6-K 1 report.htm 6-K Page 1
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SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
FORM 6-K 
REPORT OF FOREIGN PRIVATE ISSUER 
PURSUANT TO RULE 13a-16 or 15d-16 OF 
THE SECURITIES EXCHANGE ACT OF 1934 
Report on Form 6-K dated 
 
 
 
27 MARCH 2003 
 
  
  
AngloGold Limited
_ 
(Name of Registrant)  
 
11 Diagonal Street 
Johannesburg, 2001 
(P O Box 62117) 
Marshalltown, 2107 
    South Africa____ 
(Address of Principal Executive Offices) 
 
                    


 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: 
Form 20-F:        Form 40-F:   
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1): 
Yes: 
      No:    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7): 
Yes: 
      No:    
Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
 
Yes: 
      No:    
Enclosures:
   2002 ANNUAL REPORT TO SHAREHOLDERSTOGETHER WITH NOTICE OF MEETING
 

 
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1
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Key features - 2002
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 action, fluctuations in gold prices and exchange rates, and business and operational risk management. For a discussion of such factors, refer to the annual report on Form 20-F for the year ended 31 December 2001, which was filed with the Securities and Exchange Commission on 28 June 2002.
•  Sound results achieved, reflecting the longer-term benefits of the company's growth and
    risk diversification strategy
•  Long-term safety trends continue to improve: Lost Time Injury Frequency Rate down by 16%
    to lowest level ever
•  Headline earnings, before unrealised non-hedge derivatives, increased by 29% to $368m
    or $1.66 per share
•  Return on capital increased from 13% to 15%
•  Return on equity increased from 16% to 21%
•  Total dividend paid of R13.50 per share, or $1.46 per ADS
•  Total cash costs declined by 10% to $161/oz
•  Operating profit, excluding unrealised non-hedge derivatives, increased by 21% to $638m
•  Net profit up 36% to $332m
•  Production decreased by 15% to 5.9Moz mainly due to the sale of the Free State assets
•  Reserves rose by 22% to 72.3Moz
Note: Ordinary shares were sub-divided with effect from close of business on 24 December 2002 on a 2:1 basis.
All references to ordinary shares, and all related calculations, have been restated to take cognisance of this sub-division.
Throughout this document, $ refers to US Dollars, unless otherwise stated. For other abbreviations see glossary of terms on page 138.
THE FOLLOWING EXCHANGE RATES WERE USED AS A BASIS FOR CALCULATIONS IN THIS DOCUMENT
2002
2001
Average for year
Closing rate
Average for year
Closing rate
R/$
10.4835
8.5775
8.6182
11.9610
A$/$
1.8383
1.7873
1.9333
1.9631
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2
AngloGold produces approximately 6Moz of gold each year. The company has a global presence, with 20 operations in eight countries, supported by extensive yet focused exploration activities in 10 countries.
   AngloGold is listed on the following securities exchanges: Johannesburg (ANG), New York (AU) and Australia (AGG), as well as the London Stock Exchange (79LK), Euronext Paris (VA FP) and Euronext Brussels (ANG BB).
 
   AngloGold'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.
   AngloGold, which employs some 53,000 people across the world, is committed to sustainable development and takes into account both the communities and environments in which it operates.
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Corporate
profile
Brazil
Argentina
Serra Grande
Cerro Vanguardia
Morro Velho
USA
Jerritt
Canyon
Cripple Creek
& Victor
Mali
Tanzania
Namibia
Geita
Sadiola
Yatela
Morila
Navachab
SA operations
South Africa
Union Reefs
Sunrise Dam
Australia
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3
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Contents
4
Letter from the Chairman and
Deputy Chairman
Chairman Russell Edey and
Deputy Chairman James Motlatsi
share their views with
shareholders.
6
Delivering on our promises
7
One-year forecast  2003
8
Interview with the CEO
Journalist Alec Hogg interviews
CEO Bobby Godsell on
AngloGold, gold and other issues.
12
Group value-added statement
13
Review of the gold market
Marketing Director Kelvin
Williams discusses the renewed
support for gold, its performance
during 2002 and the outlook
for 2003.
14
Financial review
17
Group operating and
financial results
18
Review of operations
A solid performance for the year
reviewed by region.
46
Marketing
AngloGold believes in gold and is
committed to growing this market.
48
Exploration
Focused, yet extensive exploration
in 10 countries. Read more.
52
Mineral Resources and
Ore Reserves
54
Directors and executive
management
56
Directors' approval 
Secretary's certificate
Report of the independent auditors
57
Corporate governance
AngloGold is committed to
attaining the highest levels
of corporate governance.
63
Remuneration report
64
Directors' report
74
Group financial statements
112
Company financial statements
131
Investment in principal
subsidiaries and joint venture
interests
132
US GAAP consolidated financial
statements
For the first time, an analysis in
terms of US GAAP.
138
Glossary of terms
140
Shareholders' information
143
Directorate and administration
144
Contact information 
Inside back cover
Other reports and sources
of information

"The best news of 2002 is that the higher

Rand gold price has liberated a whole
lot of reserves in South Africa.
We are looking at six new projects
contributing 11Moz."

BOBBY GODSELL, ANGLOGOLD CEO Page 8

4.5Moz of new production at Moab Khotsong Page 28
 
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The combined effect of a sustained higher gold price and the continued success of AngloGold's brownfields exploration programme, which yielded some 3.2Moz of ore reserves at a discovery cost of only $4.40/oz in 2002, has led to a 22% increase in the company's ore reserve to 72.3Moz. Included in this is a 30% increase in the South African ore reserve to 47.5Moz.
   Looking ahead, the increase in reserves has resulted in longer mine lives rather than increased production and we anticipate gold production for 2003 to be unchanged at around 6Moz, increasing to 6.5Moz in 2006. Part of the increased reserve is due to the rise in the gold price, which has the effect of making lower- grade areas profitable. This leads to a lower average grade overall and, consequently, increased unit costs which are also affected by the stronger Rand. Total cash costs for 2003 are estimated to be $187/oz and total production costs $226/oz, with capital expenditure forecast at $303m.
   With respect to AngloGold's forward sales programme, the company has reduced its hedging contracts by some 133t during the past year. In the light of the continued strength of the gold price and the steady improvement in AngloGold's operating performance over the past two years, and consequently the reduced need for the company to manage revenue through forward pricing, the board has recommitted AngloGold to the continued restructuring and further reduction of the hedge book.
   In January, we announced that AngloGold would be paying a final dividend for the year of R6.75 per share. This gives a total dividend for the year of R13.50 per share, or $1.46 per share an increase of 50% on the 2001 total dividend in Rand terms, or 68% in Dollar terms. This level of dividend, representing more than 70% of earnings per share (before unrealised non-hedge derivatives) in Rand terms, is consistent with AngloGold's established practice of paying out a high proportion of its earnings to shareholders, once we have provided for our organic growth objectives.
   In the next stage of our HIV and AIDS strategy, AngloGold implemented the preparatory phase of a programme to administer anti-retroviral therapy (ART) drugs to HIV-positive employees. This programme will ensure that the company's overall approach to the epidemic is thoroughly consistent with global best practice. It offers infected employees the best possible chance of the prospect of both an improved quality of life and a longer career with the company.
   The Mineral and Petroleum Resources Development Act and Socio-economic Empowerment Charter were processed through
South Africa's Parliament last year. The main purpose of the new law is to alter the mineral rights regime in the country from one of private ownership to the custodianship of these rights by the State.
   The Charter's scorecard for assessing progress made by companies in promoting the participation of historically disadvantaged South Africans in the mining industry was published in February 2003. The scorecard sets out the empowerment conditions which will need to be met by applicants for new generation mining licences, which will need to be acquired within five years. We believe that AngloGold is well- placed to meet the thresholds set.
   AngloGold supports this development as necessary for economic growth and the development of a non-racial society in South Africa. The publication in the media in July 2002 of an early government draft of the mining charter caused substantial uncertainty in the market. However, the final version of the Charter, published in October following extensive consultation between government, industry and other stakeholders, is a document which, if it is implemented in the spirit in which it has been developed, will be a valuable tool in turning the country's extraordinary mineral endowment into real wealth to the benefit of all of South Africa's people. We are confident that these developments will translate into long-term benefits for all of AngloGold's stakeholders.
   One of the central themes of the Charter is human capital development. Indeed most of the document's attention is applied, not to the issue of equity ownership, but to encouraging employers in this industry to implement, improve and extend efforts to build a skilled and productive human resource base for the industry from within. We at AngloGold entirely endorse this focus and will continue to apply energy and substantial resources to workplace and literacy training, tertiary education and the development of effective secondary schools in areas of Southern Africa from where we draw human resources.
   Finally, one of our founding directors, Hong Kong-based Victor Fung, will not be standing for re-election at the forthcoming AGM, given his increased responsibilities in mainland China. AngloGold wishes to place on record its appreciation for his contribution.

Russell Edey, Chairman 

James Motlatsi, Deputy Chairman

   3 March 2003
Letter from the
Chairman and Deputy Chairman
ANGLO GOLD LIMITED ANNUAL REPORT 2002
4

(Clockwise from top left) Tshepo Shale, a loco driver, Projek Katleho Great Noligwa, South Africa; Jannie Schnaar and Kobus Jacobs, Great Noligwa, 

South Africa; Waltinho Correina Gonzaga and Leoncio Jos Arajo Costa at Serra Grande in Brazil, South America; Nolast Marebexeni is an onsetter's assistant

at Savuka, South Africa; Stuart Foya, a geochemist with the East and West Africa region, in the Morila pit; Heidi van Wyk, Moab Khotsong, South Africa.

A
ngloGold performed well in 2002, reflecting the benefits of the company's growth and risk diversification strategy. Although gold production declined with the sale of the Free State mines in South Africa, total cash costs were down year-on-year by 10% to $161/oz and headline earnings increased by 29% on the 2001 performance, to $368m. Returns on capital and equity for the year were 15% and 21%, respectively.
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Delivering 
on our promises
ANGLO GOLD LIMITED ANNUAL REPORT 2002
6
What we promised for 2002
Commitment to long-term target of eliminating all
accidents at work.
Growing the company into the gold equity of choice and an
investment that offers its shareholders competitive returns:
* Drive the company down the cost curve
* Seek organic growth
* Continue near-mine or brownfields exploration
* Develop new greenfields exploration projects
* Apply a disciplined acquisition strategy
* Seek value down the gold chain
Reducing Rand-price cover by restructuring the hedge book
What we delivered in 2002
Long-term trend in lost time injuries decreased to 8.86 per
million man hours, the lowest ever for AngloGold. 
During 2002, AngloGold was one of the top-performing
resource stocks in the world. The company consistently rewards
shareholders with a strong dividend flow. Its performance
during 2002 represents a total return to shareholders  a
combination of share price performance and dividend
of 98% in Dollar terms.
Total cash costs continued to decline  from $178/oz by 10% to
$161/oz  despite the impact of the strengthening Rand on the
South African operations.
Three new South Africa projects, at Moab Khotsong, TauTona
and Mponeng are on schedule. Sunrise Dam Expansion is
complete, with the CC&V project nearing completion.
The AngloGold growth story continues, with 11.4Moz of new
resources added at a cost of $1.60/oz and 3.2Moz of new reserves
at a cost of $4.40/oz.
Exploration is continuing in countries in which AngloGold has
operations, namely Argentina, Brazil, Tanzania, Mali, South
Africa and the United States, as well as in prospective areas in
Alaska, Canada and Peru. Some $19m was spent during the year.
AngloGold increased its stake from 46.25% to 92.5% in Cerro
Vanguardia in Argentina during the year and continues to
identify value-adding merger and acquisition opportunities.
AngloGold remains committed to developing the gold market.
Following a number of notable successes during 2002  the
Afridesia campaign, OroAfrica design centre, Riches of Brazil
and Africa competitions, and the GoldAvenue catalogue
development  the company will continue its work with the
World Gold Council but will also operate independently in
the spheres where it has strategic influence.
AngloGold reduced its hedging contracts by some 133t during
the year. The continuing strength of the gold price and the
company's solid operating performance, has reduced the need
to manage revenue through forward pricing and the hedge book
will continue to be managed, restructured and reduced.
(The above figures are the year-on-year differences in reserves, including the effect of depletion)
Growing reserves
Some of the significant increases in ore reserves include:
Mponeng 
increased by 4.6Moz mainly due to the inclusion of the Mponeng CLR and VCR below 120 level
Moab Khotsong 
increased by 4.3Moz due to the inclusion of the Phase 2 project which will exploit the Vaal reef below 101 level
TauTona 
increased by 0.8Moz due to the inclusion of the CLR below 120 level, the area East of the Bank Dyke on 116 level and the VCR area "A"
Savuka and Tau Lekoa 
increased by 1.2Moz and 0.7Moz respectively owing to changes in mine design leading to additional life at both operations
Geita 
increased by 0.8Moz due to the redesign of the Nyankanga, Geita Hill and Lone Cone pits, as well as the inclusion of the Chipaka, Area
3W and Roberts pits
Cerro Vanguardia 
increased by 1.1Moz mainly as a result of AngloGold's increase in ownership to 92.5%.
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7
ANGLO GOLD LIMITED ANNUAL REPORT 2002
One-year forecast - 2003
South
East and
South
North
Forecast
Actual
Forecast
Africa
West Africa
America
America
Australia
2003
2002
2002
Gold
Underground operations
Metric tonnes milled        - 000 
11,611
1,224
214
6
13,055
13,426
13,646
Yield
-  g/t                               8.16
7.18
7.64
5.11
8.06
8.27
8.29
Production
-  oz 000 
3,047
283
53
1
3,384
3,569
3,639
Productivity
g/employee
-  actual                           214
1,043
1,884
1,126
232
238
247
Surface and dump reclamation
Metric tonnes treated      -  000 
38,325
38,325
38,366
40,239
Yield
-  g/t                               0.23
0.23
0.30
0.23
Production
-  oz 000 
285
285
365
294
Open-pit operations
Metric tonnes treated      - 000 
8,727
1,057
18,416
5,332
33,532
27,186
30,378
Yield
-  g/t 
3.67
8.00
0.70
2.53
1.99
2.29
1.89
Production
-  oz 000 
1,031
272
414
433
2,150
2,005
1,848
Total
Production
-  oz 000 
3,332
1,031
555
467
434
5,819
5,939
5,781
Total cash costs
-  $/oz produced 
209
152
108
190
203
187
161
154
Capital 
expenditure
-  $ m 
188
25
39
27
24
303
268
268
Rand/US Dollar average exchange rate 
9.00
10.48
11.15
Note: The 2003 forecast has been revised to exclude Jerritt Canyon, which was in the process of being sold to Queenstake Resources USA Inc at the time of this report.
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Alec Hogg: Surely the most relevant aspect of the year was the way the gold price improved, starting at under $280/oz and ending at $345/oz. Subsequent to year-end we have seen $390/oz. Is this sustainable? 

Bobby Godsell: An element of it is sustainable. What pleases me is that the ghosts around the gold price have gone away. For over a decade-and-a-half people have argued that gold has lost its glister, that gold is no longer a store of value, that gold is something that only primitive people want and hold, that the Dollar will be strong forever, that US equity markets will grow by 30% a year forever. That has gone away.

   To be truthful, I don't know what the equilibrium price is.I think it is still finding its place. I think the negative sentiment has gone away and that there's more upside than downside in the price. We never predict it.

Alec: Does a higher gold price change the way you run the business? 

Bobby: The most immediate change is that our need for revenue and price certainty has diminished. That comes from two sources. At really low prices, you've got to secure particularly your marginal operations. At plus $300/oz, we have less need for hedging, so we've taken 300t out of our hedge and are more exposed to the upside. Equally our operations are running well and so we need less insurance.

   The second major change and the best news of 2002 is that the higher Rand gold price has liberated a whole lot of reserves in South Africa. South African orebodies are more defined by exchange rates and gold prices than by geology. We are looking at six new projects contributing 11Moz. Suddenly our guys in South Africa are walking tall again, they can see expansion and growth. We've come to the end of contracting, selling and closing and are planning major, new 20-year long projects.

Alec: Many have said that they'll only buy gold shares that are completely unhedged. Would AngloGold ever be unhedged?  
Bobby:
I don't think we're ever going to become theological anti- hedgers. When we started five years ago it was a very gloomy time for a gold company. We said to investors, "give us your money and we'll make you rich". One of our arguments was that we were going to pay a decent dividend. Throughout that period, we paid a dividend that has fluctuated in Dollar yield terms between 4% and 7%. So anybody holding AngloGold shares has got a yield of at least 4% in cash, plus capital appreciation. To do this we needed a certain amount of revenue certainty. 


    I do think that excessive hedging has contributed to price
weakness. Australian producers have hedged up to 100% of their reserves. That is excessive. 
   We don't want to be excessive hedgers; we don't want to sell everything at the spot perhaps somewhere in between.
Alec: What about costs, particularly in South Africa. How do you address that? 
Bobby: From a management perspective we ask ourselves two simple questions: What can we manage? What can't we manage?
   We can't manage the price. We can't manage the exchange rate. What we can manage are the costs and so our target is that we will keep our cost increases to two-thirds of the South African inflation rate. It's a tough target.
Alec: How different is that to when you started? Has it been a revolution? 
Bobby: When we started seven years ago, we had two revolutionary ideas.
Interview with 
Bobby Godsell
Chief Executive Officer
V
eteran South African publisher and journalist, Alec Hogg, interviewed Bobby Godsell on 14 February 2003 on AngloGold, gold and other issues.
ANGLO GOLD LIMITED ANNUAL REPORT 2002

For over a decade-and-a-half people have argued that gold has lost its glister, that gold is no longer a store of value, that gold is something that only primitive people want and hold, that the Dollar will be strong forever, that US equity markets will grow by 30% a year forever. That has gone away.

8

We can't manage the price. We can't manage the exchange rate. What we can manage are the costs and so our target is that we will keep our cost increases in South Africa to two-thirds of the country's inflation rate.

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INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER
9
ANGLO GOLD LIMITED ANNUAL REPORT 2002

   First, that people should make money out of owning gold stocks in bad times as well as good. We say that at low gold prices we are going to generate cash, make profits and pay dividends. At high gold prices we are going to generate more cash, make more profit and pay better dividends. Last year our dividend was up by about 68% in Dollar terms.

 

   We then said that to do this we are going to focus on making money rather than on size.

 

   So we went from being the biggest producer to being the second or third biggest. We very consciously sold off and shut down low-margin, high-risk producers. This took a third of South African production out of our hands from 4.7Moz to 3.4Moz. Last year we produced 15% less gold and made 20% better headline earnings.

 

   So it was a shift from volume to value. And it was very necessary. We had an asset portfolio that was exceedingly high risk, with very old mines, remnant mining, and variable grades. We now have a more stable asset base with diversity in mining type 40% outside of South Africa and 40% from surface and shallow operations.

 

   Now we are looking at growth and it is still growth in earnings. What is true is that if you want to grow your earnings, you have also got to grow your volume of mining.

 

Alec: The strategy, though, must have taken some kind of a diversion with the disappointment of not being able to acquire Normandy? Bobby: Normandy would have been a company character- changing transaction. I regret very much we couldn't get it. The appeal for me of Normandy is that it would have combined the leading Australian and South African companies into one of such size, such robustness, with such a strong balance sheet and such good assets, that any North American investor would have had to take notice of it.

   This is against a background where everybody says most mergers and acquisitions destroy wealth rather that create it. We certainly got to the point where, had we gone another five cents on our offer, we would have been destroying wealth.

 

What does please me is that since then our company has done

well. Our share has traded very well in the United States we now trade there in value terms, at five times what we do in Johannesburg. And our Johannesburg values haven't gone down; it's the US value that has gone up.

Alec: An issue that affected all mining companies in South Africa over the past year was the Mining Charter. You were pretty involved. 
Bobby:
To achieve an industry that is broadly representative of our country, that looks like South Africa, is a good thing. I have been concerned that empowerment should be broad rather than narrow, benefiting many rather than a few, and that it should be real. You can put somebody's name on a transaction, but if they don't really have anything at risk, then they aren't, in truth, owners. We have to make more money in South Africa, not merely redistribute it. So ownership as a generator of wealth is important.

   Against those criteria, the Charter looks to me to be very good. It covers a wide range of issues, things incidentally that AngloGold has been doing for a long time.

 

   What the Charter is turning out to be is a test of the social licence. A business will only survive if it benefits all of its stakeholders over time if people, the community, customers, employees and shareholders are left better off having an association with the company. I think it's a very good document and is going to make the South African industry more competitive, not less, and lead to greater wealth creation, not less. To draw on the gene pool of 100% of South Africa, not just white males, has got to be a good thing.

 

Alec: Out-and-out capitalists would disagree with the assertion that inclusivity will make you more competitive.
Bobby: With respect, I think that out-and-out capitalists, unless they're racists, have no reason to do this. Read the Charter, sentence by sentence, and ask yourself the question: If this is done well, if it's done in a real way, if it's done with integrity, will this create more wealth or less wealth?

   It's quite clear from the Charter that assets should change hands at fair market value. That phrase is used repeatedly. We have done three major empowerment transactions and sold off about a quarter of our production ounces. We haven't lost one cent in terms of value. There is no Father Christmas in this Charter, there's no giving things away.

 

   Also, as we move to many more black managers, I expect those managers to perform. You can't put somebody in charge of a deep level gold mine unless he's really competent. Frankly, to have half of our managers able to speak fluent seSotho or Xhosa has got to lead to greater productivity. We know that when we combine literacy and new job structures, we see a 25% increase in the output of those teams.

 
Read the Charter, sentence by sentence, and ask yourself the question: If this is done well, if it's done in a real way, if it's done with integrity, will this create more wealth or less wealth?
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Alec: What about the cost or the value of ounces in the ground? South African gold ounces have made progress compared to other parts of the world. But they do still lag? 

Bobby: Gold companies trade at a premium to their net asset value. It's true that some of the North Americans trade at a larger premium. That premium is one of two things. It's either a bet on the gold price or it's the view that management is smart enough to buy new mines, prove up new reserves.

      I am happy to accept the challenge for AngloGold that we will grow the company in terms of profitable ounces into the future. I am not terribly worried about competing with the North Americans.

Alec: Last year you said you were going to significantly increase your investment in exploration. 

Bobby: We have, through two different strategies. Brownfields exploration means you are drilling for ounces where you already have infrastructure. They are very nice ounces because if you find more, you don't have to spend capital to sink the shaft or build the plant. Particularly with open-pit mining, companies often starve the brownfields budget and only drill to have the certainty for another six or 12 months of production. Every Dollar we spend in brownfields exploration wins reserve ounces. Our exploration budget is about $60m - two thirds of that is brownfields.

       Greenfields is different. I can only explain it in non-technical terms. It's about God's sense of humour, because God put gold in interesting places. He didn't put it in Switzerland or Singapore. So we look for gold in new and interesting places we have just opened an office in Mongolia.

       We have a map that tells us in terms of basic geological theory where you could expect major gold mineralisation through different mineralisation processes. It's a disappointing map, because a large part of the world is prospective. It would be super if you could only concentrate on two or three places. China

and India ought to be very prospective. Places that have been poorly surveyed, poorly explored, obviously hold quite a lot of potential. We are very excited about Peru, about the Great Lakes area of Africa.

      In greenfields exploration you have to take some risks - you have got to try 20 things and expect 19 of them to fail.

Alec: Could there be another Wits Basin out there? 

Bobby: It's hard to believe that it's entirely unique. We do understand the Basin extremely well. We have looked in other parts of the world; we understand the palaeontological and ageing-of-the-earth signmarks. It would be wonderful to find another. We are delighted to find any decent orebody that we can make money out of.

Alec: What about Australia? Do you think there could be a big find waiting there?

Bobby: We are very excited about two orebodies that we have interests in.

       At Sunrise Dam mine, we have dramatically expanded the size of that open-pit operation and are immensely excited about the brownfields potential. Every time we put the drill down we come up with excellent results. I would be very surprised if we didn't significantly extend its life going forward.

 

The Boddington project is one of the largest and longest life

gold orebodies in the world. We share that with Newmont, who succeeded Normandy in ownership, and Newcrest, and we are trying to find the right model to expand it.

Alec: An area where you do have a distinct advantage that you have already turned to account is on the continent of Africa. 

Bobby: It's our continent, it's our home. The great thing about South Africans is that they understand about cultural diversity. We are a world in one country and no manager can assume that he knows what the people who work with him think. He's got to take the effort to find out. It's been wonderful to see Afrikaners from the Free State go to Morila in Mali, an Islamic country, French-speaking, and turn out to be very good leaders of people.

Equally, we are completely committed to developing talent

from those countries. Mali has had no modern mining history. We are running three world-class mines there with overwhelmingly local people.

Alec: There's been criticism of South African gold companies for decades about not beneficiating. A couple of years ago you made a move into this field by the acquisition of a company called OroAfrica - a reconnaissance investment. How has that turned out? 

Bobby: It has done pretty well. This was part of the journey we started on seven years ago.

 

       It's very interesting that the first sentence of every conversation about gold is a conversation about price. It's indicative of an industry that hasn't grown up, because industries don't do well because of price, they do well because of profit. The auto industry and other industries are not fascinated by price. They are interested in sales, consumers and customers.

INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER
ANGLO GOLD LIMITED ANNUAL REPORT 2002
In greenfields exploration you have to take some risks you have got to try 20 things and expect 19 of them to fail.
10
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INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER
11
ANGLO GOLD LIMITED ANNUAL REPORT 2002

 

      The gold industry is not very customer oriented. An industry that forgets its customers will, and deserves to, go out of business. The customers of gold are overwhelmingly people who buy jewellery - 80% of 4,000t of annual production goes into jewellery.

 

      For the last five years we have been looking at the customer and we would like to be part of modernising gold jewellery. This is an industry that got stuck in the 19th century. Going into OroAfrica was to find out about the customer. Here we had a modern factory located in our own country, making particularly gold chain and other machine-initiated gold jewellery, earrings and pendants, in alliance with the leading Italian gold jewellery manufacturer (Filk). OroAfrica uses about 5t of gold a year; Filk uses about 70t of gold. It's huge business.

 

      It's still early days. What we'd like to do for gold is to be the Benetton of the gold industry, to be the Starbucks of jewellery. Coffee drinking was in decline in the United States. People thought it was unhealthy. But Starbucks has come along and persuaded people to pay $3 for a cup of coffee with foam in it, when they could have the same thing for 50 cents. That completely changed the market and consumption is going up. That's what we want to do, we want to revolutionise what we offer our customers.

Alec: Starbucks has branded coffee. Can AngloGold brand gold? 

Bobby: Starbucks has also reinvigorated the entire category. If you go to to any modern city, you will find 15 Starbucks look-alikes - a place that looks nice, where you can pay a very high price for a fancy cup of coffee and where you have to learn a new language to order it. They've invented a new experience.

 

       We think we can re-invent gold jewellery, whether it is the AngloGold brand or anything else. Coming from where we do, we would very much like to have an African brand. But equally we have been experimenting with Brazilian jewellery.

 

       Gold is about people, particularly in Africa, it's about peasant life, it's about kings, the country, something that has been around for 5,000 to 7,000 years; part of the earth; part of the rich cultural heritage. If we draw on that, we think we can put a jewellery offer in the marketplace which is distinctly different to the dull, 19th century jewellery store offer that we have had.

Alec: Looking ahead, is it a year when AngloGold shareholders can expect
 similar progress as in the year behind.
Bobby: We have never been in the business of predicting the gold
price and to some extent, inevitably, our equity price is linked to
the gold price. 

 

       We are going to mine 6Moz of gold, we are going to mine it at a good cost, we are going to generate a lot of profit and we would be hoping to pay a really decent dividend. We hope that our price reflects the benefit of that, particularly over time.

 

       We listed on the New York Stock Exchange in 1998 at $16 we - are now trading at around $32 so there has been good capital appreciation. Last year a holder of an AngloGold share would have seen a total return, including dividends, of close to 100%. Whether we are going to see the gold price shoot up as dramatically this year as it did last, I don't know. But what we can say to our shareholders is, "hold our shares, over time and at any moment in time, you have made good money". And at the very least, we are going to pay a good dividend.

Alec: If we speak in a year's time, strategically what milestones would you like to have behind you. 

Bobby: Two major things:

 

       I am assuming operational excellence; I am assuming we will mine gold very profitably.

Over and above that I would hope that we would be further

down the road in growing our ounces. We want to say to shareholders that this is not a wasting-asset industry. Your piece of AngloGold paper is worth something today, it will be worth something to you in five or 10 years' time, we would like you to leave it to your kids. We have got to grow our earnings.

 

       Then I would love to have something dramatic and interesting to say about going downstream, modernising the customer base and finding ways to expand the jewellery market, maybe even making some money out of that side of the business.

Alec: And mergers and acquisitions?

Bobby: All the time and ongoing, but only if they add value. We haven't had a year where we haven't done something, but it is opportunistic. I hope that we have the courage to go after every deal and I hope we have the wisdom only to do those deals that make money for our shareholders.

The full interview is available in video, audio and transcript form on the AngloGold website
at www.anglogold.com
It's very interesting that the first sentence of every conversation about gold is a conversation about price. It's indicative of an industry that hasn't grown up, because industries don't do well because of price, they do well because of profit.

We are going to mine 6Moz of gold, we are going to mine it at a good cost, we are going to generate a lot of profit and we would be hoping to pay a really decent dividend. We hope that our price reflects the benefit of that, particularly over time.

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12
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Group value-added statement
for the year ended 31 December 2002
Figures in US Dollars millions
Notes
%
2002
%
2001* 
Value added
Turnover
2
1,761
2,041
Less: Purchases of goods and services in order to operate
mines and produce refined metal, including market
development costs net of other income
(611)
(746)
Value added by operations
90
1,150
98
1,295
Non-hedge derivatives
7
92
(5)
Income from investments and interest received
6
3
43
2
26
100
1,285
100
1,316
Value distributed
Employees
Salaries, wages and other benefits
10
35
443
48
627
Government
11
13
165
8
111
 - Current taxation
14
177
8
103
 - Deferred taxation
(1)
(12)
8
Providers of capital
 - Finance costs
8
3
44
5
72
 - Dividends
13
20
251
13
167
 - Minorities
1
15
1
8
Other 
 - Loss on disposal of mines
31
1
13
4
Total value distributed
73
931
75
989
Re-invested in the Group
 - Amortisation and depreciation
14, 15 & 16
21
273
19
249
 - Retained income
6
81
6
78
100
1,285
100
1,316
* Includes Free State assets
State for taxes
$111m or 8%
Providers
of capital
$247m or 19%
Re-invested
in the group
$327m or 25%
Employees for
remuneration
$627m or 48%
Other $4m or 0%
2001 Distribution of wealth*
Employees for
remuneration
$443m or 35%
State for taxes
$165m or 13%
Providers of capital
$310m or 24%
Re-invested
in the group
$354m or 27%
Other $13m or 1%
2002 Distribution of wealth
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13
ANGLO GOLD LIMITED ANNUAL REPORT 2002

The factors which drove the gold price during 2002 had a particularly strong impact in the final quarter. These factors included US Dollar weakness, international political tension, equity market declines and a halt to the dismantling of producer hedging. This last factor had the effect of both lowering gold producer selling in the spot market, and introducing some buying in the market. During the final quarter of the year, the price was influenced most significantly by Dollar weakness and by escalating conflict over Iraq. Over the past year, the spot price has responded almost perfectly to the Dollar's fall against the Euro (see graph). The additional tension in the Middle East provided the lift to take gold up further. All of the factors that have been positive for gold in 2002 remain firmly in play, and there is good reason to expect higher gold prices in the year ahead.

 

       Under the favourable price performance of gold, the physical market continued to show weakness throughout 2002. There has been a general decline in physical demand for gold in both the jewellery and the investment sectors, with exceptions in only a few countries. Compounding the effects of this lower demand, scrap sales and gold recycling have increased sharply in the face of higher gold prices. The negative impact of these factors in the physical market was mitigated to a degree by slightly lower new mine production, and by the reduction in supply occasioned by the run-down in gold producer hedging referred to above. As is the case in all periods of rising gold prices and gold price volatility, the physical market should revive once the price returns to a stable trading range for a period of time. However, with further gold price volatility expected in 2003, a resurgence of physical demand should not be expected immediately.

 

       A critical factor in the strength of the gold market in 2002 has been the return of investor and speculator interest in the metal. This interest has not translated particularly into demand for physical gold, but can most certainly be seen in the derivative markets, and particularly in the futures and options positions on the New York Comex and, from time to time, on the Tokyo Comex. There is no doubt also a considerable over-the-counter derivative trade in gold, although this is not easily measured. The importance of this gold buying in the derivatives markets for the

gold price can be seen from the graph, showing gold trading positions on New York Comex from the beginning of 2000, and the US Dollar spot price of gold. Buying in the derivatives markets is directly influenced by the factors referred to above, and is directly responsible for moving the price of gold.

Review of the 
gold market
T
 
                    he price of gold finished the year strongly, touching a high of $354/oz in December, fully $75 or 27% higher than                     the opening price of $279/oz. The average spot price for the year of $310/oz is almost $40 higher than the average                     price in 2001. Market volatility also increased with a price range double that seen in 2001. The US Dollar moved                     in the other direction, downwards against other currencies, including the Rand. The local currency gained over  30% against the Dollar, finishing at an exchange rate of R8.55 to the Dollar, off an opening rate for 2002 of R12.55. Both of these trends have been maintained into 2003.
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14

Results for the year

•   Headline earnings before unrealised

non-hedge derivatives increased by 29% to $368m or 166 US cps (2001: $286m or 133 US cps).

•   Return on capital improved from

13% to 15%.

•   Return on equity increased from

16% to 21%.

•   Gold production was down 15% to

5.9Moz, mainly due to the sale of the Free State assets.

•   Total cash costs declined by 10%

to $161/oz.

Dividends

A final dividend of R6.75 per share ($0.82 per share) was paid, bringing the total dividend for the year to R13.50 per share ($1.46 per share). This dividend represents a yield of 4.4% calculated on a share price of R305 on 30 January 2003. This level of dividend is consistent with AngloGold's established practice of paying out a high proportion of its earnings to shareholders, once it has provided for its organic growth objectives.

Gold production 

Gold production was down 15% (1.04Moz) to 5.9Moz. This is mainly due to the South Africa region's sale of the Free State assets, Elandsrand and Deelkraal. If these are excluded, the group's production would have increased by 3% or 190,000oz.

 

   The Free State contributed 1.2Moz and Elandsrand and Deelkraal contributed 35,000oz in the prior year.

 

   With reference to the disposals mentioned above, South Africa's production is 27% lower than 2001 at 3.4Moz.

 

   Production in the East and West Africa region increased by 25% or 217,000oz to 1.08Moz. The main contributors were at Morila (+169,000oz) due to a 74% increase in recovered grade to 11.96g/t; Yatela (+55,000oz) as 2002 was the first year of full production; and at Geita (+17,000oz) arising from increased tonnage throughput. Decreased production was recorded at Sadiola (-22,000oz) where there was lower grade and tonnage throughput.

 

   

 

 

 

   The North America region's production decreased by 7% or 34,000oz to 462,000oz. Cripple Creek's production was 11,000oz up on the prior year due to the expansion of the crusher and absorption circuit. Jerritt Canyon's production was 45,000oz below that reported in the prior year, because of adverse weather conditions, and completion of the Cortez tolling agreement and lower recovery issues.

   South America's production increased by 37,000oz to 478,000oz. This is mainly attributable to the additional 46.25% interest acquired in Cerro Vanguardia. If the additional interest were ignored, production would be 5% lower than the prior year due to production problems at Cerro Vanguardia arising from recurrent underground water in the pits causing mining of wet ore with a very high level of clay.

 

 

 

   Australia's production decreased by 6,000oz to 502,000oz. This is mainly as a result of the closure of operations at Boddington and Tanami, which was partially offset by a 29% or 87,000oz increase in production at Sunrise Dam made possible by the mill upgrade.

 

Gold income 

The average gold price received increased by 6% to $303/oz in 2002. See Review of Gold Market on page 13.

 

   Gold income together with realised non-hedge derivative income declined by 10% or $205m during the 2002 financial year to $1,841m ($2,046m). This is in line with lower production, but partially offset by a higher price received. The current year's received price is $16/oz higher than that for the previous year at $303/oz and compares to an average spot price of $310/oz.

Cost of sales  

Cost of sales, comprising total cash costs, retrenchment and rehabilitation costs, changes in gold inventories and amortisation of mining assets, went down from $1,519m in 2001 to $1,203m in 2002, a decrease of 21%, analysed as follows:

  

Total cash costs decreased from $1,255m in 2001 to $967m in 2002 (or $178/oz to $161/oz), following the reduction in gold produced from 6.983Moz in 2001 to 5.939Moz in 2002. Of the $17/oz reduction in cash costs year on year, $24/oz related to the weakening of the SA Rand against the US Dollar. Excluding the Free State operations in the prior year, total cash costs decreased by 5% from $170/oz to $161/oz.

•  

While retrenchment costs were $22m in 2001 (with most of the costs being associated with the Free State) they decreased to $3m in 2002.

•  

Rehabilitation and other non-cash costs decreased by $1m on the previous year whilst amortisation of mining assets increased by 11% to

Financial 
review
A
ngloGold's results for the year 2002 are impressive, reflecting the longer-term benefits of the company's growth and risk diversification strategy. Although gold production declined with the sale of the Free State mines in South Africa, cash costs were down year-on-year by 10% to $161/oz and headline earnings increased by 29% to $368m.
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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15

$245m. South Africa's amortisation of mining assets reduced $15m to $61m, mainly due to the sale of the Free State operations and the devaluation of the SA Rand. The lower amortisation charge in South Africa was offset by the higher amortisation charges in East and West Africa due to increased levels of production, and in North America as a result of accelerated amortisation charges on the old crusher assets.

   

Inventory movement was a $9m charge in 2001 compared to a credit of $24m in 2002. The increase in inventory levels on the previous year is mainly due to the increase in gold in process in the North America region. This is as a result of the ongoing problems with extracting gold from the heap leach pad resulting in a build up of inventory.

Operating profit 

Operating profit excluding unrealised non-hedge derivatives is 21% up on the previous year at $638m. This is mainly due to a 6% increase in the received Dollar gold price, and a weaker average Rand/Dollar exchange rate. Included in this operating profit is an amount of $80m relating to realised gains on non- hedge derivatives.

 

   The main reason for the $111m increase in operating profit is the weaker Rand/Dollar exchange rate ($143m), offset by $24m caused by lower grades.

 

   The operating margin for the AngloGold group was 35% for 2002 and 26% for 2001. The EBITDA margin was 43% in 2002 compared to 33% in 2001. These margins vary from operation to operation and are summarised on page 16.

Net profit

 Net profit of $332m (2001: $245m) is arrived at after making, amongst others, the following adjustments to operating profit:

   

Corporate and other administration expenses increased by $3m on the previous year to $25m.

   
Market development costs amounted to
$17m for the year of which some 80%
was paid to the World Gold Council.

   

Total exploration expenditure was $51m (2001: $44m) of which $28m (2001: $26m) was expensed.

   

Interest received increased from $20m to $36m, mainly as a result of the improved gold price and improved cash position with the sale of shares acquired in the aborted bid of Normandy and the proceeds from the Free State sale.

   

Other net expenses amounted to $16m for the year and included the unwinding of the decommissioning obligation, foreign exchange losses on transactions other than sales, and post-retirement medical expenses relating to mines sold.

   

Finance costs decreased by $28m to $44m, due to lower interest rates and the rearrangement of the loan facility debt. The proceeds on the sale of the Normandy investment were utilised to repay debt.

   

An abnormal item relating to thesettlement of a legal claim in the amount of $10m $5m net of tax.

   

Goodwill amortised remained fairlyconstant at $28m compared to 2001.

   A loss on disposal of the Free State

assets of $13m was recognised in 2002. During 2001, a loss of $4m was recognised in respect of the sale of assets at the Deelkraal and Elandsrand mines.

   

The taxation charge increased by $54m to $165m in 2002, owing mainly to an increase in earnings for the year. The effective tax rate is 32% compared to 30% in 2001.

   

The minorities share of earnings has increased to $15m compared to $8m in the prior year. This is due to the increase of minorities in Cerro Vanguardia from 3.75% to 7.5%.

Cash flow

OPERATING ACTIVITIES

Cash generated from operations was derived from profits on ordinary activities before taxation of $512m per the income statement, adjusted for changes in working capital and non-cash flow items. The most significant non-cash flow item was the amortisation of mining assets of $245m.

 

   Cash generated from operations of $758m was increased by interest received of $32m, but reduced by payments to outside stakeholders for:

   Finance costs of $40m; and 

   Mining and normal taxes of $131m. 

     The resultant net increase in cash from operating activities is mainly as a result of the increase in AngloGold's profitability.

INVESTING ACTIVITIES

 

Funds of $605m generated from operating activities were utilised to grow the group by investing in capital projects amounting to $271m. Major project expenditure in 2002 comprised:

   Moab Khotsong $36m; 

   Mponeng $33m; 

   TauTona $11m; 

   Cripple Creek & Victor Expansion

$66m; and

   Sunrise Dam Project $26m. 

The funds generated from operating

activities were further adjusted by:

   

$164m which was received for the disposal of the Free State assets, of which $24m was paid for contractual obligations;

   

$34m which was paid for investments, the major portion of this being Normandy;

   

$158m which was the proceeds on the sale of the Normandy investment;

   

$97m which was the net cash consideration paid for the 46.25% additional interest in Cerro Vanguardia.

 

       The net cash inflow after investment activities amounted to $514m.

 

FINANCING ACTIVITIES

   

During the year, $585m was drawn and $120m was repaid on the three- year $600m syndicated loan facility. On the existing $400m syndicated loan facility, $175m was drawn.

   

Major loans repaid include $121m to Credit Agricole, $355m on the matured syndicated loan facility and $128m on the $400m syndicated loan facility. Other repayments comprise normal scheduled payments in terms of loan agreements.

 

 

FINANCIAL REVIEW
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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16
   
A  new loan facility of A$50m was arranged with the Australia and New Zealand Banking Group Limited of which A$15m was drawn. The facility is at 0.35% over the Bank Bill Swop Reference Rate and replaces the matured Australian Dollar bank syndicated facility.
  
Dividend payments in the amount of $260m were made during the year. This compares with a dividend of $167m in 2001. Dividends were financed from the cash generated from operating activities.
 
      The net result of the operating, investing and financing activities amounted to a net cash inflow of $147m, which when added to the opening balance and translation adjustment, amounted to $413m at 31 December 2002.
Balance sheet  
With effect from 1 January 2002, the Free State assets were sold to a joint venture
between Harmony Gold Mining Company Limited and African Rainbow Minerals (Proprietary) Limited.
 
     During July 2002, an agreement was reached with Prez Companc International to acquire its entire 46.25% equity interest in Cerro Vanguardia SA, including a loan, for a net cash consideration of $97m, which was paid from AngloGold's existing but undrawn debt facilities.
 
     Net debt to capital employed is 17% compared to 31% in 2001. This decrease is attributable to the sale of the Free State assets and the Normandy shares, and the strengthening of the SA Rand against the US Dollar.
Other issues  
On 3 October 2002, the President of South Africa signed the Mineral and Petroleum Resources Development Act 2002. The provisions of this law will come into operation on dates to be specified by the President, who may stipulate different dates for different provisions. It is
uncertain when the President will exercise these powers and, until the new provisions are effective, the existing regulatory regime for mineral rights will remain in place.
 
     The company reduced its hedging contracts by some 4.29Moz during the year. In the light of the continued strength of the gold price and the steady improvement in AngloGold's operating performance over the past two years, which has reduced the need for the company to manage revenue through forward pricing, the AngloGold board has encouraged the continuing management, restructuring and reduction of the hedge book.
 
 
FINANCIAL REVIEW
ANGLO GOLD LIMITED ANNUAL REPORT 2002
2002
Gold
Operating
Operating
income
profit*
margin
EBITDA
EBITDA
$m
$m
%
$m
margin %
South Africa
930
389
38.8
373
37.2
East and West Africa
329
129
39.2
190
57.8
South America
195
84
42.1
118
59.2
North America
152
3
1.9
59
38.1
Australia
155
33
21.3
55
35.5
Total
1,761
638
34.7
795
43.2
2001
Gold
Operating
Operating
income
profit*
margin
EBITDA
EBITDA
$m
$m
%
$m
margin %
South Africa
1,298
341
26.1
351
26.9
East and West Africa
250
87
34.8
134
53.6
South America
177
65
36.1
98
54.4
North America
161
16
9.9
58
36.0
Australia
155
18
12.2
38
25.7
Total
2,041
527
25.8
679
33.2
*
Operating profit excludes unrealised non-hedge derivatives.
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17
FINANCIAL REVIEW
ANGLO GOLD LIMITED ANNUAL REPORT 2002
2002
2001
2000
1999
1998
Underground operations
Area mined
 - m
2
 000
2,116
3,043
3,900
3,880
4,275
Metric tonnes milled
 - 000 
 total 
13,426
17,954
21,293
21,704
23,396
Yield
 - g/t  average 
8.27
8.20
7.96
8.09
8.08
Production
 - oz 000
 total 
3,569
4,734
5,451
5,643
5,821
Productivity
g/employee
 target 
247
219
209
222
174
 actual 
238
214
193
210
184
Surface and dump reclamation
Metric tonnes treated
 - 000 
38,366
50,355
50,289
54,354
57,511
Yield
 - g/t 
0.30
0.32
0.32
0.30
0.30
Production
 - oz 000 
365
514
510 	 520
547
Open-pit operations
Metric tonnes mined
 - 000 
109,987
85,790
49,121 	 47,880
7,525
Stripping ratio
 - t (mined-treated)/t treated 
3.05
2.17
1.08 	 2.51
1.63
Metric tonnes treated
 - 000 
27,186
27,042
23,601 	 13,630
2,863
Yield
 - g/t 
2.29
2.00
1.69 	 1.72
2.54
Production
 - oz 000 
2,005
1,735
1,28	 2 755
234
Total
Production
 - oz 000 
5,939
6,983
7,24             3 6,918
6,602
- South Africa
 - oz 000
3,412
4,670
5,418
5,746
6,368
- East and West Africa
 - oz 000
1,085
868
366
262
234
- North America
 - oz 000
462
496
496
485	      -
- South America
 - oz 000
478
441
439
425	      -
- Australia
 - oz 000
502
508
524	     -	       -
Price received*
 - $/oz sold
303
287
308
315
333
Total cash costs
 - $/oz produced
161
178
213
213
225
Total production costs
 - $/oz produced 
203
213
245 	 244
259
Monthly average number of employees
53,097
70,380
84,036 	 86,120
93,316
LTIFR 
8.86
10.55
11.58 	 13.91
14.52
Rand/US Dollar average exchange rate
10.48
8.62 	 6.78 	  6.11
5.53
Financial results
$m
Operating profit
650
517
468
505
469
Operating profit excluding unrealised non-hedge derivatives
638
527
468
505
469
Net profit 
332
245
166 	 434
318
EBITDA 
795
679
608 	 614
566
Headline earnings 
376
281
254 	 325
277
Headline earnings before unrealised non-hedge derivatives
368
286
254 	 325
277
Capital expenditure
271
298
304 	 220
174
Financial ratios
Capital employed 
 - $m 
2,994
2,550
3,119 	 3,354
2,149
Return on capital 
 - % 
15
13
10 	 15
13
Equity                                                                                          - $m 
2,082
1,559
2,006 	 2,576
2,057
Return on equity 
 - % 
21
16
11 	 16
12
Debt                                                                                             - $m 
926
987
1,156 	    828
184
Cash                                                                                             - $m 
413
191
195 	 493
254
Net debt (cash) 
 - $m 
513
796
961 	 335
(70)
Net debt (cash) to capital employed
 - % 
17
31
31 	 10
(3)
Net debt (cash) to equity
 - % 
25
51
48 	 13
(3)
Interest cover 
 - times 
18
9
9 
12
23
Operating margin
 - %
35
26
21
23
21
EBITDA margin
 - %
43
33
28
28
25
Glossary of terms on page 138.
* Including realised non-hedge derivatives
Group operating and financial results
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The year 2002 can be characterised as one in which the company actively pursued internal growth objectives. Supported by a rising gold price and continued cost control, a number of projects were identified and initiated to deliver new ounces from increasing reserves.
 
     AngloGold's value-adding growth strategy remains on track, with projects to the value of $810m set to contribute an additional 3.3Moz to production over the next five years. In addition, feasibility and pre-feasibility studies are being undertaken on a further 11 projects, which should increase the operations' LOM.
Safety and health  
The safety and health of employees remains a key area of focus for the company. Performance on the safety and health front was encouraging in some areas and disappointing in others.
 
     The long-term trend in lost time injuries continues to decrease to 8.86 per million man hours in 2002 the lowest ever for AngloGold and reflecting an improvement of 16% for the year. This should be seen in the context of some 53,000 employees having worked 142 million hours during the year.
 
     Regrettably, however, fatal accidents continued, with 44 employees losing their lives in the course of work during the year; 39 of these fatal accidents were in the South Africa region where most of the company's operations and employees are based. As a result, the fatal injury frequency rate (FIFR) increased to 0.31 per million man hours.
 
     Despite the tragedy of these deaths, there were a number of exceptional safety performances at various operations. Great Noligwa mine achieved one million fatality-free shifts during the year, as did TauTona post year-end.
 
      *  The Serra Grande mine in Brazil recently recorded one million hours worked without a single lost-time injury. Serra Grande was also awarded the inaugural AngloGold Global Safety Award in January 2003.
 
      *  TauTona, one of the deepest mines in the world, is also one of the safest, with no rockfall-related fatalities recorded since September 2001. TauTona won the South Africa region Safety Shield for 2002.
 
      *  The Cripple Creek & Victor mine in Colorado completed its two-year expansion programme without injury.
 
     Extensive efforts at emphasising and improving safety continue with the company's intranet and mine-based newsletters, as well as a monthly safety newsletter from the Chief Operating Officer, used to communicate with all employees.
 
     Progressive and encouraging safety initiatives continue to be developed and implemented. In the Australia region, for example, safety performance is now being measured against leading indicators in addition to the traditional trailing indicators. This means that progress is assessed in terms of safety initiatives being undertaken, and on the level of employee commitment and knowledge, and not simply on the number of lost-time injuries.
 
     South Africa remains the greatest challenge in terms of safety. Task teams are working to bring about major improvements in five areas, namely safety management systems, falls of ground and seismicity, dust, the effect of illness and HIV/AIDS on the workplace and safety,
18
Review 
of
operations
A
ngloGold's operations produced some creditable performances during the year. Gold production declined by 15% mainly as a result of the sale of the Free State assets in South Africa. Excluding the production previously sourced from these assets, production rose by 3% to 5.9Moz. Total cash costs decreased by 10% to $161/oz, while resources increased by 2% to 287.6Moz and reserves increased by 22% to 72.3Moz.
ANGLO GOLD LIMITED ANNUAL REPORT 2002
AngloGold's Lost Time
Injury Frequency Rate 
(per million man hours)

(Clockwise from top left) Metallurgical test work pouring fused material from a gold fire assay in Kayes laboratory in Mali, East and West Africa region;

Severe weather conditions at Jerritt Canyon caused a slow start to the year in the North America region; This flotation tank at Ergo, South Africa, has the
capacity to treat 100,000t of slimes a day; Hydro-powered rockdrill operated by Ephraim Mabeia at Tau Lekoa mine, South Africa region; Stream sampling by
geologists in the Peru exploration division; Gold production rose significantly at Sunrise Dam, Australia region, during the year. 
LOST TIME INJURY FREQUENCY RATE
 
2002
2001
South Africa
9.98
11.58
East & West Africa
2.93
1.30
South America
4.21
8.16
North America
4.95
1.58
Australia
11.22
13.47
Group
8.86
10.55
0
2
4
6
8
10
12
14
16
1998 1999 2000 2001 2002
8.86
background image
background image
20
The massive fridge plant at Moab Khotsong in South Africa.

and developing a safety mindset. To assist in creating this safety mindset, an external consultant DuPont has completed an assessment of the company's operations and an in-house team has been established to tackle the implementation of this campaign. AngloGold's HIV/AIDS programme is dealt with on page 23.

Performance  

Highlights for the year from an operational perspective include the sterling performance of the East and West Africa region, which increased attributable production by 25% to 1,085,000oz, at a total cash cost of $126/oz.

 

     Further progress was made in AngloGold's drive for geographical and orebody diversity. Gold production from outside South Africa, principally from low-cost surface and shallow mines, rose to 42% of production, 39% of operating profit and 53% of EBITDA.

 

     Overall, attributable production decreased to 5.94Moz, mainly as a result of the impact of the sale of the Free State assets. This was partially offset by an increase in production from the remaining operations of about 3%.

 

     Good cost control was undermined to some extent by the strong performance of the SA Rand in the second half of the year. Nonetheless, total cash costs in Dollar terms decreased still further by 10% to $161/oz. As a result, operating profit increased by 21% to $638m.

 

     Capital expenditure during the year amounted to $271m of which $95m was attributable to maintenance and $176m to expansion.

Outlook  

Looking ahead, production is expected to remain unchanged in 2003 at 6Moz, while

total cash costs are expected to rise to $187/oz, largely due to the strengthening of the South African currency and the lower average grade being mined. The latter is directly related to the fact that lower grade areas have become profitable as a result of a rise in the gold price. Capital expenditure is forecast at $303m.

REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
$/oz
0
50
100
150
200
250
1998          1999         2000        2001       2002
Total cash costs over time 
Total cash costs have declined steadily
over the past five years. However, an
increase is expected in 2003 to $187/oz.
TOTAL CASH COSTS PER REGION ($/oz)
 
 
2002
2001 Variance %
South Africa
158
184
(14)
East and West Africa
126
129
(2)
South America
126
134
(6)
North America
222
211
5
Australia
193
194
(1)
Group
161
178
(10)
ATTRIBUTABLE PRODUCTION (000oz)
 
 
2002
2001 Variance % 
South Africa
3,412
4,670
(27)
East and West Africa
1,085
868
25
South America
478
441
8
North America
462
496
(7)
Australia
502
508
(1)
Group
5,939
6,983
(15)
South Africa 58%
East & West Africa 18%
Australia 8%
South America 8%
North America 8%
Contribution to production (oz) by region
South Africa 47%
Australia 7%
South America 15%
North America 7%
East & West Africa 24%
Contribution to EBITDA by region
161/oz
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22
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

Safety and health  

Tragically, 39 employees lost their lives in mine accidents during the year. This include 11 employees who lost their lives in three multiple fatal seismic accidents at Great Noligwa and Savuka. As a result, the FIFR rose to 0.34 in 2002 from 0.28 the previous year.

 

     The primary cause of fatal accidents remains falls of ground, which caused 57% of fatal accidents during the year. A high- profile Fall of Ground Safety Campaign was launched during the first quarter of the year in an attempt to increase awareness associated with particularly non-seismic falls of ground, and this campaign has largely been successful. Transport-related accidents were the second biggest problem

area and accounted for a further 25% of occupational accidents. A programme to address this involving training, infrastructure improvement and audits, was launched in the last quarter and will continue during 2003.
 
 
 
   Overall, success has been achieved in decreasing LTIFR by 14% to 9.98, the best-ever level.
 
   A number of mines performed exceptionally well, with notable safety and health achievements:
 

     * TauTona mine, despite operating at ultra-deep levels, has not had a rockfall-related accident since September 2001, and continues to post accident frequency rates similar to those of AngloGold's surface operations. TauTona

Ergo
West Wits
TauTona
Savuka
Mponeng
Vaal River
Tau Lekoa
Kopanang
Great Noligwa
Moab Khotsong
South Africa
AngloGold's operations in South Africa
The South Africa region comprises seven underground operations: the Great Noligwa, Kopanang,
Tau Lekoa and Moab Khotsong mines are located in the Vaal River area, near the towns of Orkney
and Klerksdorp, while the Mponeng, Savuka and TauTona mines are located near Carletonville.
A surface reclamation project Ergo is located near Johannesburg. Four mines in the Free State
region were sold to Freegold, a joint venture between ARMgold Limited and Harmony Gold Mining
Company Limited in November 2001, with control of these operations passing to the joint venture
with effect from 1 January 2002.
Key statistics
2002
2001
Tonnes treated (Mt)
Underground 
11.3
15.3
Surface (incl Ergo)
38.4
50.3
Average grade (g/t)
Underground
8.40
8.20
Surface (incl Ergo)
0.30
0.32
Gold production Moz
3.4
4.7
kg
106,106
145,247
Total cash cost $/oz
158
184
R/kg
53,146
50,065
Number of
employees*
44,828
64,900
Efficiencies
g/TEC
223
206
m
2
/TEC
4.58
4.42
Capex
$m
105
101
Rm
1,150
875
* Including contractors
0%
10%
20%
30%
40%
50%
Falls of ground (seismic)
Falls of ground (non-seismic)
Trucks and tramming
Vehicles
Machinery
Shaft accidents
Inundation
Slip and fall
Explosives
41%
16%
14%
11%
5%
5%
5%
2%
2%
Causes of fatal accidents - 2002 
The primary cause of fatal accidents on the South African operations is falls of ground.
A major campaign to address this was initiated during the year.
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23
REVIEW OF OPERATIONS

also won the South Africa region Safety Shield Competition for the best improvement in serious injury rates over the past five years.

 

   *  After the tragic multiple fatal accidents in May and June, Great Noligwa mine went on to achieve a million fatality- free shifts on 27 November 2002.

Occupational health  

The primary concerns in respect of occupational health in the South African operations are noise-induced hearing loss (NIHL), occupational lung diseases (OLD) and tuberculosis (TB).

 

     Occupational health services are provided to employees at two fully- equipped regional occupational health centres. These are staffed by occupational medical practitioners, professional nurses, audiologists and other support staff.

In addition, each mine has an occupational health nurse on site.

 

     During the year, 52,742 occupational medical surveillance examinations (initial, periodical, transfer and exit) were performed. There were 1,087 new cases of NIHL in 2002. This translates into a rate of 26 per 1,000 employees, compared with 12 per 1,000 in 2001. Regarding OLD, 186 employees were diagnosed, reflecting a rate of 4 per 1,000 employees, the same rate as in 2001; 983 new cases of TB were treated in 2002, a rate of 23 per 1,000 employees, also the same rate as in 2001.

 

     Stricter screening for NIHL, in preparation for a new compensation rule requiring base-lining of all employees, has meant an increase in the NIHL rates, which are now expected to fall off. No increase in liability is anticipated.

 

     Results of efforts made by AngloGold to silencing all machine drills and over 88% of noisy fans over the past three years will soon become evident in NIHL results as ambient noise levels have been significantly reduced.

 

      AngloGold continues to make advances in the control of underground dust. New and more accurate measuring methods have been introduced; better engineering practices are evident; a more standard approach to respiratory protective equipment has been implemented and employees detected as having very early OLD are moved to lower risk areas.

 

      TB remains an area of focus in the sphere of occupational health. More effective detection methods are resulting in earlier diagnosis and treatment, which is limiting the onward transmission of the disease.

 

      HIV is the major factor contributing to increased TB rates in South Africa. It is expected that the HIV Wellness Programme and introduction of anti- retroviral therapy (ART) by AngloGold (see HIV below) will have a positive impact on the TB problem and a project aimed at preventing transmission of TB, through mass prophylaxis, is planned for 2003.

HIV/AIDS  
The prevention of HIV/AIDS infections and the compassionate care of those afflicted with the disease remains a priority for the South Africa region. AngloGold's core intervention comprises four elements, namely:

SAFETY PERFORMANCE
 
LTIFR
FIFR
2002
2001
2002
2001
Great Noligwa
11.06
9.61
0.47
0.19
Kopanang
12.91
11.12
0.22
0
Tau Lekoa
17.94
13.53
0.51
0.37
Ergo
1.53
3.86
0
0.20
TauTona
7.67
12.22
0.08
0.16
Savuka
17.12
21.00
1.24
1.06
Mponeng
10.91
13.77
0.47
0.47
Moab Khotsong
6.82
4.65
0.19
0.17
SAFETY STATISTICS
 
2002
2001
2000
1999
1998
FIFR
0.34
0.28
0.24
0.38
0.41
LTIFR
9.98
11.58
11.98
14.35
15.18
The South African operations performed
creditably in the year under review, despite a
slow start. If the Free State operations are
excluded from last year's production numbers,
production for the South Africa region
decreased by 1%. 
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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24
 
     *  Prevention, that is, restricting the spread of the disease through education, the provision of condoms and the effective treatment of sexually transmitted infections, is a key component of the programme. Some 1,082 employees participated in AngloGold's Voluntary Counselling and Testing programme during 2002, which is an improvement on the previous year and a significant achievement, considering the stigma associated with the disease.
 
     *  Care for employees infected with the virus through comprehensive hospital benefits and the company's Wellness Clinics, where patients receive preventive treatment against opportunistic infections and where an ART trial project was recently introduced.
 
    *  Support for those employees no longer able to fulfil their role in the company is provided through a compassionate ill-health retirement programme linked to home-based care programmes that AngloGold funds in labour-sending or near-mine communities.
 
 
 
   *  Fundamental research into the disease and its treatment, funded by AngloGold and conducted through Aurum Health, a wholly-owned subsidiary of Anglogold Health Service. Best practice interventions identified and developed by Aurum guide the company's medical strategy.
 
   * AngloGold's AIDS strategy, which determines and guides these interventions, is a collaborative joint effort that has been defined in the agreement signed by the company and all five of its unions in July 2002.
 
    * A noteworthy programme development was the introduction of ART, which was announced in August 2002. This is being implemented for employees who are medically eligible for the treatment and
are willing to participate in the project. The first phase of this project aims to develop an understanding of and find solutions to the challenges inherent in the provision of ART in the gold mining industry. The project will identify the operational requirements of providing ART, particularly around supporting patient adherence to the drug regimen, and making the provision of ART a part of primary rather than specialist healthcare to make it accessible in the volumes required. Included in this will be the monitoring of patients' capacity to carry out their duties in underground working conditions, and of drug sensitivity. Some 200 employees have been invited to participate in the initial programme before roll-out to all eligible employees in April 2003, for which the company has budgeted $1.5m.
 
     Because HIV/AIDS is not a notifiable disease, no reliable data exists on prevalence levels. However, based on available information it is estimated some 30% of AngloGold's South African workforce is HIV-positive and some 3,000 current employees have developed advanced AIDS, making them eligible for ART. Some 1,500 employees are currently participating in AngloGold's Wellness programme. Some 600 employees left the company as part of the ill-health retirement programme during the year, alternative employment was found for 87 employees and 300 employees died in service during the year, largely as a consequence of AIDS-related conditions.
 
 
Performance 
The South African operations performed well for the year under review, despite a slow start at the beginning of the year and significant seismic events at Great Noligwa mine. Overall gold production declined by 27% to 3,412,000oz, a result of the once-off decrease of 1,232,000oz (26% on last year) attributable to the sale of the Free State assets. If the Free State operations are excluded from last year's production numbers, production decreased by 1% due to the drop in production at Ergo. Total cash costs decreased by 14% to $158/oz, and even in Rand terms were well controlled to a 6% increase to R53,146/kg. This was despite an inflation rate of approximately 12% during the year. Productivity, in terms of the two main indices used namely g/TEC and m
/TEC improved by 8% to 223 and 4% to 4.58, respectively.
2
 
 
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Joan de Jong, CEO of Hospice, North West,
with little Teboga Malangane, at the day care
centre for HIV/AIDS children. AngloGold
supports this invaluable facility in the
Klerksdorp area.
background image
Consequently, operating profit excluding unrealised non-hedge derivatives, rose by 15% to $390m (R4.1bn).
VAAL RIVER 
G
REAT NOLIGWA
 
 
 
Volume mined decreased for the year, while grades declined by some 11% to 11.02g/t as a result of a change in the mining plan following several seismic events. The cumulative effects of these damaging seismic events during the second quarter continued to be felt into the third and fourth quarters, as a result of a lack of available production mining faces. At the same time, steps to further improve workplace safety were taken and changes were made to the mining plan which resulted in a temporary slowdown in mining production. Consequently, gold production decreased by 12% to 880,000oz (27,380kg). Total cash costs rose by 2% to $124/oz, largely as a result of the decrease in gold production and costs incurred following the seismic events. In Rand terms, cash costs increased by 26% to R41,658/kg. Operating profit, excluding unrealised non-hedge derivatives, at $141m (R1,487m) was 4% lower than the previous year.
 
     In terms of outlook, production is expected to increase to 954,000oz or 29,685kg during 2003, at a total cash cost of $154/oz (R44,459/kg) as grades continue to decline. Capital expenditure during 2003, for the refurbishment of infrastructure and the No 8 plant mill, is likely to be in the region of $22.8m or R205m.
KOPANANG
 
Gold production increased by 3% to 511,000oz or 15,874kg, mainly as a result of increased volumes mined through improved labour efficiencies. Total cash costs reduced by 7% to $165/oz in Dollar terms; however, in Rand terms, cash costs increased by 14% to R55,001/kg, mainly as a result of increased cementatious support for safety reasons and lower by-product contributions from the lower exchange rate. Operating profit, excluding unrealised non-hedge derivatives, increased by 33% to $56m (R591m).
 
     For 2003, production is expected to increase to 512,000oz or 15,926kg, at a total cash cost of $220/oz (R63,741/kg), predominantly from higher volumes mined. For the year ahead, capital expenditure on infrastructure refurbish- ment, expansion development and hostel upgrades is planned at $13m or R119m.
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Great Noligwa 36%
TauTona 25%
Kopanang 14%
Mponeng 8%
Tau Lekoa 6%
Ergo 5%
Savuka 2% Surface operations 4%
Contribution of South African operations
to the region's EBITDA (%)
Great Noligwa 26%
TauTona 19%
Kopanang 15%
Mponeng 13%
Tau Lekoa 9%
Ergo 8%
Savuka 7%
Surface operations 3%
Three mines, Great Noligwa, TauTona and Kopanang, make up 60%
of the South Africa region's production.
25
CASH COSTS
 
Forecast 2003
2002
2001
2000
1999
R/kg
60,515
53,146
50,065
48,395
44,598
$/oz
209
158
184
218
227
TOTAL CASH COSTS PER OPERATION
 
R/kg
$/oz
2002
2001         2002
2001
Great Noligwa
41,658
33,068
124
122
Kopanang
55,001
48,121
165
178
Tau Lekoa
64,234
55,545
192
203
TauTona
44,465
42,347
132
154
Savuka
82,111
68,209
245
248
Mponeng
59,504
61,221
178
223
Ergo
61,810
58,884
184
215
CAPITAL EXPENDITURE
 
Forecast 2003
2002
2001
2000
1999
Rm
1,659
1,150
875
1,047
922
$m
185
105
101
145
151
Contribution of South African operations (oz)
to the region's production
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26
REVIEW OF OPERATIONS
TAU LEKOA
 
 
 
Volumes mined at Tau Lekoa rose by 6%, while grades improved by 1% to 4.45g/t. Gold production increased by 9% to 311,000oz or 9,675kg. In Dollar terms, total cash costs declined by 6% to $192/oz, while in Rand terms total cash costs increased by 16% to R64,234/kg. This was primarily as a result of increased volumes mined, increased labour building up to a higher volume platform and lower contribution from by-products.
 
     Gold production should increase to 319,000oz (9,926kg) in 2003, while total cash costs are expected to rise to $244/oz (R70,689/kg) mainly through higher volumes mined, lower grade and inflation. Tau Lekoa anticipates capital expenditure of about $8m or R71m during 2003, on technology projects, expansionary projects (Goedgenoeg and Weltevreden) and infrastructural refurbishment.
 
 
 
 
WEST WITS 
T
AU TONA
TauTona continued with its strong performance during the year, with gold production rising by 3% to 643,000oz, or 19,997kg. Total cash costs decreased to $132/oz. In Rand terms, however, this reflected an increase of 5% to R44,465/kg.
 
     For 2003, gold production is expected to decrease to 623,000oz or 19,362kg, at a total cash cost of $168/oz (R48,677/kg) mainly from lower gold production and inflationary pressures. During the year ahead, capital expenditure on infra-structure refurbishment 
and expansion projects is likely to be in the region of $22m, or R198m.
SAVUKA
 
Increased seismicity in the VCR had a negative impact on the volumes mined at the beginning of the year, although improvements in the rate of face advance countered this to some extent. After having mined a pillar in the first half of the year, the grade dropped on the depletion of the pillar, resulting in an average yield of 7.07g/t, similar to the previous year. Consequently, gold produced decreased by 2% to 236,000oz or 7,331kg, at a total cash cost of $245/oz. In Rand terms, total cash costs increased by 20% to R82,111/kg as a result of the accelerated development plan to match the new LOM profiles.
 
     Looking forward, production is expected to decrease to 235,000oz or 7,299kg in 2003, while total cash costs should rise to $330/oz (R95,531/kg) following the higher volumes mined and increased development planned. The higher volumes mined planned for 2003 are to counter the 23% drop in recovered grade. Capital expenditure on expansion projects and infrastructure refurbishment is expected to be in the region of $10m or R94m. Savuka has strategic synergies with TauTona.
 
 
MPONENG
Performance at Mponeng improved significantly during the year, with volumes mined increasing by 21% and yields rose to 8.63g/t. Although newly equipped raise lines had an impact on costs during the year, the
flexibility afforded by these had a favourable impact on production from mid-year. As a result, gold production increased by 27% to 466,000oz or 14,498kg. Total cash costs decreased by 20% to $178/oz; in Rand terms, total cash costs decreased by 3% to R59,504/kg.
 
     Gold production is expected to decrease to 401,000oz or 12,476kg in 2003, while total cash costs should increase to $244/oz (R70,681/kg) from the cost of the increased development plan and lower gold production. In 2003, capital expenditure is expected to be in the region of $46m (R413m) for expansion and shaft deepening, ore reserves development and infrastructure upgrades.
ERGO 
As anticipated, gold production decreased by 20% to 264,000oz, or 8,215kg, following the closure of the Daggafontein plant in December 2001. During the year, the operation was affected by higher- than-expected rainfall, environmental clean-up activities and power failures. The effects were offset by improved headgrades and increased metallurgical efficiency. Total cash costs decreased by 15% to $184/oz. In Rand terms, total cash costs increased by 5% to R61,810/kg.
 
     Production is expected to decrease to 215,000oz or 6,692kg in 2003 as a result of a declining headgrade. The 20% lower grade and constant volumes should result in a rise in total cash costs to $285/oz (R82,602/kg). Ergo's closure is scheduled for early 2005. Planning has started with the establishment of a closure
Moab Khotsong
The largest project under development in the
South Africa region is the Moab Khotsong
mine, located in the Vaal River area.
Production is scheduled to commence in late
2003 , with full production expected in 2006.
The mine will add 4.5Moz to the region's
production to 2015, at an average cash
cost of $129/oz. 
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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27
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

project team. The project scope includes rehabilitation, social aspects and other liabilities associated with the closure of the operation.

Growth  
Three major growth projects are currently in progress in South Africa at Mponeng, TauTona and Moab Khotsong at a total capital cost of approximately R5.6bn ($649.7m at current year's closing exchange rate).

MPONENG SHAFT DEEPENING PROJECT

 

 

 

 

 

Good progress has been made during the year with the Mponeng Shaft Deepening Project. The project involves the development of ore reserves from the Ventersdorp Contact Reef (VCR) on 113, 116 and 120 levels at Mponeng mine (ranging from 3,172m to 3,372m below surface). The project will add some 2.8Moz to production and extend the LOM by five years to 2012. Total capex for the project is R1.3bn ($159.3m at current year's closing exchange rate) with some R318.7m remaining ($37.2m at current year's closing exchange rate). Average project cash costs over the LOM should be in the region of R55,200/kg ($180/oz at current year's closing exchange rate). In-circle development is in progress and will be completed by February 2003.

 

     Access development on 113 level has been completed and permanent equipping began in January 2003. At 116 and 120 levels, access development is scheduled for completion in May 2003.

ADDITIONAL OPPORTUNITIES IN SOUTH AFRICA
 
 
 
 
 
Additional gold
Production
Mine
Project
production
start-up
Moab Khotsong
Phase 2: below 101 level
4.4Moz
2012
Mponeng
Lower grade VCR and CLR
3.1Moz
2014
TauTona
CLR 120-125 level and 116 level (east of Bank Dyke)
1.6Moz
2006
Mponeng
VCR: 120 125 level
1.3Moz
2007
TauTona
VCR shaft pillar and 66 level
0.3Moz
2005
Tau Lekoa
Above 900 level
0.2Moz
2006

Great Noligwa

Great Noligwa mine contributed 26% to the South Africa region's production. This was despite

several major seismic events at the mine during the year. The underground locomotive seen here is

known as "Big Momma". Its introduction is part of the mine's Hypermine project.

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28
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
TAU TONA EXTENSION PROJECT
 
 
 
 
 
This project has two 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). The project will add 2.7Moz to the mine, at a total capital cost of R432m ($50.4m at current year's closing exchange rate); of this some R160.1m ($18.7m at current year's closing exchange rate) has already been spent. LOM has been extended by six years to 2013, with average project cash costs expected to be in the order of R55,500/kg ($180/oz at current year's closing exchange rate).
 
     Development to access the CLR and area east of the Bank Dyke is on target, while rehabilitation of the haulages continues. The drilling programme from various levels is in progress.
MOAB KHOTSONG MINE
 
 
 
The largest of the current South African projects is the development of the Moab Khotsong mine, located in the Vaal River area. The project comprises the sinking of a new shaft to 3,130m below surface (101 level) to access the Moab lease area, a 136-tonne reserve. The shaft system will have a capacity to hoist about 150,000t/month. Production is scheduled to commence in the last quarter of 2003, with full production of 360,000oz, or 11,215kg per annum, expected by 2006. The mine will add 4.5Moz to this region's production to 2015, with an average cash cost of R39,600/kg ($129/oz at current year's closing exchange rate). Total capex for the project is R3.8bn ($440m at current year's closing exchange rate), of which some R2.8bn ($335m at current year's closing exchange rate) has already been spent. Development of this mine, which began in 1991, is on schedule.
 
     The Main shaft extension was commissioned to a depth of 3,130m in June 2002. Permanent equipping of the RV shaft is 70% complete with commissioning scheduled for March 2003. Access development has progressed to a point where the crosscut is in position and the first raiseline is being established.
ADDITIONAL OPPORTUNITIES
 
In addition, a higher gold price has contributed a further 11Moz of gold to reserves, resulting in the possible development of six deeplevel mining projects currently under evaluation.
Sustainable development  
Since the South Africa region employs by far the most people, and has the largest number of operations, its community and environmental impact is greater here than anywhere else. The aim of the South Africa region is to create a balance between the impact on the natural and social environments in which it operates while at the same time ensuring that it delivers significant and lasting benefits to employees, their communities and other stakeholders, in partnership with government, international agencies, labour, health and non-governmental organisations. As a result of historical and current socio- economic imperatives, the role played by the company in social issues is significant.
 
 
ENVIRONMENT 
An amended Environmental Management Programme Report for the West Wits and Vaal River operations was submitted to the Department of Minerals and Energy in November 2002. It is anticipated that feedback will be received on this early in 2003.
(From left to right) A pre-schooler enjoying the outside play area at the Shiloh Marabian Mission Station School in Whittlesea (a Khululeka project); Noncedile
Mozondi, one of the Mabhongo villagers who was given chickens as a part of the Masikhanyise sustainable development project. Coleth du Plessis and her pupils
in the new cookery centre at the North West Secondary School for the deaf in Leeudoringstad. All these projects were supported by the AngloGold Fund.
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REVIEW OF OPERATIONS
29
ANGLO GOLD LIMITED ANNUAL REPORT 2002
 
     Water usage and management remains a key area of focus. Water balances were updated and redesigned to ensure a more user-friendly and comprehensive system. Water monitoring programmes and procedures for ground and surface water were developed and implemented at the Vaal River and West Wits operations and a quarterly reporting and analysis system was rolled out across the region. Geotechnical assessment of rock dumps and tailings storage facilities, indicating pollution potential and associated time periods, were completed. This is the first time such an assessment has been undertaken in the South African gold mining industry. The main focus for 2003 will be the reduction in potable water usage and the treatment of mine water to reduce the contamination potential on water resources.
 
     During 2002, the region committed itself to the development of a web-based electronic Environmental Management System. The system is based on ISO14000 principles. The first of four phases, involving policy development and planning, was completed in 2002.
 
     Also during 2002, the region's Environmental Incident Review system was further refined, with the emphasis placed on implementation within the operations.
 
     AngloGold is currently funding a study being undertaken by the genetics department of the University of Pretoria into the yellowfish population of the Vaal River. This study will develop genetic fingerprints of two particular species to assist in the formulation of fisheries management regulations. Both the Vaal River and West Wits operations are part of the greater Vaal River catchment area.
 
     Good progress was made with rehabilitation trials at the Ergo Daggafontein tailings dam. The dam was decommissioned in
December 2001 and will be rehabilitated to environmental closure in terms of the Minerals Act.
SOCIAL INVESTMENT
 
In South Africa, the company's corporate social investment initiatives are directed by the AngloGold Fund and Education Trust. During 2002, some $1.5m (R15.6m) was committed to a range of initiatives, both large and small.
     The primary areas of investment remain education, welfare and development, community health, health projects related to HIV/AIDS, and skills and entrepreneurial development. Although the Fund supports projects which have a national impact, the focus is on those regions and communities in which the company operates or has a major impact. For example, during the year, some 35% of funding went to the Eastern Cape, an area from which the company traditionally draws much of its workforce.
 
 
   Some of the major projects currently in progress include:     
   * Klerksdorp Methodist Primary School is one of the few English-medium primary schools in one of AngloGold's key operational areas. The school's intake has grown exponentially over the past few years, to the point where new learners had to be turned away due to the lack of space. AngloGold's donation of $118,000 will enable a block of five classrooms to be added to the complex.
    * The Boyden Observatory is home to the second largest optical telescope in Africa. The observatory, part of the University of the Free State's Science Block, recently initiated a project to upgrade its facilities to make them more relevant to the school curriculum and accessible to previously disadvantaged communities in the area. The long-term aim is to foster greater interest in the study of science, engineering and technology.
 
 
(From left to right) A Grade 6 pupil doing his homework in the aftercare centre at the Methodist Primary School in Klerksdorp; Ayanda Matha a pre-grade
pupil enjoying the playground equipment that AngloGold sponsored for the Winterberg School Trust, Tarkastad; Elisabeth Ganakgomo preparing a quilted
bedspread that will be sold to raise funds for the Mohau AIDS centre.
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     *  Goldfields Hospice in the Free State has received a grant of $15,000. This valuable facility provides extensive community- based homecare for terminally ill patients in the Welkom area in the Free State.

     *  Siphumezulwazi Secondary School in Alice in the Eastern Cape has been awarded grant from the AngloGold Fund for the construction of five classrooms, a store room, an office and ablution facilities.

     *  The National Association of Childcare Workers in the 

Eastern Cape was awarded $27,500 for the Isibindi project in Cala, in the Eastern Cape. The project provides accredited training, support and development for child and youth care workers and is aimed at assisting children and youths who have been placed at risk as a result of abuse, HIV/AIDS or criminal involvement.

     *  Khululeka Community Education Development Centre in Queenstown, Eastern Cape, is another project that was supported during the year. A $25,000 grant to this leading early childhood development centre will enable a comprehensive training programme to be developed to empower other early childhood development practitioners with skills, resources and values to provide quality education and care for young children. The materials developed by Khululeka are already used by many other non-governmental organisations (NGOs) who do not have the resources or infrastructure to develop their own materials.

     *  The African Medical Mission in the Eastern Cape received

a grant of $27,000. The hospital which is situated in the town of Bedford, caters for a third of the people in the province many of whom live in rural areas and cannot afford alternative medical facilities and care.

     *  Carletonville Technical College was awarded some $23,000 to purchase computers for an engineering laboratory. The college is one of only six technical colleges in the country offering mining-related subjects and the only facility offering surface and hard-rock courses. Improved facilities will better equip locals with the knowledge, resources and skills to be employed by mines in the surrounding areas.

     *  Another project which received support is the St Bernard's

Hospice in the Eastern Cape. One of the best managed hospices in the region, St Bernard's provides a safe haven for terminally ill patients. A grant of $25,000 has assisted this organisation in improving and extending its homecare programme and to extend specialist care to patients, many of whom suffer from HIV/AIDS.

     *  The AngloGold Fund also awarded a grant of $20,000 to

the Triest Training Centre in North West Province. The centre provides care, rehabilitation and the integration of intellectually handicapped people into mainstream society.

     The Morifi Community Secondary School was opened in September 2002. The school, granted R2.5m from the AngloGold Fund and situated in rural Lesotho not far from Mohale's Hoek, is the first in the area to cater for pupils in the post-primary phase. It was built following extensive consultation and planning with both the community and the Lesotho Ministry of Education. As almost a fifth of employees are from Lesotho, this is in line with the strategy to contribute to those communities from where AngloGold's employees come. The first intake of 160 pupils has been enrolled and there are five teachers on the staff. The number of pupils is expected to increase to 475 within three years.

 

 

 

 

 

 

 

REVIEW OF OPERATIONS
30
(From left to right) Songo Ndungane and Popama Mokopane, Grade 2
pupils, taking a break from a literacy class, Ginsberg Primary,
King William's Town.
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32
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

Safety and health  

Safety has been an issue of concern in the East and West Africa region during the year, with 45 lost time injuries. One fatal accident occurred at Morila and three fatal accidents at Geita. The main contributing factors were identified and action plans were implemented to address the deficiencies. The LTIFR and the FIFR for the region were 2.93 and 0.26 respectively.

 

   During the year, Geita maintained its NOSA 4-star rating, while Navachab retained its NOSA 5-star rating.

Malaria  

With the ever-present threat of malaria at most of the African operations, prevention and treatment programmes are running effectively at the Malian and Tanzanian operations The focus is on education, malaria vector control, the issuing of mosquito nets and early detection and treatment.

HIV/AIDS  

HIV/AIDS programmes have been implemented in the region with the

Mali
Tanzania
Namibia
Geita
Sadiola
Yatela
Morila
Navachab
WHO OWNS AND MANAGES THE OPERATIONS
 
Operation
Country
Partners
Stake
Management
Morila
Mali
AngloGold
40%
AngloGold
Randgold Resources
40%
Government of Mali
20%
Geita
Tanzania
AngloGold
50%
Joint management
Ashanti Goldfields Company        50%
Sadiola
Mali
AngloGold
38%
AngloGold
IAMGOLD
38%
Government of Mali
18%
International Finance 
Corporation (IFC)
6%
Navachab
Namibia
 
100%
AngloGold
Yatela
Mali
AngloGold
40%
AngloGold
IAMGOLD
40%
Government of Mali
20%
Key statistics
2002
2001
Tonnes treated (Mt)
(attributable)
8.0
7.3
Average grade (g/t)
4.22
3.71
Gold production (000 oz)
(attributable)
1,085
868
Total cash cost $/oz
126
129
Number of employees*  2,275
1,600
Efficiencies (g/TEC)
1,855
1,884
Capex ($m)
(attributable)
27
34
* Including contractors
East and
West Africa 
AngloGold's operations in East and West Africa
The East and West Africa region (formerly known as the Africa region) comprises five operations,
located in three African countries other than South Africa. These are the Yatela, Sadiola and Morila
mines in Mali, the Navachab mine in Namibia and the Geita mine in Tanzania. 
SAFETY PERFORMANCE
 
LTIFR
FIFR
2002
2001
2002
2001
Morila
6.27
1.68
0.33
0.00
Geita
2.11
0.65
0.49
0.00
Sadiola
1.54
0.00
0.00
0.00
Navachab
3.05
2.98
0.00
0.00
Yatela
2.07
2.52
0.00
0.00
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33
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

primary focus on prevention through education and awareness. At all operations, education programmes have been conducted in the local communities and throughout the workforce. Peer educators have been identified and have received professional training. Partnerships have been formed with NGOs and other stakeholders in the local communities. Awareness programmes and condom distribution initiatives are ongoing.

Performance and outlook  
Overall, the East and West Africa region delivered an excellent performance for the year and produced over a million attributable ounces for the first time, largely owing to the exceptional high- grade ore at Morila. Attributable production increased by 25% to 1,085,000oz, while total cash costs decreased by 2% to $126/oz. Operating profit, excluding unrealised non-hedge derivatives, increased to $129m.

MORILA

 

Gold production at Morila increased by 67% to 421,000oz, largely as a result of the interception of exceptionally high-grade zones of ore during July to October. The average recovered grade for the year rose by 74% to 11.96g/t. As a result, total cash costs for the year improved by 28% to $74/oz and operating profit, excluding unrealised non-hedge derivatives, rose by 190% to $70m.

 

       Attributable production at Morila should decrease by 19% to 343,000oz for 2003, while total cash costs will be $93/oz with the return to average mine grades. Drilling to identify other possible high- grade zones is underway. Capital expenditure of $4m is anticipated in 2003.

GEITA

 

Geita experienced another good year. Production rose by 6% to 290,000oz, despite a 2% decline in the average grade for the year to 3.62g/t. Total cash costs increased by 19% to $175/oz, as a result of increased stripping requirements, increased mining from the Kukuluma pit, and greater distances to the Geita plant. Operating profit, excluding unrealised non-hedge derivatives, fell by 20% to $20m.

 

       During the second quarter, Geita successfully concluded its 90-day project completion testing, as required by loan covenants, resulting in the release of the AngloGold loan guarantees.

 

       Approval was granted for the first phase of the Geita expansion project during the first quarter of the year. This followed encouraging results from exploration drilling in the Nyankanga pit, which increased the total remaining ore reserve to 33.5Mt. To realise the full potential of this increased reserve, plant throughput is being raised from 4.5Mtpa to 6Mtpa in two phases over the next two years. By year-end, Phase 1 of this project

increasing throughput to 5.6Mtpa had been completed and commissioned.

 

      During 2003, attributable production should increase by 17% to 339,000oz. Total cash costs should increase by 1% to $176/oz. Capital expenditure of $12m is planned in 2003.

SADIOLA

 

Tonnage throughput at Sadiola was adversely affected by mineral sizer downtime in the first quarter, the low availability of high-grade oxide ore during the year and problems with the treatment of higher-grade soft sulphide ore. This resulted in a 5% decrease in the average recovered grade for the year to 2.96g/t. Consequently, gold production of 182,000oz was 10% lower than the previous year. Total cash costs increased by 25% to $163/oz as a result of the lower production and treatment of sulphide ores. Operating profit, excluding unrealised non-hedge derivatives, decreased by 42% to $12m.

 

       The plant conversion project to improve gold recovery from the treatment of soft sulphide ore was completed on schedule by the end of February 2002. High cyanide values in the final residue prevented the treatment of soft sulphide ore, which required high cyanide addition to maintain acceptable recoveries. A cyanide destruction plant was designed and commissioned in the third quarter and

 

 

Expansion at Geita
The first phase of the Geita gold plant
expansion was approved during the first
quarter following encouraging results from
exploration in the Nyankanga pit, which
increased the total remaining reserve to
33.5Mt. Plant throughput is being increased
from 4.5Mtpa to 6Mtpa in two phases.
Phase 1, which was completed in
December 2002, involved the installation of
secondary crushers and modification to the
ball mill to cater for the increased throughput,
raising the treatment rate to 5.6Mtpa at a
capital cost of $3m. 
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34
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
was fully operational at year-end. The system will be fully optimised by the end of January 2003.
     The final instalment on the project finance loans for the development of Sadiola was paid during the second quarter. The total repayments for the five-year period of the facility amounted to $288m.
 
   During the year ahead, attributable production at Sadiola should decrease by 7% to 169,000oz, while total cash costs will increase by 18% to $193/oz due to increased reagent costs to treat sulphide ore. Capital expenditure of $2m is planned for 2003.
 
NAVACHAB
 
Navachab continued to exceed production targets in 2002, although gold production was 2% lower at 85,000oz, mainly due to a 5% decrease in recovered grades to 1.93g/t for the year. Total cash costs declined by 10% to $147/oz. Operating profit, excluding unrealised non-hedge derivatives, increased by 41% to $12m.
   A decision to proceed with a pushback towards the east to extend the LOM by eight years to 2013 was taken by the AngloGold board in July 2002. An early application for the renewal of the mining licence has been approved. This extends the licence to 2018.
 
   Looking ahead to 2003, attributable production at Navachab should decrease by 6% to 80,000oz. It is anticipated that total cash costs will increase by 50% to $220/oz as extra stripping will be required at the Eastern Pushback.
 
   It is expected that capital expenditure will rise by 41% to $4m during the year.
 
YATELA
 
This was the first full year of operation at Yatela. Gold production increased by 105% to 107,000oz, while total cash costs increased by 18% to $175/oz, largely as a result of higher maintenance costs on the mineral sizers as a result of harder materials being treated, and increased reagent mainly cement usage. Cement is used for leach pad stability. Operating profit including non- realised hedge derivatives, rose by 114% to $10m.
   During 2003, attributable production is expected to decrease by 8% to 98,000oz. Total cash costs should increase by 14% to $199/oz. Capital expenditure of $3m is planned in 2003.
 
Growth  
As a result of the successful brownfields drilling programme at Geita during
the year, the reserve has increased by 21% to 4.7Moz, confirming the company's confidence in the prospectivity of the deposit.
   With the improvements in the gold price, a feasibility study commenced during the first quarter to evaluate the economic viability of a mine expansion project at Navachab.
 
Sustainable development 
AngloGold's aim of ensuring sustainable development is particularly pertinent in Africa where mining operations are frequently located in inaccessible areas, largely untouched by industry and economic development. Sensible mining practices, with the full involvement of local communities and governments, can ensure that long-term benefits accrue to the regions, even after mining has been completed.
Localisation programmes have been implemented at all operations with the main focus on the implementation of tech- nical and managerial training programmes to fast-track the career development of local employees. Artisan training and business skills, safety and metallurgical training are in place at the operations. Progress has been made with at least 60%
 
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35
of supervisory and managerial positions now being held by local employees.
   Sustainable social development strategies have been implemented at all of the operations. At Sadiola and Yatela mines, through the facilitation of water irrigation and the training and education of local farmers, sustainable farming projects are being implemented in the local communities. Similar programmes are being investigated at other operations. As a result of a major drought in the local communities surrounding the Malian operations, borehole drilling operations are taking place to increase the provision of water. These initiatives to establish greater water security through the use of ground water, rather than surface water have cost in the region of $120,000.
 
   At Sadiola and Yatela mines, the micro-credit programme continued with 98 loans amounting to $70,000 being granted to assist prospective small businesses.
 
   At Morila, significant contributions (of some $250,000) were made towards the upgrade and maintenance of infra- structure in the communities surrounding operations. Examples include the upgrading of medical clinics, building of roads and bridges, provision of electricity
 
for strategic facilities and the construction of dams.
   Training and education programmes have been initiated by the operations for the local communities covering topics such as HIV/AIDS and sustainable development. A social development trust consisting of mine management, NGOs and local community representatives is in the process of being formed by Morila mine. An initial contribution of $500,000 has been made by the mine to this trust. The main aim of the trust will be to manage the allocation of funds towards sustainable development projects and to monitor the success of these projects.
 
AngloGold's philosophy of ensuring
sustainable development is particularly
pertinent in Africa where mining operations
are frequently located in inaccessible areas,
largely untouched by industry and economic
development. Sensible mining practices,
with the full involvement of local
government and communities  such
as here at Sadiola in Mali  can ensure that
long-term benefits accrue to the region,
even after mining has been completed.
Navachab continues to exceed production
targets. Looking ahead, a project to extend
the LOM by eight years was approved
by the AngloGold board in July 2002.
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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36
Brazil
Argentina
Serra Grande
Cerro Vanguardia
Morro Velho
AngloGold's operations
in South America
The South America region comprises three
operations, Morro Velho and Serra Grande
(50%) in Brazil and Cerro Vanguardia
(92.5% as of July 2002) in Argentina.
Key statistics
2002
2001
Tonnes treated (Mt)
(attributable)
1.9
1.7
Average grade (g/t)
7.8
7.8
Gold production (oz)
(attributable) 
478,000
441,000
Total cash cost ($/oz)
126
134
Number of
employees *
2,660
2,300
Efficiencies (g/TEC)
684
611
Capex ($m)
(attributable)
24
20
* Excludes contractors for the Cuiab
Expansion and contractors for the
implementation phase of Crrego
do Stio mine
South America

Safety and health  

Safety performance in the region was good, with the overall LTIFR - at 4.21 - below the Ontario benchmark of 6.5. Regrettably, a fatal accident occurred at

Cerro Vanguardia on 17 July.

Following a complete review of risk management procedures in November 2002, Cerro Vanguardia was re-audited and maintained a NOSA 5-star rating and ISO14001 Certification.

 

       Serra Grande was audited during the first quarter and gained a 4-star rating. At the end of November, the mine was re- audited and achieved a NOSA 5-star rating the first underground mine in the world to achieve this distinction. The mine was awarded the inaugural Dick Fisher Safety Award, for the best performance across AngloGold's

operations, based on year-on-year safety improvements.

 

       Morro Velho was also audited in the first quarter and was awarded a NOSA 3-star rating. A re-audit will take place in the first quarter of 2003.

Performance and outlook  

Attributable production in the South America region increased to 478,000oz, principally as a result of the acquisition of

an additional 46.25% stake in Cerro Vanguardia in July 2002. Total cash costs decreased by 6% to $126/oz as a result of improved cost management, higher by- product credits and the effects of the devaluation of the Real and Peso. Attributable operating profit, excluding unrealised non-hedge derivatives, rose by 26% to $68m, primarily as more gold was sold at a higher gold price with lower cash costs.

MORRO VELHO
 
 
 

Production declined marginally to 205,000oz because of lower tonnages treated. This was exacerbated by rock mechanic problems experienced at Cuiab mine in the first quarter, which have since been resolved. Total cash costs increased by 3% to $131/oz. Operating profit, excluding unrealised non-hedge derivatives, was kept stable at $29m. Looking to 2003, production is expected

ANGLOGOLD'S OPERATIONS IN SOUTH AMERICA
 
 
 
 
 
 
 
 
 
Operation
Country
Partners
Stake
Management
Morro
Brazil
-
100%
AngloGold
Velho
Serra
Brazil
AngloGold
50%
AngloGold
Grande
TVX Gold inc
50%
Cerro
Argentina
AngloGold
92.5%
AngloGold
Vanguardia
Formicruz, Santa 
7.5%
Cruz Province
SAFETY PERFORMANCE
 
LTIFR
FIFR
2002
2001
2002
2001
Morro Velho
5.73
9.07
0.00
0.58
Serra Grande
0.70
6.42
0.00
0.00
Cerro Vanguardia
3.72
7.54
0.93
0.00
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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37
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

to increase to 218,000oz, at a total cash cost of $106/oz. Capital expenditure for the year amounted to $17m and will increase to $28m during 2003.

SERRA GRANDE

 

 

 

Attributable production decreased by 3% to 94,000oz as a result of a 3% fall in grade owing to a depletion of the sulphide orebodies. Total cash costs decreased by 7% to $100/oz mainly due to the devaluation of the Real. Attributable operating profit, excluding unrealised non-hedge derivatives, increased by 1% to $17m.

 

       Production is expected to decrease to 90,000oz in 2003, at a total cash cost of $90/oz. Capital expenditure for the year amounted to $3m, and will increase to $4m during 2003.

CERRO VANGUARDIA

 

 

 

Attributable gold production rose by 32% to 179,000oz principally as a result of the acquisition of an additional 46.25% stake from Prez Companc in July 2002. Excluding the additional production arising from the acquisition, production declined by 11% as a result of water entering the pits and combining with clay in the ore feed to the plant, causing production delays in the third quarter, which are still being addressed.

 

       Total cash costs decreased by 22% to $104/oz as a result of better cost management and the Peso devaluation,

while attributable operating profit, excluding unrealised non-hedge derivatives, increased 85% to $27m, as a result of AngloGold's additional interests in Cerro Vanguardia, lower cash costs and the higher gold price received.

 

       In 2003, production should rise to 246,000oz, at a total cash cost of $110/oz. Capital expenditure for the year amounted to $2m, and will increase to $6m during 2003.

Growth  

The pre-feasibility study for the Cuiab Expansion Project was completed in 2002. The project envisages expanding production from 2,300tpd to 4,000tpd, yielding an additional 180,000oz/year of production at an estimated capital cost of some $93m. The feasibility study for the project will be completed during 2003 and, should approval be received, is scheduled for implementation in September 2004. Full production capacity would be reached in 2006.

 

       Pre-feasibility studies to expand Cerro Vanguardia's ore treatment plant throughput to 1.2Mtpa and underground mining to produce 300,000tpa were both started in 2002. The increase in production is forecast at 75,000oz per year at an estimated capital expenditure of $13m. Implementation of these projects will be carried out from August 2003 to August 2004 and full production is expected in 2005.

    The pre-feasibility study of the Lamego Project, which envisages the exploitation of 6.3Mt of resources at 5.96g/t, is due to start in 2003. Production is forecast to be 45,000oz per year for 10 years, with capital expenditure of $14m.

 

     Opening of the access ramp to confirm resources of 600,000t at 10.78g/t of sulphide ore at Crrego do Stio began in 2002. The pre-feasibility study to treat the sulphide ore will start in 2003 at an estimated capital expenditure of $13m. The project will produce 55,000oz/year.

 

     Exploration work continues at Serra Grande, with the aim of increasing reserves. During 2002, aerial geophysical work was undertaken and studies to verify geophysical anomalies were conducted. During 2003, it is expected that the investigation of such anomalies is expected to intensify.

 

Sustainable development  
Environmental and social issues continue to receive attention.

Ongoing environmental work at Morro Velho includes a stepped-up waste collection and recycling campaign during the year, significantly reducing the amount of waste generated by the company. This programme has been bolstered by an extensive communications network to instil further awareness of the campaign.

 

Mayra Rodrigues Nunes (left), a
monitor at the Harry
Oppenheimer Environmental
Centre, hands seedlings to children
from the Nova Lima day care
centre. Both these centres are
examples of AngloGold's social
investment initiatives aimed at the
communities surrounding its
operations.
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REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

     In Raposos, Morro Velho has revitalised a dressmakers' cooperative by providing both financial and administrative support. Raposos, a mining town, was founded more than 300 years ago around one of the Morro Velho operations which has since closed.

 

 

 

     Various donations amounting to $1.2m were made by the company to a number of projects. As an example of working in partnership with local municipalities, communities and other institutions, Morro Velho recently contributed towards the establishment of the Reference Centre for Pneumology. The Centre provides free services for the diagnosis and treatment of silicosis and associated diseases. The Centre has its own team of specialist physicians including ancillary services such as social work, physical therapy and pharmacies.

 

     A project that has been dubbed "the second gold yield" will see the valuable real estate owned by Morro Velho in and around Nova Lima being used to provide much-needed green areas as a very important backdrop to the growing urban

 

landscape. Discussions are being held with key authorities in the region to ensure appropriate best practice use into the future. Also in the Nova Lima area, an educational campaign has been developed to inform communities about safe water usage.

 

 

     To increase awareness of such green issues, the Harry Oppenheimer Centre for Environmental Education continued with its efforts during the year, while at the same time providing a recreational centre. The Centre had some 9,000 visitors during the year and about 600 company employees participated in courses and workshops looking at environmental programmes and technology implemented by the company.

 

Another environmental project, established by Serra Grande 18 months ago, the Ecological Preservation Centre, received visits from more than 400 people from the community of Crixs during the year. Students and teachers, as well as other community leaders, participated in the environmental awareness courses developed by the Centre.

 

A survey of the small community of Rio Acima, home to the Engenho d'gua mine, near Morro Velho, indicated that, although most community members were positive about the development, some aspects of concern were raised such as dust and traffic control. This was then addressed by the company by watering the roads and further training of operators.

 

The Crrego do Stio mine, located in Santa Brbara, was granted a renewal of its operating permit in 2002, which is now valid until July 2007. Good progress was made with environmental rehabilitation on the mine with about 163 hectares having been replanted up to December 2002.

 

An agreement was reached with the National University of Southern Patagonia for the monitoring of the flora, fauna and soil of the region in which the Cerro Vanguardia mine is situated. The aim is to ensure the preservation of animal and plant species, in addition to maintaining water and soil quality.

 

Cerro Vanguardia received both the
ISO14001 and NOSA 5-star status,
becoming the only mine in the
world to have achieved these two
accreditations simultaneously.
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39

Safety and health 
Safety performance continued at the exceptionally high levels that have become the norm at the North American operations. The overall LTIFR was 4.95, which compares favourably with the Ontario benchmark. Jerritt Canyon's Smith mine was once again recognised by the Nevada Mining Association as having the lowest reportable injury rates for calendar 2001, while the Murray mine achieved one million man-hours without a lost time injury.

     CC&V was recognised by the Colorado Mining Association for achieving over 728,000 contractor man- hours without a lost time injury during the recent project expansion. CC&V's Safety Supervisor was also recognised by the Colorado Mining Association for his active involvement in this achievement.

 

Performance and outlook 
The year started with some difficulties at the North American operations as severe weather conditions affected Jerritt Canyon, and CC&V experienced ongoing technical problems associated with its valley leach facility. Performance had improved by year-end, however, particularly as major elements of the CC&V expansion project were completed on time and below budget. Production

for the year decreased by 7% to 462,000oz, while cash costs rose by 5% to $222/oz. Operating profit, excluding unrealised non-hedge derivatives, decreased by 84% to $3m as a result of these production issues and higher non- cash charges at CC&V.

JERRITT CANYON

 

 

 

A reorganisation of labour in the underground mines resulted in reduced productivity in the first quarter, but the resultant improvements were felt from the second quarter onwards. Attributable production decreased by 16% to 237,000oz, primarily due to lower first quarter mill tonnages, lower grades mined, and completion of the Cortez tolling agreement.

     Total cash costs increased by 12% to $249/oz,
 while operating profit excluding unrealised non-
hedge derivatives, decreased to a loss of $3m.
 

     On 27 February 2003, it was announced that AngloGold had entered into a purchase and sale agreement with Queenstake Resources USA Inc on its interest in the Jerritt Canyon Joint Venture. In terms of the agreement, Queenstake will pay the Jerritt Canyon Joint Venture $8m on closing, $6m in deferred payments and additional royalty payments. Queenstake will accept full closure and reclamation and other liabilities. The transaction is expected to close no later than 31 March 2003.

 

 

CC&V Production at CC&V increased by 5% to 225,000oz. Although gold production was negatively affected by technical problems associated with the leach system pH, higher leach solution volumes were processed during the latter part of the year. These factors, combined with the near completion of the bulk of the $195m

REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
USA
Jerritt
Canyon
CC&V
WHO OWNS AND MANAGES THE OPERATIONS
 
Operation
Country
Partners
Stake
Management
Jerritt                   USA
AngloGold
70%
AngloGold
Canyon
Meridian Gold Inc
30%
Cripple
USA
AngloGold
67%
AngloGold
Creek
*100%
& Victor
Golden Cycle Gold Corp
33%
*
Interest in gold produced.
Key statistics
2002
2001
Tonnes treated (Mt)
(attributable)
13.3
12.2
Average grade (g/t)
1.08
1.27
Gold production (oz)
(attributable)
462,000
496,000
Total cash cost ($/oz)
222
211
Number of employees*
910
850
Efficiencies (g/TEC)
1,979
2,273
Capex ($m)
(attributable)
74
93
* Including contractors
North America 
AngloGold's operations
in North America
The North America region comprises the
Jerritt Canyon Joint Venture (70%) and the
Cripple Creek & Victor Gold Mining
Company (CC&V) (67% interest, with a
100% interest in gold produced). 
SAFETY PERFORMANCE
 
LTIFR
2002
2001
Jerritt Canyon
5.74
1.17
CC&V
4.36
1.91
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expansion in the third quarter, served to enhance operational efficiencies. The expansion project has increased the average annual gold production by 40% and extended the LOM from 2008 to at least 2013, thereby yielding an additional 2.8Moz. Current indications are that the average LOM cash costs will reduce from $227/oz to $176/oz. The new crushing facility was commissioned in July 2002, while additional leach pad and solution handling equipment were brought into production in September and December 2002, respectively.

Total cash costs remained at $187/oz

as higher reagent costs were offset by continued cost-cutting efforts. Mined tonnage and metal production improved towards the latter part of the year as the full benefit of the expansion project was realised.

Operating profit, excluding

unrealised non-hedge derivatives, decreased by 38% to $6m, owing to accelerated depreciation charges on the old crusher assets and higher amortisation charges relating to increased production. For 2003, production is likely to rise to 414,000oz at a total cash cost of $179/oz. Capital expenditure amounted to $66m in 2002, and is expected to be in the region of $25m in 2003.

Growth  

Following the completion of the CC&V expansion project in 2002, extensive brownfields drilling is being conducted to further optimise surface mine plans, as well as to assess the potential for future underground operations.

Sustainable development  

AngloGold North America endeavours to make a positive contribution to the communities in which the company operates. Projects with potential social, economic or environmental benefits are identified, nominated, evaluated and recommended to management for support.

 

 

    Jerritt Canyon spearheaded the development of a voluntary mercury reduction programme with other mining companies, as well as state and federal government agencies. The aim is to reduce mercury air emissions between 2003 and 2005. Jerritt Canyon was a charter member and has implemented controls and other actions to exceed programme requirements.

 

     Haul road re-contouring, surface mine backfill grading and revegetation,

 

and site rehabilitation of facilities beyond the requirements of the approved reclamation plan, were undertaken at Jerritt Canyon in 2002.

     Funding in the form of housing and transportation for the Boise State University researchers' goshawk study group was provided again in 2002. Continued support for this research by Jerritt Canyon has resulted in this being the longest continuous study of goshawk in North America.

 

     The McCaw School of Mines Foundation, the Gold Fever programme, University of Nevada Foundation, scholarships, teachers' programmes, and a myriad other worthwhile educational programmes are supported by Jerritt Canyon.

 

     CC&V donated $25,000 in 2001 and $25,000 in 2002 to support the construction of a regional medical centre in Teller County.  These donations were used by the Medical  Centre Board to obtain a $250,000 grant  from the State

 

of Colorado for this worthwhile project that will benefit the citizens of Teller County for many years into the future.

 

 

   CC&V delivered two bulldozers with operators to assist the US Forest Service in fighting the Hayman Fire during the early summer of 2002. This was the largest fire in Colorado's history. CC&V later made a $10,000 donation for fire rehabilitation. A three-to-one federal matching fund increased this amount to $40,000. CC&V recognised the importance of fire rehabilitation in stabilising the soils and helping to control future flooding and sedimentation.

 

   CC&V continues to actively support the Vindicator Valley Trail System in co- operation with an independent advisory group referred to as the Southern Teller County Focus Group. The trails, overlooks and structures have become tourist attractions and provide an opportunity to educate the public about historic and modern mining.

 

40
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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41
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Expansion at Cripple Creek
& Victor
The expansion project, completed in 2002
without a single lost time injury, has increased
gold production capacity by 40% and extended
the LOM to 2013.
This 1,218ft long bridge, built to
accommodate the expanded CC&V leach pad,
spans a 250ft drop and cost $18m to build.
The bridge is a co-operative effort between
CC&V and the Colorado Department
of Transportation.
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42
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Union Reefs
Sunrise Dam
Key statistics
2002
2001
Tonnes treated (Mt)
(attributable)
6.1
8.0
Average grade (g/t)
2.56
1.97
Gold production (oz)
(attributable)
502,000
508,000
Total cash cost
$/oz
193
194
A$/oz
354
375
Number of employees*
600
700
Efficiencies (g/TEC)
2,437
1,952
Capex (attributable)
$m
31
42
A$m
57
82
* Including contractors
Australia 
AngloGold's operations in Australia
The Australia region comprises two operations: Sunrise Dam in Western Australia and Union Reefs
in the Northern Territory. Two further operations, Boddington and Tanami, were closed at the end
of 2001, with only the residual plant clean-up at Boddington contributing 2,000oz during the year.
Boddington is currently on a care-and-maintenance programme, pending a decision to proceed with
the Boddington Expansion Project. The Tanami plant has been leased for third party ore processing.
SAFETY PERFORMANCE*
 
 
LTIFR
2002
2001
Sunrise Dam
11.0
11.56
Union Reefs
0.0
5.08
* Based on South African benchmark
definitions

Safety and health  
The Australia region (including Union Reefs, Sunrise Dam and Boddington) recorded an LTIFR of 11.22 for the year, down some 17% on the previous year, combined with a 38% decrease in all injuries. The SafeGold initiative, launched by Bobby Godsell at the Australian operations in late 2001, contributed to the improved safety performance. Further safety initiatives will be introduced in 2003.

     Union Reefs was the recipient of the Northern Territory Government's recognition award for resource develop- ment in 2002.

 

Performance and outlook  
Overall, production in the Australia region decreased only marginally (by 1%) to 502,000oz despite the closure of Tanami and Boddington in late 2001. Excellent results were achieved from the remaining operations, particularly at Sunrise Dam, where production increased by 30%. In US Dollar terms, total cash costs decreased by 1% to

$193/oz, or A$354/oz, a decline of 6%. This was a result of an ongoing focus on cost reduction and the impact of the expansion at Sunrise Dam. Operating profit, excluding unrealised non-hedge derivatives, increased by 83% to $33m (A$60m).

SUNRISE DAM

 

 

 

Gold production at Sunrise Dam increased significantly by 30% to 382,000oz as plant throughput rose by 41% to an annual rate of 3.4Mtpa following the capital expansions under- taken the previous year. Total cash costs increased by 15% to $177/oz or by 9% to A$323/oz. After completion of a major cutback at the end of 2001, mining in the new MegaPit reached full capacity in the first half of 2002. A smaller cutback, in the Watu section of the pit, was approved during the year, giving access to additional ore that had been identified for ongoing drilling. Operating profit, excluding unrealised non-hedge derivatives, rose by 57% to $33m (A$61m). Production should remain unchanged at 382,000oz in 2003 at

an expected total cash cost of $192/oz (A$326/oz). Capital expenditure was $26m (A$47m) for 2002, and should be of the order of $14m (A$23m) in 2003.

UNION REEFS

 

 

 

Gold production at Union Reefs increased by 4% to 118,000oz, despite disruptions to mining in the main Crosscourse Pit during the wet season at the beginning of the year, and an increased focus on mining smaller, satellite resources. Furthermore, total cash costs fell by 3% to $224/oz or by 8% to A$411/oz, as a result of higher production and tight cost control. As a result, operating profit, excluding unrealised non-hedge derivatives, increased to $3m (A$6m). The mine remains in closure mode, with operations expected to cease in the second half of 2003.

 

 

Growth  
Very encouraging exploration results were achieved at Sunrise Dam during the year.
A decision to proceed with the Boddington Expansion Project is expected

 

 

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43
REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002

by the second half of 2003. AngloGold owns 33.33% of the Boddington Gold Mine, along with Newmont (44.45%) and Newcrest (22.22%). A feasibility study completed in 2000 was based on an operation with a throughput of 25Mtpa, producing an average of 600,000oz of gold and 22,500t of copper per year over a mine life of 15 years. Further work was undertaken by the respective JV partners in the past year to further test the feasibility study, better understand the project risk and identify opportunities for enhancing returns. This work is likely to continue into the second quarter of 2003.

   During 2002, Worlsey Alumina - the previous manager of the project - was

replaced by the Boddington Gold Mining Management Company, which is owned by the JV partners in proportion to their interests in the project. Environmental approvals associated with the expansion were received in June 2002 and will remain valid for a period of five years.

Sustainable development  
Environmental management and compliance, as well as the promotion of social development in the regions in which the company operates, continued as a matter of priority during the year.

      AngloGold Australia improved its environ-
mental  performance, reducing the number of
 Category 3  incidents

 

during the year to two compared with eight incidents in 2001. A detailed closure plan for Union Reefs, addressing environmental, stakeholder and community issues, was approved by the Northern Territory Government.

 

 

 

   The company was involved in a number of community development and support initiatives during the year and maintained its commitment to training, employment and business support in indigenous communities. In recognition of its positive contribution to indigenous issues in the Tanami region, the Darwin exploration team received a Community Service Award.

 

Encouraging exploration results were achieved
at Sunrise Dam, where gold production has
already increased significantly during the year
under review.
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REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
44
Attributable
Average
tonnes
grade
treated
recovered
(Mt)
(g/t)
2002
2001
2002
2001
Operation
SOUTH AFRICA
 
 
 
Ergo
32.8
41.3
0.25
0.25
Great Noligwa
2.5
2.5
11.02
12.34
Kopanang
2.2
2.1
7.23
7.4
Moab Khotsong *				  	             -	                    -	       -	             -
 
 
 
 
Mponeng 
1.7
1.5
8.63
7.71
Savuka 
1.0
0.9
7.07
7.97
Tau Lekoa 
2.2
2.0
4.45
4.42
TauTona
1.7
1.6
11.66
11.94
EAST AND WEST AFRICA
 
 
 
 
 
Geita (50%)
2.5
2.3
3.62
3.7
Morila (40%)
1.1
1.1
11.96
6.87
Navachab
1.4
1.3
1.93
2.04
Sadiola (38%)
1.9
2.0
2.96
3.13
Yatela (40%)
1.1
0.5
2.95
3.33
NORTH AMERICA
 
 
 
Cripple Creek &
Victor Joint Venture
12.4
11.3
0.57
0.59
Jerritt Canyon Joint
Venture (70%)
0.9
0.9
7.91
9.41
SOUTH AMERICA
 
 
 
Cerro Vanguardia (92.5%)
0.6
0.4
9.49
10.51
Morro Velho
1.0
1.0
6.71
6.63
Serra Grande (50%)
0.4
0.4
7.84
8.08
AUSTRALIA
 
Boddington (33.33%)					              -
 
2.6
 -
0.92
Sunrise Dam
3.4
2.4
3.49
3.81
Union Reefs
2.7
2.6
1.36
1.36
*
Moab Khotsong is a new mine in its development phase. The mine is expected to commence production in 2003.
 
Operating profit excluding unrealised non-hedge derivatives.
Summary of operations
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REVIEW OF OPERATIONS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
45
Attributable
Attributable
gold
Total cash
operating 
Attributable
production
costs
profit
EBITDA
(000oz)
($/oz)
($m)
($m)
2002
2001
2002
2001
2002
2001
2002
2001
264
332
184
215
20
16
22
18
880
1,004
124
122
141
147
149
154
511
494
165
178
56
42
63
49
-	        -	               -	                      -	       -	              -	                     -	       -
 
 
 
 
 
 
 
466
366
178
223
30
-
54
18
236
240
245
248
9
4
12
6
311
286
192
203
23
10
32
16
643
622
132
154
98
69
104
75
290
273
175
147
20
25
33
37
421
252
74
103
70
25
99
43
85
87
147
164
12
9
13
10
182
204
163
131
12
21
25
34
107
52
175
149
10
5
15
7
225
214
187
187
6
10
43
32
237
282
249
223
(3)
8
19
26
179
136
104
133
27
14
44
26
205
209
131
127
29
28
41
40
94
96
100
107
17
13
22
19
2
78
-
190
-
5
-
7
382
295
177
153
33
21
51
33
118
114
224
230
3
1
6
5
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Independently of its support for the WGC, the company is active in a number of other marketing projects in support of gold, and AngloGold remains the only gold company in the world that has committed this level of resources to marketing the metal it produces.

   Among existing downstream initiatives, the company continues as a partner in GoldAvenue, an Internet collaboration between AngloGold, JP Morgan Chase and Pamp MKS of Geneva. During 2002, GoldAvenue published two new gold jewellery catalogues focused on uniquely designed, high-value gold jewellery aimed at the US market. Both sales and market penetration improved, with further growth anticipated during the year ahead. This business is being developed in association with Vivre, a luxury goods catalogue business operation in which GoldAvenue has taken an equity interest. AngloGold has provided additional support to this venture through product development, sourcing and product selection.

 

   AngloGold holds a 25% stake in OroAfrica, the largest manufacturer of gold jewellery in South Africa, as an investment in the downstream gold value chain. AngloGold and OroAfrica have co- operated in a number of projects including OroAfrica's development and launch of an African gold jewellery brand. An important strategic step has been the establishment of a Jewellery Design Centre at OroAfrica at a cost of $250,000. The purpose of the centre is to generate new gold jewellery designs, and to improve product standards through technology, design and innovation.

 

 

   In the area of design innovation, AngloGold's current Riches of Africa Gold Jewellery Design Competition was established in 1998 to showcase South African jewellery designers, to enhance jewellery manufacturing technical skills and to support the local gold jewellery industry. Training workshops for competition entrants are held each year,

while the award-winning works are exhibited and used in fashion shows and other events both locally and abroad.

   A gold jewellery design competition in Brazil was launched by AngloGold in 2002, and is the first such competition in that country. The competition generated unprecedented interest, with a high quality of design and craftsmanship. Some 43 finalists contributed towards a collection of 52 pieces of innovative, high quality gold jewellery. Some of these pieces have been acquired for sale in the United States through GoldAvenue.

 

   The Gold of Africa Museum, inaugurated by AngloGold in 2001 with the permanent endowment of the Barbier Mueller collection of West African gold objects purchased by the company in 1998, enjoyed its first full year of operation and has proved to be an attractive museum venue in Cape Town. The museum also serves as a facility for training in the jewellery industry in Cape Town.

 

   AngloGold and Mintek, South Africa's national metallurgical research organisation, launched Project AuTEK in 2000 to research and develop industrial applications for gold. In May 2002, the project unveiled the first working prototype of a room temperature air purification unit based on a gold catalyst. The new unit is expected to be considerably cheaper to manufacture than designs based on other types of catalysts and could be used in restaurants, hospitals, hotels and office blocks.

 

 

     AngloGold remains a key sponsor of the Atteridgeville Jewellery Project, established in 2000 by the Vukani-Ubuntu Community Development Project to create opportunities in the jewellery industry in South Africa for the previously disadvantaged through training and development. A new project initiated during the year by Vukani-Ubuntu and funded by AngloGold was the production and marketing of the "Kwaito" jewellery range, strongly associated with South African Kwaito music through the slogan

"Rhythm you can wear". The focus is on affordable gold jewellery that is ready to wear and that can be mass produced by the Atteridgeville project.

 

     AngloGold undertook two new ventures with gold in the fashion industry abroad. The first was the Afridesia project, involving the sponsorship and creation of a South African clothing and gold jewellery collection at the 2002 New York Fashion Week. This project created a platform for South African designers and craftspeople at this very important forum. It also showed the value of cross fertilisation with the fashion industry for gold jewellery design. In the second important overseas project, AngloGold co-sponsored and participated in the International Herald Tribune Luxury Conference in Paris in December 2002. This participation provided AngloGold with the opportunity to access fashion industry leaders and luxury brand name retailers, and to present a case for the introduction of new gold jewellery branded products to these businesses. Both of these initiatives were well received and have given rise to further opportunities to be pursued in 2003.

 

     An important feature in many of AngloGold's marketing projects has been the beneficiation of gold, particularly in South Africa. AngloGold's commitment to adding value to gold extends beyond mining and contributes towards the upliftment of people and the sustainability of communities.

 

     The challenge for marketing gold today is bigger than it has ever been, given the sharp fall-off in physical demand for gold in the major developing markets resulting from the rise in price and volatility. This market has now been stagnant for well on a decade as gold jewellery has had to compete with other luxury consumer goods. AngloGold will continue its work with the WGC but will continue also to work independently in other areas of the gold market where it can exercise strategic influence.

Marketing
D
uring 2002, AngloGold spent some $17m on gold marketing initiatives, of which 73% was spent through the World Gold Council (WGC). This organisation underwent a major restructuring during the year and has allocated increased resources to support the market for gold investment purposes.
ANGLO GOLD LIMITED ANNUAL REPORT 2002
46
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The Afridesia project,

involving the sponsorship and

creation of a South African clothing and gold jewellery

collection at the 2002 New

York Fashion Week, created a

platform for South African

designers and craftspeople at

this important forum.

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Exploration
A
ngloGold's global exploration strategy seeks both to extend the life of existing operations (through brownfields exploration) and to establish new mines (through greenfields exploration). The aim is to provide double-digit returns on investment.
ANGLO GOLD LIMITED ANNUAL REPORT 2002
48
Brazil
Argentina
Serra Grande
Cerro Vanguardia
Morro Velho
USA
Jerritt
Canyon
Cripple Creek
& Victor
Mali
Tanzania
Namibia
Geita
Sadiola
Yatela
Morila
Navachab
SA operations
South Africa
Union Reefs
Sunrise Dam
Australia
Alaska
Canada
Peru
Mines
Greenfields exploration areas
Brownfields exploration areas
AngloGold's exploration programme
extends to four continents at a cost
of $51 million during 2002.
Exploration  
During 2002, the exploration focus continued in countries where AngloGold already has operations, namely in Argentina, Australia, Brazil, Tanzania, Mali, Namibia, South Africa and the United States. In addition, exploration was pursued in highly prospective areas in Alaska, Canada and Peru.
 
   Exploration expenditure for the year amounted to $51m, some 63% of which was spent on increasing near and in-mine resources. Exploration expenditure in 2003 will be in the region of $61m.
EXPLORATION EXPENDITURE BY REGION ($m)
 
 
Forecast 2003
2002
2001
South Africa
4
1
4
East & West Africa
11
11
7
South America
17
12
11
North America
13
10
7 
Australia
13
14
13
Corporate
(includes target generation)
3
3
2
Total
61
51
44
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EXPLORATION
 
49
ANGLO GOLD LIMITED ANNUAL REPORT 2002
SOUTH AFRICA
 
 
 
Drilling commenced in two surface boreholes at Goedgenoeg to the west of Tau Lekoa to delineate further Ventersdorp Contact reef (VCR) resources. Assay results are expected early in 2003. A surface borehole is also in progress at Moab Extension to confirm predicted structure and grade.
EAST AND WEST AFRICA
 
 
 
 
 
At Sadiola in Mali, exploration and remodelling defined additional attributable principally hard sulphide Mineral Resources of 1.8Moz before depletion. In addition, new target areas continue to be defined.
 
   Oxide exploration focused on extensions between the FE3 and FE4 satellite pits, some 7km south-east of the main Sadiola pit. Mineralisation is open ended to the north and north-west of the FE4 pit. Some encouraging intersections include 70m at 10.7g/t from 86m; 48m at 2.80g/t from 58m and 46m at 2.99g/t gold from 58m. Drilling will continue in 2003.
 
   The sulphide drilling programme targeting the orebody below the main Sadiola pit continued as planned. Results are largely confirming the expected grades and widths.
 
   At the nearby Yatela mine, infill drilling of the Alamoutala satellite deposit, situated 13km south-east of the pit, was completed during the year. A new resource model for this deposit was finalised, resulting in an increase in the attributable Mineral Resource by 0.1Moz. Optimisation and detailed planning have commenced and pending the current feasibility study, mining of the deposit is scheduled to commence in July 2003.
 
   At Morila, diamond drilling to the west of the pit intersected mineralisation up to 250m west of the current ore envelope.
 
   In southern Mali, geochemical sampling and first phase follow-up RAB (rotary airblast) drilling were completed on the Diele, Kola and Sinsin properties located adjacent to Morila. Further RAB drilling and RC (reverse circulation) drilling is planned at the Kola and Sinsin properties in 2003 to investigate Morila type mineralisation. RAB generated gold anomalies were RC drill tested towards the end of the year on the Kalaka licence situated 50km south of Morila. Assays are pending. A further two licences, Garalo and Banzana, situated approximately 100km
south-west of Morila were granted during the year. These properties will be RAB drilled in 2003.
 
   In Tanzania, the Geita deposit has been geologically modelled as one continuous mineralised trend from Geita Hill to Nyankanga, a strike length of some 5km. Resource definition drilling resulted in an increase in attributable reserves of 0.9Moz and resources of 0.8Moz. Drill intersections include 26m at 4.06g/t and 14m at 14.90g/t. Further drilling is planned in 2003 at Nyankanga East and West, the area between Geita Hill and Lone Cone, at Geita Hill and the north-eastern extension.
      At Navachab in Namibia, drilling concentrated on footwall extensions to the pit. An extensive drilling programme is planned as part of the expansion project during 2003. Resource definition drilling and new resource modelling added 1.9Moz to the resource base at Navachab in 2002.
 
Plan showing areas drilled in
vicinity of Geita in 2002
together with those planned
for 2003.
Exploration and remodelling defined additional attributable mineral
resources as well as new target areas. Section through the Sadiola orebody.
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SOUTH AMERICA
 
 
 
Target generation, follow up sampling and mapping in five South American greenfields project areas added several new prospects to the exploration portfolio in the region. Three prospects were drilled in Peru with first stage diamond and RC drilling completed at the La Rescatada project in southern Peru. Additional drilling is scheduled to commence in February 2003 and is designed to confirm the continuity and extent of mineralisation, culminating in resource definition drilling.
 
   In Brazil exploration continued to focus on near-mine resource generation at Serra Grande and Morro Velho. At Crrego do Stio, which is in the Iron Quadrangle located approximately 40km east of Morro Velho, an exploration ramp is being developed to evaluate the deeper sulphide ore potential. The ramp is scheduled to reach the ore zone in the second half of 2003. At Lamego, situated 10km north-east of Morro Velho, down-plunge drilling has confirmed the mineralisation to a vertical depth of 650m. An exploration ramp has been dewatered in preparation for underground evaluation drilling.
 
   Exploration at Cerro Vanguardia in Argentina continued to produce new open-pit resources and underground down-plunge extensions from known orebodies. In 2002, drilling added Mineral Resources of 1Mt at 8.85g/t gold and 142g/t silver.
NORTH AMERICA
 
 
 
Resource development drilling continued at both Jerritt Canyon and CC&V joint ventures, in support of LOM plans. At Jerritt Canyon, exploration concentrated on targets near the current mine workings. At CC&V, reserve development drilling continued in the latter part of the year on the East and North Cresson deposits, with work to continue in 2003 to confirm newly identified mineralisation.
 
   At Red Lake in Canada, drilling commenced on several targets in the Dorion-McCuaig, Slate Bay and Humlin areas and on the new Rivard property located at the west end of the Red Lake Belt towards the end of the year. Geophysical surveying was completed ahead of the winter drilling campaign
EXPLORATION
ANGLO GOLD LIMITED ANNUAL REPORT 2002
50
Drilling commenced on several targets at Red Lake
Joint Venture in Canada. Follow-up work will take
place in 2003.
La Rescatada is one of the three projects drilled in Peru, with initial
diamond and RC drilling completed during the year.
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EXPLORATION
51
ANGLO GOLD LIMITED ANNUAL REPORT 2002
and results are being compiled from preliminary
drilling for follow-up work in 2003. 
First phase drilling was completed at the Blue Desert
JV in Alaska.
In Nevada, three Great Basin projects were drill-tested
with a further three targets to be drill-tested during 2003. 
AUSTRALIA
 

In Australia, exploration at Sunrise Dam continued to be successful. Work in 2002 focused on increasing the underground Mineral Resource in the Sunrise Shear zone, the Western Shear zone and Mako structures. An additional 0.6Moz was added to the Mineral Resource in 2002.

 

   Toward the end of the year, exploration concentrated on testing extensions of the Dolly-Cosmo zone, yielding significant results from Dolly including: 19m at 4.00g/t from 934m; 2m at 15.45g/t from 728m and 24m at 5.58g/t from 374m. This drilling also intersected a new lode, Hammerhead, to the east of Cosmo. Results included 11m at 36.58g/t from 406m and 8m at 5.30g/t from 309m. Step out drilling on the Sunrise Shear zone intersected the structure up to 300m north-west of the new underground resource, with results including 4m at 8.49g/t from 502m and 7m at 3.87g/t from 635m.

     At Coyote in the Tanami region, a small high-grade resource was outlined. In 2003, exploration will focus on follow- up targets in eastern and western Tanami.

 
Geologists near Lake Carey at Sunrise Dam, Australia region, where
exploration continues to add Mineral Resources (below). 
A 3D view of the final pit shell is indicated (above).
background image

AngloGold had Ore Reserves of 72.3Moz and Mineral Resources of 287.6Moz as of 31 December 2002.

   Mineral Resources and Ore Reservesare reported in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC Code), together with the South African Code for the Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code), for the South African operations.

 

Mineral Resources  

Mineral Resources (excluding the Free State mines) calculated at a gold price of $400/oz, increased by 5.9Moz or 2% to 287.6Moz at the end of 2002. Ongoing exploration programmes added some 3.6Moz over and above the 6.5Moz of Mineral Resources that where depleted in 2002.

    Some of the largest increases in resource are:

       *  an increase of 3.7Moz at Tau Lekoa to 17.4Moz, due primarily to the incorporation of adjacent ground at Goedgenoeg;

       *  an increase of 1Moz to 12.8Moz at Moab Khotsong, due mainly to revised geological modelling;

       *  an increase of 0.8Moz to 8.1Moz at Geita. This increase includes recent exploration successes;

     *  an increase at Navachab of 1.8Moz to 4.6Moz. This was largely due to changes in the Namibian Dollar/ US Dollar exchange rate and the effect of this on the Mineral Resource constraints;

      *  an increase of 1.9Moz at Cerro Vanguardia to 3.5Moz, due partly to the increased stake acquired during 2002 and partly due to some brownfields exploration successes.

 

 

 

 

 

 

 

 

 

 

 

Ore Reserves  
Ore Reserves, estimated using a gold price of $325/oz at an exchange rate of R10.50 to the Dollar, show a year-on-year increase of some 12.9Moz to 72.3Moz. The higher gold price resulted in feasibility studies being conducted at several of the South African operations. This gave rise to a net increase of 10.9Moz or 22% to 47.5Moz, excluding the Free State mines.

    The increase in the Group's reserves relates principally to the following:

     *  an increase of 4.6Moz at Mponeng mainly due to the inclusion of the Carbon Leader and VCR below 120 level;

      *  an increase of 4.3Moz at Moab 

Khotsong due to the inclusion of Phase 2 which aims to exploit the Vaal Reef below 101 level;

      *  an increase of 0.8Moz at TauTona 

as a result of the inclusion of the Carbon Leader below 120 level, the area East of the Bank Dyke on 116 level and area "A" on the VCR;

     *  increases of 1.2Moz and 0.7Moz at Savuka and Tau Lekoa respectively due to changes in mine design leading to additional life at both operations;

      *  an increase of 0.8Moz at Geita due 

to the redesign of the Nyankanga, Geita Hill and Lone Cone pits, as well as the inclusion of Chipaka, Area 3W and Roberts;

     *  an increase of 1.1Moz at Cerro Vanguardia mainly as a result of Anglo- Gold's increase in ownership to 92.5%.

      The Ore Reserves are relatively 

insensitive to changes in gold price and exchange rates of up to 10%, positive or negative.

      AngloGold will continue to pursue a strategy of increasing value-adding reserves through expansion projects, brownfields and greenfields exploration and 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, 17 years' experience.

•  M F O'Brien, MSc (Engineering),

BSc (Hons) (Geology), Dip Data, Pr.Sci.Nat., MAusIMM, 23 years' experience.

Designated competent persons taking corporate responsibility for the reporting of Ore Reserves are:

•  B W Guenther, BSc (Mining

Engineering), MAusIMM, 22 years' experience.

•  D L Worrall, ACSM, MAusIMM,

22 years' experience.

•  J van Zyl Visser, BSc (Mineral

Resource Management), PLATO, 16 years' experience.

Notes  
A detailed breakdown of the Mineral Resources and Ore Reserves, together with plans of the South African operations, is available in a supplementary statistics document, 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 page 144.

   Rounding of figures in this report and in the supplementary statistics document may result in minor computational discrepancies.

 

Mineral resources 
&
ore reserves
ANGLO GOLD LIMITED ANNUAL REPORT 2002
52
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53
MINERAL RESOURCES & ORE RESERVES
ANGLO GOLD LIMITED ANNUAL REPORT 2002
ORE RESERVES (as at 31 December 2002)
METRIC
IMPERIAL
Tonnes
Grade
Contained            Tons
Grade
Contained
 Mt
g/t
 gold t
Mt
oz/t
gold Moz
South 
Africa***
 Proved
  94.7                    2.22                      210.4                104.4                    0.065                        6.8 
  Probable
  246.3                    5.14 
   1,267.2                271.5                    0.150                      40.7 
Total
  341.0                    4.33 
   1,477.5                375.9                    0.126                      47.5 
East & West Africa*
 Proved
  21.5 
 3.50 
   75.1 
23.7 
0.102 
 2.4 
  Probable
  52.3                     3.73                    195.3                   57.7                   0.109                        6.3 
Total
  73.8                     3.66                    270.4                   81.4                   0.107                        8.7 
South 
America*
 Proved
  15.3                     6.22                      95.5                   16.9                  0 .181                        3.1 
  Probable
  12.7                     4.92                      62.4                   14.0                   0.143                        2.0 
Total
28.0                     5.63                    157.8                   30.9                   0.164                        5.1 
North 
America*
 Proved
57.8                     1.34                      77.7                   63.7                   0.039                        2.5 
  Probable
69.4                     0.99                      68.8                   76.5                   0.029                        2.2 
Total
127.3                     1.15                    146.5                 140.3                   0.034                        4.7 
Australia*
 Proved
49.0                     1.42                      69.7                   54.0                   0.042                        2.2 
  Probable
100.4                     1.26                    126.4                 110.7                   0.037                        4.1 
Total
149.4                     1.31                    196.1                 164.7                   0.038                        6.3 
Totals*
 Proved
238.3                     2.22                    528.3                 262.7                   0.065                      17.0 
  Probable
481.2                     3.57 
  1,720.0                 530.4                   0.104                      55.3 
Total
719.5                     3.12                 2,248.3                 793.1                   0.091                      72.3
 
*
Reserves attributable to AngloGold.
*** Excludes the Free State mines which were sold effective from 1 January 2002.
MINERAL RESOURCES* (as at 31 December 2002)
METRIC
IMPERIAL
Tonnes
Grade
Contained            Tons
Grade
Contained
 Mt
g/t
 gold t
Mt
oz/t
gold Moz
South 
Africa***
  Measured
300.3                    1.84                      552.1                331.0                     0.054                     17.8 
  Indicated
647.7                    4.42 
   2,865.1                714.0                     0.129                     92.1 
  Inferred
463.1                    7.97 
   3,692.3                510.5                     0.233                   118.7 
Total
1,411.0 
5.04                   7,109.5             1,555.4                     0.147                   228.6 
East & West Africa** Measured
37.5 
2.68 
 100.7        41.3 
0.078 
3.2 
  Indicated
107.6                    2.81                      301.9                 118.6                  0.082                        9.7 
  Inferred
144.4                   1.68                       242.2                 159.2                  0.049                        7.8 
Total
289.5                   2.23                       644.7                 319.1                  0.065                      20.7 
South 
America**
Measured
32.4                   4.41                       143.1                   35.7                   0.129                       4.6 
Indicated
22.1                   4.68                       103.4                   24.4                   0.137                       3.3 
Inferred
42.2                   6.20                       261.8                   46.5                   0.181                       8.4 
Total
96.7                   5.26                      508.4                  106.6                   0.153                     16.3 
North 
America**
Measured
85.1                   1.24                      105.7                    93.8                   0.036                       3.4 
Indicated
107.3                   1.12                      120.1                  118.3                   0.033                       3.9 
Inferred
69.2                   1.28                        88.7                    76.3                   0.037                       2.9 
Total
261.6                   1.20                      314.6                  288.4                   0.035                     10.1 
Australia**
Measured
61.2                   1.41                        86.4                    67.5                   0.041                      2.8 
Indicated
143.5                   1.22                      175.0                  158.2                   0.036                      5.6 
Inferred
89.7                   1.18                      106.3                    98.9                   0.035                      3.4 
Total
294.4                   1.25                      367.7                  324.5                   0.036                     11.8 
Totals**
Measured
516.5                   1.91                      988.0                  569.3                   0.056                     31.8 
Indicated
1,028.2 
3.47                   3,565.5               1,133.4                    0.101                  114.6 
Inferred
808.6                   5.43 
4,391.3                  891.3                    0.158                  141.2 
Total
2,353.2 
3.80                   8,944.8               2,594.0                   0.111                   287.6 
*
Inclusive of the ore reserve component.
** Resources attributable to AngloGold.
*** Excludes the Free State mines which were sold effective from 1 January 2002.
NB: Rounding of figures may result in computational discrepancies.
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54

Executive directors  
R M G
ODSELL (50)

 

 

BA, MA 
Chief executive officer

Bobby Godsell was appointed to the AngloGold board as chief executive officer in April 1998 and as chairman in December 2000. He relinquished his role as chairman of AngloGold in May 2002. He has 29 years of service with companies associated with the mining industry, and has served as a non-executive director of Anglo American plc since March 1999. He is also the immediate past chairman of the World Gold Council.

J G BEST (54)

 

 

ACIS, ACIMA, MBA 
Finance director

Jonathan Best was appointed finance director of AngloGold in April 1998. He has had 34 years of service with companies associated with the mining industry.

D L HODGSON (55)

 

 

BSC (MINING ENGINEERING), BSC (CIVIL

 

 

 

 

 

 

 

 

 

ENGINEERING), BCOM, AMP (HARVARD

 

 

 

 

 

 

Chief operating officer

Dave Hodgson was appointed to the AngloGold board in November 2001 as chief operating officer. He was previously executive officer responsible for AngloGold's South Africa region. He has more than 30 years of mining experience.

K H WILLIAMS (54)

 

 

BA 
Marketing director

Kelvin Williams was appointed marketing director of AngloGold in April 1998. He has 27 years of service in the gold mining industry. He is chairman of Rand Refinery and a director of the World Gold Council.

Non-executive directors  
R P E
DEY (60)

 

 

FCA 
Chairman

Russell Edey was appointed to the AngloGold board in April 1998 and as deputy chairman in December 2000. In May 2002 he was appointed chairman when Bobby Godsell relinquished this office. Based in the United Kingdom, he is deputy chairman of N M Rothschild Corporate Finance and a director of a number of other companies.

DR T J MOTLATSI (51)

 

 

 

 

HOND SOC SCI (LESOTHO)

 

 

 

 

 

 

 

 

Deputy chairman

James Motlatsi was appointed to the AngloGold board in April 1998 and as deputy chairman in May 2002 upon Russell Edey being appointed chairman. 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). He is also chief executive officer of TEBA Limited.

F B ARISMAN (58)

 

 

MSC (FINANCE)

 

 

 

 

Frank Arisman was appointed to the AngloGold board in April 1998. He resides in New York and is managing director of J P Morgan Chase, a company he joined in 1972.

MRS  E LE R BRADLEY (64)

 

 

 

 

 

 

BSC, MSC

 

 

 

Elisabeth Bradley was appointed to the AngloGold board in April 1998. She is executive chairman of Wesco Investments Limited, chairman of Toyota South Africa (Proprietary) Limited and a director of a number of other companies. She is also deputy chairman of the South African Institute of International Affairs.

C B BRAYSHAW (67)

 

 

CA(SA), FCA

Colin Brayshaw was appointed to the AngloGold board in April 1998. He is a retired managing partner and chairman of Deloitte & Touche and is a non-executive director of a number of other companies including Anglo Platinum, Datatec and Johnnic Holdings.

DR V K FUNG (57)

 

 

 

 

PH D (BUSINESS ECONOMICS), MSC

 

 

 

 

 

 

 

(ELECTRICAL ENGINEERING)

 

 

 

 

Victor Fung was appointed to the AngloGold board in April 1998. Based in Hong Kong, he is chairman of the Li & Fung group of companies, Hong Kong, the Hong Kong Airport Authority and the Hong Kong University Council.

Dr Fung has advised that he will not

be making himself available for re- election when he retires by rotation from the board at the company's forthcoming annual general meeting.

A W LEA (54)

 

 

BA (HONS)

 

 

Tony Lea was appointed to the AngloGold board in July 2001. He is finance director of Anglo American plc.

W A NAIRN (58)

 

 

BSC (MINING ENGINEERING)

 

 

 

 

 

 

Bill Nairn has been a member of the AngloGold board since January 2000. He was re-appointed to the board in May 2001, having previously been alternate director to Tony Trahar. He is group technical director of Anglo American plc.

J OGILVIE THOMPSON (69)

 

 

 

 

MA

Julian Ogilvie Thompson was appointed to the AngloGold board in April 1998. He is a non-executive director of Anglo American Corporation. He is a non- executive director of De Beers Consolidated Mines and a director of a number of other companies.

 

 

ANGLO GOLD LIMITED ANNUAL REPORT 2002
Directors and executive management
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55
DIRECTORS AND EXECUTIVE MANAGEMENT
ANGLO GOLD LIMITED ANNUAL REPORT 2002
N F OPPENHEIMER  (57)
 
 
MA
Nicky Oppenheimer was appointed to the AngloGold board in April 1998. He is a former non-executive chairman of the company. He is chairman of De Beers Consolidated Mines, a non-executive director of Anglo American plc and a director of a number of other companies.
A J TRAHAR  (53)
 
 
BCOM , CA(SA)
 
 
Tony Trahar was appointed to the AngloGold board in October 2000. He is chief executive officer of Anglo American plc.
Alternate directors  
D D B
ARBER  (50)
 
 
FCA, AMP (HARVARD)
 
 
David Barber was appointed alternate director to Julian Ogilvie Thompson in April 2002. He is finance director of Anglo American Corporation.
A H CALVER  (55)
 
 
BSC (HONS ) ENGINEERING, MDP
 
 
 
 
 
 
(UNISA), PMD (HARVARD)
 
 
 
 
Harry Calver was appointed alternate director to Bill Nairn in May 2001. He is deputy technical director (engineering) of Anglo American Corporation.
P G WHITCUTT  (37)
 
 
BCOM (HONS), CA(SA), MBA
 
 
 
 
Peter Whitcutt was appointed alternate director to Tony Lea in October 2001. He is executive vice-president (finance) of Anglo American plc.
Members of the executive
committee
R M GODSELL  (50)
 
 
Chief executive officer
J G BEST  (54)
 
 
Finance director
D L HODGSON  (55)
 
 
Chief operating officer
K H WILLIAMS  (54)
 
 
Marketing director
Executive officers 
R C
ARVALHO SILVA  (51) 
 
 
 
 
BACC, BCORP ADMIN
 
 
 
 
 
South America region 
Roberto Carvalho Silva 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.
R N DUFFY  (39)
 
 
BCOM, MBA
 
 
Business planning 
Richard Duffy joined Anglo American Corporation 16 years ago. He became an executive officer of AngloGold in 1998 and was given the business planning portfolio in November 2000.
J J KOMADINA  (46)
 
 
BSC (METALLURGICAL ENGINEERING),
 
 
 
 
 
 
MBA, AMP (WHARTON)
 
 
North America region 
Jim Komadina has 25 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.
S J LENAHAN  (47)
 
 
BSOC SC, MSC
 
 
 
 
 
Corporate affairs 
Steve Lenahan 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.
R W MICSAK  (48)
 
 
BS, MLA, JD
Law and Environment 
Bob Micsak 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. He assumed responsibility for AngloGold's corporate legal affairs in September 2002.
N F NICOLAU  (43)
 
 
NHD (METALLIFEROUS MINING), MBA
 
 
 
 
South Africa region 
Neville Nicolau became the executive officer responsible for AngloGold's South Africa region in November 2001. He has 24 years of mining experience.
N W UNWIN  (50)
 
 
BA
Human resources and information technology Nigel Unwin has had many years of experience in the field of human resources. He has been an executive officer since 1999. He relinquished his executive officer responsibilities for AngloGold's Australia region during 2002.
Managing secretary  
M
S Y Z SIMELANE  (37)
 
 
 
 
BA LLB, FILPA, MAP
Yedwa Simelane joined AngloGold in November 2000 from the Mineworkers' Provident Fund where she was the senior manager of the Fund.
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56
The annual financial statements and group annual financial statements for the year ended 31 December 2002 were approved by the board of directors on 3 March 2003 and are signed on its behalf by:
Directors
R P Edey Chairman
R M Godsell Chief Executive Officer
J G Best Finance Director
C B Brayshaw Chairman, Audit Committee
Managing Secretary
Ms Y Z Simelane
ANNUAL FINANCIAL STATEMENTS
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Directors' approval
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
Johannesburg
3 March 2003 
Secretary's certificate
We have audited the annual financial statements and group annual financial statements of AngloGold Limited set out on pages 56 to 131 for the year ended 31 December 2002. 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 annual financial statements are free of material mis-statement.
AN AUDIT INCLUDES
 
   examining, on a test basis, evidence supporting the amounts and  
   disclosures in the annual 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 2002, and the results of operations and cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practices, International Accounting Standards, and in the manner required by the Companies Act in South Africa.
ERNST & YOUNG
Registered Accountants and Auditors
Johannesburg
Chartered Accountants (SA)
3 March 2003
Report of the independent auditors on the
annual financial statements
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57
ANGLO GOLD LIMITED ANNUAL REPORT 2002

Introduction   
The board of directors of AngloGold Limited welcomes the King Report on Corporate Governance for South Africa 2002 (King II) released on 26 March 2002.
     Although a great deal of the company's practices are already in line with the principles set out in King II, action plans have been drawn up to address specific areas where the company's governance position needs to be aligned with the Report's recommendations.
     The company is registered with the Securities and Exchange Commission (SEC) in the United States of America and its ordinary shares are quoted on the New York Stock Exchange (NYSE) in the form of American Depositary Shares, in terms of a sponsored American Depositary Receipt Programme administered by The Bank of New York. Accordingly, AngloGold is bound by the Sarbanes-Oxley Act of 2002 and is instituting a policy and procedures for implementing the requirements of that Act and those of the NYSE.
     Further reinforcing its resolve to continue pursuing a policy of global best practice in business management and corporate governance, the company achieved the following milestones during the year under review:
     *  The separation of the combined role of chairman and chief executive officer with the appointment of a non-executive director as chairman.
     * AngloGold's annual report 2001 being adjudged the "Best Overall Annual Report" at the premier South African Annual Report Awards ceremony, sponsored, amongst others, by the JSE Securities Exchange South Africa (JSE).
     * The adoption of a mission and values statement in line with the present and longer-term strategic direction of the AngloGold group. The full text of the statement is to be found on the inside front cover of this report. 
     * The adoption of an entirely new set of Memorandum and Articles of Association to take cognisance of numerous amendments to companies' legislation in South Africa over many years, changes to the Listings Requirements of the JSE, the impact of STRATE (Share Transactions Totally Electronic), the requirements of King II and changes in international corporate administrative practices.
     * The publication of the following documents:
        An HIV/AIDS Report 2001/2002 which details the
company's comprehensive response to AIDS in the workplace. This publication has been augmented with a subsequent announcement that AngloGold has extended its antiretroviral therapy implementation project to include all eligible employees;
        Towards Sustainability A Social Investment Report
2001/2002. The report sets out the company's obligations and role as a corporate citizen and reviews the health and safety of employees, the management of environmental strategy and programmes for social investment.

 
 
 
 
 
 
.
 
 
 
 
 

The board of directors   
The company has a unitary board structure which currently comprises four executive directors and 11 non-executive directors three of whom have alternates. The directors are identified on pages 54 and 55 of this report.
     The directors are committed to the principles of corporate discipline, transparency, independence, accountability, responsibility, fairness and social responsibility.
     Effective control of management is exercised through the executive directors. They are held accountable by means of regular reports to the board and are measured against agreed performance criteria and objectives relative to the current business climate and the prospects in each business unit. The non- executive directors derive no benefits other than their fee which is fixed by the shareholders in general meeting. The non-executive directors are high-calibre individuals and make a significant contribution to the board's deliberations and decisions. All directors have the requisite knowledge, experience and ability required to properly carry out their duties in meeting the present and future requirements of the company. All participate actively in the proceedings at meetings whether present personally or by teleconference or video conference facilities.
    
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, as well as playing an active role in the company's corporate governance process. 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 interests of the group.
     There are no contracts of service between the directors and the company or any of its subsidiaries that are terminable at periods of notice exceeding one year and requiring the payment of compensation. All directors are subject to retirement by rotation and re-election by shareholders at least once every three years.
     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 forthcoming annual general meeting to enable shareholders to make an informed decision in respect of their re-election.
    
The board retains full and effective control over the group, meeting four 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. In addition, there is provision in the company's Articles of Association for decisions to be taken between meetings by way of directors' written resolutions.
    An agenda and supporting papers are distributed to all directors prior to each board meeting. Appropriate explanations

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate governance
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58
CORPORATE GOVERNANCE
ANGLO GOLD LIMITED ANNUAL REPORT 2002
and motivations are provided for items of business requiring decision at the meeting. This ensures that relevant facts and circumstances are brought to the attention of directors. In terms of good governance, the directors can conduct unrestricted inspection of all company property, information and records.
 
Particulars regarding directors' remuneration and share options, as well as their interests in the issued ordinary share capital of the company, are set out in full on pages 71, 72 and 73 of this report.
DETAILS OF ATTENDANCE BY DIRECTORS AT THE SEVEN BOARD MEETINGS HELD DURING 2002 ARE SET OUT BELOW:
All meetings were held in Johannesburg with the exception of the meeting on 7 May which took place in London. *
* unscheduled meetings
includes attendance through teleconference or video
conference facilities
A absent with apologies
Not required to be present
1
appointed Chairman 1 May 2002
2
appointed Deputy chairman 1 May 2002
3
relinquished Chairmanship 30 April 2002
4
appointed 29 April 2002 A register of directors and officers is available for inspection at the company's registered office in Johannesburg, South Africa.
 

Board committees   
The board has also established a number of standing committees to enable it to properly discharge its duties and responsibilities and to effectively fulfil its decision-making process. Each committee acts within written terms of reference under which specific functions of the board are delegated with defined purposes, membership requirements, duties and reporting procedures. Minutes of the meetings of these committees are circulated to members of the committees and the board. Remuneration of non-executive directors for their services on the committees concerned is determined by the board. Currently, this comprises in the case of each committee: Chairman R50,000 per annum; Members R30,000 per annum each. The committees are subject to regular evaluation by the board with respect to performance and effectiveness. Chairmen of the board committees, or their representatives, are required to attend the annual general meetings to answer any questions raised by shareholders.

 
   The following information reflects the composition and activities of these committees:
EXECUTIVE COMMITTEE
 
This Committee, comprising the four executive directors, meets on a regular basis under the chairmanship of the chief executive officer and is mandated to assist in reviewing operations and performance by the group, developing strategy and policy proposals for consideration by the board and in implementing its directives.
 
   An Operations Sub-committee assists in the execution of certain duties and responsibilities of the Executive 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, business planning and any senior managers of the company as determined by the Executive Committee.
 
   The names of the executive officers appear on page 55 of this report.
 
   The Sub-committee meets under the chairmanship of the chief operating officer on a regular basis.
AUDIT COMMITTEE
 
C B Brayshaw (Chairman), Mrs E le R Bradley, R P Edey and 
P G Whitcutt
 
   The primary responsibility of the Audit Committee 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.
 
   The Committee is comprised exclusively of non-executive directors and meets at least five times a year.
 
   To assist the Audit Committee in discharging its responsibilities, internal audits are performed at all of the group's
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59
CORPORATE GOVERNANCE
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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 provide an independent, objective assurance and consulting activity designed to add value and improve the organisation's operations. This is done by a systematic, disciplined approach to review, evaluate and improve the effectiveness of risk management, internal control and governance processes. This process would 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 board has obtained assurance from management, the internal auditors and the external auditors that there have been no significant breakdowns in the internal control systems during the year.
 
   The group internal audit manager reports on anadministrative 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 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 Committee met six times during 2002, 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 preliminary announcement of the annual results and the annual financial statements, as well as all statutory submissions of a financial nature, prior to approval by the board. All Committee members attended these meetings personally, or were included in the proceedings through teleconferencing facilities, except as indicated in the table below:
Date of meeting
Apologies tendered
12 February
R P Edey
25 October
P G Whitcutt
 
   A sub-committee met on 24 June 2002 to review the company's annual report on Form 20-F prior to approval by the board and subsequent submission to the SEC in Washington.
E
MPLOYMENT EQUITY AND DEVELOPMENT COMMITTEE
(Previously the Employment Equity Committee)
Dr T J Motlatsi (Chairman), F B Arisman, R M Godsell,
D L Hodgson and W A Nairn
 
      Mr D L Hodgson was appointed an additional member of the Committee with effect from 26 July 2002.
 
   As the change of name implies, the objective of this Committee was changed during 2002 in order to place greater emphasis on the extensive opportunities offered to all employees to achieve their optimal levels of career development in the
course of their employment with the company, recognising the diversity of the society within which the group conducts its business.
 
   The Committee, comprising three non-executive directors, the chief executive officer and the chief operating officer, meets four times a year. The Committee met on four occasions during 2002. All members attended these meetings personally, or were included in the proceedings through teleconferencing facilities, except as indicated in the table below:
Date of meeting
Apologies tendered
29 January
Dr T J Motlatsi W A Nairn
25 April
W A Nairn
29 October
W A Nairn
INVESTMENT COMMITTEE
 
R P Edey (Chairman), J G Best, Mrs E le R Bradley, A W Lea, W A Nairn and K H Williams
 
   Composed of four non-executive directors, as well as the finance and marketing directors, this 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.
 
   Three meetings were held during 2002. All the Committee members attended these meetings personally, or were included in the proceedings through teleconferencing facilities, except as indicated in the table below:
Date of meeting
Apologies tendered
19 June
W A Nairn K H Williams
29 July
A W Lea
MARKET DEVELOPMENT COMMITTEE
 
Mrs E le R Bradley (Chairman), F B Arisman, Dr V K Fung, R M Godsell, Dr T J Motlatsi and K H Williams
 
   The primary objective of this Committee is to extend the influence of AngloGold as a major global gold company, in the development of a broader gold business both nationally and internationally.
 
   This Committee, which now meets a minimum of twice a year, is composed of four non-executive directors, the chief executive officer and the marketing director. The Committee held three meetings during the course of 2002. All Committee members attended the meetings personally, or were included in the proceedings through teleconferencing facilities, except as indicated in the table below:
Date of meeting
Apologies tendered
29 January
Dr V K Fung
Dr T J Motlatsi
26 April 
Dr T J Motlatsi
29 July
Dr V K Fung
R M Godsell
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CORPORATE GOVERNANCE
ANGLO GOLD LIMITED ANNUAL REPORT 2002
REMUNERATION COMMITTEE
 
R P Edey (Chairman), N F Oppenheimer, J Ogilvie Thompson and A J Trahar
 
   The Remuneration Committee, which comprises exclusively non-executive directors, 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.
 
   The Committee meets as and when required, with a minimum of one meeting per annum. Four meetings of the Committee were held during 2002. All of the members of the Committee attended these meetings personally, or were included in the proceedings through teleconferencing facilities, except as indicated in the table below:
Date of meeting
Apologies tendered
30 January
N F Oppenheimer
29 April
N F Oppenheimer
30 October
N F Oppenheimer A J Trahar
SAFETY, HEALTH AND SUSTAINABLE DEVELOPMENT
 
 
 
COMMITTEE
(Previously the Safety, Health and Environment (SHE) Committee) W A Nairn (Chairman), R M Godsell and Dr T J Motlatsi
 
   The Committee's name was changed during 2002 to reflect the broadening of its objectives to include the social, economic, environmental and health impacts of the company's operations on both local and global communities. One of the primary 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.
 
   The Committee, which comprises two non-executive directors and the chief executive officer, met on four occasions during 2002 with full attendance by Committee members.
Other committees 
T
REASURY COMMITTEE
 
 
 
The Committee meets monthly and more often when necessary, to discuss market conditions, treasury operations and future hedging strategies. The Committee operates within clearly defined parameters set by the Executive Committee.
The members of this Committee are:
C B Brayshaw (Chairman) - Non-executive director
J G Best - Executive director  finance
S Cassim - East and West Africa region  financial manager
R N Duffy - Executive officer  business planning
Ms D Earp - Manager  corporate accounting
R P H Hayes - Treasury manager
Ms H H Hickey - Group internal audit manager
Ms C A Hoad - Risk manager
M P Lynam - Treasurer
K H Williams - Executive director  marketing
FINANCE COMMITTEE
 
 
 
This Committee, which meets on a weekly basis to review matters
essentially of a financial and administrative nature, comprises:
J G Best (Chairman) - Executive director - finance
R C Croll - Manager - mining valuations
P J G Dennison - Manager - mergers and acquisitions
R N Duffy - Executive officer - business planning
Ms D Earp - Manager - corporate accounting
Ms H H Hickey - Group internal audit manager
M P Lynam - Treasurer
O C Murphy - Corporate taxation manager
 
   Either the managing secretary or the company secretary attends meetings of the Committee.
Annual financial statements The directors are required by the South African Companies Act, 1973, to maintain adequate accounting records and are responsible for the preparation of the 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 flow for the year, in conformity with generally accepted accounting practice.
 
   In preparing the annual financial statements reflected in US Dollars and SA Rands on pages 56 to 131, the group has complied with South African Statements of Generally Accepted Accounting Practice and International Accounting Standards (IAS) 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 2002, 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 2003. 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 Generally Accepted Auditing Standards. Their unqualified report on these financial statements appears on page 56.
 
   To comply with requirements for reporting by non-US companies registered with the SEC, the company has prepared a set of financial statements (Form 20-F) in accordance with US Generally Accepted Accounting Principles (US GAAP) 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 the Form 20-F will also be available to stakeholders and other interested parties upon request to the company's corporate office or its contacts as listed on page 144. In compliance with the requirements of the NYSE, a condensed consolidated income statement, balance sheet, statement of cash flows and brief financial notes based on US GAAP are included on pages 132 to 135 in this report. A condensed reconciliation between IAS and US GAAP is supplied as supplementary information (page 136).
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61
CORPORATE GOVERNANCE
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Risk management and internal control  
The board has ultimate responsibility 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 risk. This system assists the board in discharging its responsibility for ensuring that the wide range of risks, associated with the group's global operations, are effectively managed in support of the creation and preservation of shareholder wealth.
 
   During the year the King Report on Corporate Governance for South Africa 2002 was published and the Congress of the United States of America introduced the Sarbanes-Oxley Act of 2002. Corporate governance is viewed as a strategic response to pursuing opportunities in a manner that is balanced, by taking prudent risks, appropriately mitigated in exchange for measurable rewards. A full review of the risk, control and disclosure processes was undertaken, to ensure that all the additional requirements are incorporated into the system in the future. The systems are in place and the focus is on formalising them.
 
   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.
 
 
 
   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. In the event of failure or disasters, continuity plans are in place with regard to critical processes.
 
   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 received assurance from the Audit Committee which derives its information, in part, from regular internal and external audit reports on risk and internal control throughout the group.
 
   The company has 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 represent AngloGold's interests 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 in terms of the Turnbull requirements of the Combined Code Principles of Good Corporate Governance and Code of Best Practice in the United Kingdom, 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. In addition, business unit heads and corporate risk owners are required to sign off abbreviated certificates confirming their understanding of their responsibility for internal controls. They are also required to certify that their disclosure in relation to their internal controls is transparent and that there are no untrue statements or omissions in their reporting process.
 
   In terms of the Sarbanes-Oxley Act, the chief executive officer and chief financial officer are required to complete a group certificate stating that the financial statements and reports are not misleading and fairly present the financial condition, results of operations and cash flows in all material respects. The design and effectiveness of the internal controls, including disclosure controls, are also included in the declaration. As part of the process, a declaration is also made that all significant deficiencies and material weaknesses, fraud involving management or employees that play a significant role in internal control, and significant changes that could impact on the internal control environment, are disclosed to the Audit Committee and the board.
 
   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.
Sustainable development  
Matters under this heading are given extensive coverage on a regional basis in the Review of Operations between pages 18 and 45.
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 detailed 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 matters of ethics and good governance relevant to, or affecting the company.
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CORPORATE GOVERNANCE
ANGLO GOLD LIMITED ANNUAL REPORT 2002
 
   The managing secretary and company secretary are also responsible for compliance with all the statutory requirements in regard to the administration of the Share Incentive Scheme. They are kept advised about all dealings by directors and officers in shares of the company and such are reported at board meetings.
 
   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 the Companies Act. These minutes are circulated to all 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 may trade in warrants and other derivative instruments of the company at any time. Similarly, no director or officer may trade in shares of the company 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, half-yearly and year-end results. Where appropriate, a closed period is also operated during periods where major transactions are being negotiated and a public announcement is imminent.
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.
Communication  
AngloGold subscribes to a policy of full, accurate and consistent communication in respect of both its financial and operating affairs.
 
   The company regularly enters into dialogue with institutional and private investors on the basis of the guidelines of promptness, relevance, transparency and substance over form, having due regard to statutory, regulatory and other directives prohibiting the dissemination of unpublished and price-sensitive information by the company and its directors and officers.
 
   In addition to the facilities offered by the corporate secretarial department and the company's share registrars, AngloGold has
established an investor relations and communications programme in South Africa, Europe, Asia, 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, or their representatives.
 
   International media and investor briefings, which include telephonic and web-based conference calls, are held when the company's results are announced at quarterly intervals and when events require disclosure and discussion. 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 corporate office and operating units.
At the annual general meeting held on 30 April 2002,
shareholders present were given the following presentations:
  a review of the company's performance in the previous
financial year and the strategic objectives for the near to mid-term future;
  an examination of the gold market and the company's gold
hedging strategy; and
  an overview of the company's mining and operations
worldwide, as well as a brief review of the operational outlook for 2002.
 
   Copies of these presentations were posted onto the company's website. In addition, shareholders were informed at the meeting of the results of voting, in person and by proxy, in respect of all ordinary and special resolutions proposed under special business at the meeting.
Principles of business conduct  
The company is committed to the highest standards of integrity and ethical conduct in dealings with all its stakeholders.
 
   Principles of corporate business conduct, which outline the ethical and professional management practices that AngloGold upholds, have been adopted by the board. Individuals and entities doing business with AngloGold are expected to observe the same level of commitment to group integrity. The dissemination of these principles of business conduct to all levels of employees is receiving the attention of management.
Sponsor  
UBS Warburg acts as sponsor to the company in compliance with the Listings Requirements of the JSE
.
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63
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Policy  
AngloGold has operations in East, West and Southern Africa, the United States of America, Australia, Brazil and Argentina. As part of AngloGold's intention to maintain its position as a global gold company it has a Remuneration Policy which seeks to:
 
  attract, reward and retain executives of the highest calibre; 
 align the behaviour and performance of executives with     thecompany's strategic goals and to act in the overall interests of     shareholders; 
  ensure the appropriate mix of short-, medium- and long term     rewards and incentives, with the latter being closely linked to     structured company performance targets and strategic objectives; 
  ensure that regional management is competitively rewarded     within a global remuneration policy, which recognises both local     and global markets.
 
 
 
 
 
   This policy and its application is reviewed at least quarterly by a Remuneration Committee comprising four non-executive directors, under the chairmanship of the Chairman of AngloGold, Mr R P Edey. The other members of the Remuneration Committee are Mr J Ogilvie Thompson, Mr N F Oppenheimer and Mr A J Trahar.
Executive remuneration  
The following elements constitute executive remuneration:
  Salary 
  Annual performance bonus 
  Participation in the Share Option Scheme 
Benefits, including pension, disability and death cover and
healthcare.
 
SALARY
 
All salaries are reviewed annually, with the salaries of executive directors being set with reference to external market surveys, in particular South African survey information where all of the executive directors are based.
ANNUAL PERFORMANCE BONUS
 
All executive directors participate in an Annual Performance Bonus Scheme which is based on a combination of company and individual performance targets, with the company performance element comprising 70% and individual performance 30% of the bonus payable. Maximum bonus, for the full achievement of company targets, set in advance by the board, and individual performance targets agreed to by each executive director at the beginning of the review period, is expressed as a percentage of salary, with the chief executive officer's performance bonus set at a maximum of 70% of salary and the other three executive directors at 50% of salary.
 
   Company performance measures include earnings per share, return on capital and cost control. The company's overall safety performance is also taken into account after review of the above targets. The Committee retains the right to alter bonuses in the light of exceptional individual performance.
SHARE OPTION SCHEME
 
The Scheme provides for executive directors to be granted options annually, subject to the approval of the Remuneration Committee. The annual value of shares over which options are currently granted is up to a maximum equivalent to annual salary for any executive director. Each tranche of options can only be exercised if earnings per share increase by 5% plus US inflation per year over a three-year period. Options must be exercised within 10 years of being issued.
 
   Until 31 December 2001, the Scheme allowed for options to be granted in three tranches over a five-year period, subject to a maximum of 200,000 in respect of the chief executive officer and 100,000 for other executive directors. The number of options held by each executive director is reflected in the directors' report on page 72.
PENSIONS
 
All executive directors are members of the AngloGold Pension Fund, a defined benefit fund which guarantees a pension on retirement equivalent to 2% of final salary per year of service. Death and disability cover is reflective of best practice amongst comparable employers in South Africa.
OTHER BENEFITS
 
Executive directors are members of the AngloGold Medical Scheme, which covers the director and his immediate family.
 
   They are also reimbursed for reasonable business expenses which they incur.
DIRECTORS' SERVICE CONTRACTS
 
 
 
Service contracts of executive directors are reviewed annually. The contractual notice period in respect of Mr R M Godsell, as chief executive officer, is 12 months, and for the other three executive directors, six months. The contracts also deal with compensation if employment is terminated or a material change in role, responsibilities or remuneration, with compensation in these circumstances pegged at twice the notice period.
DIRECTORS' EMOLUMENTS
 
 
 
The salaries and benefits of executive directors, who receive no fees as members of the AngloGold board, and the fees paid to non-executive directors, are shown in the directors' report on page 71.
Remuneration report
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ANGLO GOLD LIMITED ANNUAL REPORT 2002
64
Nature of business  
AngloGold Limited conducts mining operations in Africa, North and South America and Australia and undertakes exploration activities worldwide. In addition, the company is involved in the manufacturing, marketing and selling of gold products, as well as the development of markets for gold.
Sub-division of ordinary shares  
Pursuant to the sub-division of the company's ordinary shares with effect from the close of business on 24 December 2002, all references to the authorised and issued share capital of the company in this report have been restated to take cognisance of the sub-division.
Events subsequent to the balance sheet  
On 27 February 2003 it was announced that, pursuant to an unsolicited offer from Queenstake Resources USA Inc (Queenstake), the company had entered into a purchase and sale agreement for the disposal of its 70% stake in the Jerritt Canyon Joint Venture in North America. The consideration payable by Queenstake to the Joint Venture partners will comprise: $8m on closure of the transaction which is expected to be no later than 31 March 2003, $6m in deferred payments and certain additional royalty payments. In terms of the agreement Queenstake has undertaken to accept full closure and reclamation and other liabilities.
Holding company
The company's holding and ultimate holding companies are respectively:
 * Anglo South Africa Capital (Proprietary) Limited
 * Anglo American plc (registered in the United Kingdom)
The effective shareholding of Anglo American plc in the issued share capital of the company at the undermentioned dates was as follows:
24 February
31 December
31 December
2003
2002
2001
Ordinary shares held
Number
114,457,368
114,457,368
114,457,368
Percentage
51.40
51.41
53.17
Share capital  
At a general meeting on 5 December 2002, shareholders approved, inter alia, a special resolution for the sub-division of the company's authorised and issued ordinary share capital on a 2 for 1 basis with effect from the close of business on 24 December 2002. The special resolution was registered on 10 December 2002.
 
      Apart from the sub-division of the ordinary share capital, there was no other change to the authorised share capital of the company during 2002. The  authorised ordinary share capital of AngloGold is R100m in 400m shares of 25 cents each.
 
   The following are the movements in the issued and unissued ordinary share capital from the beginning of the accounting period to the date of this report:
ISSUED
 
2002
2001
Number of shares
Rand
Number of shares
Rand
At 1 January 
215,268,116
53,817,029
214,042,174
53,510,544
Issues during year
Issue of shares in terms of
 Normandy top-up facility*
127,156
31,789
16,474
4,118
 Normandy share-swap*
6,403,236
1,600,809
466,366
116,592
 AngloGold odd-lot offer**
278,196
69,549
 
 
Exercise of options by participants in the
 AngloGold Share Incentive Scheme 
478,720
119,680
718,000
179,500
 Acacia Employee Option Plan
66,598
16,650
25,102
6,275
At 31 December 
222,622,022
55,655,506
215,268,116
53,817,029
Issues subsequent to year end
Exercise of options by participants in the
 AngloGold Share Incentive Scheme 
76,732
19,183
 Acacia Employee Option Plan
2,100
525
At 24 February 2003
222,700,854
55,675,214
*
Arising from the offer by AngloGold to shareholders of Normandy Mining Limited, a gold mining company registered in
Australia, to acquire the entire issued share capital of Normandy. As acceptances in respect of this offer constituted only 7.11% of
Normandy's issued share capital, with no possibility of AngloGold obtaining majority control of Normandy, the offer closed on
18 January 2002. The company's holding of Normandy shares was disposed of in January 2002 and the proceeds applied towards
repaying debt owed by the AngloGold group.
Directors' report
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DIRECTORS' REPORT
65
ANGLO GOLD LIMITED ANNUAL REPORT 2002
 
** A summary of the results of the odd-lot offer by the company to holders of less than 50 ordinary shares (pre sub-division), as published on 24 December 2002, appears below:
RESULTS OF ODD-LOT OFFER
 
 
 
Number of
Number of
Value
shareholders
shares
Rand
Holders electing/deemed to have elected to sell ordinary shares
at R246.66 per share (offer price)
11,213 
217,338
53,608,591
Holders electing to purchase ordinary shares at R234.325 per
share (a 5% discount to offer price)
4,643
495,534
116,116,004
Total ordinary shares issued 
278,196
62,507,413
 
Includes nominee companies and brokers acting on behalf of beneficial shareholders.
Prior to the odd-lot offer to shareholders, the company had a total of 31,013 shareholders and at 31 January 2003 this number had
reduced to 16,284. A total of 2,098 shareholders, holding in aggregate 50,794 ordinary shares, elected to retain their odd-lot holdings of
less than 100 shares (post sub-division).
UNISSUED
 
2002
2001
Number of shares
Number of shares
At 1 January 
184,731,884
185,957,826
Issues during year
7,353,906
1,225,942
Maximum number of shares available for allocation for
purposes of the Share Incentive Scheme
6,122,106
5,919,873
Unissued shares under the control of the directors at 31 December
171,255,872
178,812,011
Issues subsequent to year end
78,832
Additional number of shares available for allocation for purposes of
the Share Incentive Scheme
2,167
Balance of unissued shares under the control of the directors at 24 February 2003
171,174,873
 
   All the issued A and B preference shares are held by a wholly-owned subsidiary and further details of the authorised, issued andunissued 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 2003, shareholders 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 schemes 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 shares held under their control for cash other than by means of a rights offer to shareholders. 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, shareholders will be asked to consider an ordinary resolution to this effect at the forthcoming annual general meeting.
 
   The company has not exercised the general approval to buy back shares from its issued ordinary share capital granted at the annual general meeting held on 30 April 2002. At the next annual general meeting shareholders will be asked to renew the general authority for the acquisition by the company, or a subsidiary of the company, of its own shares.
 
   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.
American Depositary Shares   
At 31 December 2002, the company had in issue through The Bank of New York as Depositary, and listed on the New York Stock Exchange (NYSE), 39,879,957 (2001: 30,104,646) American Depositary Shares (ADSs). Each ADS is equal to one ordinary share.
At 24 February 2003, there were 41,861,108 ADSs in issue and listed on the NYSE.
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66
Share Incentive Schemes 
As approved by shareholders, AngloGold operates two share incentive schemes (as detailed below), for the purpose of providing an incentive to executive directors, executive officers and managers 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 schemes to the extent that they are granted options.
 

   The maximum number of ordinary shares that may be allocated for the purposes of the schemes, equivalent to 2.75% of the total number of ordinary shares in issue at that date, is:

24 February
31 December
31 December
2003
2002
2001
6,124,273
6,122,106
5,919,873
   The maximum aggregate number of shares which may be acquired by any one participant is 300,000. 
    All options which have not been exercised within ten years from the date on which they were granted automatically lapse, unless
otherwise stated.
 
Non-executive directors are not eligible for participation in the share incentive schemes.
ANGLO GOLD SHARE INCENTIVE SCHEME
 
 
 
 
 
 
 
 
 
This share incentive scheme provides for the granting of options, based on two separate criteria:
Time related
Time related options were approved by shareholders at the general meeting held on 4 June 1998, and amended by shareholders at the
annual general meeting held on 30 April 2002.
Time related options granted, may be exercised as follows:
Percentage
Period after date of grant of options
20
2 years
40
3 years
60
4 years
100
5 years
No further options will be granted under this plan which will terminate on 1 February 2012, being the date on which the last options
may be exercised or will expire.
The movement in respect of time related options during the period 1 January 2002 to 24 February 2003 was as follows:
Options
Average 
exercise price 
per ordinary 
Number
share
At 1 January 2002
2,565,600
R121.14
Movements during year
-  Granted*
108,000
R190.21
- Exercised
478,720
R118.79
- Lapsed  terminations
35,600
R145.55
At 31 December 2002
2,159,280
R124.72
Subsequent to year end
 - Exercised
76,732
R121.71
 - Lapsed - terminations
20,000
R137.73
At 24 February 2003
2,062,548
R124.70
*
Includes 64,000 options granted in 2001 at an average price of R159.36, recorded in 2002. (Prior year adjustment).
DIRECTORS' REPORT
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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DIRECTORS' REPORT
67
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Performance related
Performance related options were approved by shareholders at the annual general meeting held on 30 April 2002.
 
   Performance related options granted, may be exercised in full, three years after date of grant, provided that the conditions on which the options were granted, namely the performance of the company, as determined by the directors, are met.
The movement in respect of performance related options during the period 1 January 2002 to 24 February 2003 was as follows:
Options
Average 
exercise price 
per ordinary 
Number
share
At 1 January 2002
 
 
Movements during year
 - Granted
1,182,500
R299.50
 -  Exercised
 
 
 - Lapsed - terminations
3,400
R299.50
At 31 December 2002
1,179,100
R299.50
Subsequent to year end
-  Exercised
 
 
-  Lapsed - terminations
24,600
R299.50
At 24 February 2003
1,154,500
R299.50
 
The following are summaries of particulars required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations:
Options
Average 
Ordinary
exercise price
shares
per ordinary
issued
Number
share
At 1 January 2002
1,060,600
2,565,600
R121.14
Movements during year
- Granted*
1,290,500
R290.35
- Exercised
478,720
478,720
R118.79
- Lapsed - terminations
39,000
R158.97
At 31 December 2002
1,539,320
3,338,380
R186.45
Subsequent to year end
- Exercised
76,732
76,732
R121.71
- Lapsed - terminations
 
44,600
R226.96
At 24 February 2003
1,616,052
3,217,048
R187.43
*
Includes prior year adjustment.
Analysis of options in issue at 24 February 2003:
Holding
Holders
Number
Value  R000
1- 
 100
 
 
 
101-
 500
 
 
 
501-      1,000
233
214,000
64,093
1,001-      5,000
285
499,700
139,938
5,001-    10,000
127
951,100
162,567
10,001-  100,000
57
1,357,948
212,325
Over 100,000
1
194,300
24,055
Total
703
3,217,048
602,978
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68
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 7 AngloGold ordinary shares for every 100 options held is applicable. 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 2002 to 24 February 2003 was as follows:
Number                 Equivalent                   Ordinary 
Average issue
 
of
AngloGold
shares
price of AngloGold
options
ordinary shares
issued
ordinary shares
At 1 January 2002
1,041,400
72,898
25,102
R122.83
Movements during year
- Issued
- Exercised
951,400
66,598
66,598
R175.41
- Lapsed
 -
At 31 December 2002
90,000
6,300
91,700
R161.02
Subsequent to year end
- Exercised
30,000
2,100
2,100
R146.94
At 24 February 2003
60,000
4,200
93,800
R160.71
Financial results  
The financial statements 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 2002. A synopsis of the financial results for the year is set out in the Financial Review on pages 14 to 16.
Review of operations
The performance of the various regions are comprehensively reviewed on pages 18 to 45.
Dividends
DIVIDEND POLICY
 
The company's dividend policy is to declare an interim and a final dividend in respect of each financial year and to pay out a high proportion of its earnings 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.
DIVIDENDS PAID SINCE 1 JANUARY 2002
 
 
 
 
Final dividend 
Interim dividend 
Final dividend
number 91
number 92
number 93
Declaration date
30 January 2002
30 July 2002
30 January 2003
Last date to trade ordinary shares cum dividend
15 February 2002
16 August 2002
14 February 2003
Record date
22 February 2002
23 August 2002
21 February 2003
Amount per ordinary share
- South African currency (cents)                                 550
675
675
- United Kingdom currency (pence)                              34.19
42.25
48.43
Amount per CDI* - Australian currency (cents)                        18.88
24.34
27.00
Payment date
  4 March 2002
   30 August 2002
   28 February 2003
Amount per ADS** - United States currency (cents)
49.06
63.81
82.12 
Payment date
  14 March 2002
  10 September 2002
  10 March 2003
*
Each CDI (CHESS Depository Interest) is equal to one-fifth of one ordinary share.
**   Each ADS (American Depositary Share) is equal to one ordinary share.
 
   Shareholders who have dematerialised their ordinary shares receive payment of their dividends electronically, as provided for by STRATE. For those shareholders who have not yet dematerialised their shares, or who may intend retaining their shareholding in the company in certificated form, the company operates an electronic funds transmission service, whereby dividends may be electronically transferred to shareholders' bank accounts. These shareholders are encouraged to mandate this method of payment for all future dividends.
DIRECTORS' REPORT
ANGLO GOLD LIMITED ANNUAL REPORT 2002
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69
DIRECTORS' REPORT
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Borrowing powers  
The company's borrowing powers are unlimited. At 31 December 2002, the group's borrowings totalled $926m, R7,938m (2001: $987m, R11,811m).
Fixed assets  
With effect from 1 January 2002 the company disposed of its Free State assets to Harmony Gold Mining Company Limited and African Rainbow Minerals (Proprietary) Limited, for a consideration of R2.2bn (excluding the refund for recoupments taxation of R688m). In terms of the agreement of sale the company received a cash payment of R1.8bn on 23 April 2002, together with interest thereon at the call rate calculated from 1 January 2002 to 22 April 2002. The balance of the consideration, R400m, is payable in cash on 1 January 2005.
Investments  
In July 2002 the company acquired an additional 46.25% of the equity, as well as the total loan assignment, of Cerro Vanguardia SA, a company conducting gold mining operations in Argentina, from Prez Companc International SA for a gross consideration of $105m, thereby increasing its interest in Cerro Vanguardia to 92.5%.
 
   The company disposed of its wholly-owned subsidiary, Stone and Allied Industries (O.F.S.) Limited, to a joint venture of that company's existing management and a group of black entrepreneurs, with effect from 1 October 2002, for a consideration of R5m, comprising R1.4m in respect of the equity interest, of which R450,000 is payable on the fulfilment of certain conditions precedent, and a loan claim of R3.6m. The balance of the consideration relative to the disposal of the equity interest, R950,000, and the loan claim are payable, together with interest thereon, in five equal annual instalments commencing on 1 October 2003. The agreement of sale provides for a 10% interest in Stone and Allied Industries (O.F.S.) Limited to be held by Masakhisane Investment Limited, a wholly-owned subsidiary established by AngloGold in terms of its Small and Medium Enterprises Development Initiative, which company will render technical and administrative assistance to the purchasers until the total amount of the consideration has been settled.
Particulars of the group's principal subsidiaries and joint venture interests are reflected on page 131.
Material resolutions 
Details of special resolutions and other 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:
Nature of resolution
Effective date
AngloGold Limited
Passed at the annual general meeting held on 30 April 2002:
General approval for the acquisition by the company, or a
subsidiary of the company, of its own shares
8 May 2002
Amendment to the company's articles of association
substituting a more simplified version of the existing
Article 70, pertaining to the determination of directors'
remuneration by means of an ordinary resolution of
shareholders in general meeting
8 May 2002
Passed at a general meeting held on 5 December 2002:
Adoption of a new memorandum and articles of association 
10 December 2002
Sub-division of the company's ordinary shares on a 2 for 1 basis
10 December 2002
A specific approval for the acquisition by the company of
any excess ordinary shares arising in terms of the company's
odd-lot offer to shareholders
10 December 2002
Subsidiaries
Chellaston Limited*
Acquisition of a 46.25% interest in the equity of
Cerro Vanguardia SA
26 July 2002
Walsdon Limited*
Change of name to AngloGold International Holdings Limited
6 December 2002
AngloGold Investments
Change of name to AngloGold (Gibraltar) Holdings Limited
6 December 2002
(Senegal) Limited*
AngloGold International
Change of name from AngloGold International 
Holdings Socit Anonyme**
Holdings Limited
10 December 2002
*
Incorporated in the British Virgin Islands
**   Incorporated in Luxembourg
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70
DIRECTORS' REPORT
ANGLO GOLD LIMITED ANNUAL REPORT 2002

Annual general meeting 
At the 58th annual general meeting held on 30 April 2002, shareholders passed ordinary resolutions relating to:

* the adoption of the annual report for the year ended 31 December 2001; * the re-election of Mr J G Best, Mrs E le R Bradley, 
   Mr C B Brayshaw, Mr D L Hodgson, Mr A W Lea, Mr W A Nairn and
Mr K H Williams as directors of the company;

 

* the renewal of the general authority placing the unissued ordinary shares of the company under the control of the directors; 
* the granting of a general authority to issue ordinary shares in the capital of the company for cash, subject to certain limitations
in 
   terms  of the Listings Requirements of the JSE;

 

* increases in annual directors' remuneration, with effect from 1 May 2002, as follows:

 

- Directors: from R50,000 to R100,000

 

- Chairman: from R80,000 to R200,000

 

- Deputy Chairman: from R80,000 to R150,000

 

- A travel allowance of $2,000 per meeting payable to each director, including the chairman and deputy chairman, who travel 
  internationally to attend board meetings of the company;

 

* an amendment to the rules of the share incentive scheme to provide for the exercise of options to be based on a condition, related 
   to the performance of the company, to be determined by the directors and which will be objective and specified.

 

       Details concerning the special resolutions passed by shareholders at this meeting are disclosed on page 69. 
      Notice of the 59th annual general meeting, which is to be held in Johannesburg at 11:00 on Wednesday, 30 April 2003, is enclosed as a separate document with the annual report. Additional copies of the notice of meeting may be obtained from the company's corporate contacts and the share registrars or may be accessed from the company's website.

 

General meeting 
A general meeting of shareholders was held on 5 December 2002 at which the undermentioned ordinary resolutions were passed:

* approval of an odd-lot offer to ordinary shareholders of the company; * the granting of an authority to a director of the company to implement all resolutions passed at the meeting. Details concerning the special resolutions passed by shareholders at this meeting are disclosed on page 69.

Memorandum and Articles of Association A new memorandum and articles of association were adopted by shareholders in terms of a special resolution passed at the general meeting held on 5 December 2002. The special resolution was registered on 10 December 2002. These documents which better reflect the existing regulatory environment and serve the company's requirements, replace the memorandum of association that had been in existence since the company's incorporation under its former name of Vaal Reefs Exploration and Mining Company Limited in 1944 and the set of articles of association adopted in 1977.

Directorate and secretary The only change in the composition of the board of directors from the beginning of the accounting period to the date of this report was the appointment of Mr D D Barber as alternate director to Mr J Ogilvie Thompson with effect from 29 April 2002.

 

   

      The directors retiring by rotation at the forthcoming annual general meeting in terms of the articles of association are Mr F B Arisman, Mr R P Edey, Dr V K Fung, Mr R M Godsell and Dr T J Motlatsi. Dr Fung has advised that he wishes to retire from the board and, therefore, has not made himself available for re-election. However, Mr Arisman, Mr Edey, Mr Godsell and Dr Motlatsi, 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 143.

Biographies of the board of directors appear on pages 54 and 55.

 

      There has been no change in the offices of managing secretary and company secretary whose names and business and postal addresses are set out on page 143.

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71
DIRECTORS' REPORT
ANGLO GOLD LIMITED ANNUAL REPORT 2002
Directors' emoluments
The following tables record the emoluments paid to each director:
All figures have been stated to the nearest R000.
Bonuses and
Pre-tax
performance
Pension
gains on
related
scheme
share options
Other
Salary
payments
contributions
exercised
benefits
Total
EXECUTIVE DIRECTORS '
 
 
REMUNERATION 2002
 
R M Godsell (Chief
Executive Officer)
4,217
1,295
496
 
283
6,291
J G Best
2,476
928
300
2,130
32
5,866
D L Hodgson
2,475
678
300
2,972
100
6,525
K H Williams
2,673
898
333
2,154
150
6,208
Total
11,841
3,799
1,429
7,256
565
24,890
EXECUTIVE DIRECTORS '
 
 
REMUNERATION 2001*
 
R M Godsell (Chief
Executive Officer)
3,323
634
378
 
50
4,385
J G Best
2,122
506
252
1,575
182
4,637
D L Hodgson (appointed
1 November 2001)
387
109
54
1,061
9
1,620
K H Williams
2,268
571
276
1,053
47
4,215
Total
8,100
1,820
960
3,689
288
14,857
*
Includes pre-tax gains on options exercised in 2001, not previously reflected in remuneration table.
NON-EXECUTIVE DIRECTORS' REMUNERATION
 
 
 
  
 
2002
2001
Directors'
Committee
Travel
Directors'
Committee
fees
fees
allowance*         Total
fees                 fees
Total
R P Edey (Chairman)
160
126
41
327
80
110
190
Dr T J Motlatsi (Deputy
Chairman)
117
107
21
245
50
100
150
F B Arisman
83
60
41
184
50
60
110
Mrs E le R Bradley
83
107
 
190
50
94
144
C B Brayshaw
83
47
 
130
50
40
90
Dr V K Fung
83
30
20
133
50
36
86
A W Lea
83
28
 
111
21
 
21
W A Nairn
83
104
 
187
31
64
95
J Ogilvie Thompson 
83
30
 
113
50
30
80
N F Oppenheimer
83
30
 
113
48
30
78
A J Trahar
83
30
 
113
50
13
63
Total
1,024
699
123
1,846
530
577
1,107
Alternates
P G Whitcutt
 
30
 
30
 
6
6
Total
 
30
 
30
 
6
6
Fees paid to former non-
executive directors and
former alternate directors
Dr J W Campbell
 
 
 
 
29
18
47
D M J Ncube
 
60**
 
60
29
40
69
M W King
 
 
 
 
19
17