on establishing new mineral resources at the Goedgenoeg area (west of Tau Lekoa) and to delineate high-grade mineral resources at Moab Extension (south western extension of Moab Khotsong). Drilling at Weltevreden (adjacent to the Tau Lekoa mine) was postponed pending an economic assessment to mine low-grade mineral resources from surface down to 600m. The best intersections to date from the VCR at Goedgenoeg are 29.6g/t over 258.7cm, equivalent to 7,657cm.g/t from drillhole G43 and 25.4g/t over 271.9cm equivalent to 6,893cm.g/t from drillhole G46. The best intersection of Vaal Reef at Moab Extension was in drillhole MGR6 which returned values of 144.3g/t over 14.1cm equivalent to 2,033cm.g/t and 125.5g/t over 16.3cm, equivalent to 2,040cm.g/t.

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ngloGold had Ore Reserves of 68.3Moz and Mineral Resources of 346.8Moz as of 31 December 2001. An agreement has been reached to sell the Free State operations, which comprise 9.0Moz of Ore Reserves and 65.1Moz of Mineral Resources. Mineral Resources and Ore Reserves are reported in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code) and the South African Code for the Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code). During the year AngloGold had five major capital projects in progress that, together, contribute nearly 15Moz to the 2001 Ore Reserve, while the Boddington Expansion advanced development project contributes another 3.6Moz. Asset sales of Deelkraal and Elandsrand in 2001 and the Free State in 2002 improve AngloGold’s cost and risk profile, while reducing Ore Reserves and Mineral Resources. Mineral Resources Mineral Resources decreased by 51.0Moz to 346.8Moz at the end of 2001. Components of this net change include: ■ A significant reduction because for the first time all Mineral Resources were constrained by a $350/oz revenue assumption. This was accompanied by an increase in average gold grade. ■ Ongoing exploration programmes adding some 2.5Moz of Mineral Resources. ■ The sale of Deelkraal and Elandsrand account for 25.1Moz. ■ Depletions as a result of gold production account for 6.9Moz. Ore Reserves Ore Reserves, estimated using a gold price of $300/oz, show a year-on-year decrease of some 19.3Moz to 68.3Moz. The reduction in reserves relates principally to the following: ■ Depletions as a result of gold production account for 6.9Moz. ■ The sale of Elandsrand and Deelkraal account for 7.4Moz. ■ The removal from Ore Reserves at Moab Khotsong below 101 level accounts for 4.5Moz. Based on the gold price and exchange rates at the beginning of 2002, South African Ore Reserves

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could increase by 9Moz or 15% of the total AngloGold Ore Reserve (excluding the Free State), depending on technical, economic and other modifying factors. Of the 9Moz, some 3.5Moz are expected to be added from Moab Khotsong below 101 level and the remainder from other underground operations. Other potential projects in the West Wits and Vaal River areas look attractive at prevailing higher rand gold prices and are being reassessed. An increase in the gold price or weakening rand in the future would lead to a further increase in the South African Ore Reserves. Globally, AngloGold will continue to pursue a strategy of increasing value-adding reserves through expansion projects, brownfields and greenfields exploration and the acquisition of new assets. Competent persons Competent Persons, designated in terms of the JORC and SAMREC Codes and taking corporate responsibility for the reporting of AngloGold’s Mineral Resources, are: ■ V A Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM, 16 years’ experience. ■ M F O’Brien, BSc (Hons) (Geology), Pr.Sci.Nat., MAusIMM, 22 years’ experience. Designated competent persons taking corporate responsibility for the reporting of Ore Reserves are: ■ B W Guenther, BSc (Mining Engineering), MAusIMM, 21 years’ experience. ■ D L Worrall, ACSM, MAusIMM, 21 years’ experience. ■ J van Zyl Visser, BSc (Mineral Resource Management), PLATO, 15 years’ experience. The Competent Persons are employed by AngloGold Limited and have consented to the inclusion of the Mineral Resources and Ore Reserves information in this report. Notes Supplementary information containing a detailed breakdown of the Mineral Resources and Ore Reserves, together with plans of the South African operations, is provided in the annual report section of the AngloGold website (www.anglogold.com) and may be downloaded as PDF files using Adobe Acrobat Reader. This information is also obtainable from the AngloGold offices at the addresses given on the inside back cover of the report.


ORE RESERVES (as at 31 December 2001) Metric

Africa*

Australia*

North America*

South Africa (excluding Free State) Free State 1

South America*

Totals

* 1

Proved Probable Sub-total Proved Probable Sub-total Proved Probable Sub-total Proved Probable Sub-total Proved Probable Sub-total Proved Probable Sub-total Proved Probable Total

Tonnes Mt 22.3 43.2 65.6 50.3 99.3 149.6 81.4 63.2 144.5 62.1 209.7 271.8 5.9 31.5 37.4 7.0 5.2 12.2 229.0 452.1 681.1

Grade g/t 3.20 3.96 3.70 1.44 1.20 1.28 1.32 1.10 1.22 3.05 4.52 4.18 8.09 7.42 7.53 8.06 7.52 7.83 2.38 3.50 3.12

Imperial Contained gold t 71.4 171.2 242.6 72.6 119.5 192.1 107.0 69.7 176.8 189.2 947.8 1,137.0 47.5 233.8 281.3 56.6 39.0 95.6 544.4 1,581.1 2,125.4

Tons Mt 24.6 47.6 72.3 55.4 109.5 164.9 89.7 69.7 159.3 68.5 231.2 299.6 6.5 34.7 41.2 7.7 5.7 13.4 252.4 498.4 750.8

Grade oz/t 0.093 0.115 0.108 0.042 0.035 0.037 0.038 0.032 0.036 0.089 0.132 0.122 0.236 0.217 0.220 0.235 0.219 0.228 0.069 0.102 0.091

Contained gold Moz 2.3 5.5 7.8 2.3 3.8 6.2 3.4 2.2 5.7 6.1 30.5 36.6 1.5 7.5 9.0 1.8 1.3 3.1 17.5 50.8 68.3

Reserves attributable to AngloGold. An agreement was reached to sell the Free State operations effective from 1 January 2002.

MINERAL RESOURCES 2 (as at 31 December 2001) Metric

Africa**

Australia**

North America**

South Africa (excluding Free State)

Free State 1

South America**

Totals

** 1 2

Measured Indicated Inferred Sub-total Measured Indicated Inferred Sub-total Measured Indicated Inferred Sub-total Measured Indicated Inferred Sub-total Measured Indicated Inferred Sub-total Measured Indicated Inferred Sub-total Measured Indicated Inferred Total

Tonnes Mt 34.1 102.4 86.4 222.8 67.1 147.5 94.1 308.7 105.3 87.5 54.3 247.1 311.7 643.0 462.5 1,417.2 21.2 385.5 287.4 694.0 19.9 19.7 45.6 85.2 559.3 1,385.5 1,030.4 2,975.1

Grade g/t 2.73 2.56 1.98 2.36 1.34 1.19 1.10 1.19 1.27 1.26 1.29 1.27 1.68 4.60 7.82 5.01 9.87 3.65 1.42 2.92 4.83 4.75 5.93 5.40 2.05 3.61 4.50 3.63

Imperial Contained gold t 92.9 261.8 170.9 525.6 89.7 175.4 103.4 368.5 133.3 110.3 69.9 313.5 523.2 2,956.9 3,614.9 7,095.0 208.8 1,406.8 408.0 2,023.6 96.2 93.3 270.6 460.2 1,144.1 5,004.4 4,637.8 10,786.4

Tons Mt 37.6 112.9 95.2 245.6 74.0 162.6 103.7 340.3 116.1 96.5 59.9 272.4 343.6 708.8 509.8 1,562.2 23.4 424.9 316.8 765.0 21.9 21.7 50.3 93.9 616.5 1,527.3 1,135.8 3,279.5

Grade oz/t 0.079 0.075 0.058 0.069 0.039 0.035 0.032 0.035 0.037 0.037 0.038 0.037 0.049 0.134 0.228 0.146 0.288 0.106 0.041 0.085 0.141 0.138 0.173 0.158 0.060 0.105 0.131 0.106

Contained gold Moz 3.0 8.4 5.5 16.9 2.9 5.6 3.3 11.8 4.3 3.5 2.2 10.1 16.8 95.1 116.2 228.1 6.7 45.2 13.1 65.1 3.1 3.0 8.7 14.8 36.8 160.9 149.1 346.8

Resources attributable to AngloGold. An agreement was reached to sell the Free State operations effective from 1 January 2002. Includes Proved and Probable Ore Reserves.

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Executive directors

CHAIRMAN AND CHIEF EXECUTIVE OFFICER Bobby Godsell, BA, MA Bobby Godsell (49) was appointed chief executive officer of AngloGold in April 1998 and chairman in December 2000. He has 28 years of service with companies associated with the mining industry, and serves as a non-executive director of Anglo American. Bobby is also chairman of the World Gold Council. Jonathan Best, ACIS, ACIMA, MBA Jonathan Best (53) was appointed finance director in April 1998. He has had 33 years of service with companies associated with the mining industry. Dave Hodgson, BSc (Mining Engineering), BSc (Civil Engineering), BCom, AMP (Harvard) Prior to his appointments as director and chief operating officer of AngloGold in November 2001, Dave Hodgson (54) was executive officer responsible for AngloGold’s South Africa region. He has more than 30 years of mining experience. Kelvin Williams, BA Kelvin Williams (53) was appointed marketing director in April 1998. He is chairman of Rand Refinery and a director of the World Gold Council. Non-executive directors

DEPUTY CHAIRMAN Russell Edey, FCA Russell Edey (59) was appointed a director of AngloGold in April 1998 and deputy chairman in December 2000. Based in the United Kingdom, he is deputy chairman of NM Rothschild Corporate Finance and a director of a number of other companies. Frank Arisman, MSc (Finance) Frank Arisman (57) was appointed to the AngloGold board in April 1998. He lives in New York and is managing director of J P Morgan Chase, a company which he joined in 1972. Elisabeth Bradley, BSc, MSc Elisabeth Bradley (63) was appointed a director of AngloGold in April 1998. She is executive chairman of Wesco Investments Limited, vice-chairman of Toyota SA Limited and a director of a number of other companies. Mrs Bradley is also deputy chairman of the South African Institute of International Affairs.

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Colin Brayshaw, CA(SA), FCA Colin Brayshaw (66) has been a director of AngloGold since its formation in 1998. He is a retired managing partner and chairman of Deloitte & Touche, and is a director of a number of other companies including Anglo Platinum, Datatec and Johnnic. Victor Fung, PhD (Business Economics), MSc (Electrical Engineering) Victor Fung (56) was appointed to the AngloGold board in April 1998. Based in Hong Kong, he is chairman of Prudential Asia Investments (which he joined in 1986), of Li & Fung Limited, Hong Kong, and of the Hong Kong Airport Authority. Tony Lea, BA (Hons) Tony Lea (53) was appointed a director of AngloGold in July 2001. He is finance director of Anglo American. James Motlatsi James Motlatsi (50) was appointed to the board of AngloGold in April 1998. He has been associated with the South African mining industry since 1970, and is the immediate past president of the National Union of Mineworkers (NUM). James is chief executive officer of TEBA Limited. Bill Nairn, BSc (Mining Engineering) Bill Nairn (57) has been a member of the AngloGold board since January 2000. He was re-appointed a director in May 2001, having previously been alternate director to Tony Trahar. Bill is a director of Anglo American and is technical director of Anglo American Corporation of South Africa Limited. Julian Ogilvie Thompson, MA Julian Ogilvie Thompson (68) was appointed a director of AngloGold in April 1998. He is chairman of Anglo American and deputy chairman of De Beers Consolidated Mines and is also a director of a number of other companies.


Non-executive directors (continued) Nicky Oppenheimer, MA Nicky Oppenheimer (56) was appointed to the board in April 1998. He is a former non-executive chairman of AngloGold. Nicky is chairman of De Beers Consolidated Mines, a non-executive deputy chairman of Anglo American, and a director of a number of other companies. Tony Trahar, BCom, CA(SA) Tony Trahar (52) was appointed to the AngloGold board in October 2000. He joined the Anglo American group in 1974 and was appointed chief executive officer of Anglo American in July 2000. Alternate directors Harry Calver, BSc (Hons) Engineering, MDP (UNISA), PMD (Harvard) Harry Calver (54) was appointed alternate director to Bill Nairn in May 2001. He is deputy technical director (engineering) of Anglo American Corporation. Peter Whitcutt, BCom (Hons), CA(SA), MBA Peter Whitcutt (36) was appointed alternate director to Tony Lea on the AngloGold board in October 2001. He is executive vice-president (finance) of Anglo American. Members of the executive committee Bobby Godsell (49) BA, MA Chairman and chief executive officer Jonathan Best (53) ACIS, ACIMA, MBA Finance director Dave Hodgson (54) BSc (Mining Engineering), BSc (Civil Engineering), BCom, AMP (Harvard) Chief operating officer Kelvin Williams (53) BA Marketing director Executive officers Roberto Carvalho Silva (50) BAcc, BCorp Admin South America region Roberto joined the Anglo American group in Brazil in 1973 and was appointed president and CEO of AngloGold South America in January 1999. He became an executive officer in February 2000. Richard Duffy (38) BCom, MBA Business planning Richard joined Anglo American Corporation 15 years ago. He became an executive officer of AngloGold in 1998 and was given the business planning portfolio in November 2000.

Dick Fisher (60) Technology, safety and health Dick has been associated with the South African mining industry since 1959. He has held his current position since 1998. Neville Nicolau (42) NHD (Metalliferous Mining), MBA South Africa region Neville became the executive officer responsible for AngloGold’s South Africa region in November 2001. He has 23 years of mining experience. Jim Komadina (45) BSc (Metallurgical Engineering), MBA, AMP (Wharton) North America region Jim has 24 years of diverse mining experience and was appointed president and CEO of AngloGold North America in 1999. He became an executive officer in February 2000. Steve Lenahan (46) BSoc Sc, MSc Corporate affairs Steve has been working in the mining industry since 1978 when he started his career at De Beers. He was appointed investor relations executive in 1998 and assumed responsibility for corporate affairs in early 2001. Bob Micsak (47) BS, MLA, JD Environment Bob served as vice president, general counsel and chief environmental officer of AngloGold North America before he was appointed an AngloGold executive officer with the environment as his portfolio in August 2000. Nigel Unwin (49) BA Australia region, human resources and information technology Nigel has had many years of experience in the field of human resources. He became an executive officer in 1999, assumed responsibility for the Australia region in November 1999, for information technology in November 2000, and for human resources in January 2001. Managing secretary Yedwa Simelane (36) BA LLB, FILPA, MAP Yedwa joined AngloGold in November 2000 from the Mineworkers’ Provident Fund where she was the senior manager of the Fund.

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The annual financial statements and group annual financial statements for the year ended 31 December 2001 were approved by the Board of Directors on 20 February 2002 and are signed on its behalf by:

Directors:

R M GODSELL Chairman and Chief Executive Officer

R P EDEY

J G BEST

Deputy Chairman

Finance Director

C B BRAYSHAW Chairman, Audit Committee

Managing Secretary: MS Y Z SIMELANE

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In terms of Section 268G(d) of the Companies Act, 1973, I certify that the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act, and that all such returns are true, correct and up to date.

MS Y Z SIMELANE Managing Secretary

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Johannesburg 20 February 2002


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S TAT E M E N T S

We have audited the annual financial statements and group annual financial statements of AngloGold Limited set out on pages 48 to 118 for the year ended 31 December 2001. These financial statements are the responsibility of the company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit. Scope

We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material mis-statement. An audit includes: – examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; – assessing the accounting principles used and significant estimates made by management; and – evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Audit opinion

In our opinion the annual financial statements and group annual financial statements fairly present, in all material respects, the financial position of the company and the group at 31 December 2001, and the results of operations and cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice, International Accounting Standards, and in the manner required by the Companies Act in South Africa.

ERNST & YOUNG Registered Accountants and Auditors Chartered Accountants (SA)

Johannesburg 20 February 2002

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The AngloGold group subscribes to a policy of global best practice in business management and corporate governance. Introduction

With a production base spanning four continents and an exploration programme encompassing ten countries on four continents, and shareholders in all the major share trading centres, AngloGold Limited is a global company. Its primary listing is on the JSE Securities Exchange South Africa which requires that all companies listed on that exchange comply with the Code of Corporate Practices and Conduct as set out in the King Report on Corporate Governance issued in South Africa in November 1994. The company’s ordinary shares have secondary listing status on the stock exchanges in London and Paris, as well as being quoted in Brussels in the form of International Depositary Receipts and in New York in the form of American Depositary Shares. The company has a full compliance listing on the Australian Stock Exchange for its shares in the form of CHESS Depository Interests (CDIs). With effect from 1 January 2000, AngloGold implemented the recommendations of the Turnbull Report on Internal Control: Guidance to Directors on the Combined Code – Principles of Good Corporate Governance and Code of Best Practice which consolidated the guidelines and codes developed by the Cadbury, Greenbury and Hempel committees in the United Kingdom. Over the past seven years, the King Committee has been working, together with numerous local and international bodies, to formulate further recommendations for the maintenance and improvement of standards of corporate governance in South African companies and their associates in conformity with international best practice. Since the issue of the second King Report for public comment in July 2001, the King Committee has received an unprecedented number of submissions from numerous countries, professional bodies, non-government organisations and government, necessitating an extension of the date for the release of the second report to 26 March 2002. The company has taken careful note of the new recommendations contained in this report. A great deal of the company’s practices are already in line with these requirements. However, attention will be given during the remainder of 2002 to those recommended practices in the second King Report which still need to be adopted by the company. Board of directors

The company has a unitary board structure of 15 directors, comprising four executive directors and 11 non-executive directors. Six of the non-executive directors, being Mrs E le R Bradley, Dr V K Fung and Messrs F B Arisman, C B Brayshaw, R P Edey and T J Motlatsi, are independent of management. The five remaining non-executive directors, namely Messrs A W Lea, W A Nairn, N F Oppenheimer, J Ogilvie Thompson and A J Trahar, are directors of AngloGold’s ultimate holding company, Anglo American plc. The non-executive directors derive no benefits from the company for their services as directors other than their fee which is fixed by the shareholders in general meeting. The non-executive directors, the majority of whom are independent, are of a high calibre and sufficient number for their independent views to carry significant weight in the board’s deliberations and decisions. The four executive directors are Messrs J G Best, finance, D L Hodgson, chief operating officer, K H Williams, marketing, and the chairman and chief executive officer, R M Godsell. Any governance concerns arising out of the combined role of chairman and chief executive officer are sufficiently mitigated by a strong and independent element on the board, and the presence on the board of an independent deputy chairman, Mr R P Edey. The directors are committed to the principles of corporate discipline, transparency, independence, accountability, responsibility, fairness and social responsibility. Full details regarding changes in the company’s directorate, emoluments paid to directors, directors’ interests in shares of the company and the interest of executive directors in shares of the company granted in the form of options are disclosed on pages 61 to 63. Details of directors and alternate directors presently constituting the board appear on pages 44 and 45. There are no contracts of service between any directors and the company or any of its subsidiaries that are terminable at periods of notice exceeding one year and requiring payment of compensation. All directors are subject to retirement by rotation and re-election by shareholders at least once every three years in accordance with the company’s articles of association. In addition, all directors are subject to re-election by shareholders at the first annual general meeting following their appointment. The appointment of new directors is approved by the board as a whole. The names of the directors submitted for re-election are accompanied by sufficient biographical details in the notice of the annual general meeting to enable shareholders to make an informed decision in respect of their re-election.

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The board retains full and effective control over the group, meeting five times a year with additional meetings being arranged when necessary, to review strategy, planning, operational and financial performance, acquisitions and disposals, major capital expenditure, stakeholder communications and other material matters reserved for its decision. The board is also responsible for monitoring the activities of executive management within the group. Board meetings are held in South Africa and internationally. Where directors are not able to attend personally, telephonic or video conference facilities are made available to include them in relevant proceedings and permit participation in decisions and conclusions reached. The directors have access to the advice and services of a managing secretary, as well as a company secretary, who are both responsible to the board for ensuring compliance with procedures and regulations of a statutory nature. Directors are entitled to seek independent professional advice concerning the affairs of the group at the group’s expense, should they believe that course of action would be in the best interest of the group. Board Committees

The board has established a number of standing committees in which, with the exception of the Executive Committee, the non-executive directors play an active role, particularly in the capacity as chairman of the committee concerned. All standing committees operate within written terms of reference established by the board. Minutes of the meetings of all standing committees are circulated to members of the board. Remuneration of non-executive directors for their services on the various committees is determined by the board. The following information reflects the composition and activities of these committees: Executive Committee

The board has delegated authority to run the day-to-day affairs of the company to an Executive Committee comprising the four executive directors. The committee meets regularly to review operations and performance, develop strategy and policy proposals for consideration by the board and to implement its directives. To assist it in the execution of certain of its duties and functions, the committee has established two sub-committees, namely an Operations Committee and a Strategic Committee.

OPERATIONS COMMITTEE The objective of this sub-committee is to oversee the implementation of the company’s strategic objectives and review operational performance in detail. Members of the sub-committee are appointed by the Executive Committee and include the executive officers responsible for the various regional operations, together with the executive officers responsible for human resources, corporate affairs, exploration, technology, safety, health and environment, business planning and any senior managers of the company as determined by the Executive Committee. The names of the executive officers appear on page 45. The sub-committee meets under the chairmanship of the chief operating officer on a regular basis.

STRATEGIC COMMITTEE The objective of this sub-committee is to develop a coherent dialogue and consensus on the strategic direction of the company. Members of the sub-committee are appointed by the Executive Committee and include all members of the Operations Committee, as well as senior managers as determined by the Executive Committee from time to time. The sub-committee meets under the chairmanship of the chief executive officer on a regular basis. Audit Committee

C B Brayshaw (Chairman) Mrs E le R Bradley

R P Edey P G Whitcutt

Mr R P Garnett resigned from the committee on 30 July 2001 and Mr P G Whitcutt was appointed in his place with effect from 25 October 2001. The committee comprises only non-executive directors. Its primary responsibility is to assist the board of AngloGold in carrying out its duties relating to accounting policies, internal control, financial reporting practices, and identification of exposure to significant risks.

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To assist the Audit Committee in discharging its responsibilities, internal audits are performed at all of the group’s operating units and function under the control of, and report to, the group’s internal audit manager. The internal audits are performed by teams of appropriate, qualified and experienced employees. The primary mandate of the group’s internal auditors is to examine, review and evaluate the effectiveness of the applicable operating activities, the attendant business risks and the systems of internal operation and financial control, so as to bring material deficiencies, instances of non-compliance, high-risk exposure and development needs to the attention of the group internal audit manager and operational management for resolution. The group internal audit manager reports on an administrative basis to the finance director and functionally to the Audit Committee. The company’s Audit Committee has access to all records of the internal audit team. The Audit Committee meets five times a year with the external audit partner, the group’s internal audit manager and the finance director to review the audit plans of the internal and external auditors, to ascertain the extent to which the scope of the audit can be relied upon to detect weaknesses in internal controls and to review the quarterly and half-yearly financial results, the audited preliminary announcement of the annual results and the annual financial statements prior to approval by the board. The group’s internal audit manager and the external audit partner have unrestricted access to the chairman of the committee and, where necessary, to the chairman of the board and chief executive officer. All important findings arising from audit procedures are brought to the attention of the committee and, if necessary, to the board. The chairman of the Audit Committee is also the chairman of the Treasury Committee whose function is to review and recommend to the Executive Committee all treasury counterparts, limits, instruments and hedge strategies. The Treasury Committee meets on a monthly basis. Employment Equity Committee

T J Motlatsi (Chairman) F B Arisman

R M Godsell W A Nairn

The company is committed to promoting an organisational culture which provides all employees with opportunities to progress to their optimal levels of career development. To ensure that the company achieves its employment equity objectives and the proper implementation of its strategies, the Employment Equity Committee, comprising the chief executive officer and three non-executive directors, meets four times a year. Investment Committee

R P Edey (Chairman) J G Best Mrs E le R Bradley

A W Lea W A Nairn K H Williams

Mr M W King and Dr J W Campbell resigned from the committee on 16 May 2001 and 30 July 2001 respectively. Messrs A W Lea and W A Nairn were appointed to the committee with effect from 30 January 2002. Composed of the finance and marketing directors and non-executive directors, the committee meets as and when required for the purpose of assessing capital projects and ensuring that investments, disinvestments and financing proposals are in accordance with the company’s primary objective of creating wealth for its shareholders on a sustainable long-term basis. Market Development Committee

Mrs E le R Bradley (Chairman) F B Arisman Dr V K Fung

R M Godsell T J Motlatsi K H Williams

Mrs E le R Bradley was appointed chairman of the committee pursuant to Dr V K Fung’s resignation from this position on 30 July 2001. The primary objective of the Market Development Committee is to extend the influence of the company as a major global gold company, in the development of a broader gold business both nationally and internationally. This committee, which meets four times a year, is composed of the chief executive officer, the marketing director and four non-executive directors. Remuneration Committee:

R P Edey (Chairman) N F Oppenheimer

J Ogilvie Thompson A J Trahar

Mr D M J Ncube resigned from this committee and Mr A J Trahar was appointed in his stead on 30 July 2001. The committee, consisting entirely of non-executive directors, meets as and when required but at least on an annual basis.

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The Remuneration Committee is primarily responsible for approving the remuneration policies of the company and the terms and conditions of employment of executive directors and officers, including the determination of salaries, performance-based bonuses and the administration of the company’s Share Incentive Scheme. Safety, Health and Environment Committee

W A Nairn (Chairman) R M Godsell T J Motlatsi Mr W A Nairn was appointed chairman on Mr D M J Ncube’s resignation from the committee on 30 July 2001. The company attaches great importance to the safety and health of its employees and to the environment at large. One of the prime objectives of this committee is the elimination of all accidents of a mining nature. The committee conducts on-site inspections in regard to matters of serious concern. Through a comprehensive environmental policy, the committee assesses the impact that the company’s international operations might have on the environment. The committee, which meets on a quarterly basis, comprises the chief executive officer and two non-executive directors. Annual financial statements

The directors are required by the South African Companies Act, 1973, to maintain adequate accounting records and to prepare annual financial statements which fairly present the state of affairs of the company and the AngloGold group at the end of the financial year, and the results of operations and cash flows for the year, in conformity with generally accepted accounting practice. In preparing the annual financial statements reflected in United States dollars and South African rands on pages 64 to 118, the group has complied with South African Statements of Generally Accepted Accounting Practice and International Accounting Standards and has used appropriate accounting policies supported by reasonable and prudent judgements and estimates. The directors are of the opinion that these financial statements fairly present the financial position of the company and the group at 31 December 2001, and the results of their operations and cash flow information for the year then ended. The directors have reviewed the group’s business plan and cash flow forecast for the year to 31 December 2002. On the basis of this review, and in the light of the current financial position and existing borrowing facilities, the directors are satisfied that AngloGold is a going concern and have continued to adopt the going-concern basis in preparing the financial statements. The external auditors, Ernst & Young, are responsible for independently auditing and reporting on the financial statements in conformity with South African Auditing Standards. Their unqualified report on these financial statements appears on page 47. As part of its listing on the New York Stock Exchange (NYSE), the company is registered with the United States Securities and Exchange Commission (SEC). To comply with requirements for reporting by non-US companies registered with the SEC, the company is preparing a set of financial statements in accordance with US Generally Accepted Accounting Principles which will be available from The Bank of New York to holders of the company’s securities listed in the form of American Depositary Shares on the NYSE. Copies of these particular financial statements will also be available to stakeholders and other interested parties upon request to the company’s corporate office or its contacts as listed on inside back cover. Risk management and internal control

The board is responsible for the total risk management process within the group. Management is accountable to the board and has established a group-wide system of internal control to manage significant group risks. This system supports the board in discharging its responsibility for ensuring that the wide range of risks, associated with the group’s international operations, are effectively managed in support of the creation and preservation of shareholder wealth. The management of risk encompasses all significant business risks, including operational risk, which could undermine the achievement of business objectives. The board has approved the level of acceptable risk and required that operations manage and report in terms thereof. Issues and circumstances, which could give rise to material adverse reputational considerations, are also considered to be unacceptable risk.

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There is clear accountability for risk management. The requisite risk and control capability is assured through board control and appropriate management selection and skills development. Managers are supported in giving effect to their risk responsibilities through sound policies and guidelines on control management. Continual monitoring of risk and control processes, across significant risk areas, provides the basis for regular and exception reporting to the audit and executive committees. For key risk areas, group risk owners have been appointed and board policies issued. The risk assessment and reporting criteria are designed to provide the board with a consistent, group-wide perspective of the key risks. The system of internal control, which is embedded in all key operations, provides reasonable assurance, rather than absolute assurance, that the group’s business objectives will be achieved within the risk tolerance levels defined by the board. Regular management reports, which provide a balanced assessment of key risks, are an important component of board assurance. Additional sources include assertions by divisional heads as well as board committees established to focus on specific risks such as safety, health and environment and capital investment. The board also receives assurance from the Audit Committee which derives its information, in part, from regular internal and external audit reports throughout the group on risk and internal control. The company seeks to have a sound system of internal control, based on the group’s policies and guidelines, in all material associates and joint ventures. Where this is not possible the directors, who are represented on the boards of these entities, seek assurance that significant risks are being managed. In conducting its annual review of the effectiveness of risk management, the board considers the key findings from the ongoing monitoring and reporting process, management assertions and independent assurance reports. The board also takes account of material changes and trends in the risk profile and considers whether the control system, including reporting, adequately supports the board in achieving its risk management objectives. During the course of the year the board considered the group’s responsiveness to changes within its business environment and systems of control. The board is satisfied that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the group. Company secretarial function

Appointment and removal of the managing secretary and company secretary are matters for the board. Both these officials are required to provide the directors of the company, collectively and individually, with guidance as to their duties, responsibilities and powers. They are also required to ensure that the directors are aware of all laws, legislation, regulations and corporate governance issues relevant to, or affecting the company and reporting at any meetings of the shareholders of the company or of the company’s directors, any failure to comply with such laws, legislation, regulations or corporate governance issues. The managing secretary and company secretary are also required to ensure that minutes of all shareholders’ meetings, directors’ meetings and the meetings of the various committees of the board of directors are properly recorded in accordance with section 242 of the Companies Act. These minutes are circulated to members of the board. Insider trading

No employee may deal directly or indirectly in AngloGold ordinary shares on the basis of unpublished price-sensitive information regarding its business or affairs. No director or officer of the company may trade in these shares during a closed period determined by the board. A list of persons regarded as officers for this purpose has been approved by the board and is revised from time to time. Closed periods are operated prior to the publication of the quarterly and year-end results. Where appropriate, the closed period is also extended to include other sensitive periods. Employee participation

The company has in place a variety of strategies and structures, which are designed to promote employee participation. These strategies and structures are further developed and adapted from time to time to meet variations in operational requirements and to accommodate changing circumstances. Management and employee representatives meet in formal and informal forums at company and operational levels to share information and to address matters of mutual interest.

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Relations with shareholders

It is the policy of the company to pursue dialogue with institutional and private investors. In addition to the facilities offered by the corporate secretarial department and the company’s share registrars, AngloGold has established a strong team of investor relations and communications contacts in South Africa, the United Kingdom, Europe, the United States and Australia to maintain contact with members of the investing communities and the media around the world. The company encourages shareholders to attend its general meetings, which provide opportunities for shareholders to ask questions of the board, including the chairmen of the various standing committees of the board. International media and investor briefings are held when the company’s results are announced at quarterly intervals. The company also has a website containing up-to-date information. Equally high value is placed on the process of internal communication to all employees at the company’s operating units. Code of ethics

Progress is being made with regard to the compilation of a revised code on ethical standards for application within the societies in which the company operates worldwide. All directors and employees are required to maintain the highest ethical standards in ensuring that the group’s business practices are conducted in a manner in which, in all reasonable circumstances, is above reproach. Dematerialisation of shares

In November 2001, AngloGold commenced non-certificated dealings under the STRATE (Share Transactions Totally Electronic) programme on the JSE Securities Exchange South Africa. Shareholders on the South African register of members were sent, with the June 2001 quarterly report, a fully explanatory letter on how the new system would operate.

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R E P O R T

for the year ended 31 December 2001

Nature of business

AngloGold Limited is a major global gold company with mining, processing and marketing operations in Africa, North and South America and Australia and gold exploration interests worldwide. Events subsequent to the balance sheet

On 5 September 2001 it was announced that the company intended to acquire up to 100% of the issued share capital of Normandy Mining Limited (Normandy), Australia’s largest listed gold mining company, by way of an offer of 2.15 AngloGold shares for every 100 Normandy shares. Members of the company duly approved the proposed acquisition, as fully detailed in a circular sent to them by the company on 26 October 2001, at a general meeting held on 19 November 2001. The company formally extended the closing date of its original offer to Normandy shareholders from 9 November until 14 December 2001. In answer to a competing offer for Normandy by Newmont Mining Corporation (Newmont), the company announced a revised offer for Normandy on 29 November 2001 of 2.15 AngloGold shares for every 100 Normandy shares plus a cash consideration of A$0.20 per Normandy share. Members again endorsed the proposed acquisition of Normandy – on the basis of the revised offer set out in a circular sent to them on 4 December 2001 – at a general meeting held on 19 December 2001. The period of this revised offer to Normandy shareholders was from 6 December 2001 to 27 December 2001. On 18 December 2001, the company announced an extension to the closing date of its revised offer to Normandy shareholders from 27 December 2001 to 4 January 2002. Responding to an upward revision in Newmont’s competing offer for Normandy, the company announced on 27 December 2001 that it was increasing the cash component of its offer to Normandy shareholders by 10 Australian cents to A$0.30 per Normandy share and extending the revised offer period from 4 January 2002 to 11 January 2002. A further meeting of AngloGold’s members to approve the increase in the cash offer to Normandy shareholders was not convened in view of the relatively small amount of the increase involved. On 10 January 2002, AngloGold gave notice of a final extension to its latest revised offer to 18 January 2002. In an announcement made by the company on 18 January 2002, it was stated that as acceptances received in respect of its latest revised offer constituted only 159.3m Normandy shares, representing 7.11% of Normandy’s issued share capital, the company was of the view that it was not possible for it to obtain majority control of Normandy and that it was accordingly closing its offer. On 21 January 2002 it was announced that the company’s holding of Normandy shares had been disposed of, realising approximately $159m, which proceeds would be applied towards repaying debt owed by the group.

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Share capital

There was no change to the authorised share capital of the company during 2001. The following are the movements in the issued and unissued ordinary share capitals from the beginning of the accounting period to 13 February 2002: Issued Number of shares

Rand

At 1 January 2001 Issues during year Acquisition of shares in Normandy Issue of shares in terms of Normandy top up facility Exercise of options by participants in the: AngloGold Share Incentive Scheme Acacia Employee Option Plan

107,021,087

53,510,544

233,183 8,237

116,592 4,118

359,000 12,551

179,500 6,275

At 31 December 2001

107,634,058

53,817,029

3,201,596 63,442

1,600,798 31,721

91,000 14,800

45,500 7,403

111,004,902

55,502,451

Issues subsequent to year end Acquisition of shares in Normandy Issue of shares in terms of Normandy top up facility Exercise of options by participants in the: AngloGold Share Incentive Scheme Acacia Employee Option Plan At 13 February 2002 All the issued A and B redeemable preference shares are held by a wholly-owned subsidiary. Unissued

Number of shares

At 1 January 2001 Issues during year

92,978,913 612,971

At 31 December 2001

92,365,942

Maximum number of shares that were available for allocation for purposes of the Share Incentive Scheme at 31 December 2001 was 2,959,937 (2000: 2,943,080) Issues subsequent to year end

3,370,844

At 13 February 2002

88,995,098

Maximum number of shares that may be allocated for purposes of the Share Incentive Scheme at 13 February 2002

3,052,635

Balance of unissued shares under the control of the directors at 13 February 2002

85,942,463

Further details of the authorised, issued and unissued shares, as well as the share premium, are given in note 24 to the group’s financial statements. At the annual general meeting to be held on 30 April 2002, members will be asked to consider an ordinary resolution placing the number of unissued ordinary shares, exclusive of the number of shares reserved for purposes of the Share Incentive Scheme as at that date, under the control of the directors until the next annual general meeting. In terms of the Listings Requirements of the JSE Securities Exchange South Africa (JSE), shareholders may, subject to certain conditions, authorise the directors to issue the unissued shares held under their control for cash other than by means of a rights offer to members. In order that the directors of the company may be placed in a position to take advantage of favourable circumstances which may arise for the issue of such shares for cash without restriction for the benefit of the company, members will be asked to consider an ordinary resolution to this effect at the forthcoming annual general meeting. As AngloGold is not incorporated in Australia, the acquisition of its shares by another company or person is not subject to the takeovers and substantial holding provisions of Chapter 6 of the Australian Corporations Act. However, AngloGold is required to comply with those provisions in the case of a bid for an Australian company.

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for the year ended 31 December 2001

Relevant information concerning the conversion of certificated ordinary shares of the company into uncertificated shares (dematerialisation) in terms of the STRATE system, was contained in a letter dated 30 July 2001 posted to shareholders on the South African register, together with the June 2001 quarterly report. The dematerialisation process applicable to the company commenced on 15 October 2001 with the first trading for electronic settlement on 5 November 2001, for settlement on 12 November 2001. Since 5 November 2001, paper scrip is no longer accepted for settlement in respect of transactions entered into on the JSE. American Depositary Shares

At 31 December 2001, the company had in issue through The Bank of New York as Depositary, and listed on the New York Stock Exchange (NYSE), 30,104,646 (2000: 33,024,720) American Depositary Shares (ADSs). Each ADS represents one-half of one ordinary share. At 13 February 2002, there were 38,868,626 ADSs in issue and listed on the NYSE (12 February 2001: 35,031,148). Share Incentive Schemes

AngloGold Share Incentive Scheme At the general meeting held on 4 June 1998, members approved the introduction of the AngloGold Limited Share Incentive Scheme for the purpose of providing an incentive to executive directors, executive officers and senior employees of the company and its subsidiaries to identify themselves more closely with the fortunes of the group and its continued growth, and also to promote the retention of such employees by giving them an opportunity to acquire shares in the company. Employees participate in the Scheme to the extent that they are granted options and accept them. The maximum number of ordinary shares that may be allocated for the purposes of the Scheme, equivalent to 2.75% of the total number of ordinary shares in issue at that date, is: 13 February 2002

31 December 2001

31 December 2000

3,052,635

2,959,937

2,943,080

The maximum aggregate number of shares which may be acquired by any one participant in the Scheme is 150,000. The options granted may be exercised as follows: Percentage

Period after date of grant of options

20 40 60 100

2 years 3 years 4 years 5 years

All options which have not been exercised within ten years from the date on which they were granted automatically lapse. At the annual general meeting held on 25 April 2001, members approved amendments to the scheme in terms of which the company was given permission to grant options to acquire shares in the company to those participants in the Scheme who had been issued debentures at a share price at which the debentures had been issued to them, against relinquishment of their rights to the debentures. The participants concerned were, therefore, placed in the position in which they would have been had they been granted options to acquire shares in the company rather than to subscribe for debentures which were automatically convertible into shares. On 30 June 2001, pursuant to this authority, 428,600 debentures at an average issue price of R243.14 per debenture were cancelled, in exchange for the issue of 428,600 options to acquire ordinary shares in the company at an average strike price of R243.14 per share. The movement in respect of debentures during the period 1 January 2001 to 30 June 2001 was as follows:

In issue at 1 January 2001 To 30 June 2001: – Granted – Converted – Cancelled – Cancelled in exchange for share options Balance at 1 July 2001

Number

Average issue price

494,900

R241.75

– 42,400 23,900 428,600

– R219.19 R256.87 R243.14

For reporting purposes, the movement in respect of debentures has been incorporated into both the summarised schedule on page 57, and the schedule detailing the options held by executive directors, executive officers and senior managers on page 62 as if the debentures issued were share options granted.

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The following are summaries of particulars required to be disclosed in terms of the Scheme and stock exchange regulations: Options Ordinary shares issued

At 1 January 2001 Movements during year Granted Exercised Lapsed – terminations At 31 December 2001 Subsequent to year end Exercised Lapsed At 13 February 2002 *

Average exercise price per ordinary share

Number

171,300

1,488,700*

R237.15

359,000

246,500 359,000 93,400

R243.08 R219.83 R248.80

530,300

1,282,800

R242.29

91,000

91,000 5,200

R241.88 R317.00

621,300

1,186,600

R241.99

Comprises 993,800 share options and 494,900 debentures

Analysis of options in issue at 13 February 2002: Holding

Holders

Number

Value – R000

1 – 100 101 – 500 501 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 Over 100,000

– 1 – 163 35 19 –

– 300 – 507,800 278,000 400,500 –

– 78 – 127,293 70,054 89,721 –

Total

218

1,186,600

287,146

Acacia Employee Option Plan The company’s wholly-owned subsidiary, AngloGold Australia Limited (originally Acacia Resources Limited) operates the Acacia Employee Option Plan for certain of its employees. In terms of this plan, on exercising of options, a ratio of 3.5 AngloGold ordinary shares for every 100 options held will be applied. The issue price of the AngloGold shares is calculated using the A$/R exchange rate ruling on the date of allotment. No further options will be granted under this plan which will terminate on 28 April 2004, being the date on which the last option may be exercised or will expire. The movement in respect of options during the period 1 January 2001 to 13 February 2002 was as follows:

Number of options

Equivalent AngloGold ordinary shares

Granted as at 1 January 2001

3,660,000

128,100

Movements during year Issued Exercised Lapsed

– 358,600 2,260,000

– 12,551 79,100

Held as at 31 December 2001

1,041,400

36,449

Subsequent to year end Exercised

423,029

14,806

Held as at 13 February 2002

618,371

21,643

Ordinary shares issued

Average issue price of AngloGold ordinary shares

12,551

R245.67

14,806

R367.80

The options outstanding at 13 February 2002 were held by three employees, with holdings ranging from 35,000 options (1,225 equivalent AngloGold ordinary shares), to 493,371 options (17,268 equivalent AngloGold ordinary shares).

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57


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for the year ended 31 December 2001

Financial results

The financial statements on pages 64 to 118 set out fully the financial position, results of operations and cash flows of the group and the company for the financial year ended 31 December 2001. Dividends

The company follows a full-payout dividend policy after providing for long-term growth. This policy is reviewed by the board from time to time in the light of the group’s cash requirements and financial position. Details of dividends paid/payable since 1 January 2001 are as follows: Final dividend No. 89

Interim dividend No. 90

Final dividend No. 91

30 January 2001

30 July 2001

30 January 2002

Last date to trade ordinary shares cum dividend

16 February 2001

17 August 2001

15 February 2002

Record date

23 February 2001

24 August 2001

22 February 2002

650 cents 700 cents 57.40 pence 57.91 pence 15.85 cents 15.83 cents 30 March 2001 28 September 2001

1,100 cents 68.38 pence 18.88 cents 4 March 2002

Declaration date

Amount per ordinary share – South African currency – United Kingdom currency Amount per CDI* – Australian currency Payment date Amount per ADS** – United States currency Payment date

39.88 cents 9 April 2001

38.21 cents 9 October 2001

48.00 cents*** 15 March 2002

* Each CDI (Chess Depository Interest) represents one-tenth of one ordinary share. ** Each ADS (American Depositary Share) represents one-half of one ordinary share. *** Figure used for illustrative purposes and based on a rate of exchange of R/$11.43 on 30 January 2002. The actual amount will be determined at the R/$ currency conversion rate ruling on approximately 4 March 2002. Borrowing powers

The company’s borrowing powers are unlimited. At 31 December 2001, the group’s borrowings totalled $987m, R11,811m (2000: $1,140m, R8,642m). Fixed assets

Sale of Deelkraal and Elandsrand mines The Deelkraal and Elandsrand mines were disposed of to Harmony Gold Mining Company Limited with effect from 1 February 2001 for an amount of R872m. All conditions precedent relative to the sale were fulfilled by 9 April 2001 on which date the agreement of sale became unconditional. Sale of Free State assets On 21 November 2001, it was announced that agreement had been reached whereby Harmony Gold Mining Company Limited (Harmony) and African Rainbow Minerals (Proprietary) Limited (ARM) would acquire the company’s entire interests in the gold mining operations located in the Free State Province of South Africa, comprising the Bambanani, Joel, Matjhabeng and Tshepong mines, as well as their related infrastructure, assets and associated liabilities (the Free State assets), with effect from 1 January 2002 for a consideration of R2.2bn. In terms of that agreement, the Free State assets were to be transferred into a wholly-owned subsidiary of the company, the shares in and claims against which would then be jointly purchased by Harmony and ARM. This arrangement was subject to the receipt of a ruling from the South African Revenue Service that such transfer would constitute a scheme of rationalisation in terms of the Taxation Laws Amendment Act of 1994. The transaction was also subject to the fulfilment of a number of conditions precedent. In terms of a further announcement on 7 January 2002, it was disclosed that a potential restructuring of the transaction had been agreed to in that should the ruling from the taxation authorities not be obtained by 31 January 2002, Harmony and ARM would then, through a jointly-held company, acquire the Free State assets directly from the company, as going concerns, with effect from 1 January 2002. The consideration payable in terms of the revised structure would then be an amount of R2.2bn, plus an amount equal to any liability for taxation payable by AngloGold. Payment of the aggregate consideration will be made as follows: – R1.8bn in cash ten business days following the last date by which the remaining conditions precedent are required to be fulfilled; – the balance of R400m in cash on 1 January 2005; and – the additional amount constituting any liability for taxation arising out of the revised structure of the transaction as and when the assessed amount is paid by AngloGold.

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No ruling from the taxation authorities had been received by 31 January 2002 and, consequently, the terms of the revised agreement apply. At the date of this report, the transaction was still subject to fulfilment of the following remaining conditions by no later than 30 April 2002: – the approval by the Minister of Minerals and Energy of the cession of the mining leases in respect of the acquisition of the Free State assets by the jointly-held company; – the granting of the necessary mining authorisations to the jointly-held company; and – the prerequisite rulings and approvals of the relevant regulatory authorities. The transaction has been approved by the Competition Authorities. The only assets that the company will retain in the Free State are its Technical Development Services Division and those that form part of its wholly-owned subsidiary, ISS International Limited. The company will also retain all of its mineral rights north of the Free State goldfields. A schedule giving details of the group’s mining rights and property is available for inspection at the company’s registered and corporate office. Investments

Particulars of the group’s principal subsidiaries and joint venture interests are reflected on page 118. Special resolutions

Details of special resolutions of a significant nature passed by the company and its subsidiaries during the year under review, requiring disclosure in terms of the Listings Requirements of the JSE, are as follows:

AngloGold Limited

Nature of resolution

Effective date

Amendments to articles of association: • to allow the company to deal with its capital structure in a manner not otherwise governed by legislation; • to empower the company to acquire its own shares and to acquire shares in any holding company of the company; • to reduce the company’s unclaimed dividends forfeiture period from 12 years to 3 years; • to enable the company to give effect to the implementation of STRATE Amendment to articles of association to allow for dividends to be declared in South African rands or United States dollars

25 April 2001

23 November 2001

Change of name from AngloGold Australasia Limited

12 June 2001

Change of name from Corpinvest 82 (Proprietary) Limited and status to a public company

29 October 2001

Change of main business and main object to permit the company to carry on the business of short-term insurance and re-insurance in accordance with the Short Term Insurance Act, 1998

29 October 2001

Adoption of new articles of association

11 December 2001

500 unissued ordinary shares of R1 each converted into “A” ordinary shares

11 December 2001

Subsidiaries

Australia AngloGold Australia Limited South Africa AGRe Insurance Company Limited

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for the year ended 31 December 2001

Special resolutions (continued) Subsidiaries

Nature of resolution

Effective date

Amendment to articles of association to reduce the company’s unclaimed dividends forfeiture period from 12 years to 3 years

28 June 2001

South America AngloGold Exploración Venezuela S.A.

Closure of the company

31 July 2001

Cerro Vanguardia S.A.

Acquisition of Mincorp Exploraciónes S.A.

9 February 2001

South Africa (continued) Southvaal Holdings Limited

Annual general meeting

The 58th annual general meeting will be held at the Vineyard Hotel, Colinton Road, Newlands, Cape Town, at 11:00 on Tuesday, 30 April 2002. Notice of the meeting is enclosed as a separate document, additional copies of which may be obtained from the company’s corporate contacts and the share registrars. In addition to the ordinary business to be conducted at the meeting – the adoption of this annual report, the re-election of directors and the renewal of authority to directors to issue the unissued shares of the company under certain circumstances – members will be requested to consider the passing of ordinary and special resolutions, under the heading of special business, relating to the undermentioned proposals: Special resolutions

– general approval for the acquisition by the company, or a subsidiary of the company, of its own shares and for the acquisition by the company of shares in its holding company. – amendment to the company’s articles of association relating to directors’ remuneration.

Ordinary resolutions

– an increase in the remuneration payable to the directors of the company. – amendment to the company’s Share Incentive Scheme, to provide for the exercise of share options based on performance related criteria rather than by effluxion of time.

Directorate and secretary

The following are details of changes in the composition of the board of directors from the beginning of the accounting period to the date of this report: Appointments 16 May 2001 A H Calver (Alternate to W A Nairn) W A Nairn 30 July 2001 A W Lea 30 October 2001 P G Whitcutt (Alternate to A W Lea) 1 November 2001 D L Hodgson (also Chief Operating Officer)

Resignations/Withdrawals 16 May 2001 M W King (Alternate R P Garnett) W A Nairn (Alternate to A J Trahar) 30 July 2001 Dr J W Campbell D M J Ncube

In accordance with the articles of association, Mr D L Hodgson, Mr A W Lea and Mr W A Nairn retire from the board at the forthcoming annual general meeting and offer themselves for re-election. Mr J G Best, Mrs E le R Bradley, Mr C B Brayshaw and Mr K H Williams retire by rotation at the forthcoming annual general meeting and, being eligible, offer themselves for re-election. The names of the directors and alternate directors of the company in office at the date of this report are listed on page 122. Biographies of the board of directors appear on pages 44 and 45. There has been no change in the offices of managing secretary and company secretary. The names of the managing secretary and company secretary and their business and postal addresses are set out on page 122.

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Directors’ emoluments

The following tables record the emoluments payable to each director during the year: * Includes salary paid by a subsidiary company which was previously omitted from the 2000 figures. Bonuses and performance related *Salary payments

Board fees

Board committee fees

– –

– –

3,323 2,122

634 506

378 252

50 182

4,385 3,062

3,773 2,687

– –

– –

387 2,268

109 571

54 276

9 47

559 3,162

– 2,830

2001

8,100

1,820

960

288

11,168

2000 (restated)

6,230

1,768

833

459

9,290

80 50 50 50

110 60 94 40

– – – –

– – – –

– – – –

– – – –

190 110 144 90

160 110 140 90

29 50 19 21 50 31 29 50 48 50

18 36 17 – 100 42 40 30 30 13

– – – – – – – – – –

– – – – – – – – – –

– – – – – – – – – –

– – – – – – – – – –

47 86 36 21 150 73 69 80 78 63

83 90 80 – 150 – 120 80 110 9

2001

607

630

1,237

2000 (restated)

589

633

1,222

17

17

30

22

22

101

6

6

2001

45

45

2000

41

90

131

2001

607

675

1,282

2000 (restated)

630

723

1,353

12,450

10,643

All figures in R000

Executive directors R M Godsell (Chairman and Chief Executive Officer) J G Best D L Hodgson (appointed 1 November 2001) K H Williams

Non-executive directors R P Edey (Deputy Chairman) F B Arisman Mrs E le R Bradley C B Brayshaw Dr J W Campbell (resigned 30 July 2001) Dr V K Fung M W King (resigned 16 May 2001) A W Lea (appointed 30 July 2001) T J Motlatsi W A Nairn (appointed 16 May 2001) D M J Ncube (resigned 30 July 2001) J Ogilvie Thompson N F Oppenheimer A J Trahar

Alternates A H Calver (appointed 16 May 2001) R P Garnett (withdrawn 16 May 2001) W A Nairn (withdrawn 16 May 2001) P G Whitcutt (appointed 30 October 2001)

Pension scheme contributions

Other benefits

Total 2001

*Total 2000 (restated)

Totals

Aggregate emoluments of directors who served during the year

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I R E C T O R S

R E P O R T

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for the year ended 31 December 2001

Options Options to subscribe for ordinary shares of 50 cents each in the company granted to, and exercised by, executive directors, as executive officers and senior managers during the year to 31 December 2001, and subsequent to year end to 13 February 2002, are included in the table below. The movement in respect of debentures has been incorporated into the schedule, as if the debentures issued were share options granted – see reference on page 56. Executive directors R M Godsell

Granted as at 1 January 2001 Number Average exercise price per share – R

Senior managers

Total

34,000

48,800

219,350

170,000

1,099,350

1,488,700

216.08

222.68

217.53

209.64

216.30

231.42

242.20

237.15

10,000

236,500

246,500

250.60

242.76

243.08

Exercised during year Number Average exercise price per share – R

10,000

5,000

7,000

22,000

76,600

260,400

359,000

208.00

208.00

208.00

208.00

218.44

221.24

219.83

Average market price per share at date of exercise – R

365.50

420.20

358.46

375.69

340.89

347.89

348.10

Pre-tax gain at date of exercise – R value – Average R per share

– –

1,575,000 157.50

1,061,000 212.20

1,053,200 150.46

3,689,200 167.69

9,378,996 122.44

32,980,882 126.65

46,049,078 128.27

29,800

63,600

93,400

238.55

253.60

248.80

89,150

37,400

29,000

41,800

197,350

73,600

1,011,850

1,282,800

216.08

226.61

219.17

209.92

217.23

244.65

247.01

242.29

3,000

1,000

4,000

10,700

76,300

91,000

208.00

208.00

208.00

211.09

247.97

241.88

528.00

571.00

538.75

469.22

476.73

478.57

– –

– –

960,000 320.00

363,000 363.00

1,323,000 330.75

2,761,976 258.13

17,453,950 228.76

21,538,926 236.69

5,200

5,200

317.00

317.00

89,150

37,400

26,000

40,800

193,350

62,900

930,350

1,186,600

216.08

226.61

220.46

209.96

217.41

250.34

246.53

241.99

16 October 16 October 2010 2010

16 October 2010

31 August 2008

Held as at 31 December 2001 Number Average exercise price per share – R

Subsequent to year end Exercised Number Average exercise price per share – R Average market price per share at date of exercise – R Pre-tax gain at date of exercise – R value – Average R per share Lapsed Number Average exercise price per share – R Held as at 13 February 2002 Number Average exercise price per share – R Latest expiry date

N G L O

Executive officers

47,400

Lapsed during year Number Average exercise price per share – R

A

Total

89,150

Granted during year Number Average exercise price per share – R

62

J G Best D L Hodgson K H Williams

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15 January 20 October 2011 2011


Directors’ interests in shares

The interests of the directors in the ordinary share capital of the company at 31 December 2001 were as follows: 31 December 2001 Beneficial NonDirect Indirect beneficial

Executive directors J G Best R M Godsell D L Hodgson (appointed 1 November 2001) K H Williams

31 December 2000 Beneficial NonDirect Indirect beneficial

– 230

– –

– –

– 230

– –

– –

– –

– 460

– –

– –

– 460

– –

230

460

230

460

Non-executive directors F B Arisman 10,000 Mrs E le R Bradley 2,600 C B Brayshaw – Dr J W Campbell (resigned 30 July 2001) – R P Edey – Dr V K Fung – M W King (resigned 16 May 2001) – A W Lea (appointed 30 July 2001) – T J Motlatsi – W A Nairn (appointed 16 May 2001) – D M J Ncube (resigned 30 July 2001) – J Ogilvie Thompson – N F Oppenheimer – A J Trahar –

– – – – 500 – – – – – – – – –

– 5,500 – – – – – – – – – 239 4,513 –

10,000 2,600 – 161 – – 2,023 – – – 115 – – –

– – – – 500 – – – – – – – 95,927 –

– – – – – – – – – – – – – –

12,600

500

10,252

14,899 (restated)

96,427 (restated)

23 – – 23

– – – –

– – – –

– – – –

– – – –

– – – –

46

12,876

960

10,252

15,129 (restated)

96,887 (restated)

Alternates A H Calver (appointed 16 May 2001) R P Garnett (withdrawn 16 May 2001) W A Nairn (withdrawn 16 May 2001) P G Whitcutt (appointed 30 October 2001)

Total

There have been no changes in the above interests since 31 December 2001. A register detailing directors’ and officers’ interests in contracts is available for inspection at the company’s registered and corporate office.

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63


G

R O U P

I N C O M E

S TAT E M E N T

for the year ended 31 December 2001

2000

2001

Figures in million

Notes

SA Rands

64

A

N G L O

G

2001

2000

US Dollars

15,972

18,309

Revenue

3

2,121

2,299

15,338 (12,065)

17,590 (12,973)

Gold income Cost of sales

3 4

2,041 (1,519)

2,208 (1,740)

3,273 (175) (82) (54) (309)

4,617 (174) (133) (20) (228)

Operating profit Corporate administration and other expenses Market development costs Research and development costs Exploration costs

5

522 (20) (16) (2) (26)

468 (25) (12) (8) (44)

2,653 301 73 (481) – –

4,062 225 (48) (608) 30 (126)

Profit from operations Investment income Other net (expense) income Finance costs Realised gain on hedging instruments Unrealised loss on hedging activities

458 26 (7) (72) 5 (10)

379 45 10 (69) – –

2,546 (135) – (708) – – (10)

3,535 (259) (21) (3) (32) 67 (54)

Profit before exceptional items Amortisation of goodwill Debt written off Impairment of mining assets Loss on disposal of mining assets Impairment reversal of investments Termination of retirement benefit plans

400 (29) (3) (1) (4) 6 (5)

365 (20) – (93) – – (1)

1,693 (490)

3,233 (983)

Profit on ordinary activities before taxation Taxation

364 (111)

251 (73)

1,203 (87)

2,250 (70)

Profit on ordinary activities after taxation Minority interest

253 (8)

178 (12)

1,116

2,180

Net profit

245

166

1,773

2,476

Headline earnings

12

281

254

1,773

2,536

Headline earnings before unrealised hedging activities

12

286

254

2,035 2,031 2,311 2,367

Earnings per ordinary share (cents) Basic Diluted Headline Headline before unrealised hedging activities

12

1,043 1,027 1,658 1,658

229 228 262 267

155 153 237 237

1,400

1,800

Dividends declared per ordinary share (cents)

13

181

190

1.2

1.3

1.5

1.2

O L D

L

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Dividend cover based on headline earnings before unrealised hedging activities

6 7 8

9 15/16 14 32 17

11


G

R O U P

B A L A N C E

S H E E T

as at 31 December 2001

2000

2001

Figures in million

Notes

SA Rands

*

2001

2000

US Dollars

20,159 3,056 148 55 358 378

24,606 4,652 151 275 460 204

24,154

30,348

1,477 – 1,737 1,453 161

2,284 2,906 1,867 1,948 109

4,828

9,114

28,982

39,462

11,004 213

13,357 355

11,217

13,712

5,381 120 2,148 4,187

4,192 – 2,573 3,423

11,836

10,188

– 2,389 3,261 279

4,901 2,464 7,619 578

5,929

15,562

28,982

39,462

ASSETS Non-current assets Mining assets Goodwill Investments in associates Other investments AngloGold Environmental Rehabilitation Trust Long-term loans

2,057 389 13 23 38 17

2,661 403 20 7 47 50

2,537

3,188

191 243 156 163 9

195 – 229 192 21

762

637

Total assets

3,299

3,825

EQUITY AND LIABILITIES Shareholders’ equity* Minority interests

1,117 30

1,453 28

1,147

1,481

350 – 215 286

710 16 283 553

851

1,562

410 206 637 48

– 315 430 37

1,301

782

3,299

3,825

Current assets Cash and cash equivalents Financial derivatives Trade and other receivables Inventories Current portion of long-term loans

Non-current liabilities Borrowings Debentures Provisions Deferred taxation

Current liabilities Financial derivatives Trade and other payables Current portion of borrowings Taxation

Total equity and liabilities

14 15 16 17 19 20

21 22 23 20

25 26 27 28

29 25

Shareholders’ equity is analysed in the Statement of Changes in Shareholders’ Equity.

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65


G

R O U P

C A S H

F L O W

S TAT E M E N T

for the year ended 31 December 2001

2000

2001

Figures in million

Notes

SA Rands

66

A

N G L O

G

2000

US Dollars

15,490 (11,593)

18,333 (12,861)

3,897 250

5,472 176

(59) 12 (523) (641) (1,981)

(85) 11 (613) (897) (1,447)

955

2001

2,617

Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from operations Interest receivable Contributions to AngloGold Environmental Rehabilitation Trust Dividends received from associates Finance costs Mining and normal taxation paid Dividends paid

2,153 (1,480) 31

673 20

603 37

19 16 8

(10) 1 (73) (111) (167)

(9) 2 (76) (104) (310)

333

143

(79) (219) 6 (1) (3) –

(145) (159) 8 (7) (1) 5

109 (4) 43

(345) (8) 19

13

Net cash inflow from operating activities Cash flows from investing activities Capital expenditure – to maintain operations – to expand operations Proceeds on disposal of mining assets Associate acquired Other investments acquired Proceeds from sale of investments through disposal (acquisition) of subsidiaries, joint ventures and mines Loans advanced Repayment of loans advanced

2,247 (1,644)

14

(986) (1,077) 55 (55) (11) 31

(681) (1,886) 63 (11) (24) 4

(2,528) (52) 130

878 (37) 367

(4,493)

(1,327)

Net cash outflow from investing activities

(148)

(633)

12 (18) 2,530 (759)

85 – 2,381 (3,567)

Cash flows from financing activities Proceeds from issue of share capital Share issue expenses Proceeds from borrowings Repayment of borrowings

7 – 276 (414)

2 (3) 373 (112)

1,765

(1,101)

Net cash (outflow) inflow from financing activities

(131)

260

(1,773) 219 3,031

189 618 1,477

Net increase (decrease) in cash and cash equivalents Translation Cash and cash equivalents at beginning of year

54 (58) 195

(230) (68) 493

1,477

2,284

Cash and cash equivalents at end of year

191

195

O L D

L

I M I T E D

16

32

21


G

R O U P

S TAT E M E N T

O F

C H A N G E S

I N

S H A R E H O L D E R S

E Q U I T Y

for the year ended 31 December 2001

Figures in million

Ordinary share Share capital premium

US Dollars Balance at 31 December 1999 Net profit Dividends (note 13) Ordinary shares issued Share issue expenses written off Translation

9

1,267

25

5

17 (3) (238)

(5)

38

1,043

20

43

(2)

Balance at 31 December 2000 7 Effect of adoption of IAS 39 Net profit Dividends (note 13) Ordinary shares issued Net value realised during the year Net unrealised losses on revaluation of hedge instruments Net unrealised losses on derivatives recognised in assets and liabilities Transfer from non-distributable reserves Translation (3) Balance at 31 December 2001 Note SA Rands Balance at 31 December 1999 Net profit Dividends (note 13) Ordinary shares issued Share issue expenses written off Transfer from non-distributable reserves Translation

*

NonForeign distri- currency butable transreserves* lation

Other comprehensive Retained income** earnings

Shareholders’ equity

559 166 (310)

1,865 166 (310) 17 (3) (282)

(75) – 49

340 (25) 245 (167)

(1)

1,453 24 245 (167) 22 (1)

(108)

(108)

22

(28) (388)

(1) (7)

207

4

677

12

250

(88)

24

24

53

7,799

150

32

1

116 (18)

1 (132)

(28) – (323)

262

1,117

3,443 1,116 (1,981)

11,477 1,116 (1,981) 117 (18) – 293

(1)

1 293

Balance at 31 December 2000 54 Effect of adoption of IAS 39 Net profit Dividends (note 13) Ordinary shares issued Net value realised during the year Net unrealised losses on revaluation of hedge instruments Net unrealised losses on derivatives recognised in assets and liabilities Transfer from non-distributable reserves Translation

7,897

Balance at 31 December 2001

54

8,086

Note

24

24

149

325

– 373

2,579 (186) 2,180 (1,447)

(6)

11,004 187 2,180 (1,447) 189 (6)

(1,301)

(1,301)

189

(337) 6

(337) – 2,888

3,132

13,357

(6) 2,674 143

2,999

214 (1,057)

Non-distributable reserve comprises a surplus on disposal of company shares ($12m, R141m) and a foreign equity reserve ($nil m, R2m).

** Other comprehensive income represents the effective portion of fair value gains or losses in respect of cash flow hedges until the underlying transaction occurs, upon which the gains or losses are recognised in earnings or included in the initial measurement of the asset or liability.

A

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L

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67


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

for the year ended 31 December 2001

1

Accounting policies

The financial statements are prepared according to the historical cost accounting convention, as modified by the revaluation of certain financial instruments. The group’s accounting policies set out below are consistent in all material respects with those applied in the previous years, except for the adoption of International Accounting Standard (IAS) 39 (AC 133), Financial Instruments: Recognition and Measurement. These accounting policies conform with International Accounting Standards and South African Statements of Generally Accepted Accounting Practice. The effect of IAS39 is to recognise derivative instruments on the balance sheet in the form of financial instruments. Refer to financial instruments on page 71. South African Statement of Generally Accepted Accounting Practice, AC 133 has been adopted ahead of its effective date. The group has changed its presentation currency from South African rands to United States dollars to facilitate a better understanding of its results since the majority of its sales are in US dollars and a smaller proportion of its costs are in South African rands. The following method of translation has been used: ■ equity items other than net profit at the closing rate; ■ assets and liabilities at the closing rate; ■ income, expenses and cash flows at the average exchange rate; and ■ resulting exchange differences are included in equity. The dollar cash flow has been derived from the dollar balance sheet and income statement. To assist investors in South Africa, amounts have also been disclosed in South African rands. This is supplementary to the information required by IAS. AngloGold the company, continues to present its results in South African rand. Basis of consolidation The group financial statements incorporate the financial statements of the company, its subsidiaries and its proportionate interest in joint ventures. The financial statements of subsidiaries and joint ventures are prepared for the same reporting period as the holding company, using the same accounting policies. Where an investment in a subsidiary or a joint venture is acquired or disposed of during the financial year, its results are included from, or to the date control became, or ceased to be effective. All inter-group transactions and balances are eliminated on consolidation. Unearned profits that arise between group entities are eliminated. Foreign entities Assets and liabilities (both monetary and non-monetary) of foreign entities are translated at the closing rate. Income statement items are translated at an average rate of exchange for the period. Exchange differences are taken directly to a foreign currency translation reserve. Acquisition and goodwill arising thereon Where an investment in a subsidiary, joint venture or an associate is made, any excess of the purchase price over the fair value of the attributable mineral reserves and net assets is recognised as goodwill. Goodwill which represents resources is amortised on a systematic basis which recognises the depletion of resources over the lesser of the life of the mine or 20 years. The unamortised balance is reviewed on a regular basis and, if impairment in the value has occurred, it is written off in the period in which the circumstances are identified. Goodwill in respect of subsidiaries and proportionately consolidated joint ventures is disclosed as goodwill. Goodwill relating to associates is included within the carrying value of the investment in associates. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing rate. Joint ventures A joint venture is an entity in which the group holds a long-term interest and which is jointly controlled by the group and one or more other venturers under a contractual arrangement. The group’s interest in a jointly controlled entity is accounted for by proportionate consolidation.

68

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1

Accounting policies (continued)

Associates The equity method of accounting is used for an investment over which the group exercises significant influence and normally owns between 20% and 50% of the voting equity. Associates are equity accounted from the effective dates of acquisition to the effective dates of disposal. Results of associates are equity accounted from their most recent audited annual financial statements or unaudited interim financial statements. Any losses of associates are brought to account in the consolidated financial statements until the investment in such associates is written down to a nominal amount. Thereafter, losses are accounted for only insofar as the group is committed to providing financial support to such associates. The carrying values of the investments in associates represent the cost of each investment, including unamortised goodwill, the share of post-acquisition retained earnings and any other movements in reserves. The carrying value of associates is reviewed on a regular basis and if any impairment in value has occurred, it is written off in the period in which these circumstances are identified. Mining assets Mining assets are recorded at cost less accumulated amortisation and impairments. Cost includes pre-production expenditure incurred during the development of the mine and the present value of future decommissioning costs. Cost also includes finance charges capitalised during the construction period where such costs are financed by borrowings. Mine development costs Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in existing orebodies and to expand the capacity of a mine. Where funds have been borrowed specifically to finance a project, the amount of interest capitalised represents the actual borrowing costs incurred. Mine development costs are amortised using the units-of-production method based on estimated proved and probable mineral reserves. Amortisation is first charged on new mining ventures from the date on which production reaches commercial quantities. Proved and probable mineral reserves reflect estimated economically recoverable quantities which can be recovered in future from known mineral deposits. Stripping costs incurred during the production phase to remove additional waste ore are deferred and charged to operating costs on the basis of the average life of mine stripping ratio. The average stripping ratio is calculated as the number of tonnes of waste material removed per tonne of ore mined. The average life of the mine ratio should be recalculated annually in the light of additional knowledge and changes in estimates. The cost of the ‘excess stripping’ is capitalised as mine development costs when the actual stripping ratio exceeds the average life of mine stripping ratio. When the actual stripping ratio is below the average life of the mine ratio, sufficient previously capitalised costs are expensed to increase the cost up to the average. Thus, under this method, the cost of stripping in any period will be reflective of the average stripping rates for the orebody as a whole. Mine infrastructure Plant, equipment and buildings are amortised using the lesser of their useful life or units-of-production method based on estimated proved and probable mineral reserves. Land Land is not depreciated. Mineral rights, dumps and ore reserves Mineral rights are amortised using the units-of-production method based on estimated proved and probable mineral reserves. Dumps are amortised over the period of treatment. Ore reserves are measured mining resources which, when proved and probable, are transferred to mine development costs and amortised from the date on which commercial production begins. If the recoverable amount of any of the above assets is less than the carrying value, an allowance is made for the impairment in value.

A

N G L O

G

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L

I M I T E D

69


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

1

Accounting policies (continued)

Borrowing costs Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Other borrowing costs are expensed as incurred. Leased assets Assets subject to finance leases are capitalised at cost with the related lease obligation recognised at the same amount. Capitalised leased assets are depreciated over the shorter of their estimated useful lives and the lease term. Finance lease payments are allocated, using the effective interest rate method, between the lease finance cost, which is included in interest paid, and the capital repayment, which reduces the liability to the lessor. Operating lease rentals are charged against operating profits in a systematic manner related to the period of use of the assets concerned. Research and exploration expenditure Research and exploration expenditure is expensed in the year in which it is incurred. When a decision is taken that a mining property is capable of commercial production, all further pre-production expenditure is capitalised. Capitalisation of preproduction expenditure ceases when the mining property is capable of commercial production. Inventories Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and slow moving items. Cost is determined on the following bases: ■ gold in process is valued at the average production cost at the relevant stage of production; ■ gold on hand, uranium oxide and sulphuric acid are valued on an average production cost method; and ■ consumable stores are valued at average cost. Provisions Provisions are recognised when the group has a present obligation, whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Employee benefits The group operates a defined benefit pension plan and post-retirement medical aid benefit plans, and a number of defined contribution pension plans. Defined benefit plans The cost of providing benefits to the group’s defined pension and post-retirement benefit plans are determined using the projected unit credit actuarial valuation method. Actuarial gains and losses arising in the defined benefit plans are recognised as income or expense when the cumulative unrecognised gains or losses for each individual plan exceed the greater of 10% of the defined benefit obligation or the fair value of plan assets. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans. Where the fair value of the plan assets exceeds the present value of the obligation, the resulting net assets is not recognised in respect of South African plans due to the legal status of the surplus. Defined contribution plans Contributions to defined contribution plans in respect of services during that year are recognised as an expense in that year. Environmental expenditure Long-term environmental obligations comprising decommissioning and restoration are based on the group’s environmental management plans, in compliance with the current environmental and regulatory requirements. Decommissioning costs The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commenced. Decommissioning costs are provided for at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. When this provision gives access to future economic benefits, an asset is recognised and included within mining infrastructure. The unwinding of the decommissioning obligation is included in the income statement. The estimated future cost of decommissioning obligations are regularly reviewed and adjusted as appropriate for new circumstances or changes in law or technology. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money. Gains from the expected disposal of assets are not taken into account when determining the provision.

70

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1

Accounting policies (continued)

Restoration costs The provision for restoration represents the cost of restoration of site damage arising, after the commencement of production, from rectifying work whose cost was reported through the income statement. Gross restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money. Restoration costs are accrued and expensed over the operating life of each mine using the units-of-production method based on estimated proved and probable mineral reserves. Expenditure on ongoing restoration costs is brought to account when incurred. Environmental Rehabilitation Trust Annual contributions are made to the AngloGold Environmental Rehabilitation Trust, created in accordance with South African statutory requirements, to fund the estimated cost of rehabilitation during and at the end of the life of a mine. The funds that have been paid into the trust fund plus the growth in the trust fund are shown as an asset on the balance sheet. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. The following criteria must also be present: ■ the sale of mining products is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer; ■ foreign currency derivative financial instruments are translated at contract rates. Gains and losses on these contracts are recognised in income as a component of the related sale of mining products; ■ dividends are recognised when the right to receive payment is established; and ■ interest is recognised on a time proportion basis, taking account of the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the group. Deferred taxation Deferred taxation is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Deferred tax assets and liabilities are measured at current tax rates. Financial instruments Financial instruments recognised on the balance sheet include investments, loans receivable, trade and other receivables, cash and cash equivalents, borrowings, derivative instruments, and trade and other payables. Financial instruments are initially measured at cost, including transaction costs, when the group becomes a party to their contractual arrangements. The subsequent measurement of financial instruments is dealt with below. Derivative instruments The group enters into derivative instruments to ensure a degree of price certainty and to guarantee a minimum revenue on a portion of the future planned gold production of its mines. IAS39 (AC133) requires that derivative instruments be treated as follows:

■ Commodity based (“normal purchase or normal sale”) contracts that meet the requirements of IAS39 are recognised in earnings when they are settled by physical delivery.

■ Where the conditions in IAS39 for special hedge accounting are met the derivative is recognised on the balance sheet as either a financial asset or financial liability, and recorded at fair value. The group enters into cash flow hedges whereby the effective portion of fair value gains or losses are recognised in equity (other comprehensive income) until the underlying transaction occurs, then the gains or losses are recognised in earnings or included in the initial measurement of the asset or liability. The ineffective portion of fair value gains and losses is recorded in earnings in the period to which they relate. ■ All other derivative instruments are subsequently measured at their estimated fair value, with the changes in estimated fair value at each reporting date being reported in earnings in the period to which they relate. The estimated fair values of derivative instruments are determined at discrete points in time based on the relevant market information. These estimates are calculated with reference to the market rates using industry standard valuation techniques.

A

N G L O

G

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L

I M I T E D

71


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

1

Accounting policies (continued)

Investments Listed investments, other than investments in subsidiaries, joint ventures, and associates, are subsequently measured at fair value, which is calculated by reference to the quoted selling price at the close of business on the balance sheet date. Unlisted investments are shown at fair value, or at cost where fair value cannot be reliably measured. Fair value gains or losses arising on available for sale financial assets are taken to equity in the period in which they arise. Long-term loans receivable Long-term loans receivable are subsequently measured at amortised cost using the effective interest rate method. Trade and other receivables Trade and other receivables originated by the group are subsequently measured at amortised cost less allowance for doubtful debts. Cash and cash equivalents Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Impairment of financial assets At each balance sheet date an assessment is made of whether there is any objective evidence of impairment of financial assets. If there is evidence then the recoverable amount is estimated and an impairment loss is recognised in accordance with IAS36 (AC128). Financial liabilities Financial liabilities, other than trading financial liabilities and derivatives, are subsequently measured at amortised cost being the original obligation less principal payments and amortisations. Trading financial liabilities and derivatives are subsequently measured at fair value. 2

Segmental information

Based on risks and returns, the directors consider that the primary reporting format is by business segment. The directors consider that there is only one business segment being mining, extraction and production of gold. Therefore the disclosures for the primary segment have already been given in these financial statements. The secondary reporting format is by geographical analysis by origin and destination. Geographical analysis by origin is as follows: Gold income 2001 2000

US Dollars (m) South Africa Africa Australia North America South America

SA Rands (m) South Africa Africa Australia North America South America

72

A

N G L O

G

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L

I M I T E D

Operating profit 2001 2000

Net operating assets 2001 2000

Average number of employees 2001 2000

1,298 250 155 161 177

1,587 111 172 165 173

331 87 25 16 63

298 48 34 19 69

858 448 202 338 302

1,483 432 224 286 327

64,881 1,627 726 854 2,292

79,124 849 957 718 2,388

2,041

2,208

522

468

2,148

2,752

70,380

84,036

11,164 2,171 1,349 1,377 1,529

11,021 767 1,198 1,147 1,205

2,949 762 231 134 541

2,089 333 235 136 480

10,260 5,353 2,418 4,044 3,619

11,235 3,274 1,697 2,167 2,476

17,590

15,338

4,617

3,273

25,694

20,849


Gold production (imperial oz000) 2001 2000

South Africa Africa Australia North America South America

4,670 868 508 496 441

5,418 366 524 496 439

145,247 26,992 15,819 15,436 13,709

168,524 11,388 16,300 15,426 13,657

6,983

7,243

217,203

225,295

Total assets 2001 2000

US Dollars (m) South Africa Africa Australia North America South America

SA Rands (m) South Africa Africa Australia North America South America

Gold production (kg) 2001 2000

Capital expenditure 2001 2000

1,283 721 449 381 465

1,824 741 479 320 461

106 34 42 93 23

159 51 35 37 22

3,299

3,825

298

304

15,349 8,624 5,370 4,557 5,562

13,823 5,611 3,628 2,426 3,494

915 287 364 800 201

1,083 343 240 249 148

39,462

28,982

2,567

2,063

Geographical analysis by destination is as follows:

Gold income (m) US Dollars SA Rands 2001 2000 2001 2000

South Africa North America Australia Europe United Kingdom

31 1,225 180 410 195

110 552 221 177 1,148

270 10,562 1,547 3,531 1,680

766 3,835 1,534 1,227 7,976

2,041

2,208

17,590

15,338

A

N G L O

G

O L D

L

I M I T E D

73


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

15,338 384 250

17,590 543 176

15,972

18,309

10,421 131

10,454 240

10,552 118 9

2,041 60 20

2,208 54 37

2,121

2,299

Cash operating costs Other cash costs

1,226 29

1,502 19

10,694 185 123

Total cash costs Retrenchment costs (note 10) Rehabilitation and other non-cash costs

1,255 22 13

1,521 17 2

10,679 1,508

11,002 1,884

Production costs Amortisation of mining assets (note 14)

1,290 220

1,540 217

12,187 (122)

12,886 87

Total production costs Inventory change

1,510 9

1,757 (17)

12,065

12,973

1,519

1,740

5

441 (132)

284 (56)

309

228

250 26

176 7

25

42

301

225

O L D

Exploration costs

24 51

(16) (10)

75 (2)

(26) (22)

Unwinding of decommissioning obligation (notes 27 and 31)

73

(48)

I M I T E D

63 (19)

26

44

20 1

37 4

5

4

26

45

(2) (2)

3 7

(4) (3)

10 –

(7)

10

Other net (expense) income

Other net (expense) income consists of the following principal categories: Exchange (loss) gain on transactions other than sales (Loss) profit on sale of assets (note 31)

L

32 (6)

Investment income

Investment income consists of the following principal categories: Interest receivable (notes 3 and 31) Profit from associates after taxation (note 16) Growth in AngloGold Environmental Rehabilitation Trust (notes 19 and 31)

7

G

Cost of sales

Expenditure incurred during the year Expenditure transferred to mining assets

6

N G L O

Revenue

Revenues consists of the following principal categories: Gold income Sale of uranium, silver and sulphuric acid Interest receivable (note 6)

4

A

2000

US Dollars 3

74

2001


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 8

Finance costs

507 16

606 7

Interest paid on bank loans and overdrafts Interest paid on debentures

72 1

74 2

523 (42)

613 (5)

Total interest Less: amounts capitalised (note 14)

73 (1)

76 (7)

481

608

72

69

1 – –

1 – –

1

1

217 3

215 2

220

217

4 4

4 2

538 35

787 55

27 5

38 6

5 21 (11) 2 – 22

5 21 (5) (7) 1 17

9

7 1 –

8 1 2

8

11

1,495 13

1,857 27

1,508

1,884

24 14

38 33

Profit before exceptional items is arrived at after taking account of:

Auditors’ remuneration Audit fees Under provision prior year Other services

Amortisation of mining assets (notes 4 and 14) Owned assets Leased assets

Grants for educational and community development Operating lease charges 10 Employee benefits

4,781 338

4,663 300

257 36

229 55

36 141 (33) (45) 9 118

41 182 (91) 20 – 185

5,638

5,584

29

91

Employee costs including executive directors Salaries, wages and other benefits Defined contribution pension plans expense Health care and medical scheme costs – Current medical expenses – Post retirement medical expenses Defined benefit expense – current service cost – interest cost – expected return on plan assets – actuarial loss (gain) – curtailment, settlement loss Retrenchment costs (note 4)

Actual return on plan assets – defined benefit pension plan

644

918

11

5

Refer to directors’ report for details of directors’ emoluments

A

N G L O

G

O L D

L

I M I T E D

75


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 11 Taxation

111 373 1 48

375 509 – 66

533

950

153 – (196) –

105 (66) – (6)

(43)

490

Current taxation Mining taxation Non-mining taxation Under provision prior year Secondary tax on companies

Deferred taxation Current Unrealised hedging activities Exceptional item – impairment (note 12) Exceptional item – debt written off

41 55 – 7

16 55 – 7

103

78

13 (5) – –

21 – (26) –

33

8

(5)

983

111

73

There is unredeemed capital expenditure estimated at $298m, R3,564m (2000: $417m, R3,161m) which is available for set-off against future taxable income from the mining operations of Joel mine. With effect from 1 January 2002, a sale agreement for Joel has been signed with ARM/Harmony Joint Venture which may result in the unredeemed capital expenditure not being utilised. The unutilised tax losses of the North American operations which are available for offset against future profits earned in the USA, amount to $177m, R2,115m (2000: $220m, R1,667m). The unutilised tax losses of the South American operations which are available for offset against future profits earned in these countries, amount to $49m, R583m (2000: $71m, R534m). Analysis of tax losses and unredeemed capital expenditure 66

Assessed losses utilised during the year

8

Utilised tax losses remaining to be used against future profits can be split into the following periods: 108 475 5,679 6,262

76

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I M I T E D

Utilisation required within one year Utilisation required within two and five years Utilisation in excess of five years

9 40 475 524


2000

2001

Figures in million

2001

2000

11 Taxation (continued)

Tax reconciliation A reconciliation of the marginal South African tax rate compared with that charged in the income statement is set out in the following table: Marginal tax rate Disallowable expenditure Impairment Goodwill amortised Taxable non-mining income Amortisation and inventory change Mining capital allowances Mining tax formula adjustment Dividends received Foreign income tax allowances Other Effective tax rate

% 46 5 – 2 (3) 12 (10) (1) (7) (7) (7)

% 46 3 8 2 (2) 18 (23) (3) (1) (8) (11)

30

29

12 Earnings per ordinary share

Basic The calculation of basic earnings per ordinary share is based on net profit of $245m, R2,180m (2000: $166m, R1,116 m) and 107,139,446 (2000: 106,962,987) shares being the weighted average number of ordinary shares in issue during the financial year. Headline Headline earnings removes items of a capital nature from the calculation of earnings per share. The calculation of headline earnings per ordinary share is based on headline earnings of $281m, R2,476m (2000: $254m, R1,773m) and 107,139,446 (2000: 106,962,987) shares being the weighted average number of ordinary shares in issue during the financial year. Headline earnings before unrealised hedging activities This calculation is based on headline earnings before unrealised hedging activities of $286m, R2,536m (2000: $254m, R1,773m) and 107,139,446 shares being the weighted average number of ordinary shares in issue during the financial year. Diluted The calculation of diluted earnings per ordinary share is based on net profit of $245m, R2,180m (2000: $166m, R1,116m) and 107,357,903 (2000: 108,579,787) shares being the diluted number of ordinary shares.

A

N G L O

G

O L D

L

I M I T E D

77


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

2001

SA Rands

2000

US Dollars 12 Earnings per ordinary share (continued)

1,116 135 – – 708 (196) – – 10

2,180 259 21 (6) 3 – (67) 32 54

The net profit has been adjusted by the following to arrive at headline earnings and headline earnings before unrealised hedging activities: Net profit Amortisation of goodwill (notes 15 and 16) Debt written off Taxation on debt written off Impairment of mining assets (note 14) Deferred taxation on impairment of mining assets (note 11) Impairment reversal of investments Loss on disposal of mining assets Termination of retirement benefit plans

1,773 – –

2,476 126 (66)

Headline earnings Unrealised loss on hedging activities Deferred tax on unrealised hedging activities

281 10 (5)

254 – –

1,773

2,536

Headline earnings before unrealised hedging activities

286

254

Weighted average number of shares Dilutive potential of share options Debentures in issue Share options – Acacia Employee Option Plan

107,139,446 218,457 – –

106,962,987 993,800 494,900 128,100

Diluted number of ordinary shares

107,357,903

108,579,787

696

Ordinary shares No. 89 of 650 SA cents (illustrative 82 US cents) per ordinary share declared on 30 January 2001 and 650 SA cents (illustrative 80 US cents) paid on 30 March 2001.

86

192

803

751

No. 90 of 700 SA cents (illustrative 85 US cents) per ordinary share declared on 30 July 2001 and 700 SA cents (illustrative 76 US cents) paid on 28 September 2001.

81

118

1,981

1,447

167

310

245 29 3 – 1 – (6) 4 5

166 20 – – 93 (26) – – 1

The weighted average number of shares has been adjusted by the following to arrive at the diluted number of ordinary shares:

13 Dividends

1,178

No. 91 of 1,100 SA cents (illustrative 96 US cents) per ordinary share was declared on 30 January 2002.

78

A

N G L O

G

O L D

L

I M I T E D


Figures in million

Mine development costs

Mine infrastructure

Mineral rights, dumps and ore reserves

Land

Total

14 Mining assets

US Dollars Cost Balance at beginning of year Additions Fair value adjustment (note 33) Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Transfers and disposals Interest capitalised (note 8) Translation Balance at end of year

2,500 179 –

1,451 117 –

279 1 (2)

15 1 –

4,245 298 (2)

(304) 123 – (635)

(35) (127) 1 (222)

– (5) – (23)

– – – (2)

(339) (9) 1 (882)

1,863

1,185

250

14

3,312

Accumulated amortisation Balance at beginning of year Amortisation charge for the year (note 4 and 9) Impairments (notes 12 and 31) Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Transfers and disposals Translation

913 101 –

660 99 –

11 20 1

– – –

1,584 220 1

(180) 30 (226)

(3) (30) (132)

– (4) (5)

– – –

(183) (4) (363)

Balance at end of year

638

594

23

1,255

1,587 1,225

791 591

268 227

15 14

2,661 2,057

18,937 1,540 –

10,997 1,012 –

2,115 5 (17)

110 10 –

32,159 2,567 (17)

(2,426) 1,057 – 3,174

(278) (1,095) 5 3,539

(1) (38) – 933

(3) (2) – 41

(2,708) (78) 5 7,687

22,282

14,180

2,997

156

39,615

Net book value at 31 December 2000 Net book value at 31 December 2001 SA Rands Cost Balance at beginning of year Additions Fair value adjustment (note 33) Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Transfers and disposals Interest capitalised (note 8) Translation Balance at end of year Accumulated amortisation Balance at beginning of year Amortisation charge for the year (note 4 and 9) Impairments (notes 12 and 31) Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Transfers and disposals Translation

6,919 863 –

4,988 851 –

93 170 3

– – –

12,000 1,884 3

(1,437) 260 1,025

(25) (257) 1,533

(1) (37) 61

– – –

(1,463) (34) 2,619

Balance at end of year

7,630

7,090

289

15,009

12,018 14,652

6,009 7,090

2,022 2,708

110 156

20,159 24,606

Net book value at 31 December 2000 Net book value at 31 December 2001

Included in the amounts above for mine infrastructure are assets held under finance leases with a net book value of $14m, R171m (2000: $3m, R26m). Mining assets with a carrying value of $119m, R1,423m (2000: $224m R1,698m) are encumbered by project finance (note 25).

A

N G L O

G

O L D

L

I M I T E D

79


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 15 Goodwill

1,700

3,600

1,080 611 – 209

– 258 (76) 1,944

Cost Balance at beginning of year Through acquisition of subsidiaries, joint ventures and mines (note 32) Fair value adjustment (note 33) Transfer Translation

3,600

5,726

Balance at end of year

335 135 – 74

544 255 (76) 351

475

276

– 30 (9) (17)

143 100 – (44)

479

475

Accumulated amortisation Balance at beginning of year Amortisation (notes 12 and 31) Transfer Translation

72 29 (9) (2)

54 20 – (2)

90

72

389

403

544

1,074

Balance at end of year

3,056

4,652

Net book value

16 Investments in associates

The group has the following associated undertakings: – A 48.48% (2000: 42.73%) interest in Rand Refinery Limited, which is involved in the refining of bullion and by-products which are sourced inter alia from South Africa and foreign gold producing mining companies. The year end of Rand Refinery Limited is 30 September. – A 25% (2000: 25%) interest in Oro Group (Proprietary) Limited which is involved in the manufacture and wholesale of jewellery. The year end of Oro Group (Proprietary) Limited is 31 March. Equity accounting is based on the results for the six months ended 30 September 2001.

80

A

N G L O

G

O L D

9 71 26 55 (12) (1) – –

73 75 7 11 (11) – (4) –

Carrying value of associates consists of: Unlisted shares at cost Share of retained earnings brought forward Profit after taxation (notes 6 and 31) Acquisitions Dividends Disposals Amortisation of goodwill (note 12) Translation

6 9 1 1 (1) – – (3)

1 9 4 7 (2) – – 1

148

151

Carrying value

13

20

148

151

Directors’ valuation of unlisted associates

13

20

79 94

85 102

The group’s effective share of certain balance sheet items of its associates are as follows: Non-current assets Current assets

7 9

11 12

173

187

Total assets

16

23

L

I M I T E D


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 16 Investment in associates (continued)

34 37

34 44

Non-current liabilities Current liabilities

3 4

4 5

71

78

Total equity and liabilities

7

9

102

109

Net assets

9

14

102 46

109 42

Reconciliation of the carrying value of investments in associates with net assets: Net assets Goodwill

9 4

14 6

148

151

Carrying value

13

20

17 Other investments

3 – – –

3 124 (3) 7

Listed investments Balance at beginning of year Additions Disposals Translation

– 14 – (3)

– – – –

3

131

Balance at end of year

11

2

131

Market value of listed investments

11

Unlisted investments Balance at beginning of year Additions Disposals Impairment reversal per income statement Translation

7 – – 6 (1)

7 1 (1) – –

43 11 (5) – 3

52 4 (1) 67 22

52

144

Balance at end of year

12

7

52

144

Directors’ valuation of unlisted investments

12

7

55

275

Total other investments

23

7

54

275

Total valuation

23

7

18 Interest in joint ventures

The group’s effective share of income, expenses, assets, liabilities and cash flows of joint ventures, which are included in the consolidated financial statements, are as follows: 902 (544)

2,350 (1,435)

358 (7) 21 (106)

915 (37) 17 (176)

266

719

Income statement Gold income Cost of sales Operating profit Other net expense Investment income Finance costs Profit on ordinary activities before taxation

273 (166)

133 (80)

107 (5) 2 (20)

53 (1) 3 (16)

84

39

A

N G L O

G

O L D

L

I M I T E D

81


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 18 Interest in joint ventures (continued)

4,344 836

6,343 1,674

Balance sheet Non-current assets Current assets

530 140

573 110

5,180

8,017

Total assets

670

683

3,223 23

5,732 45

479 4

425 3

1,304 18

1,281 67

107 6

172 2

354 258

478 414

Shareholders’ equity Minority interests Non-current liabilities Interest-bearing borrowings Provisions Current liabilities Interest-bearing borrowings Other

40 34

47 34

5,180

8,017

Total equity and liabilities

670

683

1,167 (1,017) (224)

(2,248) (339) 2,704

(261) (39) 314

172 (150) (33)

14

(11)

47 10

45 9

5 (3) (21)

4 – (11)

38

47

22

45

Loan to AngloGold Limited Employees’ Share and Debenture Trust (note 26)

16

Other

4

10

26

71

9

21

17

50

Cash flow statement Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities

(74)

117

Net increase (decrease) in cash and cash equivalents

274 59

358 85

25 – –

42 (25) –

Balance at beginning of year Contributions Growth in AngloGold Environmental Rehabilitation Trust (note 6) Expenditure incurred Translation

358

460

Balance at end of year

19 AngloGold Environmental Rehabilitation Trust

20 Long-term loans

82

A

N G L O

G

O L D

341

263

120

78

50

539

313

Unsecured Loans to joint venture partners

161

109

Less: Current portion of long-term loans included in current assets

378

204

Total long-term loans

L

I M I T E D


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 21 Cash and cash equivalents

1,276 201

2,284 –

1,477

2,284

737 121 111 768

537 587 262 481

1,737

1,867

Cash and deposits on call Money market instruments

191 –

168 27

191

195

45 49 22 40

97 16 15 101

156

229

93 5 15

100 7 24

113 50

131 61

163

192

8

30

8

30

Issued 107,634,058 (2000: 107,021,087) ordinary shares of 50 SA cents each

4

7

22 Trade and other receivables

Trade debtors Prepayments and accrued income Value added taxation Other debtors

23 Inventories

755 56 184

1,115 61 174

At cost Gold in process Gold on hand By-products

995 458

1,350 598

Total metal inventories Consumable stores at average cost

1,453

1,948

24 Share capital and premium

100

100

1

1

101

101

Share capital Authorised 200,000,000 ordinary shares of 50 SA cents each 2,000,000 A redeemable preference shares of 50 SA cents each 5,000,000 B redeemable preference shares of 1 SA cent each

54

54

1

1

2,000,000 A redeemable preference shares of 50 SA cents each

778,896 B redeemable preference shares of 1 SA cent each

55

55

(1)

(1)

Less: A redeemable preference shares held within the group

54

54

Balance at end of year

8,209 (312)

8,398 (312)

7,897

8,086

7,951

8,140

Share premium Total share premium Less: Held within the group

Share capital and premium

4

7

4

7

730 (53)

1,096 (53)

677

1,043

681

1,050

A

N G L O

G

O L D

L

I M I T E D

83


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 25 Borrowings

84

A

N G L O

G

2,734

4,250

2,585

1,136

910

1,450

837

325

170

169

164

O L D

Unsecured Syndicated loan facility Interest charged at libor plus 0.9% per annum. Loan is repayable in February 2002 and is US dollar-based. Syndicated loan facility Interest charged at libor plus 0.75% per annum. Loan is repayable in May 2004 and is US dollar-based. Dresdner Bank Gold Loan

355

361

216

150

121

120

110

Loan from Anmercosa Finance Limited Interest charged at libor plus 2% per annum. Loan is repayable in half-yearly instalments terminating in May 2002 and is US dollar based.

14

43

244

Syndicated loan facility Interest charged at Bank Bill Swap Offer Rate plus 0.45% per annum. Loan is repayable by September 2002 and is Australian dollar-based.

20

22

273

Loan from Anmercosa Finance Limited Interest charged at libor plus 1% per annum. Loan is repayable by May 2002 and is US dollar-based.

23

22

Credit Agricole Interest charged at libor plus 0.75% per annum. Loan is repayable by July 2002 and is US dollar-based. Dresdner Bank Luxembourg SA

57

8

83

129

Citibank NA Interest charged at libor plus 1.1% per annum. Loan is repayable in October and November 2002 and is US dollar-based.

11

11

78

121

Bank Boston Interest charged at libor plus 1.475% per annum. Loan is repayable in instalments commencing May 2002 and terminating in July 2002 and is US dollar-based.

10

10

58

Unibanco

8

48

99

Rolls Royce Interest is index linked. Loan is repayable in monthly instalments terminating in December 2010 and is US dollar-based.

8

6

91

Santander Bank Interest charged at libor plus 1.5% per annum. Loan is repayable in June and July 2003 and is US dollar-based.

8

33

79

Senstar Capital Corporation Interest charged at an average rate of 8.29% per annum. Loans are repayable in monthly instalments terminating in June 2008 and are US dollar-based.

7

4

73

Itau Bank Interest charged at libor plus 1.5% per annum. Loan is repayable by July 2003 and is US dollar-based.

6

69

RMBI (Dublin) Ltd Interest charged at libor plus 0.5% per annum. Loan is of a short-term nature and no dates of repayment are fixed and is US dollar-based.

6

L

I M I T E D

J.P. Morgan Gold Loan


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 25 Borrowings (continued)

38

60

61

Unsecured (continued) HSBC Bamerindus Interest charged at libor plus 1.3% per annum. Loan is repayable in May 2003 and is US dollar-based.

5

5

Deutsche Bank Interest charged at Bank Bill Swap Offer Rate plus 0.45% per annum. Loan is repayable by March 2002 and is Australian dollar-based.

5

51

Investec Interest charged at 6.5% per annum. Loan is repayable in half-yearly instalments terminating in June 2006 and is US dollar-based.

4

23

30

Government of Mali Interest charged at libor plus 2% per annum. Loans are repayable in half-yearly instalments terminating in March 2006 and are US dollar-based.

3

3

23

36

Dresdner Bank Luxembourg SA Interest charged at libor plus 1.5% per annum. Loan is repayable in June and July 2002 and is US dollar-based.

3

3

15

24

Banco do Brasil Interest charged at libor plus 1.15% per annum. Loan is repayable in September 2002 and is US dollar-based.

2

2

9

7

Economic Development Corporation Limited Interest charged at libor plus 0.6% per annum. Loan is repayable in half-yearly instalments terminating in December 2002 and is US dollar-based.

1

1

514

200

17

69

7,254

10,102

845

958

511

743

62

67

479

579

Cerro Vanguardia Syndicated Project finance Interest charged at libor plus 3.75% per annum. Loan is repayable in half-yearly instalments terminating in December 2004 and is US dollar-based.

48

63

259

315

Morila Syndicated Project finance Interest charged at libor plus 2% per annum. Loan is repayable in half-yearly instalments terminating in December 2005 and is US dollar-based.

26

34

139

72

6

18

8,642

11,811

Total borrowings

987

1,140

3,261

7,619

Less: Current portion of borrowings included in current liabilities

637

430

5,381

4,192

Total long-term borrowings

350

710

Local money market short-term borrowings, based in South African rands. Total unsecured borrowings Secured Geita Syndicated Project finance Interest charged at libor plus 1.2% per annum. Loan is repayable half-yearly until 2007 and is US dollar-based.

Sadiola Project finance Semos Senior Lenders Interest charged at libor plus 3.5% per annum. Loan is repayable in half-yearly instalments terminating in May 2002 and is US dollar-based.

A

N G L O

G

O L D

L

I M I T E D

85


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 25 Borrowings (continued)

3,261 4,587 613 181

7,619 638 3,390 164

8,642

11,811

Amounts falling due Within one year Between one and two years Between two and five years After five years

637 53 283 14

430 605 81 24

987

1,140

25 17 945

22 69 1,049

987

1,140

185 – 51 148

– 130 75 –

384

205

Currency The currencies in which the borrowings are denominated are as follows: 169 514 7,959

305 200 11,306

8,642

11,811

Australian dollars South African rands United States dollars

Undrawn facilities Undrawn borrowing facilities as at 31 December 2001 are as follows: – 985 569 –

2,213 – 609 1,767

1,554

4,589

Syndicated loan – US dollar Dresdner Bank Luxembourg SA Syndicated loan – Australian dollar Deutsche Bank – Australian dollar

On 7 February 2002 the group finalised a new three year $600m borrowing facility, at a margin of 0.7% over libor, that will be used to refinance near-term maturing debt. Morila and Geita Project Finance Secured by a fixed and floating charge over the project assets (note 14), the hedging contracts and a pledge over the shares in the project company. Sadiola and Cerro Vanguardia Project Finance Secured by a fixed and floating charge over the project assets (note 14), the major project contracts and a pledge over the shares in the project company. 26 Debentures

115 13 (3) (5) – – 120

86

A

N G L O

G

O L D

L

I M I T E D

120 – – – (120) – –

Balance at beginning of year Allocations during the year Exercised during the year Lapsed during the year Redeemed during the year Translation Balance at end of year (note 20)

16 – – – (14) (2)

19 2 – (1) – (4)

16


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 27 Provisions

764 – 4 (1) 6 773

(22) – (12) 4

Post-retirement medical funding Balance at beginning of year Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Charge to income statement Less: Utilised during the year Translation

743

Balance at end of year

773

102

123

(4) – – (36)

– – – (21)

62

102

%

%

11.0 10.0

13.5 10.5

53

62

(4) 3 10 – (18)

– – – 1 (10)

44

53

112

132

(2) 11 (19) (12)

1 – – (21)

90

112

The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. The assumptions used in calculating the above defined benefit post-retirement medical obligation is as follows: Discount rate Expected increase in health care costs The normal retirement age is 60 years, and fully eligible age is 55 years. The last valuation was performed as at 31 December 2001.

383

401

– 2 – 4 12

(37) 22 82 – 61

Environmental rehabilitation obligations Provision for decommissioning Balance at beginning of year Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Unwinding of decommissioning obligation (note 7) Change in estimates Prior year adjustment Translation

401

529

Balance at end of year

814

855

4 – – 37

(17) 95 (164) 309

Provision for restoration Balance at beginning of year Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Charge to income statement Less: Utilised during the year Translation

1,078

Balance at end of year

855

A

N G L O

G

O L D

L

I M I T E D

87


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 27 Provisions (continued)

98 – – 21

119 43 (21) 82

Other provisions Balance at beginning of year Charge to income statement Less: Utilised during the year Translation

16 5 (2) –

17 – – (1)

119

223

Balance at end of year

19

16

2,148

2,573

215

283

406 11 –

610 17 8

417

635

50 81

82 –

286

553

553 34 8 (67) (10)

711 (28) (5) – –

(63) (169)

– (125)

Total provisions 28 Deferred taxation

Deferred taxation relating to temporary differences is made up as follows: 4,621 131 63

4,857 133 –

4,815

4,990

Deferred taxation liabilities Mining assets Inventories Other Deferred taxation assets Provisions Financial derivatives

628 –

598 969

4,187

3,423

4,375 (173) (43) – –

4,187 292 33 (805) (80)

– 28

(500) 296

The movement on the deferred tax balance is as follows: Balance at beginning of year Fair value adjustment (note 33) Income statement charge (note 11) Taxation on other comprehensive income Effect of adoption of IAS 39 Through (disposal) acquisition of subsidiaries, joint ventures and mines (note 32) Translation

4,187

3,423

Balance at end of year based on the liability method

286

553

3,823

3,423

If partial provision had been made for deferred taxation the taxation liability would have decreased by

286

505

364

48

1,251 524 614

1,166 542 756

97 45 64

165 69 81

2,389

2,464

206

315

Net deferred taxation

Balance at 31 December 2001 based on the partial provision for deferred taxation

29 Trade and other payables

88

A

N G L O

G

O L D

L

I M I T E D

Trade creditors Accruals Other creditors


2000

2001

Figures in million

SA Rands

2001

2000

US Dollars 30 Retirement benefits

South Africa region The group has made provision for pension and provident schemes covering substantially all employees. Eligible employees are members of either AngloGold’s defined benefit fund or one of the industry-based defined contribution funds. There is one defined benefit scheme and three defined contribution schemes. The assets of these schemes are held in administered trust funds separated from the group’s assets. Scheme assets primarily consist of listed shares, property trust units and fixed income securities. 687 669

842 836

18

6

687

842

Defined benefit pension fund Fair value of fund assets Present value of fund obligation

70 70

91 88

Funded benefit plan asset

–

3

Market value of plan assets

70

91

% 10.5 6.5 7.5 10.5

% 12.0 8.0 9.0 12.0

The assumptions used in calculating the above defined benefit pension plan obligation are as follows: Discount rate Pension increase Rate of compensation increase Expected return on plan assets

South Africa region At the last statutory valuation of the defined benefit pension fund as at 31 December 1999, the Pension Fund was certified by the reporting actuaries as being in a sound financial position, subject to the continuation of the current contribution rates. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pension as well as returns on investments. Separate calculations for the Pension Fund are carried out on an annual basis and the results of these calculations as at 31 December 2001 are reflected above. Any deficits in the defined benefit scheme advised by the actuaries are funded either immediately or through increased contributions to ensure the ongoing soundness of the scheme. Contributions to the various defined contribution retirement schemes are fully expensed during the year in which they are funded and the cost of providing retirement benefits for the year amounted to $31m, R263m (2000: $45m, R303m). All funds are governed by the Pension Funds Act of 1956 as amended. Africa region Namibia (Navachab) Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual insurance company. Both the company and the employees make contributions to this fund. AngloGold seconded employees at Navachab remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold. Mali (Sadiola, Yatela and Morila) The Malian operations do not have retirement schemes for employees. All employees (local and expatriate) contribute towards the Government social security fund, and the company also makes a contribution towards this fund. On retirement, Malian employees are entitled to a pension from the Malian Government. Expatriate employees are reimbursed only their contributions to the social security fund. AngloGold seconded employees in Mali remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold.

A

N G L O

G

O L D

L

I M I T E D

89


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

30 Retirement benefits (continued)

Africa region (continued) Tanzania (Geita) Geita does not have a retirement scheme for employees. Tanzanian nationals contribute towards the Government social security fund, and the company also makes a contribution towards this fund. On retirement, employees are entitled to a retirement benefit from the Tanzanian Government. The company makes no contribution towards any retirement schemes for contracted expatriate employees. AngloGold seconded employees in Tanzania remain members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold. Australia region The region contributes to the Australian Retirement Fund for the provision of benefits to employees and their dependants on retirement, disability, death, resignation or retrenchment. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the region on behalf of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation. Members also have the option of contributing to approved personal superannuation funds. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements. North America region The AngloGold North America Inc. Retirement Plan and the AngloGold North America Inc. Retiree Medical Plan were incorporated during 1999 with the purchase of the Minorco assets. Retirement Plan – Substantially all AngloGold North America employees at 31 December 1999 were covered by the AngloGold North America Inc. Retirement Plan (the “Plan”), a non-contributory defined benefit plan. With effect from 31 December 1999, the benefits of the Plan participants were frozen and the Plan was terminated during 2000. Curtailment accounting was applied to the Plan at 31 December 1999 and the liability was extinguished at 31 December 2000 with the termination of the Plan and related distribution of Plan assets to participants. At 31 December 2001, all of the Plan assets had been distributed and the Plan will file its final termination forms with the Federal government in 2002. Post-retirement benefits – AngloGold North America provides health care and life insurance benefits for certain retired employees under the AngloGold North America Retiree Medical Plan (the “Retiree Medical Plan”). This Plan is not funded. With effect 31 December 1999, no additional employees were eligible to receive post-retirement benefits under the Retiree Medical Plan. Curtailment accounting was applied at 31 December 1999. The Retiree Medical Plan was last evaluated by independent actuaries in December 2001 who took into account reasonable long-term estimates of increases in health care costs and mortality rates in determining the obligations of AngloGold North America under the Retiree Medical Plan. The evaluation of the Retiree Medical Plan reflected liabilities of $2m, R28m, (2000: $3m, R19m). The Retiree Medical Plan is an unfunded plan. The Retiree Medical Plan is evaluated on an annual basis using the projected benefit method. The cost of providing benefits under the Retirement Plan and the Retiree Medical Plan was insignificant in 2001 and 2000. Defined Contribution Plan – AngloGold North America sponsors a 401(k) savings plan whereby employees may contribute up to 17% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold North America. AngloGold North America’s contributions were $2m, R23m, (2000: $2m, R15m) during the year. Supplemental Employee Retirement Plan – Certain former employees of Minorco (USA) Inc. were covered under the Minorco (USA) Inc. Supplemental Employee Retirement Plan (the “SERP”), a non-contributory defined benefit plan. The SERP was last evaluated by independent actuaries in 2001 who took into account reasonable long-term estimates of inflation, and mortality rates in determining the obligations of AngloGold North America under the SERP. This evaluation of the SERP reflected Plan liabilities of $1m, R12m (2000: $0.8m, R6m). The SERP is an unfunded plan. The SERP is evaluated on an annual basis using the projected benefit method. The cost of providing benefits under the SERP for the year were nominal. South America region The AngloGold South America region operates a number of defined contribution arrangements for their employees. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan) and are embodied in a pension plan entity, Fundambrás Sociedade de Previdència Privada, which is responsible for administering the funds and making arrangements to pay the benefits. On conversion of the defined benefit fund to the defined contribution fund on 30 November 1998, an actuarial liability in the amount of $6m was calculated. This unfunded liability has been provided for in the current year. In December 2001, contributions started to be made to a new PGBL fund, a defined contribution plan similar to the American 401 (k) type of plan, administered by Bradesco Previdencia e Seguros. The transfer of funds from Fundambrás to the PGBL requires approval from governmental SPC agency that shall take place in 2002 and is conditional to the full funding of the actuarial liability at 31 December 2001 which amounted to $5m.

90

A

N G L O

G

O L D

L

I M I T E D


2000

2001

Figures in million

Notes

2001

SA Rands

2000

US Dollars 31 Cash generated from operations

1,693

3,233

6 1,508 (250) (26)

324 1,884 (176) (7)

(25) (51) 2 481 – 135 – 708 – – 10 (294)

(42) 10 22 608 (53) 259 21 3 (67) 32 54 (633)

3,897

Profit on ordinary activities before taxation Adjusted for: Non-cash movements Amortisation of mining assets (note 4) Interest receivable (note 6) Profit from associates after taxation (note 6) Growth in AngloGold Environmental Rehabilitation Trust (note 6) Loss (profit) on sale of assets (note 7) Unwinding of decommissioning obligation (note 7) Finance costs (note 8) Movement on hedging activities Amortisation of goodwill (notes 15 and 16) Debt written off Impairment of mining assets (note 14) Impairment reversal of investments Loss on disposal of mining assets Termination of retirement benefit plans Movements in working capital

5,472

(292) (241) 239

(193) (551) 111

(294)

(633)

364

251

31 220 (20) (1)

1 217 (37) (4)

(5) 2 3 72 (12) 29 3 1 (6) 4 5 (17)

(4) (7) – 69 – 20 – 93 – – 1 3

673 Movements in working capital: Decrease (increase) in trade and other receivables Decrease (increase) in inventories (Decrease) increase in trade and other payables

Elandsrand, Morila Deelkraal and and Vaal River Geita shaft No 2

603

65 22 (104)

4 4 (5)

(17)

3

Elandsrand, Deelkraal and Vaal River shaft No 2

Morila and Geita

32 Through (disposal) acquisition of subsidiaries, joint ventures and mines

2,254 43 36 22 (742) (4) – (139)

(1,245) (55) – – – 76 500 36

1,470 1,080 –

(688) – 32

2,550 – 22 2,528

Mining assets (note 14) Inventories Trade and other receivables Cash and cash equivalents Borrowings Provisions (note 27) Deferred taxation (note 28) Trade and other payables

(156) (7) – – – 10 63 5

311 6 5 3 (101) (1) – (18)

Carrying value Goodwill (note 15) Loss on disposal of mining assets

(85) – 4

205 143 –

(656) (222) –

Purchase consideration Recoupment taxation Less: Cash and cash equivalents

(81) (28) –

348 – 3

(878)

Cash flow on (disposal) acquisition

(109)

345

A

N G L O

G

O L D

L

I M I T E D

91


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2000

2001

Figures in million

Notes

2001

SA Rands

2000

US Dollars 33 Subsequent changes in value of identifiable assets and liabilities

During 2001, there was a subsequent change to the fair value of assets acquired in Geita Gold Mining Limited (Geita) and Société des Mines de Morila S.A. (Morila) as at 15 December and 3 July 2000 respectively. Subsequent to acquisition, additional evidence and audited financial statements were available to assist with the estimation of amounts assigned to the assets of Geita and Morila and this resulted in fair value adjustments. The fair value adjustments in 2000 relate to Acacia Resources Limited which was acquired during 1999. (823) 611 39 173 – –

(17) 258 – (292) 51

Mining assets (note 14) Goodwill (note 15) Trade and other receivables Deferred taxation (note 28) Trade and other payables

(2) 30 – (34) 6

(134) 100 6 28 –

34 Related parties

Related party transactions are concluded on an arm’s length basis. Details of material transactions with those related parties not dealt with elsewhere in the financial statements are summarised below: Purchases from related parties

2001 Amounts owed to related parties

Purchases from related parties

2000 Amounts owed to related parties

US Dollars With fellow subsidiaries of the Anglo American plc group Boart Longyear Limited – mining services Haggie Limited – mining equipment Mondi Limited – timber Scaw Metals Limited – steel and engineering Shaft Sinkers (Pty) Ltd – mining services With associates Rand Refinery Limited – gold refinery

11 7 15 6 12

1 – 1 1 1

7 4 20 7 12

1 – – – –

3

4

SA Rands With fellow subsidiaries of the Anglo American plc group Boart Longyear Limited – mining services Haggie Limited – mining equipment Mondi Limited – timber Scaw Metals Limited – steel and engineering Shaft Sinkers (Pty) Ltd – mining services With associates Rand Refinery Limited – gold refinery

97 61 132 54 107

8 3 8 10 12

55 32 153 56 93

9 3 – – –

26

27

Directors Details relating to directors’ emoluments and shareholdings in the company are disclosed in the directors’ report. Shareholders The principal shareholders of the company are detailed on page 120.

92

A

N G L O

G

O L D

L

I M I T E D


2000

2001

Figures in million

Notes

SA Rands

2001

2000

US Dollars 35 Commitments and contingencies

447 4,969

1,017 6,004

Acquisition of mining assets Contracted for Not contracted for

85 502

59 656

5,416

7,021

Authorised by the directors

587

715

413 4,134

2,512 2,655

Allocated for: Expansion of capacity – within one year – thereafter

210 222

55 546

4,547

5,167

432

601

34 835

1,112 742

93 62

4 110

869

1,854

155

114

Maintenance of capacity – within one year – thereafter

This expenditure will be financed from existing cash resources, proceeds from the disposal of the Free State assets, proceeds from the disposal of shares in Normandy Mining Limited and future borrowings. The group has also given collateral to certain bankers for satisfactory contract performance in relation to exploration and development tenements and mining operations in Australia amounting to $7m, R87m (2000: $8m, R61m). AngloGold has provided a guarantee on the hedge book for Geita Mine. The marked-to-market loss amounts to $3m, R34m at 31 December 2001. AngloGold has provided a completion guarantee on the Geita Project Finance. This contingent liability amounts to $62m, R742m (2000: $68m, R515m). AngloGold has signed as surety in favour of the bankers on the Yatela loan for $11m, R132m. AngloGold North America has environmental obligations of $68m (R6m), of which $58m (R5m) is covered by reclamation bonds with various Federal, Nevada, and Colorado governmental agencies (2000: $58m). These obligations are guaranteed by AngloGold Limited. There is a potential claim against the South Africa region in respect of contamination of the water supply amounting to $1m, R11m (2000: $1m, R9m). 36 Risk management activities

In the normal course of its operations, the group is exposed to gold price, currency, interest rate, liquidity and credit risks. In order to manage these risks, the group may enter into transactions which make use of both on- and off-balance sheet financial instruments. The group does not acquire, hold or issue derivative instruments for trading purposes. The group has developed a comprehensive risk management process to facilitate, control and to monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. Controlling risk in the group The Executive Committee and the Treasury Committee are responsible for risk management activities within the group. The Treasury Committee, chaired by an independent member of the AngloGold Audit Committee, comprising executive members and treasury executives, reviews and recommends to the Executive Committee all treasury counterparts, limits, instruments and hedge strategies. The treasurer is responsible for managing investment, gold price, currency and liquidity risk. Within the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy, counterpart and dealer limits and provides regular and detailed management reports.

A

N G L O

G

O L D

L

I M I T E D

93


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

36 Risk management activities (continued)

Gold price and currency risk Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The gold market is predominately priced in US dollars which exposes the group to the risk that fluctuations in the SA rand/US dollar, Brazilian real/US dollar and Australian dollar/US dollar exchange rate may also have an adverse effect on current or future earnings. A number of products, including derivative instruments are used to manage well-defined gold price and foreign exchange risks, that arise out of the group’s core business activities. Forward-sales contracts and call and put options are used by the group to protect itself from downward fluctuations in the gold price. These instruments may establish a minimum price for a portion of future production while maintaining the ability to benefit from increases in the gold price for the majority of future gold production. Net delta open hedge position as at 31 December 2001 The group had the following net forward-pricing commitments outstanding against future production. Table A: Summary: Net delta open hedge position as at 31 December 2001 12 months ending 31 December

Rand Gold kg sold

Price in R/kg

Dollar Gold kg sold

Price in US$/oz

A$ Gold kg sold

Price in A$/oz

Total kg sold

Total oz sold (000)

2002 2003 2004 2005 2006 January 2007 – December 2011

22,920 24,706 22,438 22,509 14,007

60,332 90,914 109,137 132,592 135,287

66,375 39,226 35,404 32,287 26,901

301 320 322 325 332

18,919 13,686 5,443 5,163 6,146

563 524 534 646 615

108,214 77,618 63,285 59,959 47,054

3,479 2,495 2,035 1,928 1,513

10,140

135,367

76,525

352

10,397

535

97,062

3,121

Total

116,720

105,636

276,718

327

59,754

559

453,192

14,571

Table B: Summary: All open contracts in the group’s gold hedge position as at 31 December 2001 Year 2002

2003

2004

2005

Dollar/Gold Forward contracts Amount (kg) $/oz

61,727 $299

33,465 $315

32,435 $317

25,879 $326

20,524 $334

43,831 $349

217,861 $321

Put options purchased Amount (kg) $/oz *Delta (kg)

10,238 $312 5,110

5,808 $352 4,898

2,662 $390 2,118

757 $291 283

563 $291 183

728 $292 210

20,756 $331 12,802

Put options sold Amount (kg) $/oz *Delta (kg)

94

A

N G L O

G

2006 2007 – 2011

3,732 $273 1,270

Total

3,732 $273 1,270

Call options purchased Amount (kg) $/oz *Delta (kg)

24,535 $338 1,049

4,710 $394 176

572 $360 115

Call options sold Amount (kg) $/oz *Delta (kg)

24,584 $340 1,857

10,463 $372 1,039

3,303 $342 966

12,902 $321 6,125

12,222 $329 6,194

57,194 $357 32,484

120,668 $348 48,665

Rand/Gold Forward contracts Amount (kg) R/kg

20,316 R56,208

21,067 R90,427

20,264 R110,801

19,964 R133,897

11,825 R142,973

10,140 R135,367

103,576 R106,478

Put options purchased Amount (kg) R/kg *Delta (kg)

1,875 R93,603 144

1,875 R93,603 103

1,875 R93,603 79

1,875 R93,603 44

1,875 R93,603 31

O L D

L

I M I T E D

29,817 $347 1,340

9,375 R93,603 401


36 Risk management activities (continued)

Table B: Summary: All open contracts in the group’s gold hedge position as at 31 December 2001 (continued) Year 2002

2003

2004

2005

2006 2007 – 2011

Total

Call options purchased Amount (kg) R/kg *Delta (kg)

12,031 R86,039 11,746

1,058 R93,881 980

Call options sold Amount (kg) R/kg *Delta (kg)

14,669 R87,148 14,206

4,831 R93,767 4,516

2,187 R93,630 2,095

3,432 R122,862 2,501

2,187 R93,630 2,151

A Dollar/Gold Forward contracts Amount (kg) A$/oz

18,040 A$572

13,841 A$526

5,443 A$534

6,221 A$659

9,331 A$635

22,395 A$618

75,271 A$589

Call options purchased Amount (kg) A$/oz *Delta (kg)

6,687 A$728 847

3,888 A$701 817

3,110 A$724 1,058

6,221 A$673 3,185

20,062 A$691 11,998

39,968 A$698 17,905

Call options sold Amount (kg) A$/oz *Delta (kg)

3,732 A$554 1,726

3,110 A$700 662

Rand/Dollar (000) Forward contracts Amount ($) ZAR per $

25,574 R6.31

25,574 R6.31

Put options purchased Amount ($) ZAR per $ *Delta ($)

105,000 R8.18 1,233

105,000 R8.18 1,233

Call options purchased Amount ($) ZAR per $ *Delta ($)

78,450 R8.33 75,910

8,000 R6.94 7,985

86,450 R8.20 83,895

Call options sold Amount ($) ZAR per $ *Delta ($)

153,450 R8.76 147,294

8,000 R6.94 7,985

161,450 R8.67 155,279

A Dollar (000) Forward contracts Amount ($) $ Per A$

43,748 A$0.58

29,428 A$0.59

13,089 R86,673 12,726 27,306 R93,846 25,469

6,842 A$620 2,388

15,970 A$0.64

89,146 A$0.59

The delta position indicated above reflects the nominal amount of the option multiplied by the mathematical probability of the option being exercised. This is calculated using the Black and Scholes option formula with the ruling market prices, interest rates and volatilities as at 31 December 2001. The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continually reviewed in the light of changes in operational forecasts, market conditions and the group’s hedging policy. Forward sales contracts require the future delivery of gold at a specified price. A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a predetermined date. Net cash receipts received under the option hedging strategies for the year were $33m, R293m (2000: $48m, R327m). Interest rate and liquidity risk Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk.

A

N G L O

G

O L D

L

I M I T E D

95


N

O T E S

T O

T H E

G R O U P

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

36 Risk management activities (continued)

In the ordinary course of business, the group receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimising risks. The group is able to actively source financing at competitive rates. The group has sufficient undrawn borrowing facilities available to fund any working capital requirements. Investment maturity profile

Currency millions

Maturity date

Less than one year

$ ZAR A$ CHF

Fixed rate investment/ (borrowings) amount

Effective rate %

12 380

Floating rate investment/ (borrowings) amount

3 9

Effective rate %

125 148 17 1

7 8 4 1

Borrowings maturity profile

Currency millions

$ ZAR A$

Between Between Within one year one and two years two and five years After five years Fixed rate Effective Fixed rate Effective Fixed rate Effective Fixed rate Effective borrowings rate borrowings rate borrowings rate borrowings rate amount % amount % amount % amount %

595 200 50

3.1 11.5 4.7

53

4.1

283

3.2

14

5.3

Interest rate risk

Currency millions

$ ZAR A$

Fixed for less than one year BorrowEffective ings rate amount %

917 200 50

3.2 11.5 4.7

Fixed for between one and three years BorrowEffective ings rate amount %

23

8.6

Fixed for greater than three years BorrowEffective Total ings rate borrowings amount % amount

5

7.8

945 200 50

Credit risk Credit risk arises from the risk that a counterpart may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparts. These counterparts are financial and banking institutions of the highest quality. Where possible, management tries to ensure that netting agreements are in place. Trade debtors comprise a small group of international companies. No provision for doubtful debts was made as the principal debtors continue to be in a sound financial position. The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparts. The group believes that no concentration of credit exists. Fair value The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the group’s financial instruments as at 31 December are as follows:

96

A

N G L O

G

O L D

L

I M I T E D


36 Risk management activities (continued)

Type of instrument 2001

2000

Carrying amount

Fair value

Carrying amount

Fair value

US Dollars Trade and other receivables Cash and cash equivalents

156 191

156 191

229 195

229 195

– Cash and deposits on call – Money market instruments

191 –

191 –

168 27

168 27

Borrowings Trade and other payables Forward sale contracts Option contracts Foreign exchange contracts Foreign exchange option contracts

987 206 (131) 9 (26) (19)

987 206 (124) (66) (26) (22)

1,140 315 – – – –

1,140 315 192 23 (19) (12)

SA Rands Trade and other receivables Cash and cash equivalents

1,867 2,284

1,867 2,284

1,737 1,477

1,737 1,477

– Cash and deposits on call – Money market instruments

2,284 –

2,284 –

1,276 201

1,276 201

11,811 2,464 (1,568) 109 (308) (228)

11,811 2,464 (1,490) (789) (309) (264)

8,642 2,389 – – – –

8,642 2,389 1,451 177 (145) (90)

Borrowings Trade and other payables Forward sale contracts Option contracts Foreign exchange contracts Foreign exchange option contracts

The fair value amounts above include off balance sheet designated hedges. The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Trade and other receivables, cash and cash equivalents and trade and other payables The carrying amounts approximate fair value because of the short-term duration of these instruments. Borrowings The existing debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value. Derivative instruments The fair values of forward sales contracts and derivative instruments are estimated based on the ruling market prices, volatilities and interest rates at 31 December 2001. 37 Events after balance sheet date

Sale of Free State Assets With effect from 1 January 2002 a sale agreement has been signed with the African Rainbow Minerals (Proprietary) Limited and Harmony Gold Mining Company Limited Joint Venture for the sale of the Free State assets for $183m (R2.2bn), plus an amount equal to any liability for the taxation payable by AngloGold. On fulfillment of the conditions of the sale, AngloGold will be paid $150m (R1.8bn) with the balance of $33m (R400m) payable on 1 January 2005. The additional amount constituting any liability for taxation arising out of the transaction will be paid to AngloGold as and when the assessed amount is paid by AngloGold. Based on the year ended 31 December 2001 results the effect of the sale would be to reduce the production by 17%, EBITDA by 9% and cash costs by 4% – from $178 per oz to $170 per oz. Sale of investment in Normandy With the offer made to Normandy Mining Limited shareholders, AngloGold acquired 7.1% of the shares totalling 159,717,481. The investment was sold in January 2002 for a gross amount of $159m less transaction cost of $11m and the A$30 cents cash top-up offer totalling $25m. The net proceeds of $123m approximates the purchase price of the shares and there is no significant surplus on the sale.

A

N G L O

G

O L D

L

I M I T E D

97


C

O M P A N Y

I N C O M E

S TAT E M E N T

for the year ended 31 December 2001

Figures in million

Notes

2001

2000 SA Rands

Revenue

1

11,629

11,404

Gold income Cost of sales

1 2

11,164 (8,216)

11,021 (8,849)

2,948 (183) (133) (14) (324) (95)

2,172 (178) (82) (54) (220) (133)

2,199 54 (30) (189) 81 (228)

1,505 164 21 (106) – –

1,887 (4) (21) – (32)

1,584 – – (470) –

1,830 (602)

1,114 (186)

1,228

928

Operating profit Corporate administration and other expenses Market development costs Research and development costs Royalties paid Exploration costs Profit from operations Investment income Other net (expense) income Finance costs Realised gain on hedging instruments Unrealised loss on hedging activities Profit before exceptional items Amortisation of goodwill Debt written off Impairment of mining assets Loss on disposal of mining assets Profit on ordinary activities before taxation Taxation Net profit

98

A

N G L O

G

O L D

L

I M I T E D

3 4 5

6 11 10

8


C

O M P A N Y

B A L A N C E

S H E E T

as at 31 December 2001

Figures in million

Notes

2001

2000 SA Rands

ASSETS Non-current assets Mining assets Investments in associates Investments in subsidiaries Other investments AngloGold Environmental Rehabilitation Trust Inter-group balances Long-term loans

Current assets Cash and cash equivalents Financial derivatives Trade and other receivables Inventories Current portion of inter-group balances

10 11 12 13 14

15 16 17

Total assets EQUITY AND LIABILITIES Shareholders’ equity* Non-current liabilities Borrowings Debentures Provisions Inter-group balances Deferred taxation

Current liabilities Trade and other payables Financial derivatives Current portion of borrowings Taxation

Total equity and liabilities *

19 20 21 22

23 19

10,126 151 5,795 127 339 4,408 36

11,144 148 5,795 22 279 2,021 157

20,982

19,566

686 2,116 690 475 769

234 – 694 639 223

4,736

1,790

25,718

21,356

8,825

10,215

2,585 – 1,333 2,637 2,557

918 120 1,396 1,668 3,867

9,112

7,969

1,066 4,587 1,718 410

1,309 – 1,651 212

7,781

3,172

25,718

21,356

Shareholders’ equity is analysed in the Statement of Changes in Shareholders’ Equity.

A

N G L O

G

O L D

L

I M I T E D

99


C

O M P A N Y

C A S H

F L O W

S TAT E M E N T

for the year ended 31 December 2001

Figures in million

Notes

2001

2000 SA Rands

Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from operations Interest receivable Contributions to the AngloGold Environmental Rehabilitation Trust Dividends received from unlisted associate Finance costs Mining and normal taxation paid Dividends paid

25 13 11

9

Net cash outflow from operating activities Cash flows from investing activities Capital expenditure – to maintain operations – to expand operations Proceeds from sale of mining assets Associate acquired Other investments acquired Inter-group loans Repayment of loans advanced

11 12

Cash flows from financing activities Proceeds from issue of share capital Share issue expenses Proceeds from borrowings Repayment of borrowings Net cash inflow from financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year

100

A

N G L O

G

O L D

L

I M I T E D

11,322 (9,288)

2,225 47 (85) 11 (189) (564) (1,447)

2,034 138 (59) 12 (106) (349) (1,981)

(2)

(311)

(74) (800) 878 (11) (1) 427 1

(158) (908) 8 (55) (11) (1,923) 5

420

(3,042)

85 – 274 (325)

12 (18) 1,382 (4)

34

1,372

452 234

(1,981) 2,215

686

234

10

Net cash inflow (outflow) from investing activities

Cash and cash equivalents at end of year

11,617 (9,392)

15


C

O M PA N Y

S TAT E M E N T

O F

C H A N G E S

I N

S H A R E H O L D E R S

E Q U I T Y

for the year ended 31 December 2001

Figures in million

Ordinary and preference share capital

SA Rands Balance at 31 December 1999 Net profit Dividends (note 9) Ordinary shares issued Share issue expenses written off Translation

*

Ordinary and preference share premium

54

8,111

1

116 (18)

Nondistri- Other combutable prehensive reserves* income**

141

Retained earnings

Shareholders’ equity

3,010 928 (1,981)

11,316 928 (1,981) 117 (18) (147)

– 452

1,957 (135) 1,228 (1,447)

10,215 317 1,228 (1,447) 189

(147)

Balance at 31 December 2000 Effect of adoption of IAS 39 Net profit Dividends (note 9) Ordinary shares issued Net value realised during the year Net realised losses on revaluation of hedge instruments Net unrealised losses on derivatives recognised in assets and liabilities Translation

55

8,209

189

Balance at 31 December 2001

55

8,398

Note

18

18

(6)

(112)

(112)

(1,336)

(1,336)

(286)

(286) 57

57 51

(1,282)

1,603

8,825

Non-distributable reserves is a surplus on disposal of company shares within the group (R141m), and a downward revaluation of foreign denominated loans and intergroup balances (R90m).

** Other comprehensive income represents effective portion of fair value gains or losses in respect of cash flow hedges until the underlying transaction occurs, upon which the gains or losses are recognised in earnings or included in the initial measurement of the asset or liability.

A

N G L O

G

O L D

L

I M I T E D

101


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

for the year ended 31 December 2001

Figures in million

2001

2000 SA Rands

1

Revenue

Revenue consists of the following principal categories: Gold income Sale of uranium, silver and sulphuric acid Interest receivable (note 3)

2

3

11,164 418 47

11,021 245 138

11,629

11,404

Cash operating costs Other cash costs

7,221 51

8,121 34

Total cash costs Retrenchment costs (note 7) Rehabilitation and other non-cash costs

7,272 185 66

8,155 98 (48)

Production costs Amortisation of mining assets (note 10)

7,523 628

8,205 704

Total production costs Inventory change

8,151 65

8,909 (60)

8,216

8,849

47 7

138 26

54

164

Other net (expense) income consists of the following principal categories: Exchange (loss) gain on transactions other than sales Profit on sale of assets

(11) –

14 7

Unwinding of decommissioning obligation (notes 21 and 25)

(11) (19)

21 –

(30)

21

182 7

90 16

189

106

Cost of sales

Investment income

Investment income consists of the following principal categories: Interest receivable (notes 1 and 25) Profit from associates after taxation (note 11)

4

5

Other net (expense) income

Finance costs

Interest paid on bank loans and overdrafts Interest paid on debentures

102

A

N G L O

G

O L D

L

I M I T E D


Figures in million

2001

2000 SA Rands

6

Profit before exceptional items is arrived at after taking account of:

Auditors’ remuneration Audit fees Under provision prior year

Amortisation of mining assets (notes 2 and 10) – Owned assets Grants for educational and community development Operating lease charges 7

3 1

3 1

4

4

628 31 17

704 24 14

4,018 263

4,496 303

227 39

228 36

41 182 (91) 20 185

36 134 (24) (40) 98

Employee benefits

Employee costs including executive directors Salaries, wages and other benefits Defined contribution pension plan expense Health care and medical scheme costs – Current medical expenses – Post-retirement medical expenses Defined benefit expense – current service cost – interest cost – expected return on plan assets – actuarial loss (gain) Retrenchment costs (note 2)

Actual return on plan assets – defined benefit pension plan

4,884

5,267

91

24

294 240 –

44 187 3

534

234

149 (87) – 6

148 – (196) –

68

(48)

602

186

Refer to directors’ report for details of directors’ emoluments. 8

Taxation

Current taxation Mining taxation Non-mining taxation Under provision prior year

Deferred taxation Current (note 22) Unrealised hedging activities Exceptional item – impairment (note 22) Exceptional item – debt written off

A

N G L O

G

O L D

L

I M I T E D

103


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

2001 Non-mining %

Tax reconciliation A reconciliation of the mining and non-mining tax rate compared with that charged in the income statement is set out in the following table: Marginal tax rate Adjusted for hedge revenue Disallowed expenditure Amortisation and inventory change Mining capital allowances Mining taxation formula adjustment Dividends received Royalties Other Effective tax rate

2000 Mining %

Non-mining %

Mining %

38 36 9 – – – (43) – 2

46 (13) 7 21 – (1) – (25) 5

38 27 2 – – – (31) – 5

46 (13) 6 26 (32) – – (25) (4)

42

40

41

4

There is unredeemed capital expenditure estimated at R3,564m (2000: R3,161m) which is available for set-off against future taxable income from the mining operations of Joel mine. With effect from 1 January 2002, a sale agreement for Joel has been signed with the ARM/Harmony Joint Venture which may result in the unredeemed capital expenditure not being utilised. Figures in million

2001

2000 SA Rands

9

Dividends

Ordinary shares No. 89 of 650 SA cents per ordinary share declared on 30 January 2001 and paid on 30 March 2001.

696

1,178

No. 90 of 700 SA cents per ordinary share declared on 30 July 2001 and paid on 28 September 2001.

751

803

1,447

1,981

No. 91 of 1,100 SA cents per ordinary share was declared on 30 January 2002.

104

A

N G L O

G

O L D

L

I M I T E D


Figures in million

Mine development costs

Mine infrastructure

Mineral rights, dumps and ore reserves

Land

Total

10 Mining assets

SA Rands Cost Balance at 31 December 1999 Additions Transfers and disposals

13,478 1,010 –

4,315 56 (19)

372 – –

35 – –

18,200 1,066 (19)

Balance at 31 December 2000 Additions Through disposal of subsidiaries joint ventures and mines Transfers and disposals

14,488 805

4,352 67

372 –

35 2

19,247 874

(2,426) (19)

(278) –

(1) –

(3) –

(2,708) (19)

Balance at 31 December 2001

12,848

4,141

371

34

17,394

4,512 556 470

2,371 125 –

46 23 –

– – –

6,929 704 470

Accumulated amortisation Balance at 31 December 1999 Amortisation charge for the year (note 2) Impairments Balance at 31 December 2000 Amortisation charge for the year (note 2) Amortisation on assets of subsidiaries, joint ventures and mines disposed

5,538 477

2,496 128

69 23

– –

8,103 628

(1,437)

(25)

(1)

(1,463)

Balance at 31 December 2001

4,578

2,599

91

7,268

Net book value at 31 December 2000 Net book value at 31 December 2001

8,950 8,270

1,856 1,542

303 280

35 34

11,144 10,126

A

N G L O

G

O L D

L

I M I T E D

105


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

Figures in million

2001

2000 SA Rands

11 Investments in associates

The company has the following associated undertakings: – A 48.48% (2000: 42.73%) interest in Rand Refinery Limited, which is involved in the refining of bullion and by-products which are sourced inter alia from South Africa and foreign gold producing mining companies. The year-end of Rand Refinery Limited is 30 September. – A 25% (2000: 25%) interest in Oro Group (Proprietary) Limited which is involved in the manufacture and wholesale of jewellery. The year end of Oro Group (Proprietary) Limited is 31 March. Equity accounting is based on the results for the six months ended 30 September 2001.

106

A

N G L O

G

Carrying value of associates consists of: Unlisted shares at cost Share of retained earnings brought forward Profit after taxation (notes 3 and 25) Acquisitions Dividends Disposals Amortisation of goodwill

73 75 7 11 (11) – (4)

9 71 26 55 (12) (1) –

Carrying value

151

148

Directors’ valuation of unlisted associates

151

148

The company’s effective share of certain balance sheet items of its associates are as follows: Non-current assets Current assets

85 102

79 94

Total assets

187

173

Non-current liabilities Current liabilities

34 44

34 37

Total equity and liabilities

78

71

Net assets

109

102

Reconciliation of the carrying value of investments in associates with net assets: Net assets Goodwill

109 42

102 46

Carrying value

151

148

O L D

L

I M I T E D


Figures in million

2001

2000 SA Rands

12 Other investments

Listed investments Balance at the beginning of year Additions Disposals

– 104 –

– – –

Balance at the end of year

104

Market value of listed investments

104

Unlisted investments Balance at the beginning of year Additions Disposals

22 2 (1)

11 11 –

Balance at the end of year

23

22

Directors’ valuation of unlisted investments

23

22

Total other investments

127

22

Total valuation

145

22

Balance at the beginning of year Contributions Expenditure incurred

279 85 (25)

220 59 –

Balance at the end of year

339

279

– 36

120 37

36

157

686 –

76 158

686

234

13 AngloGold Environmental Rehabilitation Trust

14 Long-term loans

Unsecured Loan to AngloGold Limited Employee Share and Debenture Trust (note 20) Other

15 Cash and cash equivalents

Cash and deposits on call Money market instruments

A

N G L O

G

O L D

L

I M I T E D

107


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

Figures in million

2001

2000 SA Rands

16 Trade and other receivables

Trade debtors Prepayments and accrued income South African Revenue Services – Value added taxation Other debtors

79 368 123 120

114 3 111 466

690

694

At cost Gold in process Gold on hand By-products

227 1 72

317 20 89

Total metal inventories Consumable stores at average cost

300 175

426 213

475

639

100 1 –

100 1 –

101

101

Issued 107,634,058 (2000: 107,021,087) ordinary shares of 50 cents each Balance at the beginning of year Issue of shares

54 –

53 1

Balance at the end of year

54

54

2,000,000 A redeemable preference shares of 50 cents each 778,896 B redeemable preference shares of 1 cent each

1 –

1 –

Balance at the end of year

1

1

Share premium

8,398

8,209

Share capital and premium

8,453

8,264

17 Inventories

18 Share capital and premium

Share capital Authorised 200,000,000 ordinary shares of 50 cents each 2,000,000 A redeemable preference shares of 50 cents each 5,000,000 B redeemable preference shares of 1 cent each

108

A

N G L O

G

O L D

L

I M I T E D


Figures in million

2001

2000 SA Rands

19 Borrowings

Unsecured loans Syndicated loan facility Interest charged at libor plus 0.75% per annum. The loan is repayable in May 2004 and is US dollar-based.

2,585

1,136

Credit Agricole Interest charged at libor plus 0.75% per annum. Loan is repayable in July 2002 and is US dollar-based.

1,450

910

Deutsche Bank Interest charged at Bank Bill Swap Offer Rate plus 0.45% per annum. Loan is repayable by March 2002 and is Australian dollar-based.

61

Economic Development Corporation Interest charged at libor plus 0.6% per annum. Loan is repayable in half-yearly instalments terminating in December 2002 and is US dollar-based.

7

9

200

514

Total borrowings

4,303

2,569

Less: Current portion of borrowings included in current liabilities

1,718

1,651

Total long-term borrowings

2,585

918

Amounts falling due Within one year Between one and two years Between two and five years

1,718 – 2,585

1,651 918 –

4,303

2,569

61 200 4,042

– 514 2,055

4,303

2,569

Dresdner Bank Gold Loan

Local money market short-term borrowings, based in South African rand.

Currency The currency in which the borrowings are denominated is as follows: Australian dollars South African rands United States dollars

20 Debentures

Balance at the beginning of year Allocations during the year Exercised during the year Redeemed during the year Balance at the end of year (note 14)

120 – – (120)

115 13 (3) (5)

A

120

N G L O

G

O L D

L

I M I T E D

109


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

Figures in million

2001

2000 SA Rands

21 Provisions

Post-retirement medical funding Balance at the beginning of year Disposal of subsidiaries Less: Utilised during the year Other

746 (22) (12) 1

746 – – –

Balance at the end of year

713

746

% 11.0 10.0

% 13.5 10.5

Environmental rehabilitation obligations Provision for decommissioning Balance at beginning of year Unwinding of decommissioning obligation (note 4) Disposal of subsidiaries Change in estimate

312 19 (37) 31

312 – – –

Balance at end of year

325

312

Provision for restoration Balance at beginning of year Charge to income statement Disposal of subsidiaries Less: Utilised during the year

338 7 (17) (33)

392 (54) – –

Balance at end of year

295

338

1,333

1,396

The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. The assumptions used in calculating the above defined benefit postretirement medical expense is as follows: Discount rate Expected increase in health care costs The normal retirement age is 60 years, and fully eligible age is 55 years. The last valuation was performed as at 31 December 2001.

Total provisions

110

A

N G L O

G

O L D

L

I M I T E D


Figures in million

2001

2000 SA Rands

22 Deferred taxation

Deferred taxation relating to temporary differences is made up as follows: Deferred taxation liabilities Mining assets Inventories Other

3,919 97 2

4,294 142 4

4,018

4,440

501 960

573 –

Net deferred taxation

2,557

3,867

The movement on the deferred tax balance is as follows: Balance at beginning of year Income statement charge (note 8) Taxation on impairment (note 8) Taxation on unrealised hedging activities (note 8) Disposal of subsidiary Financial derivatives

3,867 149 – (87) (500) (872)

3,915 148 (196) – – –

Balance at end of year

2,557

3,867

312 302 452

437 326 546

1,066

1,309

842 836

687 669

6

18

Market value of plan assets

842

687

The assumptions used in calculating the above amounts as at 31 December are: Discount rate Pension increase Rate of compensation increase Rate of return on assets

% 10.5 6.5 7.5 10.5

% 12.0 8.0 9.0 12.0

Deferred taxation assets Provisions Financial instruments

23 Trade and other payables

Trade creditors Accruals Other creditors

24 Retirement benefits

Defined benefit pension fund Fair value of fund assets Present value of fund obligation Funded benefit plan asset

At the last statutory valuation of the defined benefit pension fund as at 31 December 1999, the Pension Fund was certified by the reporting actuaries as being in a sound financial position, subject to the continuation of the current contribution rates. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pension as well as returns on investments. Separate calculations for the Pension Fund are carried out on an annual basis and the results of these calculations as at 31 December 2001 are reflected above. Any deficits in the defined benefit scheme advised by the actuaries are funded either immediately or through increased contributions to ensure the ongoing soundness of the scheme. Contributions to the various defined contribution retirement schemes are fully expensed during the year in which they are funded and the cost of providing retirement benefits for the year amounted to R263m (2000: R303m). All funds are governed by the Pension Funds Act of 1956 as amended.

A

N G L O

G

O L D

L

I M I T E D

111


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

Figures in million

2001

2000 SA Rands

25 Cash generated from operations

Profit on ordinary activities before taxation Adjusted for: Amortisation of mining assets (note 10) Non-cash movements Interest receivable (note 3) Profit from associates after taxation (note 3) Unwinding of decommissioning obligation (note 4) Finance costs (note 5) Movement in hedging activities Amortisation of goodwill Debt written off Impairment of mining assets (note 10) Loss (profit) on sale of mining assets Movements in working capital

1,830

1,114

628 (38) (47) (7) 19 189 255 4 21 – 32 (661)

704 (48) (138) (26) – 106 – – – 470 (7) (141)

2,225 Movements in working capital: (Increase)/decrease in trade and other receivables Decrease/(increase) in inventories Decrease in trade and other payables Decrease in current portion of inter-group balances

2,034

(17) 109 (207) (546)

116 (45) (64) (148)

(661)

(141)

26 Related parties

Related party transactions are concluded on an arm’s length basis. Details of material transactions with those related parties not dealt with elsewhere in the financial statements are summarised below: 2001

With fellow subsidiaries of the Anglo American plc group Boart Longyear Limited – mining services Haggie Limited – mining equipment Mondi Limited – timber Scaw Metals Limited – steel and engineering Shaft Sinkers (Pty) Ltd – mining services With associates Rand Refinery Limited – gold refinery

112

A

N G L O

G

O L D

L

I M I T E D

2000

Purchases from related

Amounts owed to related

Purchases from related

Amounts owed to related

parties

parties

parties

parties

97 61 132 54 107

8 3 8 10 12

52 32 153 55 93

9 3 – – –

26

27


Figures in million

2001

2000 SA Rands

27 Commitments and contingencies

Acquisition of mining assets Contracted for Not contracted for

441 1,948

356 4,638

Authorised by the directors

2,389

4,994

Allocated for: Expansion of capacity – within one year – thereafter

778 1,572

327 3,998

2,350

4,325

27 12

29 640

39

669

Maintenance of capacity – within one year – thereafter

This expenditure will be financed from existing cash resources, proceeds on the disposal of the Free State assets and future borrowings. There is a potential claim against the South Africa region in respect of contamination of the water supply amounting to R11m (2000: R9m). 28 Risk management activities

In the normal course of its operations, the company is exposed to gold price, currency, interest rate, liquidity and credit risks. In order to manage these risks, the company may enter into transactions which make use of both on- and off-balance sheet financial instruments. The company does not acquire, hold or issue derivative instruments for trading purposes. The company has developed a comprehensive risk management process to facilitate, control and to monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterpart limits, controlling and reporting structures. Controlling risk in the company The Executive Committee and the Treasury Committee are responsible for risk management activities within the company. The Treasury Committee, chaired by an independent member of the AngloGold Audit Committee, comprising executive members and treasury executives, reviews and recommends to the Executive Committee all treasury counterparts, limits, instruments and hedge strategies. The treasurer is responsible for managing investment, gold price, currency and liquidity risk. Within the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy, counterpart and dealer limits and provides regular and detailed management reports. Gold price and currency risk Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The gold market is predominately priced in US dollars which exposes the company to the risk that fluctuations in the SA rand/US dollar exchange rate may also have an adverse effect on current or future earnings. A number of products, including derivative instruments are used to manage well-defined gold price and foreign exchange risks, that arise out of the company’s core business activities. Forward-sales contracts and call and put options are used by the company to protect itself from downward fluctuations in the gold price. These instruments may establish a minimum price for a portion of future production while maintaining the ability to benefit from increases in the gold price for the majority of future gold production.

A

N G L O

G

O L D

L

I M I T E D

113


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

28 Risk management activities (continued)

Net delta open hedge position as at 31 December 2001 The company had the following net forward-pricing commitments outstanding against future production. Table A: Summary: Net delta open hedge position as at 31 December 2001 12 Months ending 31 December

Rand Gold kg sold

Price in R/kg

Dollar Gold kg sold

Price in US$/oz

Kilograms sold

2002 2003 2004 2005 2006 January 2007 – December 2011

22,828 24,706 22,438 22,509 14,007

60,258 90,914 109,137 132,592 135,287

28,526 11,027 8,211 10,429 8,775

294 342 368 336 342

51,354 35,733 30,649 32,938 22,782

10,140

135,367

44,086

360

54,226

Total

116,628

105,657

111,054

338

227,682

Table B: Summary: All open contracts in the company’s gold hedge position at 31 December 2001 Year 2002

2003

2004

2005

2006 2007 – 2011

25,664 $290

5,992 $322

5,941 $348

4,510 $356

2,799 $369

Put options purchased Amount (kg) $/oz *Delta (kg)

8,709 $318 4,162

4,977 $364 4,421

1,866 $439 1,757

Put options sold Amount (kg) $/oz *Delta (kg)

2,799 $274 944

Dollar/Gold Forward contracts Amount (kg) $/oz

114

A

N G L O

G

12,441 $365

Total

57,347 $325 15,552 $347 10,340 2,799 $274 944

Call options purchased Amount (kg) $/oz *Delta (kg)

23,794 $338 1,156

4,043 $402 96

Call options sold Amount (kg) $/oz *Delta (kg)

20,995 $346 800

8,864 $379 710

1,866 $347 513

12,441 $321 5,919

11,819 $329 5,976

55,986 $358 31,645

111,971 $350 45,563

Rand/Gold Forward contracts Amount (kg) R/kg

20,222 R55,104

21,067 R90,427

20,264 R110,801

19,964 R133,897

11,825 R142,973

10,140 R135,367

103,482 R106,504

Put options purchased Amount (kg) R/kg *Delta (kg)

1,875 R93,603 138

1,875 R93,603 102

1,875 R93,603 78

1,875 R93,603 45

1,875 R93,603 32

O L D

L

I M I T E D

27,837 $347 1,252

9,375 R93,603 395


28 Risk management activities (continued)

Table B: Summary: All open contracts in the company’s gold hedge position at 31 December 2001 (continued) Year 2002

2003

Call options purchased Amount (kg) R/kg *Delta (kg)

12,031 R86,039 11,756

1,058 R93,881 981

Call options sold Amount (kg) R/kg *Delta (kg)

14,669 R87,148 14,224

4,831 R93,767 4,521

Rand/Dollar (000) Forward contracts Amount ($) ZAR per $

2005

2006 2007 – 2011

Total

13,089 R86,673 12,737 2,187 R93,630 2,096

3,432 R122,862 2,500

2,187 R93,630 2,150

27,306 R93,846 25,491

25,574 R6.31

25,574 R6.31

Put options purchased Amount ($) ZAR per $ *Delta ($)

105,000 R8.18 1,260

105,000 R8.18 1,260

Call options purchased Amount ($) ZAR per $ *Delta ($)

78,450 R8.33 75,860

8,000 R6.94 7,984

86,450 R8.20 83,844

153,450 R8.76 147,186

8,000 R6.94 7,984

161,450 R8.67 155,170

Call options sold Amount ($) ZAR per $ *Delta ($) *

2004

The delta position indicated above reflects the nominal amount of the option multiplied by the mathematical probability of the option being exercised. This is calculated using the Black and Scholes option formula with the ruling market prices, interest rates and volatilities as at 31 December 2001. The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continually reviewed in the light of changes in operational forecasts, market conditions and the company’s hedging policy. Forward sales contracts require the future delivery of gold at a specified price. A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a predetermined date. Net cash receipts received under the option hedging strategies for the year were R215m (2000: R262m). Interest rate and liquidity risk Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk. In the ordinary course of business, the company receives cash from the proceeds of its gold sales and is required to fund working capital requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market related returns while minimising risks. The company is able to actively source financing at competitive rates. The company has sufficient undrawn borrowing facilities available to fund working capital requirements.

A

N G L O

G

O L D

L

I M I T E D

115


N

O T E S

T O

T H E

C O M P A N Y

F I N A N C I A L

S TAT E M E N T S

(

C O N T I N U E D

)

for the year ended 31 December 2001

28 Risk management activities (continued)

Investment maturity profile

Maturity date

Less than one year

Currency millions

$ ZAR

Fixed rate investment/ (borrowings) amount

380

Effective rate %

9

Floating rate investment/ (borrowings) amount

14 138

Effective rate %

1 8

Borrowings maturity profile

Currency millions

$ ZAR A$

Within one year Fixed rate Effective borrowings rate amount %

122 200 10

2.7 11.5 4.8

Between two and five years Fixed rate Effective borrowings rate amount %

216

2.7

Interest rate risk

Maturity date

Less than one year

Currency millions

$ ZAR A$

Fixed rate investment/ (borrowings) amount

122 200 10

Effective rate %

2.7 11.5 4.7

Credit risk Credit risk arises from the risk that a counterpart may default or not meet its obligations timeously. The company minimises credit risk by ensuring that credit risk is spread over a number of counterparts. These counterparts are financial and banking institutions of the highest quality. Where possible, management tries to ensure that netting agreements are in place. No provision for doubtful debts was made as the principal debtors continue to be in a sound financial position. The company does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparts. The company believes that no concentration of credit exists. Fair value The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the company’s financial instruments as at 31 December are as follows:

116

A

N G L O

G

O L D

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28 Risk management activities (continued)

Type of instrument 2001

2000 Carrying amount

Carrying amount

Fair value

SA Rands Trade and other receivables Cash and cash equivalents

690 686

690 686

694 234

694 234

– Cash and deposits on call – Money market instruments

686 –

686 –

76 158

76 158

Borrowings Trade and other payables Forward sale contracts Option contracts Foreign exchange contracts Foreign exchange option contracts

4,303 1,066 (1,874) (219) (149) (229)

4,303 1,066 (1,976) (1,112) (148) (268)

Fair value

2 569 1 309 -

2 569 1 309 666 197 (83)) (91)

The fair value amounts above include off balance sheet designated hedges. The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Trade and other receivables, cash and cash equivalents and trade and other payables The carrying amounts approximate fair value because of the short-term duration of these instruments. Borrowings The existing debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value. Derivative instruments The fair values of forward sales contracts and derivative instruments are estimated based on the ruling market prices, volatilities and interest rates at 31 December 2001.

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INVESTMENT

IN PRINCIPAL SUBSIDIARIES AND JOINT VENTURE INTERESTS

for the year ended 31 December 2001

Nature of business

Direct investments Advanced Mining Software Limited AngloGold American Investments Limited 1 Anglogold Health Service (Pty) Limited AngloGold Offshore Investments Limited 1

C B G B

AngloGold Ventures (Pty) Limited Eastvaal Gold Holdings Limited Igolide Health Networks (Pty) Limited Masakhisane Investment Limited Nuclear Fuels Corporation of SA (Pty) Limited Nufcor International Limited 9 Southvaal Holdings Limited Stone and Allied Industries (O.F.S.) Limited

F B G B E E B D

Indirect investments AngloGold (Colorado) Corporation 5 AngloGold (Jerritt Canyon) Corporation 5 AngloGold Argentina Limited 1 AngloGold Argentina S.A. 6 AngloGold Australia Investment Holdings Limited 1

B B B B B

AngloGold Australia Limited 8 AngloGold Brasil Ltda 7 AngloGold Brazil Limited 1 AngloGold Finance Australia Holdings Limited 10

B B B B

AngloGold Finance Australia Limited 10

B

AngloGold Geita Holdings Limited 1 AngloGold Investments Australasia Limited 1

B B

AngloGold Investments Australia Pty Limited 8 AngloGold Investments (Sadex) Limited 1 AngloGold Mining (West Africa) Limited 2 AngloGold Morila Holdings Limited 1 AngloGold Namibia (Proprietary) Limited3 AngloGold North America Inc. 5 AngloGold North American Holdings Limited 1 AngloGold South America Limited 1 AngloGold South American Holdings Limited 1 AngloGold USA Incorporated 5 Chellaston Limited 1 Cluff Resources Limited 9 Dysart International Limited 1 Erongo Holdings Limited 1 ~o Morro Velho Ltda 7 Mineraça ~o Serra Grande S.A. 7 Mineraça Quorum International Limited 1 Sadiola Exploration Limited 1

B B B B B B B B B B B B B B A A B B

Joint ventures Cerro Vanguardia S.A. 6 Geita Gold Mining Limited 11 Société des Mines de Morila S.A. 4 Société d’Exploitation des Mines d’Or de Sadiola S.A. 4 Société d’Exploitation des Mines d’Or de Yatela S.A. 4

A A A A A

Nature of business A – Mining B – Investment holding C – Software development D – Stone crusher E – Market agent F – Marketing intermediary G – Health care * Indicates preference shares

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Shares held

Percentage held

Book value

Net loan account

2001

2000

2001 %

2000 %

2001 Rm

2000 Rm

2001 Rm

2000 Rm

40,000 1 8 5,001,000 43,251* 1 454,464,000 100 100 1,450,000 3,000,000 26,000,000 400,000

40,000 1 8 5,001,000 43,251* 1 454,464,000 100 100 1,450,000 3,000,000 26,000,000 400,000

100 100 100 100 100 100 100 100 100 100 50 100 100

100 100 100 100 100 100 100 100 100 100 50 100 92.85

2 928 – 1,180 – – 917 – – 7 18 3 16

2 928 – 1,180 – – 917 – – 7 18 3 16

(6) (203) 103 (1,084) – 65 (604) – 5 – – (186) 4

(4) 97 93 (1,064) – – (604) – 4 104 – (83) –

10,000 10,000 1,000 1,000 1 1 1,331,093 1,331,093 2,000 2,000 43,251* 43,251* 257,462,077 257,462,077 8,827,437,875 8,827,437,875 1 1 1,002 1,002 43,251* 43,251* 1,002 1,002 43,251* 43,251* 1,000 1,000 2,000 2,000 43,251* 43,251* 1 1 1,000 ’A’ 1,000 ’A’ 5,000 5,000 1,000 1,000 10,000 10,000 7,902 7,902 1 1 488,000 488,000 1 1 100 100 2 2 46,819,281 46,819,281 2 2 13,334 ’A’ 13,334 ’A’ 4,585,851,748 4,585,851,748 499,999,997 499,999,997 2 2 5,000 ’A’ 5,000 ’A’

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 50 100 100 100 50 100 50

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 50 100 100 100 50 100 50

– – – – – – 2,724 – – – – – – – – – – – – – – – – – – – – – – – – – – –

– – – – – – 2,724 – – – – – – – – – – – – – – – – – – – – – – – – – – –

– – – – – – 83 – – – – – – 2,581 – – – 62 – – 139 – – – – – – – – (23) – – – –

– – – – – – 12 – – – – – – 750 – – – 202 – – – – – – – – – – – – – – – –

46.25 50 40 38 40

46.25 50 40 38 40

– – – – –

– – – – –

– – 1,604 – –

– – 1,069 – –

5,795

5,795

2,540

576

15,000,000 1 400 38,000 400

13,050,000 1 400 38,000 400

All companies are incorporated in the Republic of South Africa except where otherwise indicated 1 Incorporated in the British Virgin Islands 7 Incorporated in Brazil 2 Incorporated in the Isle of Man 8 Incorporated in Australia 3 Incorporated in Namibia 9 Incorporated in the United Kingdom 4 Incorporated in Mali 10 Incorporated in Malta 5 Incorporated in the United States of America 11 Incorporated in Tanzania 6 Incorporated in Argentina


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I N F O R M AT I O N

Stock exchange listings

The primary listing of the company’s ordinary shares is on the JSE Securities Exchange South Africa. Its ordinary shares have secondary listing status on the stock exchanges in London and Paris, as well as being quoted in Brussels in the form of International Depositary Receipts (IDRs) and in New York in the form of American Depositary Shares (ADSs). The company has a full compliance listing on the Australian Stock Exchange for its 7,443,941 ordinary shares in the form of CHESS Depository Interests (CDIs). Stock exchange information 2001

2000

1999

1998

496.00 208.40 422.00 45,659

385.00 186.00 221.00 24,902

428.00 225.00 316.60 31,787

361.60 167.40 229.20 18,251

London Stock Exchange Share code: 79 LK Pounds per share: Market price – high – low – year-end Shares traded – 000

27.79 18.25 24.18 9,431

35.51 17.14 19.45 2.5

41.72 22.86 32.01 3.2

35.35 20.09 23.42 12,206

Paris Bourse Share code: VA FP Euros per share (1998: French francs per share) Market price – high – low – year-end Shares traded – 000

50.00 28.51 39.05 839

57.80 28.20 31.85 947

68.60 33.23 50.90 1,412

338.80 189.90 221.10 1,437

49.79 29.03 40.50 819

49.95 28.55 31.85 1,002

68.20 33.50 50.85 2,635

2,060 1,150 1,398 2,273

28.69 12.25 14.94 46,940

37.00 18.31 25.69 41,355

31.00 16.00 19.56 14,213

8.68 4.75 5.48 17,831

8.90 7.10 7.64 4,870

– – – –

JSE Securities Exchange South Africa Share code: ANG Rands per share: Market price – high – low – year-end Shares traded – 000

Brussels Bourse Share code: ANG BB Euros per share (1998: Belgian francs per share) Market price – high – low – year-end IDRs traded – 000 One IDR represents one ordinary share

New York Stock Exchange Share code: AU (listing commenced 5 August 1998) US dollars per ADS: Market price – high 22.34 – low 13.15 – year-end 18.06 ADSs traded – 000 106,231 Each ADS represents one-half of an ordinary share Australian Stock Exchange Share code: AGG (listing commenced 15 November 1999) Australian dollars per CDI: Market price – high – low – year-end CDIs traded – 000

8.00 4.80 7.25 62,576

Each CDI represents one-tenth of an ordinary share. The market price for years 1999 and 2000 have been adjusted for comparative purposes to account for the 10:1 reconstruction which took place in 2001.

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Australian Stock Exchange Listing Rules

The following disclosures are made pursuant to the Listing Rules of the Australian Stock Exchange and according to information available to the directors: The 20 largest holders of the ordinary share capital of the company as at 31 January 2002 were: Ordinary shares held Number %

Anglo American plc SCMB Custody Account ANZ Nominees Ltd Standard Bank Nominees (Transvaal) (Pty) Ltd The Bank of New York (various accounts) Public Investment Comm (various accounts) RMB Asset Management (various accounts) Sanlam 50000 National Nominees Ltd Citibank (various accounts) Société Interprofessionnell Pour La Compensation Des Valeurs Mobilieres a/c Sicovam PIC Equity SIS Segaintersettle AG First National Nominees (Pty) Ltd Brown Brothers Harriman & Company Ferbros Nominees (Pty) Ltd/Fifth Nominees (Pty) Ltd ESKOM Pension Fund (various accounts) PICTET et Cie Banquiers UBS Ltd Nedcor Bank Nominees Ltd

†* † * *

*

57,228,684 20,399,466 5,894,906 5,331,206 4,251,618 1,654,420 1,130,600 821,896 810,014 789,162

51.58 18.39 5.31 4.81 3.83 1.49 1.02 0.74 0.73 0.71

685,789 507,800 500,356 498,828 360,640 338,659 337,243 333,550 310,611 245,613

0.62 0.46 0.45 0.45 0.33 0.31 0.30 0.30 0.28 0.22

102,431,061

92.33

* *

*

Total † SCMB Custody Account reduced to reflect Anglo American plc separately. Information extracted from STRATE register except where indicated by *. Analysis of ordinary shareholdings as at 31 January 2002 Number of shareholders

% of total shareholders

Number of shares

% of shares issued

Size of holding 1 – 100 101 – 500 501 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 Over 100,000

17,535 3,557 1,393 2,038 273 187 50

70.1 14.2 5.6 8.1 1.1 0.7 0.2

345,087 499,860 1,008,359 4,253,204 1,895,905 5,017,607 97,925,684

0.3 0.5 0.9 3.8 1.7 4.5 88.3

Total

25,033

100.0

110,945,706

100.0

Shareholder spread as at 13 February 2002

Pursuant to the Listings Requirements of the JSE Securities Exchange South Africa, with the best knowledge of the directors and after reasonable enquiry, the spread of shareholders was as follows: Class

Number of holders

%

Ordinary shares Non-public shareholders: Directors Shares held by Anglo American plc Public shareholders

7 1 25,025

0.01 51.55 48.44

Total

25,033

100.00

A redeemable preference shares B redeemable preference shares

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} All shares are held by a wholly-owned subsidiary company


Major shareholders as at 13 February 2002

According to information available to the directors, the following are the only shareholders beneficially holding, directly or indirectly, in excess of 5% of the ordinary share capital of the company: Ordinary shares held 13 February 2002 Number %

Anglo American plc The Bank of New York* *

57,228,684 19,434,313

51.55 17.50

31 December 2001 Number %

57,228,684 15,052,323

31 December 2000 Number %

53.17 13.98

57,234,459 16,512,360

53.48 15.43

Shares held through various custodians in respect of ADSs issued by the Bank

Voting rights

The articles of association provide that every member present at a meeting in person or, in the case of a body corporate, represented, is entitled to one vote only on a show of hands. Upon a poll members present or any duly appointed proxy shall have one vote for every share held. There are no limitations on the right of non-South African shareholders to hold or exercise voting rights attaching to any shares in the company. CDI holders are not entitled to vote in person at meetings, but may vote by way of proxy. Options do not carry a right to vote until the option has been exercised and ordinary shares allotted. Diary

Financial year-end

31 December

Annual financial statements Annual general meeting Quarterly reports

Issued

14 March 2002

11:00

30 April 2002

Issued

30 April 2002 31 July 2002 31 October 2002 31 January 2003

Dividends

Final – No. 91 Interim – No. 92 Final – No. 93 *

Declared

Last date to trade ordinary shares cum dividend

30 January 2002 30 July 2002 30 January 2003

15 February 2002 16 August 2002 14 February 2003

Payment date to shareholders

4 March 2002 26 August 2002* 24 February 2003*

Payment date to ADS holders

15 March 2002 6 September 2002* 7 March 2003*

Approximate dates

Currency conversion guide

At 31 December one rand was equal to: 2001

2000

Australian dollar

0.16

0.24

Belgian franc

3.76

5.64

Euro

0.09

0.14

French franc

0.61

0.92

German mark

0.18

0.27

Japanese yen

10.83

15.07

Swiss franc

0.14

0.21

UK pound

0.06

0.09

US dollar

0.08

0.13

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A N D

A D M I N I S T R AT I O N

Directors

Share registrars

Executive R M Godsell (Chairman and Chief Executive Officer) J G Best D L Hodgson K H Williams

South Africa Computershare Services Limited 2nd Floor, Edura, 41 Fox Street Johannesburg 2001 (PO Box 61051, Marshalltown 2107) South Africa Telephone: +27 11 370 7700 Fax: +27 11 836 0792

Non-Executive R P Edey* (Deputy Chairman) F B Arisman# Mrs E le R Bradley C B Brayshaw Dr V K Fung# A W Lea (Alternate: P G Whitcutt) W A Nairn (Alternate: A H Calver*) T J Motlatsi J Ogilvie Thompson N F Oppenheimer A J Trahar * #

British American

Offices

Registered and corporate Managing Secretary Ms Y Z Simelane Company Secretary C R Bull

United Kingdom Computershare Investor Services PLC PO Box 82 The Pavilions, Bridgwater Road Bristol BS99 7NH England Telephone: +44 870 702 0001 Fax: +44 870 703 6119 Australia Computershare Investor Services Pty Limited Level 12, 565 Bourke Street Melbourne, Victoria 3000 (GPO Box 2975EE Melbourne, Victoria 3001) Australia Telephone: +61 3 9611 5711 Fax: +61 3 9611 5710 ADR Depositary

11 Diagonal Street Johannesburg 2001 (PO Box 62117, Marshalltown 2107) South Africa Telephone: +27 11 637 6000 Fax: +27 11 637 6624 Australia Level 13 & 14 St Martins Tower 44 St Georges Terrace Perth, WA 6000 (PO Box Z5046, Perth WA 6831) Australia Telephone: +61 8 9425 4604 Fax: +61 8 9425 4662 United Kingdom Secretaries St James’s Corporate Services Limited 6 St James’s Place London SW1A 1NP England Telephone: +44 20 7499 3916 Fax: +44 20 7491 1989

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The Bank of New York 620 Avenue of the Americas 6th Floor New York, NY 10011 United States of America Telephone: +1 646 885 3294 Fax: +1 646 885 3043 Authorised representative

United States of America Puglisi & Associates 850 Library Avenue, Suite 204 PO Box 885 Newark, Delaware 19715 United States of America Telephone: +1 302 738 6680 Fax: +1 302 738 7210


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O F

T E R M S

By-products

Any products that emanate from the core process of producing gold, including silver, uranium and sulphuric acid. Capital employed

Equity plus minority interests, interest bearing debt, less loans and cash. Where average capital employed is referred to, this is the average of the figures at the beginning and the end of the financial year. Capital expenditure

Total capital expenditure on mining assets to both maintain and expand operations. Dividend cover

Headline earnings before unrealised hedging activities per ordinary share divided by dividends per ordinary share. Debt

Borrowings including short-term portion, plus debentures. Effective tax rate

Current and deferred taxation as a percentage of net profit before taxation. EBITDA

Earnings before interest, taxation, depreciation and amortisation. It refers to profit before exceptional items, net interest and amortisation of mining assets. Equity

Shareholders’ equity adjusted for other comprehensive income and deferred taxation. Where average equity is referred to, this is calculated by averaging the figures at the beginning and the end of the financial year. Illustrative dividend rate

For illustrative purposes, a US dollar dividend value has been provided based on the rate of exchange ruling on the date of declaration. Interest cover

EBITDA divided by finance costs. Life of mine

Number of years that the operation is planning to mine and treat ore, and is taken from the current mine plan. Market capitalisation

Number of ordinary shares in issue at close of business on 31 December multiplied by the closing share price as quoted on the JSE Securities Exchange South Africa. Mineral resource

A mineral resource is a concentration or occurrence of material of economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a mineral resource are known, estimated from specific geological evidence and knowledge, or interpreted from a well-constrained and portrayed geological model. Mineral resources are subdivided, in order of increasing geological confidence, into inferred, indicated and measured categories. The mineral resources are inclusive of those resources which have been modified to produce ore reserves. Net asset value per share

Shareholders’ equity divided by the weighted average number of shares in issue. Net operating assets

Mining assets, inventories, trade and other receivables (excluding value added taxation), less trade and other payables. Net debt

Debt less cash and cash equivalents.

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Operating margin %

Operating profit as a percentage of gold income. Ore reserves

An ore reserve is the economically mineable material derived from a measured and/or indicated mineral resource. It is inclusive of diluting materials and allows for losses that may occur when the material is mined. Appropriate assessments have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified. Ore reserves are sub-divided in order of increasing confidence into probable ore reserves and proved ore reserves. Ounces (troy)

Used in imperial statistics. A kilogram is equal to 32.1507 ounces. Region

Defines the operational management divisions within AngloGold and these are South Africa, Africa, Australia, North America and South America. Return on capital

Headline earnings before unrealised hedging activities and before finance costs expressed as a percentage of average capital employed, adjusted for the timing of acquisitions and disposals. Return on equity

Headline earnings before unrealised hedging activities expressed as a percentage of average equity, adjusted for the timing of acquisitions and disposals. Total cash costs

Total cash costs include site costs for all mining processing and administration, as well as contributions from by-products and are inclusive of royalties and production taxes. Amortisation, rehabilitation, corporate administration, retrenchment, capital and exploration costs are excluded. Total production costs

Total cash costs including amortisation, retrenchment, rehabilitation and other non-cash costs. Corporate administration, capital and exploration costs are excluded. Weighted average number of ordinary shares in issue

The number of ordinary shares in issue at the beginning of the year, increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the income of the group. Abbreviations

t m bn FIFR LTIFR

RIFR VCR LOM oz kg tpm $ A$ Libor R, ZAR Capex Mt Moz

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tons (short) or tonnes (metric). million. billion. Fatal Injury Frequency Rate per million hours worked. Lost Time Injury Frequency Rate per million hours worked. Note that AngloGold utilises the strictest definition in reporting Lost Time Injuries in that it includes all Disabling Injuries (where an individual is unable to return to his place of regular work the next calendar day after the injury) and Restricted Work Cases (where the individual may be at work, but unable to perform full or regular duties on the next calendar day after the injury) within this definition. Reportable Injury Frequency Rate per million hours worked. Ventersdorp Contact Reef. Life of mine. Ounces (troy) Kilograms. Tonnes per month. United States dollars. Australian dollars. London interbank offer rate. South African rands. Capital expenditure. Million tonnes or tons. Million ounces.

I M I T E D


C

O N TA C T

I N F O R M AT I O N

South Africa

Australia

Steve Lenahan Telephone: +27 11 637 6248 Fax: +27 11 637 6247 E-mail: slenahan@anglogold.com

Andrea Maxey Telephone: + 61 8 9425 4604 Fax: + 61 8 9425 4662 E-mail: amaxey@anglogold.com.au

Peta Baldwin Telephone: +27 11 637 6647 Fax: +27 11 637 6399 E-mail: pbaldwin@anglogold.com

Level 13 & 14 St Martins Tower 44 St Georges Terrace Perth, WA 6000 (PO Box Z5046, Perth WA 6831) Australia

11 Diagonal Street Johannesburg 2001 (PO Box 62117, Marshalltown 2107) South Africa Europe

Tomasz Nadrowski Telephone: +41 22 718 3312 Fax: +41 22 718 3334 E-mail: tnadrowski@anglogold.com 67, rue du Rhone 4th Floor 1207 Geneva Switzerland Alex Buck Telephone: +44 20 7664 8712 Fax: +44 20 7664 8711 E-mail: abuck@anglogold.com 4th Floor, The Linen Hall 162-168 Regent Street London W1B 5TE England United States of America

Charles Carter Telephone: (800) 417 9255 (toll free in USA and Canada) or +1 212 750 7999 Fax: +1 212 750 5626 E-mail: ccarter@anglogold.com 509 Madison Avenue Suite 1914 New York, NY 10022 United States of America

General E-mail enquiries investors@anglogold.com AngloGold website http://www.anglogold.com Global BuyDIRECTSM The Bank of New York maintains a direct share purchase and dividend reinvestment plan for AngloGold. For additional information, please visit The Bank of New York’s website at www.globalbuydirect.com or call Shareholder Relations at 1-888-BNY-ADRS or write to: The Bank of New York Shareholder Relations Department – Global BuyDIRECTSM Church Street Station PO Box 11258 New York, NY 10286-1258 United States of America Comments, questions and suggestions on AngloGold’s market development programme may be directed to: Sarah DaVanzo Telephone: +27 11 637 6284 Fax: +27 11 637 6444 E-mail: sdavanzo@anglogold.com 11 Diagonal Street Johannesburg 2001 (PO Box 62117, Marshalltown, 2107) South Africa

This Annual Report is available in printed format from the contacts whose details appear above or on the Internet at the abovementioned website address. In addition, AngloGold is producing the Form 20-F (a report required by the Securities and Exchange Commission in the United States), copies of which will be available in printed format from the abovementioned contacts after 31 March 2002. Supplementary information on Mineral Resources, Ore Reserves and development, prepared on a business unit basis, are obtainable from the above sources as well as in PDF format on the AngloGold website. Plans of the South Africa region underground workings are also available on request.


ANGLOGOLD LIMITED (Incorporated in the Republic of South Africa) Registration number 1944/017354/06 ISIN: ZAE000014601 JSE Share Code: ANG

Cover: Rozana Manuel (4) is the niece of Nadia Harris, an assistant at the Gold of Africa Museum shop in Cape Town, South Africa. Nadia’s family hails from the historic District Six area of Cape Town and, although born and bred South African, has inherited a wealth of cultural heritage from their Malay and Indian forefathers who settled in the Cape. In her first visit to the museum Rozana is fascinated by a pair of sandals embellished with golden cowrie shells which were traded as a form of currency for centuries. The Gold of Africa Museum is the first to be dedicated to the display of African gold and was established and opened by AngloGold in November 2001. The museum’s collection of over 350 African gold artefacts from the 19th and 20th centuries from West Africa was purchased from the renowned Musée BarbierMueller in Geneva. Combined with a selection of gold artefacts from two of southern Africa’s most important burial sites, Mapungubwe and Thulamela, the museum is not only about preserving objects from yesteryear, but about reviving inspiration and techniques of past African civilisations. Located in the historic Martin Melck House, the museum complex is a hive of activity, filled with dazzling gold, traditional African goldsmiths, audio visual presentations on Africa’s gold heritage and exquisite gold items for sale.

Produced by: Russell & Associates • Design: Zelda’s Studio • Typesetting: Immaculate Typesetting Picture editor: Dion Chang • Cover photograph: Philip Mostert • Printing: Colorpress


Gh aga anglogold 2001