• Eastvaal Gold Holdings Limited;
  
  

• Elandsrand Gold Mining Company Limited;
  
  

• East Rand Gold and Uranium Company Limited;
  
  

• Free State Consolidated Gold Mines Limited;
  
  

• HJ Joel Gold Mining Company Limited;
  
  

• Southvaal Holdings Limited; and
  
  

• Western Deep Levels Limited.
  
  

• production decrease by 10% through the sale or closure of 24 South African shafts;
  
  

• cash operating costs drop by 18% to US$229 per ounce;
  
  

• operating profit increase from US$117 million to US$416 million;
  
  

• net earnings grow by 77% from US$179 million to US$317 million;
  
  

• return on capital increase from 7% to 15%; and
  
  

• earnings per share increase from US183 cents to US324 cents.
  
  

• a 100% interest in the Independence Mining Company Inc. in the United States, comprising:
  
  - Pikes Peak Mining Company which in turns owns 66.7% of the Cripple Creek and Victor Joint Venture (CC&V) in Colorado; and
  - a 70% interest in the Jerritt Canyon Joint Venture;
  
  

• a 100% interest in Minera??o Morro Velho in Brazil;
  
  

• a 50% interest in Minera??o Serra Grande in Brazil; and
  
  

• a 46.25% interest in Cerro Vanguardia in Argentina.
  
  

• growth in shareholder returns;
  
  

• the development and expansion of global gold markets;
  
  

• increased profit margins through the reduction of production costs and improved productivity;
  
  

• generating new mine production through exploration and acquisition;
  
  

• extending future reserves and resources through a global exploration programme;
  
  

• a research and development focus on new technology for the new millennium, including breaking rock in new ways, taking people away from mining risk, and innovation in gold metallurgy; and
  
  

• reducing exposure to risks that dilute shareholder returns.
  
  

• 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 project; and

• AngloGold?s liquidity and capital resources and expenditure;

contain certain forward-looking statements concerning 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 be correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors:

• changes in economic and market conditions;
• success of business and operating initiatives;
• changes in the regulatory environment and other government actions;
• fluctuations in gold prices and exchange rates; and
• business and operational risk management.

The board of AngloGold has determined that it is not in a position to provide meaningful and reliable forecast financial information beyond 31 December 1999.

The board considers that inclusion of such a forecast would be unduly speculative and potentially misleading for Acacia shareholders. This is particularly so in view of the current instability of the gold price, and the effect that instability may have on AngloGold?s future earnings performance.

In making this determination, the board has taken into account the facts that:

• AngloGold shares have been listed on securities exchanges around the world for some time and that international practice is not to give forecasts where there is uncertainty of outcome; and in addition

• the acquisition of Acacia will not have a material impact on AngloGold?s earnings.

Average received gold price	US$314 per ounce
Production	7 million ounces for the year
Rand/US Dollar exchange rate	6.09
Unit cash costs	US$209 per ounce
Unit total production costs	US$238 per ounce

In addition to the assumptions made about key parameters, the forecast assumes that there will be no material adverse change to taxation and other regulatory regimes in any of the countries in which AngloGold operates. It also assumes that there will be no material adverse affect on AngloGold as a result of any unforeseen, significant changes in economic or operational circumstances (such as litigation, employee strike action, seismic events, etc.) before the end of the forecast period.

Given that there are only 2 months remaining to year-end, AngloGold is confident of achieving the forecast.

A sensitivity analysis has not been prepared as AngloGold, through its managed hedging programme, is assured of an average received price of US$314 for the year ending 31 December 1999.

• driving down operating costs, primarily through work redesign, worker education and the development of appropriate mining technology;

• expanding AngloGold's market share by seeking new profitable reserves wherever they may be; and

• diversifying the production base to achieve a better spread of country and ore body risk.

• approve all instruments and structures used in hedging;

• approve the accounting treatment for all instruments;

• recommend to the board for approval, all hedge counterparts and recommend exposure limits for all counterparts.

The policy sets down the minimum deal reporting and authorisation periods from daily for the treasurer to quarterly for the board. All hedge deals must be recorded in the treasury system, marked to market and included in reports for review and authorisation within the specified periods.

Controls

The treasury committee has an independent middle office function, which monitors and reports on all treasury activity and monitors the accuracy and completeness of reports and compliance with the hedge and treasury policies. In addition AngloGold?s internal and external auditors, on a continuous basis check the control environment and ensure the adequacy thereof and adherence to the hedge and treasury policy and regulatory environment.

Credit risk

Business is only conducted with treasury committee approved counterparts and within the approved limits. In addition business is spread over a wide number of counterparts to ensure no concentration of risk occurs. AngloGold generally does not obtain collateral or other security to support financial transactions.

AngloGold has sufficient credit lines in place to support any hedging transactions in terms of its current approved hedge policy. The credit lines currently in place with various counterparts are limited in some instances by limits on value or ounces, and a number of the credit lines are margined.

Hedge position

AngloGold?s open hedge position at the end of the third quarter is summarised below. AngloGold believes that it was a correct decision to remain out of the market during much of this past quarter, as it was felt that the price had been unduly depressed by unjustified negative sentiment towards gold. AngloGold has removed all exposure to gold lending rates through to early 2000. Thereafter, AngloGold has only limited exposure to gold lending rates, and the overwhelming majority of the forward positions are based on the fixed forward prices. This has contributed substantially to the stability of AngloGold?s hedge position during the current volatile gold prices.

As at 30 September 1999, AngloGold had outstanding the following net forward pricing commitments against future production. A portion of these sales consists of US dollar-priced contracts which have been converted to Rand prices at average annual forward Rand values based on a spot Rand/US Dollar exchange rate of SAR6.00 = US$1.00 available on 30 September 1999. The percentage of the sales priced in US Dollars is shown below:

• provide a working environment that is conducive to safety and health;

• place the management of occupational safety and health as a prime responsibility of line management from the executive through to the first line supervisory level;

• obtain employee involvement and consult with employees or their representatives to gain commitment in the implementation of the policy;

• provide all necessary resources to enable compliance with the policy;

• comply with all relevant laws, regulations and standards. In the absence of appropriate legislation, standards reflecting best practice will be adopted;

• adopt a zero tolerance approach to the implementation of standards and procedures;

• implement safety and health management systems based on internationally recognised standards and assess the effectiveness of these through periodic audit;

• conduct the necessary risk assessments to minimise and control occupational hazards;

• promote initiatives to continuously reduce the safety and health risks associated with the business activities;

• set safety and health objectives based on a comprehensive strategic plan and measure performance against the plan;

• monitor the effects of AngloGold?s operational activities on the safety and health of employees and others and conduct regular performance reviews;

• provide the necessary personal protective equipment;

• establish and maintain a system of medical surveillance for all employees;

• communicate openly on safety and health issues with employees and other stakeholders;

• ensure that employees at all levels receive appropriate training and are competent to carry out their duties and responsibilities;

• require all contractors to comply with the policy; and

• seek to influence joint partners to apply the policy and promote it in other ventures.

Environment

AngloGold recognises that the long term sustainability of its business is dependent on good stewardship in the protection of the environment and efficient management in the exploration and extraction of mineral resources.

AngloGold has adopted an Environmental Policy which states that it will endeavour to:

• as a minimum, comply with all applicable laws, regulations and requirements;

• conduct its activities so that consideration is given to economic, social and environmental values;

• establish and maintain management systems to identify, monitor and control environmental aspects of its activities;

• assure that financial resources are available to meet its reclamation and environmental obligations;

• ensure that its employees and contractors are aware of its Environmental Policy and their relevant responsibilities;

• conduct environmental audits to evaluate the effectiveness of its management systems;

• communicate and consult with interested and affected parties on environmental aspects of its activities;

• work to continually improve its environmental performance; and

• participate, through a managed public affairs process, in debate on environmental matters at local, national and global levels.

• on 29 June 1998 19,670,314 ordinary shares (at a price of SAR195 per share, including a premium of SAR194.50 per share) and 51,312,260 ordinary shares (at a price of SAR95.00 per share, including a premium of SAR94.50 per share) were issued to AAC (and associated entities) in respect of the cession of service agreements, gold mineral rights and share interests, and to the former shareholders of six previously listed companies, under the Schemes of Arrangement entered into in respect of the formation of AngloGold;

• on 13 July 1998 7,212,283 ordinary shares were issued (at a price of SAR85.00 per share, including a premium of SAR84.50 per share) to the former shareholders of Eastvaal Gold Holdings Limited (Eastvaal), under the Scheme of Arrangement entered into in respect of the formation of AngloGold; and

• during the period 29 September 1998 to 25 October 1999 110,100 ordinary shares were issued under the AngloGold Share Incentive Scheme. 102,600 ordinary shares were issued to employees who exercised their options (at a price of SAR207.50 per share, including a premium of SAR207.50 per share). 7,500 ordinary shares were issued to employees who had converted their debentures (at a price of SAR216 and SAR259.40 per share, including a premium of SAR215.50 and SAR258.90 per share, respectively).

• AngloGold has a fully dedicated and entirely independent management including its chief executive officer, Bobby Godsell. Management is remunerated by AngloGold and incentivised by an AngloGold share incentive scheme;

• the majority of AngloGold?s board of directors are non-executive directors and the majority of directors are fully independent of AA plc;

• AngloGold has the management, financial capacity and resources to carry out all aspects of its ongoing business activities;

• where appropriate AngloGold purchases selected specialised technical services from AA plc on normal commercial terms. Any such contracts are subject to review by the audit committee; and

• AngloGold has no service agreements or other contracts in terms of which any turnover or profit related fees are payable to AA plc.

General policy

AngloGold has successfully negotiated two multi-year wage arrangements with representative labour unions in the industry. In addition, the annual wage increments have been linked to productivity improvements, with the aim of achieving neutrality in unit costs as a result of the wage increases. These have had an additional effect of promoting labour stability.

As with its corporate restructuring in 1998, AngloGold has gone through a period of dramatic workplace restructuring and downsizing, specifically in the South African operations where AngloGold has sought to modernise entrenched mining practices and develop a better skilled and better rewarded workforce.

Predominantly through the sale and closure of marginal mines, AngloGold has reduced its workforce by more than one third over the last eighteen months. At the same time, AngloGold has brokered new wage and workplace agreements with organised labour in a manner that has pioneered workplace change and productivity improvement in the mining industry in South Africa. This restructuring has been effected without any lost time through industrial action. In addition, the restructuring and sale of several AngloGold operations has resulted in successful black economic empowerment initiatives.

Within South Africa, AngloGold is engaged in a five-year programme aimed at modernising the organisation. The main features of this initiative include a significant upgrading of basic adult education and training to eradicate illiteracy and improve levels of numeracy. Appropriate education standards for operators and supervisors have been targeted. While much of this education takes place on a part-time basis, with incentives for acquiring qualifications, key production personnel and supervisors are released to attend courses on a full-time basis. Expenditure on this programme for 1999 has been budgeted at US$8.5 million.

AngloGold?s ongoing efforts to improve employee relations include the development of flatter, more efficient organisation structures. These initiatives vary in their application and outcome, depending on the business unit. In the Vaal River operations, Tau Lekoa mine is the pilot site for the introduction of an operational plan that departs from South African mining tradition, relying as it does on self-directed production teams with management taking on a support, coaching and safety promotion role. Consultation with and participation from organised labour in these initiatives is critical to their successful outcome. To support this strategy, particular effort is being applied to production team training, with a focus on team building, and understanding the business consequences of good team efficiencies.

Production and productivity indexed pay systems are an integral part of all programmes to ensure support for work redesign and education.

In the context of downsizing, AngloGold supported the development by the National Union of Mineworkers of an agency which aims to equip retrenched workers with entrepreneurial skills and new job opportunities. AngloGold has also made breakthroughs with organised labour in the area of health and safety, including the deployment of full-time safety stewards in its operations.

Together with workplace innovation in the South African operations, AngloGold has acquired assets elsewhere in Africa and in the Americas, where work practices, the role of organised labour, and employee relations more generally are very different. AngloGold is currently experiencing the benefits to be derived from integrating best employee and workplace practice throughout its operations.

Share Incentive Scheme

At the general meeting held on 4 June 1998, shareholders approved the introduction of the AngloGold Limited Share Incentive Scheme (Scheme) for the purpose of providing an incentive to employees and salaried directors of AngloGold 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 employees by giving them an opportunity to acquire shares in AngloGold. Employees participate in the Scheme to the extent that they are granted options or take up automatically convertible unsecured debentures (Debentures).

The maximum number of ordinary shares which have been made available for the purposes of the scheme is 2,693,611, equivalent to 2.75% of the issued ordinary shares. The maximum aggregate number of shares which may be acquired by any one participant in the Scheme is 150,000.

The subscription price of Debentures may be financed by employees incurring a loan from the AngloGold Limited Employees' Share and Debenture Trust. As security for the loan, the employees pledge the Debentures issued to them to the Trust. The interest on the Debentures is payable annually at the official interest rate per the Seventh Schedule of the Income Tax Act of South Africa which approximates market rates.

Since the implementation of the Scheme to 25 October 1999, a total of 639,700 options had been issued but not yet exercised at prices varying between SAR208 and SAR256. A total of 102,600 ordinary shares of 50 cents each have been issued to employees who exercised their options. As at 25 October 1999, participants in the Scheme have taken up but not yet converted a total of 418,500 fully paid Debentures at prices varying between SAR216 and SAR285 per Debenture. A total of 7,500 Debentures have been converted to ordinary shares under the Scheme rules.

As at 25 October 1999, the unallocated balance of shares subject to the Scheme amounted to 1,635,411.

The options granted may be exercised and the Debentures accepted may be converted as follows: