2	Intentions and effect of the takeover on AngloGold
2.1	AngloGold?s intentions concerning Acacia
	In formulating its offer to acquire the shares in Acacia, AngloGold has considered and evaluated Acacia?s assets, based on the information which was in the public domain and available to it. It has drawn the conclusion that, taken as a portfolio of assets, Acacia offers value to AngloGold shareholders at the rate of share exchange stipulated in the offer. If the takeover scheme is successful AngloGold will, in the ordinary course of its management, review the activities, assets and labour force of Acacia to evaluate performance, profitability and prospects in the light of the information then available to AngloGold. Accordingly, it is intended that decisions relating to these matters be made after completion of the review. The contents of this section should be read against this background. On the basis of the facts and information concerning Acacia that are known to AngloGold and subject to the qualifications above, AngloGold intends that: (a) the business conducted by Acacia will continue in its present form (without any major change or redeployment of the fixed assets) and at the current level of activity save in relation to the non-gold assets (see below); (b) the present employees of Acacia will continue to be employed; and (c) a detailed review, on an asset by asset basis, will be conducted to identify possible opportunities whereby AngloGold could improve shareholder value. AngloGold believes that its size and presence in the gold industry requires focus only on gold mining and marketing. Consequently, it is not AngloGold?s strategy to develop and operate non-gold assets. On successful completion of the transaction AngloGold will review the non-gold metal interests of Acacia, held through Acacia Magnesite Pty Ltd and Acacia Metals Pty Ltd, with a view to realising the value of these assets over time and to the best advantage of shareholders. AngloGold intends to review both its own Australian exploration programme and Acacia?s exploration activities and tenements, with a view to developing a targeted approach to mine extension and regional exploration, and ensuring the best application of expenditure for exploration. In the context of AngloGold?s plans for its own grassroots exploration programme in Australia, the company will review the deployment of AngloGold exploration personnel, so as to complement and enhance Acacia?s exploration efforts, and ensure cost savings where applicable through a combined effort. AngloGold is, however, committed to spend US$3.2 million on exploration in Australia in 2000. AngloGold management anticipates that real benefits for the enlarged company will come from access to pooled managerial and technical expertise on AngloGold properties around the world, combined with Acacia?s management and technical expertise in Australia, and a commitment to further develop a world-class Australian gold business. AngloGold considers that the sound management team and strong shareholder base of Acacia will provide AngloGold with a solid platform for growth. AngloGold intends to acquire 100% of the issued shares in Acacia and then delist Acacia from the ASX. AngloGold has also sought a listing on the ASX. Once obtained, AngloGold currently intends to maintain that listing beyond completion of the Acacia takeover. If AngloGold does not achieve 100% ownership of Acacia, it intends to seek to replace some or all of the members of the board of Acacia to reflect AngloGold?s ownership interest and then seek to implement such of the intentions mentioned above as are consistent with the interests of all shareholders. This would only be undertaken with due regard to the fiduciary duties of directors. For the avoidance of doubt, the intentions of AngloGold set out above are the same as the intentions of AngloGold Investments Australia.
2.2	Impact on earnings and cash flow per share
	In assessing the acquisition of Acacia, AngloGold has assumed that the exploration properties and activities of Acacia may be of benefit in the future. No earnings from this source have been included in the pro-forma forecasts. On this basis, the impact on AngloGold of the acquisition of Acacia, in terms of earnings per share, is expected to be neutral if goodwill is excluded and mildly dilutive if goodwill is included. The transaction is expected to be accretive on a cash flow per share basis.
2.3	Pro-forma consolidated balance sheet
	A pro-forma consolidated balance sheet as at 30 September 1999 has been compiled to present the financial position of the AngloGold economic entity on the assumption that 100% of the shares in Acacia had been acquired on 30 September 1999 in accordance with the terms of the Offer accompanying this Statement. The pro-forma consolidated balance sheet has been prepared in accordance with the accounting policies outlined in Appendix B, the measurement requirements, but not the disclosure requirements, of IAS and the assumptions set out below: (i) the Acacia balance sheet used in the compilation of the pro-forma consolidated balance sheet is that announced by Acacia as part of its annual report as at 30 June 1999. No adjustments for subsequent share issues under the Acacia Employee Share Plan have been made as such issues are not considered material to the financial information presented. A balance sheet of Acacia at 30 September 1999 is not publicly available. For the purposes of the pro-forma consolidated balance sheet, it has been assumed that there are no material differences between 30 June 1999 and 30 September 1999. The balance sheet of Acacia has been translated from Australian Dollars into Rand and US Dollars in accordance with IAS, using the 30 September 1999 exchange rates of SAR3.9915 and US$0.6525;   (ii) the compilation of the pro-forma consolidated balance sheet assumes the following transactions took place as at 30 September 1999: the issue of 8,824,998 AngloGold shares at an issue price of SAR325 per share, being the closing price of AngloGold shares on the JSE on Friday 22 October 1999. This equates to SAR2,868million of issued capital, or US$478million translated at the 30 September 1999 exchange rate of US$1.00 = SAR6.006; the acquisition by AngloGold of 100% of the issued share capital in Acacia from Acacia shareholders for the consideration being described above. In the event that AngloGold acquires more than 50% of the issued share capital of Acacia, however less than 100%, the issued share capital of AngloGold will be reduced accordingly and the minority interests in the AngloGold economic entity increased. Further, in the event that AngloGold acquires more than 20% of the issued share capital of Acacia, however less than 50%, the net assets of Acacia will not be consolidated, an investment in Acacia will be recorded at cost and be equity accounted. In the event that AngloGold acquires less than 20% of the issued share capital of Acacia, an investment will be recorded at cost; and costs associated with the acquisition of Acacia are estimated to be SAR42.6 million (US$7.1 million). These costs have been charged against the share capital of AngloGold, in accordance with the South African companies legislation. This has the effect of increasing the issued share capital in AngloGold from SAR5,280million to SAR8,105million (US$879million to US$1,350million), as shown in the pro-forma consolidated balance sheet; and   (iii) This has the effect of increasing the issued share capital in AngloGold from SAR5,280million to SAR8,105million (US$879million to US$1,350million), as shown in the pro-forma consolidated balance sheet; and (iii) at the date of obtaining control of Acacia, which is assumed to be 30 September 1999 for the purposes of the pro-forma consolidated balance sheet, AngloGold is required to record the acquired assets and liabilities at fair value. No adjustments have been made to reflect the fair value of the assets and liabilities acquired, with the exception of the mining assets and deferred taxation. The difference between the consideration paid by AngloGold and the net assets of Acacia, as reflected by the 30 June 1999 financial report, has been attributed to the fair value of the mining assets, with the associated deferred taxation adjustment also being made.
2.4	Pro-forma consolidated reserves and resources
	AngloGold?s mineral resource classification standards AngloGold has adopted internationally accepted mineral resource classification standards, which are conceptually based on the JORC Code as well as on the latest draft of the South African Code for Reporting of Mineral Resources and Mineral Reserves, which in turn is based on the JORC Code. This approach has been adopted both for clarity of reporting to shareholders and for facilitating ore body management by AngloGold. This system is a strictly data and confidence-based categorisation and estimation procedure. The mineral resource is sub-divided into categories of various levels of confidence in the estimate, ultimately based both on the geo-statistical characteristics of the ore body and on the proximity, type and amount of geological and sampling data that might have been used to extrapolate values into particular blocks. Different geo-statistical techniques are applied as appropriate and the quality of the estimates is tested by cross-validation and reconciliation. Acacia?s mineral resource classification standards Acacia mineral resource and reserve estimates were compiled in accordance with the JORC Code by competent persons. All the competent persons are members of the Australian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and have relevant experience in relation to the mineralisation being reported on by them to qualify as Competent Persons as defined in the 1999 Edition of the JORC Code. Comparison of AngloGold?s and Acacia?s mineral resources A comparison of AngloGold?s and Acacia?s mineral resources as at 31 December 1998 and 30 June 1999 respectively is set out below. The table must be read in conjunction with the ?Important note?* that follows: *Important note Discretion should be exercised when trying to combine the above mineral resources and reserves as: differences exist in the economic criteria used for mineral reserve estimation; AngloGold mineral resources and reserves are quoted as at 31 December 1998 whereas Acacia mineral resources and reserves are quoted as at 30 June 1999; and AngloGold has reported ?Other Resources? whereas Acacia has reported ?Inferred Resources?, as defined in note 3 to the table immediately above. Definitions of mineral reserves and resources Appendix A is a glossary of expressions used in this Statement relating to mineral reserves and resources.