[ CONTENTS ]

ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

    This management discussion and analysis of financial condition and results of operations is based on the U.S. GAAP Financial Statements of AngloGold (formerly Vaal Reefs) for the years ended and as at December 31, 1996, 1997 and 1998 which are included under Item 19 of this Annual Report. The acquisition of the Participating Companies and the interests in the Share Interests Companies has been accounted for as a purchase business combination under U.S. GAAP. Accordingly, the U.S. GAAP Financial Statements for the years ended and as at December 31, 1996 and 1997 do not include the results of operations or financial condition of those companies, whereas the results of operations and financial condition of the Participating Companies and Share Interests Companies are included in the U.S. GAAP Financial Statements of AngloGold for the year ended and as at December 31, 1998 from June 29, 1998, the effective date of the Consolidation for accounting purposes. Therefore, such financial statements are not necessarily indicative of the Company's financial condition or results of operations for any future periods.

Overview

    AngloGold's revenues are derived primarily from the mining of gold. As a result, the Company's operating results are directly related to the price of gold which can fluctuate widely and are affected by numerous factors beyond its control, including industrial and jewelry demand, expectations with respect to the rate of inflation, the strength of the U.S. dollar (the currency in which the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales by central banks, forward sales by producers, global or regional political or economic events, and production and cost levels in major gold-producing regions such as South Africa. In addition, the price of gold sometimes is subject to rapid short-term changes because of speculative activities. The current demand for and supply of gold may affect gold prices, but not necessarily in the same manner as current supply and demand affect the prices of other commodities. The supply of gold consists of a combination of new production from mining and existing stocks of bullion and fabricated gold held by governments, public and private financial institutions, industrial organizations and private individuals.

    As the amounts produced in any single year constitute a very small portion of the total potential supply of gold, normal variations in current production do not necessarily have a significant impact on the supply of gold or on its price. If revenue from gold sales falls for a substantial period below the Company's cost of production at its operations, the Company could determine that it is not economically feasible to continue commercial production at any or all of its operations or to continue the development of some or all of its projects. The Company's weighted average total cash cost of equity attributable production for its worldwide operations was U.S.$233 per ounce of gold sold in 1998, U.S.$254 in 1997 and U.S.$255 in 1996.

    On March 26, 1999 the afternoon fixing price for gold on the London Bullion Market were U.S.$279.80.

    AngloGold has utilized commodity instruments to protect the selling price of certain anticipated gold production. Although the use of such instruments may protect a company against low gold prices, it will only do so for a limited period and only to the extent the hedge book can be sustained. The use of such instruments may also prevent full participation in subsequent increases in the market price for gold with respect to covered production.

    AngloGold's costs and expenses consist primarily of production costs, royalties and depreciation, depletion and amortization. Production costs are incurred on labor, consumables and utilities. Labor is the largest component of production costs. Royalties were paid by AngloGold to Southvaal up to the effective accounting date for the right to mine the mineral rights formerly held by this company, and royalties for the remainder of the period was eliminated on Consolidation.

    Like all companies in South Africa, AngloGold has been subject to the uncertainties of the changing political environment since the elections in 1994. Forty years of apartheid came to an end in 1991 leading to South Africa's successful transition to a democracy in 1994. This has culminated in the recent release of a new constitution and the government's stated economic policy to achieve economic growth within an environment of monetary and fiscal discipline, low inflation and international competitiveness.

    Following the publication of the Leon Commission Report in South Africa on all aspects of mining health and safety, legislation in the form of the Mine Health and Safety Act was implemented. It is anticipated that mining companies will incur additional expenditures, as yet unquantifiable, in order to comply with the legislation's requirements. Management anticipates that such additional expenditures will not have a material adverse effect upon the Company's results of operations or financial condition, although there can be no assurance of this.

    A significant number of South Africa's workers belong to either registered or unregistered trade unions, and most of the major industries are unionized. Approximately 70 percent of the Company's employees are members of South Africa's registered or unregistered trade unions. A number of the trade unions have close links to various political parties. In the past, trade unions have had a significant influence in South Africa as vehicles for social and political reform and in the collective bargaining process. It is uncertain whether labor disruptions will be used to advocate political causes in the future. Significant labor disruptions could have a material adverse effect on the results and financial condition of the Company.

    South Africa has recently enacted a Labor Relations Act. This Act entrenches the rights of employees to belong to trade unions and the rights of trade unions to have access to the workplace. It also guarantees the right to strike and the right to participate in secondary strikes in certain prescribed circumstances. The right to picket has also been recognized. This Act recognizes the right of employees to participate in the decision-making of companies by providing for the compulsory establishment of workplace forums to represent the interests of employees where a company employs more than 100 employees. The range of issues on which the workplace forum must be consulted include restructuring of the workplace, partial or total plant closures, mergers and transfers of ownership, insofar as these affect employees, and terminations. Management does not anticipate that the implementation of this Act's provisions will have a material adverse effect on the Company's cost of labor and consequently on its results and financial condition, although there can be no assurance of this.

    Rights to mine in South Africa are derived from ownership of mineral rights and mining authorizations granted by the State. In Mali, rights to mine are granted under covenants with the government and in Namibia mining licenses are granted by the government to mining companies. After the election of a democratic government in South Africa in 1994, Pennuell Maduna became Minister of Mineral & Energy Affairs in 1995. By October 1996, a draft Green Paper had been produced through tripartite negotiations involving the Chamber of Mines, various individual companies, organized labor and the State. In May 1997, the Minister made a series of statements which appeared to contradict the consensus reached in the draft Green Paper. He criticized the position on mineral rights and small-scale mining. The final White Paper, which was published on October 29, 1998, confirmed the proposals of the Green Paper to adopt legislation requiring that privately owned mineral rights be reallocated to the State. According to the White paper, the State, as custodian of the nation's mineral resources for the benefit of all, would acquire all mineral rights over a period of time (currently proposed to be 20 years). The State would issue licenses for prospecting and mining operations against payment of a form of royalty by the holders of such licenses to the State. As a transitional arrangement, the following new system for granting access to mineral rights would apply:

(i) The right to prospect and to mine for all minerals will vest in the State.

(ii) The government will develop detailed legislative proposals for the introduction of the new system of access to all mineral rights guaranteeing the continuation of current prospecting and mining operations in accordance with the "use-it and keep-it" principle and a transitional period to allow holders of prospecting, mining and mineral rights to licence the operations referred to above, as well as extensions which are necessary to provide for the continuation of such operations.

    The White Paper reflects the government's intentions only. The White Paper leaves unaddressed the issue of compensation for existing mineral rights. There can be no assurance as to whether or when any proposed legislation on this matter will be passed. However, if passed, any such legislation could have a material adverse affect on the Company's financial condition and results of operations. See "Item 1. Description of Business ? Rights to Mine; Title to Properties" and "? Risk Factors ? Regulation".

    Currently the majority of the Company's earnings are generated in South Africa and most of its costs, therefore, are denominated in rand. As the price of gold is denominated in U.S. dollars, weakness in the rand generally results in short-term earnings improvement. Sustained rand weakness would, however, have an inflationary effect. Exchange controls are currently in force in South Africa. Although the exchange rate of the rand is primarily market determined, its value at any time cannot be considered a true reflection of the underlying value of the rand while exchange controls exist. The government has indicated its intention to lift exchange controls over time. When this occurs, rand exchange rates will be more closely tied to market forces. It is not possible to predict when this will occur or the future value of the rand.

    The Company's operations have not been materially adversely affected by inflation in recent years. However, the Company is unable to control the prices at which it sells its gold (except to the limited extent that it enters into forward sales contracts) and it is possible, therefore, that if there were to be significant inflation in South Africa without a concurrent devaluation of the rand or an increase in the price of gold, there could be a material adverse effect upon the Company's results and financial condition.

    The effects of the rand/U.S. dollar exchange rate, based upon average rates during the respective year, and the local annual inflation rate, as measured by the Producer Price Index ("PPI"), are set out in the table below:

    On January 27, 1998 AngloGold sold shafts Nos. 1, 3, 4, 5, 6 and 7 of the Vaal Reefs operations, excluding all major equipment and winders, for R38.2 million to ARM. Under the agreement, AngloGold retains the rehabilitation liability for No. 1 shaft but ARM will assume such liability for the other shafts. In addition to the sale of the shafts Nos. 1, 3, 4, 5, 6 and 7, the Company entered into a tribute agreement with respect to No. 2 shaft pursuant to which ARM will mine the shaft area and 60 percent of revenue, net of costs and capital expenditure, will accrue to AngloGold. During 1997 these shafts generated revenue of approximately R546 million, had production of approximately 15 tonnes and had a net loss of approximately R12 million. Services of employees at these shafts were terminated at a cost of approximately R100 million. The Masimong mine (previously Freegold 3) was sold to the Harmony Gold Mining Company effective September 21, 1998. Operations at Tshepong South (previously Freegold 4), which was in the shaft sinking phase, were suspended on September 11, 1998 as a result of re-evaluation of the risks and the prevailing financial returns.

Results of Operations

Comparison of 1998 to 1997

    On November 26, 1997 Anglo American Corporation of South Africa Limited announced that it planned to merge its gold operations, mineral rights and exploration activities under the name of AngloGold Limited, to create a single independently focused global gold company. The effective date of the transaction was June 29, 1998. The vehicle used for the Consolidation was Vaal Reefs Exploration and Mining Company Limited (Vaal Reefs). Reported results for 1997 reflect the results of operations and financial condition of Vaal Reefs. The financial year 1998 reflects Vaal Reefs from January 1, 1998 to June 28, 1998 and the consolidated AngloGold from June 29, 1998 to December 31, 1998, (i.e., reflecting the inclusion of the results of operations and financial condition of the Participating Companies and Share Interests Companies).

    Gold experienced another difficult year on international markets in 1998, and the price suffered accordingly. Gold reached a high in 1998 at U.S.$314 per ounce and a low of U.S.$273 which was 4 percent lower than the 1997 low of U.S.$283. During 1998 the average U.S. dollar price for gold was U.S.$287 per ounce, about U.S.$44 per ounce or 13 percent, lower than the average price for 1997. The price of gold in South Africa enjoyed relief from the rand/dollar exchange rate, and the average rand spot price for 1998 of R51,924 per kilogram was 6 percent higher than the average of R48,907 in 1997. The rand weakened in 1998 to a low of R6.80 reflecting general emerging market concerns. The rand subsequently recovered and strengthened to R5.50 in October 1998 and has since depreciated to a rate of R6.27 at March 26, 1999.

    Sales and other income increased from R3,956 million in 1997 to R8,340 million in 1998. Product sales consist mostly of gold sales as well as uranium oxide and sulphuric acid sales. Product sales increased from R3,919 million in 1997 to R8,069 million in 1998 due to an increase in gold and uranium oxide sales. Gold sales volumes increased by 82 percent mainly as a result of the merging of the gold assets in the Consolidation. After the Consolidation, the average price received on gold sales was 19 percent higher than in 1997 and the spot price 13 percent higher.

    Uranium oxide and sulphuric acid sales increased from approximately R227 million to approximately R280 million mainly as a result of higher unit sales of 9 percent and a 13 percent higher unit price.

    Production costs increased by 88 percent from R2,887 million in 1997 to R5,424 million in 1998 primarily as a result of the volume increases during the year (tons treated increased by more than 223 percent and area mined increased by 66 percent), increased prices for resources used in production and increased wages. Cost per ton treated increased by R5.37 due to inflation while the decrease to R117.87 per ton treated is a result of benefits of synergies due to the Consolidation. Wages constitute approximately 50 percent to 60 percent of the total cash costs per unit of production. Negotiated pay increases were settled at 10 percent in 1997and 9 percent in as part of a two year (1997 and 1998) wage and productivity settlement. The U.S. dollar unit costs per ounce decreased by 8 percent from U.S.$254 per ounce to U.S.$233 per ounce as a result of the increase in production and the exchange rate fluctuations discussed above. In 1998, gold production increased by 82 percent to 126,282 kilograms which is mainly a result of the Consolidation and, excluding the effect of the Consolidation, an 8 percent increase in the recovery grade which was partly offset by a 14 percent decrease in tons treated.

    Employment severance costs decreased from R130 million in 1997 to R73 million in 1998.

    Income and mining tax benefit was R30 million in 1997 compared to a R146 million expense in 1998. Non-mining income and mining profits are taxed under different regimes in South Africa. Tax charges in 1998 amounted to R484 million, which was R467 million higher than in 1997. Deferred taxation on unredeemed capital expenditure and arising out of price protection activities moved from a benefit of R47 million in 1997 to a benefit of R338 million in 1998. The primary reason for this variance was the sale of shafts during 1998.

    As a result of the factors discussed above, net income increased from R243 million in 1997 to R1,022 million in 1998. AngloGold paid R45 million preferred dividends in 1998 compared to R23 million in 1997. As a result, net income applicable to common shareholders was R977 million in 1998 compared to R220 million in 1997.

Comparison of 1997 to 1996

    Sales and other income increased from R3,762 million in 1996 to R3,956 million in 1997 primarily as a result of increased product sales. Product sales consist mostly of gold sales as well as uranium oxide and sulphuric acid sales. Product sales increased from R3,698 million in 1996 to R3,919 million in 1997 due to an increase in gold and uranium oxide sales of R93 million and R128 million, respectively. Gold sales volumes increased by 3 percent mainly as a result of improved productivity following the implementation of productivity based wage increases. As discussed below, spot prices decreased by 8 percent in rand terms which was mostly offset by price protection activities that generated R277 million.

    Gold experienced a difficult year on international markets in 1997, and the price suffered accordingly. After slipping some U.S.$30 per ounce over 1996, gold opened in 1997 at U.S.$367 per ounce. During the year gold lost over U.S.$80 per ounce or 23 percent as a result of ongoing speculation against the metal, fixing at an 18 year low of U.S.$283 in December 1997. The average dollar price for 1997 was U.S.$331 per ounce, about U.S.$57 per ounce or 15 percent lower than the average price for 1996. The local price of gold enjoyed little relief from the rand/dollar exchange rate, and the average rand price for 1997 of R48,907 per kilogram was 8 percent below the average of R53,433 in 1996. While the rand opened the year at R4.68 to the dollar in 1997, it strengthened swiftly as a result of positive sentiment and investor inflows into South Africa to reach its strongest point of R4.40 in January 1997. Thereafter, the currency weakened through 1997, declining sharply to R4.87 in the face of the U.S. dollar's strength at the end of 1997. Hedge cover in place for the Company was 58.7 tons at the beginning of 1997. Cover was reduced during the first half of 1997, but the Company's hedge position was rebuilt to 77.2 tonnes at the end of 1997 to restore earlier levels of price security for the Company.

    Uranium oxide and sulphuric acid sales increased from approximately R99 million to approximately R227 million mainly as a result of higher unit sales at lower average spot prices. The uranium market was such that long-term contractual commitments, AngloGold's preferred marketing route, were not available in 1997. As a result, AngloGold sold a major portion of its inventory of uranium oxide at spot prices on the market.

    Production costs increased by 17 percent from R2,459 million in 1996 to R2,887 million in 1997 primarily as a result of the volume increases during the year, increased prices for resources used in production and increased wages. Wages constitute approximately 50 percent to 60 percent of the total cash costs per unit of production. Negotiated pay increases were settled at 10 percent in 1997 as part of a two year wage and productivity settlement. The dollar unit costs per ounce decreased marginally from U.S.$255 per ounce to U.S.$254 per ounce, as a result of the exchange rate fluctuations discussed above. In 1997, gold production increased by 3 percent to 69,489 kilograms.

    Employment termination costs increased from R25 million in 1996 to R130 million in 1997. R100 million of such costs in 1997 resulted from the termination of employee services in connection with the disposal of shaft Nos. 1 to 7 to ARM as discussed above. The balance of approximately R30 million of such costs in 1997 represents employment termination costs paid out as a result of ongoing restructuring over the past two years.

    Income and mining tax benefit was R30 million in 1997 compared to R59 million in 1996. Non-mining income and mining profits are taxed under different regimes in South Africa. In 1996, the mining tax rate was decreased and deferred tax balances were accordingly reduced by R224 million. Tax charges in 1997 amounted to R17 million which was R55 million lower than in 1996. Deferred taxation on unredeemed capital expenditure and arising out of price protection activities moved from a charge of R93 million in 1996 to a benefit of R47 million in 1997.

    As a result of the factors discussed above, net income decreased from R658 million in 1996 to R243 million in 1997. AngloGold paid preferred dividends of R23 million in 1997 compared to R1 million in 1996. As a result, net income applicable to common shareholders was R220 million in 1997 compared to R657 million in 1996.

Liquidity and Capital Resources

Operating Activities

    Net cash provided by operating activities was R1,648 million in 1998, 170 percent higher than the 1997 amount of R611 million. This was mainly due to an increase in net income from R243 million to R1,022 million as a result of the Consolidation, costs and expenses increasing by approximately 88 percent, while sales and other income increased by 111 percent (a detailed discussion of these movements is included in comparison of 1998 to 1997).

    The increase in income from operations was partly offset by a cash outflow as a result of additional investment in operating working capital. The additional operating working capital consisted of a net increase in gold, uranium oxide and sulphuric acid stock levels and funds applied to reduce current liabilities.

Investing Activities

    Investing activities in 1998 generated a net cash inflow of R591 million as a result of the cash from the acquisitions made which amounted to R1,009 million. The balance of R418 million mainly consists of additions to property, plant and equipment which compares to the R532 million invested in 1997. In 1997, AngloGold (formerly Vaal Reefs) purchased approximately 2 percent equity interest in Driefontein at a cost of approximately R135 million which interest AngloGold have agreed, subject to approval by Gold Fields' shareholders other than Anglo American and AngloGold, to sell to Gold Fields for R1,314 million during 1999. Proceeds from the sale of mining assets amounted to R179 million during 1998.

    During 1998, as part of the Consolidation, a total of 25,701,945 ordinary shares of AngloGold were issued to Anglo American in exchange for its shares of the Participating Companies.

    In addition, in connection with the Consolidation, AngloGold issued to Anglo American 13,076,734 ordinary shares of AngloGold in exchange for its share of the Share Interests Companies.

    AngloGold also acquired the Gold Mineral Rights from Anglo American for 2,916,746 ordinary shares of AngloGold.

    In connection with these transactions, AngloGold also acquired from Anglo American and JCI all the rights of Anglo American and JCI, respectively, under the Service Agreements. The rights under the Service Agreements acquired from Anglo American were acquired in exchange for 3,417,436 ordinary shares of AngloGold and a cash payment of approximately R62 million, and the rights under the Service Agreements acquired from JCI were acquired for cash.

    AngloGold issued 33,092,047 shares to the shareholders of the Participating Companies and the Share Interests Companies other than Anglo American in connection with the Consolidation.

Financing Activities

    Net cash used in financing activities increased by R873 million from R121 million to R994 million mainly as a result of the Consolidation. An overdraft facility that was obtained from Anglo American of approximately R104 million is now settled.

    Net movements in long-term debts increased by R396 million to R811 million mainly due to borrowings to finance the cash elements of the Consolidation. The debt, totalling R811 million, primarily consist of the following:

    Dividends paid increased from R365 million to R949 million. The Company declares interim dividends at the time of announcing the interim results and declares and pays final dividends in the following year based on the previous year's results. Due to increased operating income in 1998 and the increased total number of outstanding shares due to the Consolidation, total and per share dividends paid increased in 1998.

    As a result of the above, total shareholders' equity increased to R18,297 million while retained earnings increased to R1,487 million in 1998.

Liquidity

    Liquidity of the Company will be influenced by the repayment of the loans listed below as well as by the ability of the Company to succeed in its objective of producing gold at levels below U.S.$250 per ounce and therefore generating the cash resources to cover its liquidity needs. Management believes that this will be achievable after the restructuring and downsizing of the various operations. The cash cost for 1998 was U.S. $233 per ounce while the production cost amounts to U.S.$243 per ounce.

    AngloGold obtained an unsecured U.S. dollar denominated loan from Economic Development Corporation Limited at LIBOR plus 0.6 percent per annum, repayable in 10 six-month instalments terminating in December 2002. At December 31, 1998 the amount of this loan outstanding was approximately R11 million. Repayments of the loan will be financed from cash generated from mining operating profits.

    An unsecured interest free loan which amounted to approximately R67 million at December 31, 1997 was received by Weltevreden from its former members. The loan was used to finance capital expenditure and was repayable from the proceeds of the sale of the assets underwritten by the loan in the Weltevreden area. Until July 15, 1998, any proceeds of the sale of these assets were to be used for payment to the former members of Weltevreden in proportion to the amounts outstanding on their loan accounts as at December 31, 1996. As the loan account had not been repaid in full by July 15, 1998, Gengold Limited ("Gengold") has undertaken to sell the remainder of its claim on loan account against Weltevreden to AngloGold for a consideration of R1. Gengold's portion of the loan amounts to approximately R56 million. Similarly, Freegold (Ops) has undertaken to sell the remainder of its claim on loan account against Weltevreden to AngloGold for a consideration of R1, and its portion of the loan amounts to approximately R2 million. A similar undertaking has been obtained from Lydenburg Exploration Limited in respect of its portion of the loan amounting to R10 million.

    At December 31, 1998, R590 million loan was accounted for from Anmercosa Finance Limited. Interest is charged at LIBOR plus 2 percent, payable in eight half yearly instalments terminating in May 2002.

    A loan of R98 million from Debsam Limited of which interest is charged at LIBOR plus 2 percent was obtained during 1998. The payment date and terms of the loan are not yet determined.

    Long term debt increased from approximately R412 million to approximately R807 million as a result of those loans discussed in the previous paragraph. Long term debt as a percentage of shareholders' equity decreased from approximately 21 percent to approximately 4 percent as a result of Consolidation, leaving the Company with sufficient ability to fund future capital expenditure from internal sources.

    Capital commitments and contingent liabilities of AngloGold include contracted capital expenditure of approximately R232 million and authorized capital expenditure not yet contracted of approximately R962 million.

As a result of the Consolidation, the following significant capital commitments and contingencies are applicable to the Company:

Year 2000

    The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's computer programs or hardware that have date-sensitive software or embedded chips may recognise a date using "00" as the Year 1900 rather than the Year 2000. This could result in a systems failure or miscalculations causing disruptions of operations, including among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities.

    AngloGold is actively addressing Year 2000 issues. A Year 2000 Steering Committee was formed and is responsible for co-ordinating and facilitating the associated activities across the Company. In addition, the internal audit function performs regular audits on the adequacy of processes followed, which are augmented, by external audits. The Year 2000 Steering Committee reports progress to the Executive Management Team and the Audit Committee of the Company.

    All IT systems developed since 1994 have taken cognisance of Year 2000, and non-IT systems since 1997. AngloGold developed a policy and methodology to ensure a thorough and standard approach to addressing the Year 2000 problem across the Company.

    The policy clearly outlines objectives, principles, responsibilities, scope and timetable.

The methodology describes the approach and phases to be completed, including deliverables:

The Company's Readiness

    As at December 31, 1998, all of the Company's business units have substantially completed Phases 1 to 4 and have completed a considerable portion of the work under Phases 5 to 8. However, certain of the work will continue into 1999. This work will be separately monitored and tracked with appropriate target completion dates. Contingency plans will be developed for all components that may have a material negative impact on AngloGold's final "Year 2000 compliancy". The target date for full compliance is July 31, 1999.

    As part of the Company's overall program, and to ensure adequate means to measure progress, AngloGold has established four functional categories:

    Mining (non-IT): Some of the tools and equipment (hardware and software) used in mining processes are date-sensitive. The Company expects, based on the results of the assessment and based on written assurances from its suppliers, that the critical tools and equipment used by it for mining purposes will be "Year 2000 compliant" or will be made ready through upgrades by the suppliers of the tools or equipment. As a result, the Company does not expect significant interruption to its mining capabilities, because of the failure of tools and/or equipment.

    Business Applications (IT): Throughout its business the Company is fixing and testing all business applications such as core financial information and reporting systems, procurement, human resources/payroll, commercial applications and revenue systems, and does not expect any significant Year 2000 problems in this area. This has not impacted any planned IT development projects.

    Facilities and Infrastructure: The Company also is fixing and testing its facilities and infrastructure (health, safety and environment systems, buildings, security/alarms/doors, desktop computers, networks) to ensure they are "Year 2000 compliant" and does not expect significant interruption to its operations, because of Year 2000 problems with its facilities and infrastructure.

    Logistics: The Company has allocated resources to ensure that its operations are not disrupted, because of services or products supplied to the Company. In addition, the Company has requested written assurances from its joint venture partners and alliance partners of their "Year 2000 readiness".

    Of critical importance to the Company's Year 2000 Compliance, is the readiness of suppliers and the products the Company procures from suppliers. AngloGold has many thousands of suppliers and has a comprehensive program to identify and obtain Year 2000 information from its critical suppliers. The program includes awareness letters, site visits, questionnaires, compliance agreements and warranties as well as a review of suppliers' Year 2000 web-sites. If a supplier is determined to entail a "high risk" of non-Year 2000 readiness, the Company will develop contingency and alternate sourcing plans to minimize the Year 2000 risk. The Company has had a 90 percent response from critical suppliers and a 20 percent response from non-critical suppliers confirming Year 2000 readiness. All critical tools and equipment were assessed and certified by suppliers, winders certification is the only exception.

Year 2000 Costs

    AngloGold estimates that the expected directly attributable costs for its Year 2000 activities from 1997 through 2000 will be approximately R30 million, which will be funded by cash from operations. These costs do not include estimates for planned upgrades, internal manpower and the costs incurred by IBM (part of outsourcing contract). External costs incurred in 1998 until December 31, 1998 were approximately R10.2 million. The Company does not believe that the incremental costs of addressing Year 2000 issues will have a material adverse effect on the Company's consolidated results of operations, liquidity and capital resources.

The Company reviews and updates data for costs incurred and forecasted costs each month. As the Company continues to assess the last phases of the Year 2000 Program, estimated costs may change.

Most Reasonably Likely Worst Case Scenarios for the Company and Contingency Plans.

    The Company has and will continue to devote substantial resources to address its Year 2000 issues. However, there can be no assurances that the Company's hardware and software do not contain undetected Year 2000 problems. Further, there can be no assurances that the Company's assessment of suppliers and vendors will be accurate. In addition, many analysts believe that there will be a significant amount of litigation arising out of "Year 2000 readiness" issues. Because of these factors, it is impossible for the Company to predict the impact of such factors.

The Company believes its worst case scenarios include:

(i) corruption of data contained in the Company's internal information systems;

(ii) hardware failures;

(iii) the failure of infrastructure services provided by government agencies and other third-party suppliers (including energy, water, and transport); and

(iv) health, environmental and safety issues relating to its facilities.

    In the unlikely event of these occurring, the Company's operations could be interrupted.

    The Company is preparing contingency plans for all mission critical components to address the above. These activities are included in the plan, and the objective is to produce uniform best practices, that will be implemented to minimize risks. The Company expects such contingency plans to be in place by June 30, 1999.

This disclosure is a Year 2000 Readiness Disclosure within the meaning of the U.S. Year 2000 Information and Readiness Disclosure Act of 1998.

ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Gold Price Risk Management Activities

    The Group does not acquire, hold or issue derivative instruments for trading purposes. A number of products, including derivative instruments are used to manage well defined gold price and foreign exchange risks, that arise out of the Group's core business activities. Fixed and spot-deferred forward sales contracts and call and put options are used by the Group to protect itself from downward fluctuations in the gold price. These instruments establish a minimum price for future production while maintaining the ability to participate in increases in the gold price.

    Derivatives are accounted for as hedging transactions provided the following criteria are met:

    Gains or losses arising from transactions accounted for as a hedge are recognized in revenue when the hedged production is delivered. If the instrument is sold, extinguished or terminated prior to the delivery of the hedged production, gains or losses are deferred until the original designated date of delivery.

    Derivatives which do not meet the hedge criteria outlined above at inception or cease to meet the hedge criteria at any later date, are accounted for on a mark to market basis and the associated gains or losses recognized as revenue in the current period.

    Gold hedging instruments are denominated in both rands and U.S. dollars. The primary hedging instruments utilized are fixed forward, spot-deferred forward sales contracts and purchased put options. Typically, forward sale contracts and purchased put options meet the required criteria and are accounted for as hedging transactions. Forward sale contracts and purchased put options not meeting the hedge criteria are accounted for on a mark to market basis. Purchased and sold call options and sold put options are also used to hedge price risk management. Where these instruments do not meet hedge accounting criteria, they are marked to market and recognized in the current period. The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continuously reviewed in light of changes in operational forecasts, market conditions and the Group's hedging policy. The Group's reserves and financial strength has allowed it to arrange credit lines of up to ten years with counterparties.

The following table indicates the Group's net gold hedge position at December 31, 1998.

    Forward sales contracts require the future delivery of gold at a specified price. A number of these contracts are spot-deferred and are intended by the Group for delivery against production in a future period. The notional amount of outstanding forward sales type contracts at the end of 1998 was 276,736kg compared to 46,324kg at the end of the previous year for Vaal Reefs.

    A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date. A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a predetermined date. The Group's risk as outlined above in purchasing compound options is limited to the premium paid. Net cash receipts received under the option hedging strategies was R220 million in 1998 compared to R27 million in the previous year. The notional value of option contracts outstanding at the end of 1998 was 196,036 kg compared to 68,163 kg at the end of the previous year for Vaal Reefs.

Foreign Exchange Price Risk Protection Agreements

    The Group periodically enters into forward exchange and currency option contracts to hedge certain recorded transactions, firm commitments and other anticipated transactions denominated in foreign currencies. The objective of the Group's foreign currency hedging activities is to protect the Group from the risk that the eventual cash flows resulting from transactions denominated in U.S. dollars will be adversely affected by changes in exchange rate between the U.S. dollar and the Group's functional currency, the South African rand.

The following table indicates the Group's foreign currency hedge position at December 31, 1998.

Credit Risk

Realization of all these contracts is dependant upon the counterparties performing in accordance with the terms of the contracts. The Group does not anticipate non-performance by any counterparties. The Group generally does not obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparties. The Group believes that no concentration of credit risk exists.

Fair Value

    The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the Company's financial instruments at December 31, 1998 and 1997 are as follows:

(1) The carrying amounts approximate fair value because of the short maturity of these instruments.
(2) Fair value reflects the net present value of the future cash flows, discounted at the prevailing market rate for short-term debt. The debt re-prices on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
(3) The fair value of volatility based instruments are estimated based on market prices, volatilities and interest rates, while the fair value of forward sales and purchases are estimated based on the quoted market price for the contracts at December 31, 1998 and 1997.

Sensitivity Analysis

    A sensitivity analysis of the hedge book at December 31, 1998 indicates the following:

(1) In million rands.

ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT

Directors

The current directors of the Company are:

(1) Member of the Audit Committee.
(2) Chief Executive Officer since 1998.
(3) At each annual General Meeting, one-third of the board of directors must retire according to seniority or by lot and may be re-elected.

    Frank B. Arisman, MSc (Finance). Mr. Arisman is a managing director of JP Morgan, which he joined in 1972. He was appointed a director of AngloGold in April 1998.

    Jonathan G. Best, MBA, ACIMA, ACIS. Mr. Best has had over 30 years of service with companies associated with the mining industry. He is a director of a number of companies and was appointed a director of AngloGold, then Vaal Reefs, in February 1994.

    Elisabeth le R Bradley, BSc, MSc. Mrs. Bradley is executive chairman of Wesco Investments Limited, vice-chairman of Toyota SA Limited and a director of a number of other companies. She is deputy chairman of the South African Institute of International Affairs and was appointed a director of AngloGold in April 1998.

    Colin B. Brayshaw, CA(SA), FCA. Mr. Brayshaw is a retired Managing Partner and Chairman of Deloitte & Touche. He is a director of a number of companies and was appointed a director of AngloGold in January 1997. He was appointed as a member of AngloGold's Audit Committee in January 1997 and has been chairman of that Committee since April 1997.

    James W. Campbell, Ph.D (Geophysics), BSc (Mathematical Physics), BSc (Management Engineering). Dr. Campbell joined Anglo American in 1975 and is an executive director of that corporation and is responsible for Anglo American's coal and base metals interests. He is a director of a number of other companies and was appointed a director of AngloGold in April 1998.

    Russell P. Edey, FCA. Mr. Edey, who joined N M Rothschild & Sons Limited in 1977, is now deputy chairman of NM Rothschild Corporate Finance Limited and of Rothschild Europe B.V. He is a director of a number of other companies and was appointed a director of AngloGold in April 1998.

    Victor K-K Fung, Ph.D (Business Economics), M.Sc. (Electrical Engineering). Dr. Fung is chairman of Prudential Asia Investments Limited, which he joined in 1986. He is also chairman of Li & Fung Limited, Hong Kong, and chairman of the Hong Kong Trade Development Council. He was appointed a director of AngloGold in April 1998.

    Robert P. Garnett, CA(SA). Mr. Garnett is a Finance Manager of Anglo American, having joined that corporation in 1994. He is a director of a number of companies and was appointed an alternate director of AngloGold in April 1998.

    Robert M. Godsell, BA, MA. Mr. Godsell has had 25 years of service with companies associated with the mining industry and is a director of Anglo American. He is currently President of the Chamber of Mines of South Africa. He is a director of a number of companies and was appointed a director of AngloGold, then Vaal Reefs, in March 1989 and was chairman from April 1996 to April 1998. He was appointed chief executive officer of AngloGold in April 1998.

    Michael W. King, CA(SA), FCA. Mr. King, a deputy chairman of Anglo American, has been a director of that corporation since 1979 and in 1980 was appointed an executive director and head of its Finance Division. He is a director of a number of companies, and was appointed a director of AngloGold in April 1998.

    Thokoana J. Motlatsi. Mr. Motlatsi was employed by South African gold mining companies from 1970. He has held the position of President of the National Union of Mineworkers since 1982 and he is also President of the Southern Africa Miners' Federation. He was appointed a director of AngloGold in April 1998.

    Donald M.J. Ncube, BA (Economics and Political Science), MSc in Manpower Studies (University of Manchester, England). Mr. Ncube is executive chairman of Real Africa Holdings Limited, an investment holding company focusing on black economic enablement initiatives. He is also a director of a number of other companies and was appointed a director of AngloGold in April 1998.

    Nicholas F. Oppenheimer, BA (Politics, Philosophy and Economics). Mr. Oppenheimer is a non-executive deputy chairman and a director of Anglo American and chairman of Amgold. He is also chairman of De Beers Consolidated Mines Limited and a director of a number of other companies. He was appointed a director and non-executive Chairman of AngloGold in April 1998.

    Julian Ogilvie Thompson, BA (Politics, Philosophy and Economics). Mr. Ogilvie Thompson, chairman of Anglo American, has been a director of that corporation since 1970 and was appointed an executive director in 1971. He is deputy chairman of De Beers Consolidated Mines Limited, chairman of Minorco and a director of a number of other companies. He was appointed a director of AngloGold in April 1998.

    Timothy C.A. Wadeson, Graduate of the Camborne School of Mines, Chartered Engineer, Fellow of the Institution of Mining and Metallurgy. Mr. Wadeson has had over 40 years of service with companies associated with the mining industry and is Group Technical Director and an executive director of Anglo American. He is a director of a number of companies and was appointed a director of AngloGold in January 1997.

    Kelvin H. Williams, BA. Mr. Williams has had 23 years of service with companies associated with the mining industry. He is director of Anglo American and a director of a number of other companies. He is chairman of the Rand Refinery and is a director of the World Gold Council and was appointed a director of AngloGold, then Vaal Reefs, in December 1990.

    The beneficial and non-beneficial interests of the directors and the alternate director of AngloGold, including shares held indirectly, in the share capital of AngloGold at December 31, 1998 are set out in Item 12.

    None of the directors of AngloGold has a service agreement with any member company of AngloGold nor is it proposed that any of the directors of AngloGold will have such a service agreement.

The Articles of AngloGold provide for the following:

• AngloGold may in a General Meeting elect any person to be a director to fill a casual vacancy.

• The directors shall have the power at any time and from time to time to appoint any person as a director, either to fill a casual vacancy or as an addition to the board, but so that the total number of directors shall not at any time exceed the maximum number fixed being 24 directors.

• The Articles contain no provision for directors to hold qualification shares.

• The directors shall be entitled to such remuneration as AngloGold, by ordinary resolution in a General Meeting, may determine.

• The directors may borrow or raise, from time to time for such purposes of AngloGold, such sums as they deem fit.

There is no agreement between AngloGold and Anglo American concerning membership on the AngloGold Board of Directors. However, Anglo American has informed AngloGold that it does not currently intend to have more than five members affiliated with Anglo American on the AngloGold Board of Directors at any time.

Executive Officers

The current executive officers of the Company are:

(1) Terms of executive officers are continuous.

    The business experience and functions of the executive officers of AngloGold are as follows. For a description of Messrs. Best, Godsell and Williams, see under "Directors" above.

    I.D. Cockerill holds a BSc Hons in Geology (London) and an MSc in Mining (Royal School of Mines). He joined De Beers in 1979 at its Namaqualand Division and worked subsequently for Anglo American at the Free State Geduld and Saaiplaas gold mines. From 1990 to 1992, he served as the Senior Mining Engineer in the Minorco Technical Director's Office in London. He then managed Elandsrand and Western Deep Levels mines and was appointed Technical Director in AngloGold's Corporate Office in 1996. He moved to his current position in 1998.

    R.N. Duffy holds a commerce degree from the University of the Witswatersrand. He joined Anglo American in 1987, in its computer services division. He has spent time at Anglo American's Zambian office and with companies forming part of its small and medium business development initiatives. In 1996, he became Purchasing Manager: Information in Anglo American's purchasing division. He was appointed to his current position in 1998.

    J.M. Duncan holds a journalism degree from Rhodes University. He joined Anglo American in 1982 from a career in print journalism and worked subsequently in various public relations posts within the group. He joined the Gold and Uranium Division in 1991. His corporate communications responsibilities to AngloGold include investor relations and was appointed AngloGold's Corporate Communications Officer in 1998.

    R.J. Fisher began his mining career in the Rand Mines Group in 1959 and joined Anglo American at Vaal Reefs in 1966, where he obtained his Mine Manager's Certificate of Competency. After working on a number of mines in the group, and for a spell at Head Office, he returned to Vaal Reefs as Manager of its West Mine in 1986. He was appointed Regional General Manager of Vaal Reefs in 1994 and Chief Operating Officer in 1996. He became AngloGold's Safety, Health and Environment Officer
in 1998.

    D.L. Hodgson holds Bachelor of Science degrees in Mining Engineering (from the Royal School of Mines, University of London) and in Civil Engineering (from the University of the Witwatersrand), and a Bachelor of Commerce degree from the University of South Africa. He joined De Beers in 1970 and Anglo American in 1973, at Vaal Reefs. He was appointed Regional General Manager of Freegold in 1995 and Chief Operating Officer in 1996. He became Chief Operating Officer at AngloGold's West Rand Region in 1997 and AngloGold's Technology Officer in 1998.

    S.J. Lenahan graduated in Social Sciences from Natal University. He also holds a Master of Science degree in Industrial Relations from London University. He started his career with De Beers in 1978 and moved subsequently to Anglo American, where he worked in the Industrial Relations Department, the Diamond Services Division and the Public Policy Department. He joined AngloGold's Corporate Office in 1996 and became AngloGold's Investor Relations Officer in 1998.

    R.G. Mills holds a Bachelor of Science degree in mining engineering from the University of the Witswatersrand. He joined Anglo American in 1965 and, after various assignments in the group, moved to De Beers where he became General Manager of its Finsch mine in 1987. He was appointed Consulting Engineer in the Group Technical Director's Office of Anglo American with responsibility for international operations in 1992, and after a spell in South America, returned as Group Deputy Technical Director: Mining in 1995. He was appointed to his current position in AngloGold in 1998.

    J.F. Myburgh holds Bachelor of Arts and Bachelor of Law degrees from the University of the Witwatersrand. In 1972 he commenced practice at the Johannesburg Bar as an Advocate and became a Senior Counsel in November 1986. He was retained by Anglo American for labour law disputes and represented the gold and coal divisions in the litigation which stemmed from the 1987 strike. He was a member of the Johannesburg Bar Council for a number of years and was Chairman from 1990 to 1991. He was permanently appointed as a judge of the Supreme Court in 1991 and was appointed as Judge President of the Labour Appeal Court and the Labour Court in April 1996. He was appointed General Counsel of AngloGold in January 1999.

    A.G. Smith holds a Bachelor of Science degree in mining engineering from the University of the Witswatersrand. He began his career with Anglo American in 1975, in the coal division. He has worked for AMSA (one of the Minorco group companies) in Brazil, and for De Beers as General Manager of its Finsch mine and amalgamated Kimberley, Koffiefontein and Finsch operations. He joined AngloGold as Chief Operating officer at Freegold in 1997 and became AngloGold's South African Operations Officer in 1998.

    B.I. Tapson holds a degree in social sciences from Rhodes University. He joined De Beers in 1978 and held various posts in this company in South Africa, Botswana and Namibia. He moved to Anglo American in 1990 as Human Resources Consultant in the Diamond Services Division, and joined the Corporate Office of AngloGold in 1997. He became AngloGold's Human Resources Officer in 1998.

    N.W. Unwin holds a Bachelor of Arts degree from the University of the Witwatersrand. He began his career with Anglo American in 1974 at Head Office in the Human Resources Department and in 1977 transferred to the Gold and Uranium Division, first in Operations, then in 1981 at its Head Office. He was appointed Manpower Consultant in 1987. He moved to Edgars Stores Limited as Human Resources Executive in 1991 and became AngloGold's Executive Officer Strategic Planning and Labour Relations in 1999.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS

    The aggregate remuneration paid to directors and executive officers during the financial year ended December 31, 1998 by AngloGold was R12.6 million, comprising emoluments of R11.7 million and fees of R0.9 million (fees being directors fees and fees for serving on board committees). No benefits in kind were granted to the directors during the said period. The annual remuneration of directors was increased with effect from April 1,1998 from R15,000 to R50,000 for each director other than the chairman, and from R30,000 to R80,000 for the chairman. The estimated aggregate remuneration payable to directors and executives officers of AngloGold for the year ending December 31, 1999 is R17.5 million. The estimated contributions by AngloGold to post-retirement benefits of directors and executive officers for the same period is R1.3 million.

ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES

    At December 31, 1998 options over Ordinary Shares held by the directors and officers were as follows:

(1) Rands per share price varies depending on fluctuations in the market place.
(2) Options expire 10 years from the day when they are issued.

    Options may be exercised as follows:

(1) Dates of issue range from January 3, 1994 to June 1, 1998.

    Dates of issue refer to issues on comparable terms to employees of the Company whom previously participated in the AAC Executive Share Incentive Scheme prior to the formation of AngloGold.

    The Share Incentive Scheme also provides for the issue of variable rate automatically convertible unsecured debentures (the "Debentures").

    At December 31, 1998 variable rate unsecured debentures automatically convertible into Ordinary Shares upon expiration of certain time periods (the "Debentures") held by the directors and officers were as follows:

(1) Rand per share price varies depending on fluctuations in the market place.

(2) Debentures which are not converted into Ordinary Shares within 10 years from the day when they are issued will be ceded to the AngloGold Limited Employees' Share and Debenture Trust.

    Debentures may be converted as follows:

(1) Dates of issue range from August 1, 1998 to December 21, 1998.

    The above options and Debentures were issued pursuant to the AngloGold Share Incentive Scheme (the "Share Incentive Scheme"). The Share Incentive Scheme is an incentive to senior employees of AngloGold, including salaried directors of AngloGold and its subsidiaries, to identify themselves more closely with the activities of AngloGold, to promote its continued growth, to retain employees and to give to such employees an opportunity to acquire Ordinary Shares of the Company and is summarized below.

Share Incentive Scheme

    On June 4, 1998 AngloGold's shareholders approved the Share Incentive Scheme, provisions of which are summarized below:

General

    The purpose of the Share Incentive Scheme is to promote the retention of the employees (including salaried directors) of AngloGold and its subsidiaries by giving them an opportunity to acquire shares in AngloGold.

    The aggregate number of shares which may be made available for the Share Incentive Scheme at any time, shall not at any time exceed 2.75 percent of the total number of issued shares of AngloGold, being 2,690,963 shares at December 31. 1998. Only employees of AngloGold and its subsidiaries may participate in the Share Incentive Scheme and only if and to the extent that options are granted to them, or debentures are offered to and are accepted by them in accordance with the Share Incentive Scheme. The maximum aggregate number of shares in respect of which options may be granted or debentures sold to a single employee under the Share Incentive Scheme is limited to 150,000 shares. The board of directors may in their sole and absolute discretion grant options to, or direct the trustees to offer debentures to, specified employees.

    An employee will be obliged to sell, exchange or otherwise dispose of his shares, options or debentures if agreed to by the majority of shareholders in the event of a take-over, reconstruction or amalgamation of AngloGold if such take-over, reconstruction or amalgamation provides for such Share Incentive Scheme share, option or debenture to be exchanged for shares in the new company or holding company on terms that are not less favorable to such employee.

    Share Scheme shares shall, subject to the provisions of the Share Incentive Scheme, rank pari passu with issued shares in all respects, including participation in dividends declared by AngloGold.

    The Share Incentive Scheme shall endure for an indefinite period until terminated by a resolution of the directors or the resolution of AngloGold at a General Meeting.

Options

    An option may only be granted to an employee to purchase a certain number of shares, specified by the directors, at the option price payable in accordance with the Share Incentive Scheme. It is personal to the employee to whom it is addressed and may only be accepted by him or his family company or his family trust. An option may only be granted and exercised in accordance with the procedures set out in the Share Incentive Scheme.

    The number of shares in respect of which an option is held by an employee will be increased proportionately to take account of: (i) any rights offers of shares by AngloGold to its shareholders, at a price equal to the rights offer price of the additional shares, as though the employee was a registered holder of shares, and (ii) any shares issued by AngloGold by way of a capitalization issue of shares as though the employee had been a registered holder of shares. The option price payable will not be increased where the number of option shares is increased due to the capitalization issue and the option price per share will be reduced proportionately.

    Options will, inter alia, either be deemed cancelled or lapse: (i) if not exercised by an employee or his deceased estate, within one year of his death or retirement, or termination of employment for a reason approved by the directors, (ii) if an employee leaves AngloGold's service prematurely, is dismissed or if his estate is sequestrated, or (iii) if not exercised within 10 years from the acceptance date.

Debentures

    An employee may alternatively be offered variable rate automatically convertible unsecured debentures pursuant to a debenture offer at a specified debenture price. On acceptance, should the employee not pay for the debenture price in full in cash, as security for his obligation to repay the debenture debt, the employee will be required to pledge the debentures allotted to him to the trustees of the Share Incentive Scheme and the outstanding capital amount will bear interest at the official interest rate. Debenture offers will be personal to an employee and may only be accepted by him or his family company or his family trust. An employee will not rank for participation in any capitalization issue which is made as an alternative to, or in conjunction with, the declaration by AngloGold of any cash dividend.

    The directors must procure that, prior to the expiration date, debentures will automatically and compulsorily be converted into Share Scheme shares on a one-for-one basis and may only be converted after the lapse of specified periods.

    Share Incentive Scheme shares acquired by an employee by way of the issue of a debenture and conversion of that debenture will cease to be Share Incentive Scheme shares: (i) when released from the pledge on repayment of the debenture debt by the employer, (ii) when they are rights offer shares that are taken up, (iii) when released from the pledge when the employee dies, retires or leaves his employment prematurely, or (iv) when purchased in the event of AngloGold being taken over, reconstructed or amalgamated.

    Debentures will not rank for participation in rights offers by AngloGold, but AngloGold must, if it makes a rights offer, make a non-renounceable offer of new debentures to employees on the same basis and at the same price as applies to the rights offer shares in question.

    If AngloGold allots and issues shares to its shareholders by way of a capitalization issue while there are debentures in issue, then the directors may elect to either reduce the debenture debt or increase proportionately the number of Share Incentive Scheme shares arising from the conversion of the debentures.

    The trustees of the Share Incentive Scheme will be obliged to repurchase from the employee those debentures not converted but which have been paid for in full, or release the Share Incentive Scheme shares in respect of those debentures already converted, subject to certain conditions: (i) within one year of the employee's death or retirement, or termination of employment for reasons acceptable to the directors, (ii) immediately in the event of early termination of the employee's employment, dismissal of the employee or sequestration of his estate, or (iii) after ten years from the date of acceptance of a debenture offer, or earlier if requested by his deceased estate.

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

    Since January 1, 1998 the Company has not been, and is not now, a party to any material transaction or proposed transaction which any director, any other executive officer, any spouse or relative of any of the foregoing or any relative of such spouse had or was to have direct or indirect material interest. In addition, no such persons had any indebtedness to the Company during such period.

    The following are the direct and indirect beneficial and non-beneficial interests of each of the directors of AngloGold whom have a directorship in Minorco on December 31, 1998.

* Indirect portion interest.

PART II

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED

    Not applicable to annual reports.

PART III

ITEM 15. DEFAULTS UPON SENIOR SECURITIES

    Not applicable.

ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED SECURITIES

    None.

PART IV

ITEM 17. FINANCIAL STATEMENTS

    Not applicable

ITEM 18. FINANCIAL STATEMENTS

    Reference is made to item 19 for a list of all financial statements filed as part of this Annual Report.

ITEM 19. FINANCIAL STATEMENTS & EXHIBITS

A. FINANCIAL STATEMENTS OF THE COMPANY

    Consolidated U.S. GAAP Financial Statements of AngloGold Limited

    Report of the Independent Auditors

    Consolidated Statements of Income for the years ended December 31, 1998, 1997 and 1996

    Consolidated Balance Sheets at December 31, 1998 and 1997

    Consolidated Statements of Stockholders' Equity for the years ended December 31, 1998 and 1997

    Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997 and 1996

    Notes to the Consolidated Financial Statements for the years ended December 31, 1998, 1997 and 1996.

B. EXHIBITS

(1) The following exhibits are filed as part of this Annual Report:

1.1 Addendum to Agreement relating to Purchase of Shares in Anmercosa Exploration (Senegal) Limited;

1.2 Addendum to the Cession and Assignment of Service Agreements.

(3) The Company agrees to furnish to the Securities and Exchange Commission upon request by the Commission a list or diagram of its subsidiaries indicating as to each subsidiary named: (a) its country or other jurisdiction of incorporation or organization, (b) its relationship to the Company, and (c) the percentage of voting securities owned or other basis of control by its immediate parent if any.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 30, 1999

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