Edgar Filing: ANGLOGOLD ASHANTI LTD

Page 1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated

March 30, 2005

AngloGold Ashanti Limited

(Name of Registrant)

11 Diagonal Street

Johannesburg, 2001

(P O Box 62117)

Marshalltown, 2107

South Africa

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F:

Form 40-F:

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(1):

Yes:

No:

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule
101(b)(7):

Yes:

No:

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes:

No:

Enclosures:

ANGLOGOLD ASHANTI : 2004 ANNUAL REPORT PREPARED IN ACCORDANCE
WITH IFRS WITH CONDENSED CONSOLIDATED FINANCIAL ACCOUNTS
PREPARED IN ACCORDANCE WITH US GAAP

Annual
Report

background image

Scope of the report

This Annual Report 2004 presents the operating and financial results for
the period 1 January 2004 to 31 December 2004. They have been pre-
pared in accordance with International Financial Reporting Standards
and US Generally Accepted Accounting Practice. The latter only applies
to the financial statements which are prepared in compliance with the
New York Stock Exchange regulations. The financial statements have
also been prepared in line with the South African Companies Act No.
61 of 1973 and the Listings Requirements of the JSE Securities
Exchange South Africa (JSE). The guidelines of the King Report on
Corporate Governance, 2002 have also been taken into account. The
annual report is submitted to the JSE, as well as to the London, New
York, Ghana and Australian stock exchanges and the Paris and
Brussels bourses. It is also submitted to the US Securities and
Exchange Commission (SEC) on a Form 6-K. For completeness and
consistency in reporting, the Annual Report 2004 has been expanded
to align with the annual report of Form 20-F as filed with the SEC.

The most significant event of the past year was the business combina-
tion of AngloGold Limited (AngloGold) with Ashanti Goldfields Company
Limited (Ashanti). The establishment of AngloGold Ashanti Limited
(AngloGold Ashanti) was effective on 26 April 2004 when the former
Ashanti operations were incorporated into the group. For reporting pur-
poses, the effective reporting period for the combined operation began
on 1 May 2004. The former Ashanti operations are therefore reported
in this report for an eight-month period only, that is, May-December
2004.

Mineral Resources and Ore Reserves are reported in line with the South
African Code for Reporting of Mineral Reserves and Resources (SAM-
REC 2000) and the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC 2004).
Competent persons in terms of all these codes have prepared,
reviewed and confirmed the Mineral Resources and Ore Reserves as
reported in this publication. The Annual Report 2004 contains a sum-
mary of the Mineral Resources and Ore Reserves. A more detailed
breakdown that includes plans is available separately in a supplemen-
tary statistics document.

In addition, AngloGold Ashanti has for the second year produced a
Report to Society in conjunction with the Annual Report to ensure a
comprehensive understanding of all aspects of the group. The Report
to Society seeks to explain and assess the economic, social and envi-
ronmental responsibilities and performance obligations the company
believes it has to its stakeholders, who include shareholders, employ-
ees, employee representatives and the communities in which it oper-
ates, as well as regional and national governments.

Both the Annual Report 2004 and the Report to Society 2004 are avail-
able online on the company’s website at www.anglogoldashanti.com, as
is the supplementary document on group Mineral Resources and Ore
Reserves. These documents are also available on CD or in a printed
version, and can be requested from the contacts listed at the end of
this report.

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

Certain forward-looking statements

Certain statements contained in this document including, without limitation, those concerning the economic outlook for the gold mining industry, expectations regarding
gold prices, production, cash costs and other operating results, growth prospects and outlook of AngloGold Ashanti's operations, including the completion and com-
mencement of commercial operations of certain of AngloGold Ashanti’s exploration and production projects, its liquidity and capital resources and expenditure, contain
certain forward-looking statements regarding AngloGold Ashanti’s operations, economic performance and financial condition. Although AngloGold Ashanti believes that
the expectations and the outcome and consequence of any pending litigation proceedings reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government action, fluctuations in gold prices and exchange rates, and business and operational risk management. For a discussion of such factors, refer to the risk factors as detailed in the corporate governance section of this Annual Report 2004. In addition to this publication, AngloGold Ashanti has produced an annual report on Form 20-F, which was filed with the US Securities and Exchange Commission (SEC) on or about 30 March 2005, for the year ended 31 December 2004.

Key features 2004 – financial

Key features 2004 – operational

Letter from the chairman and deputy chairman

Letter from the chief executive officer and president

One-year forecast – 2005

Group value-added statement

Summarised group financial results

Summarised group operating results

Information on the group

Directors and executive management

Business overview

Review of operations

Rights to mine and title to properties

Global exploration

Mineral Resources and Ore Reserves

Financial review

Directors’ approval

Secretary’s certificate

Report of the independent auditors

Corporate governance

Remuneration report

Directors’ report

Annual financial statements contents

Group financial statements

Company financial statements

153

Condensed consolidated financial accounts

172

Investment in principal subsidiaries and joint venture interests

178

Glossary of terms

180

Shareholders’ information

183

Administrative information

Inside back cover

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Contents

Key features 2004 – financial

•

Average dollar gold spot price 13% higher than 2003 at $409 per ounce

•

Received gold price increased by 9% to $394 per ounce

•

Adjusted operating profit down by 22% to $434 million

•

Capital expenditure up by 30% to $585 million

•

Adjusted headline earnings down by 7% to $263 million

•

Total dividend for the year of R3.50 per share, or $0.56 per ADS

•

Hedge book restructured for more exposure to higher dollar gold price

2004

2003

Average for year

Closing rate

Average for year

Closing rate

R/$

6.4368

5.6450

7.5516

6.6679

A$/$

1.3570

1.2776

1.5406

1.3275

•

Combining the operations of AngloGold with those of Ashanti

•

Gold production up 8% to 6.05 million ounces, largely as a result of the business combination

•

Total cash costs rise 25% to $268 per ounce as dollar weakens against operating currencies

•

Ore Reserves up 25% to 79 million ounces and Mineral Resources 3% higher at 218 million ounces as at the

end of December 2004

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Key features 2004 – operational

Letter from the chairman and the deputy chairman

Dear Shareholder

The year ended 31 December 2004 was operationally generally sound,
except for the newly acquired Ashanti mines, but financially challenging.
Although gold production was higher than the previous year, largely as
a result of the business combination with Ashanti, and the received
price of gold increased by $31 per ounce, lower grades and higher
costs driven by the oil price, mining contractor costs and stronger
operating currencies pushed adjusted headline earnings 7% lower and,
consequently, the dividend was substantially reduced. Additionally, the
company’s hedge book, which has served us very well in the past
during periods of a weaker spot price, presented us with further
challenges in the face of a sustained stronger gold price and a
restructure of the hedge book was commenced at the end of
December and completed in January 2005.

The average spot price for gold of $409 per ounce for 2004 was
$46 per ounce stronger than the average price for 2003 and the final
quarter of the year saw a spot gold price of $457 per ounce, the highest
price in almost 17 years. The driving influence of positive investor
sentiment, which appears to be behind this sustained improvement,
remained the weakening of the dollar and continued political uncertainty
in the Middle East.

The physical market for gold during 2004 showed some encouraging
moves in the important markets of Turkey and Vietnam and sustained
demand in India. In China, for the first time in several years, sales of
gold jewellery grew during 2004 due to the introduction to that market
of modern, 18- carat gold jewellery product. With these high population
economies achieving growth in the high single digits, there seems good
reason for cautious optimism about future demand and pricing for all
commodities including gold.

It is against this background that AngloGold Ashanti took the
decision to lower its mandate for hedging from 50% to 30% of the
next five years of production spread over ten years and to restructure
its hedge book. The effect of these moves was to increase the
proportion of the company’s anticipated 6.5 million ounces of gold
production that is exposed to the spot price to 90% in 2005 and
83% in 2006 and to improve the value of remaining forward sales
contracts in future years.

Concern that the International Monetary Fund (IMF) might sell part of its
substantial gold reserves in order to write down the debt of heavily
indebted poorer countries has recently given rise to a degree of
uncertainty in the gold market. Such a scheme was previously proposed

in 1999; then it seemed to us perverse that an international body such as
the IMF should act in a way that would negatively affect gold markets in
order to reduce the debt burden of certain developing countries, many of
which are significant gold producers. Leading figures in the United States
Congress have already indicated their opposition to any sale of IMF gold
and, without the support of the United States at the IMF, such a sale
would not be permitted. However, in 1999, a means was derived to
realise value from the IMF gold reserves through the revaluation of a
portion of the IMF gold holdings, from their low balance sheet value of
$42 per ounce to the spot price for the metal at that time. This achieved
the IMF purpose without impacting either the gold market or the price
and we urge the IMF to act in a way on this occasion which will achieve
its certainly worthwhile objective without severe and negative
consequences for gold producing developing economies.

The positive trends in the gold market have also led gold companies to
extend their efforts to find and turn to account, tomorrow’s production
ounces. In the case of AngloGold Ashanti, this has given rise to a “new
frontier” strategy of looking for exploration and acquisition targets outside
of the world’s recognised and mature gold regions and to dispose of
properties which are unlikely to yield real shareholder returns. In Russia,
AngloGold Ashanti has acquired a share in London-based Trans-Siberian
Gold as an entry point to this region. In China, strategic alliances are
being sought to allow the company successfully to extract value from
what may well be a prospective region. During the year the company
announced joint venture arrangements giving it interests in Laos and the
Philippines. In Mongolia, the company continued to acquire land
positions in several prospective areas. In the DRC, exploration drilling has
commenced in the gold-rich Ituri region of the north-east of the country.

Finally, faced with the combination of improving physical demand for the
product, the likelihood of a sustained higher spot gold price, stronger
currencies against the dollar and higher operating costs, the major
challenge facing management is to grow margins, improve returns on
capital and to continue to reward shareholders. We are confident that the
company has strategies in place to meet these challenges during the rest
of 2005 and in the years beyond.

RP Edey

TJ Motlatsi

Chairman

Deputy chairman

10 March 2005

Russell Edey

James Motlatsi

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Letter from the chief executive officer and the president

Dear Shareholder

The most pleasing features of 2004 from an operational point of view
were the dramatic improvements in workplace safety in all of our
operating regions – lost-time injuries came down by 26% for the year and
the rate of fatal accidents by 34%. These numbers are a tribute to the
hard work and dedication to a safe working environment on the part of
our operating management.

The key strategic event in 2004 for us was the completion of the
AngloGold Ashanti business combination. From the outset, our objective
had been to combine the two companies into a long-life, low-cost, high-
margin investment opportunity, bringing together the best that both had
to offer, by way of ore bodies, capital and human resources. The business
combination was endorsed by the executive, legislative and judicial
branches of the Ghanaian government – a critical requirement for a
company which is likely to be operating profitably in that country fifty
years from now.

Immediately following the completion of the business combination, we
reported on the difficulties we were experiencing at Siguiri, our operation
in the Republic of Guinea. Discussions between AngloGold Ashanti
management and senior government officials on the underlying principles
and details of the Convention de Base governing the relationship
between the company and the government are proceeding well and we
anticipate a workable agreement in the near future.

The positive relationship between ourselves and government here at
home in South Africa is also proving to be an advantage in converting our
mining rights in terms of the new Act. We realise that we are dealing with
unprecedented areas of law and regulation in this process and we
continue to have constructive interactions with the Department of
Minerals and Energy to deal with uncertainties which the process reveals.

AngloGold Ashanti has developed a comprehensive education,
counselling and health care response to HIV/AIDS in South Africa.
Education about the nature of this disease and its patterns of
transmission is a continuing and comprehensive part of workplace
communication. Every AngloGold Ashanti employee has access to
several convenient and confidential voluntary counselling and testing
(VCT) facilities. During 2004, some 4,000 employees made use of these
centres and some 10,000 employees since the VCT programme began.

700 employees who have tested positive for HIV as part of the VCT
programme have enrolled in wellness clinics and participate in an
HIV/AIDS treatment programme and 706 employees are participating in
anti-retroviral therapy programmes. The improvement in their state of
health and their immune systems is impressive. AngloGold Ashanti hopes
to participate in a major vaccine trial during the course of 2005.

Looking ahead to the rest of this year and beyond, we face three
key challenges.

First, we must manage our production costs in the face of strong
operating currencies, rising mining contractor costs, higher energy prices
and high transport charges. The global cost management project
underway has already yielded savings in excess of $50 million, with a
similar level anticipated for 2005.

Secondly, against a background of what seems now to be a sustained
stronger spot gold price, we will continue actively to manage our hedge
book in the way which we have effectively done over the past three years
and particularly in the last quarter of 2004, when we reduced our level of
cover by some 2.2 million ounces, giving us greater exposure to the spot
price in the future.

Thirdly, the integration of AngloGold and Ashanti is now effectively
complete and we continue to hold the view that the combination will allow
us to unlock the potential of both companies. The current operations at
Obuasi continue to present us with a significant challenge but we are
confident that we have the strategies and plans in place to ensure a
gradual but steady improvement in performance, which we anticipate
becoming evident during the course of the year.

AngloGold Ashanti chief operating officer Dave Hodgson and chief
financial officer Jonathan Best have indicated their wish to retire during
2005. The board, on the recommendation of its Nominations
Committee, will appoint Srinivasan Venkatakrishnan (Venkat) as chief
financial officer from 1 August when Jonathan leaves at the end of July.
In view of the company’s size, the board believes that it is necessary to
appoint two chief operating officers (COO), one responsible for
operations in Africa, and the other leading those in the Americas and
Australia. Thus when Dave leaves at the end of April, Neville Nicolau will
be appointed COO (Africa) and Roberto Carvalho Silva COO (Americas
and Australia) from 1 May.

Dave and Jonathan have made an invaluable contribution to this
company over the last ten years. In Venkat, Neville and Roberto, we
are fortunate to have three experienced executives to assume these
key positions.

The year 2004 was an exciting but challenging one for your company. We
remain fully committed to our promise to you to generate competitive
returns through the continuous improvement of AngloGold Ashanti’s
resources – its people, assets and product.

RM Godsell

SE Jonah

Chief executive officer

President

10 March 2005

Bobby Godsell

Sam Jonah

One-year forecast – 2005

Total

South

AngloGold

Africa Argentina

Australia

Brazil

Ghana

Guinea

Mali

Namibia

Tanzania

USA

Ashanti

Gold

Underground operations

Metric tonnes milled

– 000

10,744

–

253

1,279

2,399

–

14,675

Yield

– g/t 8.01

–

3.48

7.31

5.81

–

7.51

Produced

– oz 000

2,767

–

301

448

–

3,544

Productivity

g/employee

255

–

539

1,117

376

–

286

Surface and dump reclamation

Metric tonnes treated

– 000

10,741

–

1,920

–

12,661

Yield

– g/t 0.32

–

0.45

–

0.34

Produced

– oz 000

112

–

140

Open-pit operations

Metric tonnes mined

– 000

–

18,290

32,144

–

24,346

19,009

17,380

5,399

61,497

–

178,065

Stripping ratio

(1)

–

19.03

6.46

–

4.62

1.12

3.43

3.36

9.22

–

4.99

Metric tonnes treated

– 000

–

860

3,337

–

6,649

5,617

3,703

1,252

5,810

–

27,228

Yield

– g/t –

7.37

4.06

–

1.55

0.94

3.60

1.99

3.36

–

2.60

Produced

– oz 000

–

204

435

–

332

171

428

628

–

2,278

Heap-leach operations

Metric tonnes mined

– 000

–

3,509

–

4,814

5,460

–

53,528

67,311

Metric tonnes placed

(2)

– 000 –

–

219

–

3,308

1,173

–

18,144

22,844

Stripping ratio

(1)

–

15.01

–

0.46

8.07

–

1.95

2.02

Gold placed

(3)

– kg –

–

652

–

3,232

3,334

–

11,510

18,728

Yield

(4)

– g/t –

–

2.97

–

0.98

2.84

–

0.63

0.82

Produced

– oz 000

–

107

–

330

563

Total

Gold produced

– oz 000

2,879

204

463

334

808

264

535

628

330

6,525

Total cash costs

– $/oz produced

309

176

286

133

258

291

209

277

253

224

273

Capital expenditure

– $m

337

108

655

(1)

Stripping ratio = (total tonnes mined – ore tonnes mined)/ore tonnes mined.

(2)

Tonnes placed onto leach pad.

(3)

Gold placed into leach pad inventory.

(4)

Gold placed/tonnes placed.

Rates of exchange

R/$ 6.20:1

A$/$ 0.77:1

BRL/$ 2.80:1

ARS/$ 3.00:1

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Group value-added statement

Dollar million

Notes

(1)

2004

2003

Value added

Gold income

2 and 3

2,396

2,029

Less: Purchases of goods and services in order to operate mines
and produce refined metal, including market development costs
net of other income

(900)

(760)

Value-added by operations

1,496

1,269

Non-hedge derivatives

–

119

Fair value gains on interest rate swaps

–

Profit on disposal of investments

–

Profit on disposal of assets and subsidiaries

Income from investments and interest received

7 and 9

Government
Deferred taxation

106

–

Utilised in the group
Retained income

–

Total value added

100

1,737

100

1,490

Value distributed

Employees
Salaries, wages and other benefits

863

660

Government

142

– Current taxation

– Deferred taxation

–

Providers of capital
– Finance costs and unwinding of the decommissioning obligation

– Dividends declared

147

224

– Minorities

Other
– Impairment of tangible assets

–

– Non-hedge derivatives

142

–

Total value distributed

1,325

1,141

Re-invested in the group

– Amortisation and depreciation

4, 18, 19 and 20

412

261

– Retained income

–

100

1,737

100

1,490

(1)

Refer to the notes on the group financial statements on pages 104 to 152.

for the year ended 31 December 2004

Summarised group financial results

Dollar million

2004

2003

2002

2001

2000

(1)

Balance sheet

Assets

Tangible and intangible assets

6,296

3,176 2,654 2,446 3,064

Cash and cash equivalents

312

505 413 191 195

Other assets

1,582

1,176 897 662 566

Total assets

8,190

4,857 3,964 3,299 3,825

Equity and liabilities

Equity

3,287

1,681 1,483 1,147 1,481

Borrowings

1,605

1,158 926 987

1,156

Deferred taxation

1,347

598 402 286 553

Other liabilities

1,951

1,420 1,153 879 635

Total equity and liabilities

8,190

4,857 3,964 3,299 3,825

Other financial data

Net capital employed

6,095

3,274 2,635 2,385 2,995

Equity

4,745

2,568 2,082 1,559 2,006

Net debt

1,293

653 513 796 961

Net asset value – US cents per share

1,223

730 648

519

679

Net tangible asset value – US cents per share

1,065

545 480

338

491

Financial ratios

Return on net capital

11 17

Return on equity

12 21

Net debt to net capital employed

20 19

Net debt to equity

25 25

(1)

IAS 39 adopted with effect 1 January 2001.

Dollar million

2004

2003

2002

2001

2000

Income statement

Gold income

2,396

2,029 1,761 2,041 2,208

Cost of sales

(2,022)

(1,526)

(1,203)

(1,519)

(1,740)

374

503 558 522 468

Corporate administration and other expenses

(51)

(36)

(25)

(22)

(33)

Market development costs

(15)

(19)

(17)

(16)

(12)

Exploration costs

(44)

(38)

(28)

(26)

(44)

Amortisation of intangible assets

(31)

(29)

(28)

(29)

(20)

Impairment of tangible assets

(1)

(44)

– (1)

(93)

Non-hedge derivatives

(142)

119 92 (5)

–

Other operating expenses

(12)

(14)

(5)

– –

Other operating income

– – – –

Abnormal items

–

(19)

(10)

– –

Operating profit

423 537 423 266

Interest receivable

38 36 20 37

Other net income

3 – –

Profit (loss) on disposal of assets, investments and subsidiaries

10 (13)

(4)

–

Profit on disposal of investments

–

45 –

– –

Finance costs and unwinding of decommissioning obligation

(87)

(53)

(48)

(75)

(69)

Fair value gains on interest rate swaps

6 – – –

Profit before taxation

472 512 364 251

Taxation

(142)

(165)

(111)

(73)

Profit after taxation

100

330 347 253 178

Allocated as follows
Equity shareholders

312 332 245 166

Minority interest

18 15 8 12

100

330 347 253 178

Other financial data

Adjusted operating profit

434

559 638 527 468

Cash operating profit

787

791 883 747 685

Headline earnings

102

318 376 281 254

Adjusted headline earnings

263

282 368 286 254

Adjusted operating margin

27 35 26 21

Cash operating margin

38 48 37 31

EBITDA

694

659 799 682 608

EBITDA margin

32 43 33 28

Interest cover

times

13 18 10 9

Earnings per ordinary share (cents)

Basic

US cents

140 150 114 78

Diluted

US cents

139 149 114 76

Headline US

cents

143 169 131 119

Adjusted headline

US cents

105

127 166 133 119

Dividends declared per ordinary share

US cents

101 146 87 91

Weighted average number of shares (million)

251

223 222 214 214

Issued shares at year-end (million)

264

223 223 215 214

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Dollar million

2004

2003

2002

2001

2000

Cash flow statement

Cash flows from operating activities

Cash generated from operations

585

592 758 673 603

Net finance costs and other income

(59)

(37) (22) (62) (46)

Mining and normal taxation paid

(34)

(102) (131) (111) (104)

Net cash inflow from operating activities

492

453 605 500 453

Cash flows from investing activities

Capital expenditure

(585)

(363) (271) (298) (304)

Net proceeds from acquisition and disposal of

mines and subsidiaries

(171)

10 51

109

(345)

Net proceeds from disposal of investments and other

(10)

117 2 5

Net loans advanced (repaid)

(15) 12 39 11

Utilised in hedge restructure

(123)

–

Net cash outflow from investing activities

(806)

(307) (91) (148) (633)

Cash flows from financing activities

Net proceeds from share issues

10 7 7 (1)

Net borrowings proceeds (repaid)

259

197 (114) (138) 261

Dividends paid

(198)

(314) (260) (167) (310)

Proceeds from hedge restructure

–

Net cash inflow (outflow) from financing activities

104

(107) (367) (298)

(50)

Net (decrease) increase in cash and cash equivalents

(210)

39 147 54 (230)

Translation

53 75

(58)

(68)

Opening cash and cash equivalents

505

413 191 195 493

Closing cash and cash equivalents

312

505 413 191 195

Other financial data

Free cash flow

163

305 510 421 308

Summarised group financial results

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

2004

2003

2002

2001

2000

Operating results

Underground operations
Metric tonnes milled

000

13,554

13,047

13,426

17,954

21,293

Yield

g/t

7.50

8.03

8.27

8.20

7.96

Produced

oz 000

3,270

3,367

3,569

4,734

5,451

Productivity
g/employee

target

270

236

247

219

209

actual

254

228

238

214

193

Surface and dump reclamation
Metric tonnes treated

000

35,800

36,822

38,366

50,355

50,289

Yield

g/t

0.31

0.27

0.30

0.32

Produced

oz 000

360

320

365

514

510

Open-pit operations
Metric tonnes mined

000

135,171

125,529

97,030

51,667

22,867

Stripping ratio

(1)

6.34

8.95

6.18

6.93

5.22

Metric tonnes treated

000

18,236

13,967

13,682

15,294

13,332

Yield

g/t

3.21

3.43

3.80

2.99

2.41

Produced

oz 000

1,884

1,540

1,673

1,469

1,034

Heap-leach operations
Metric tonnes mined

000

71,837

59,507

51,192

34,123

26,253

Metric tonnes placed

(2)

000

22,120

18,265

13,504

11,748

10,269

Stripping ratio

(1)

2.08

2.59

2.63

1.73

1.59

Gold placed

(3)

18,534

14,782

14,228

10,668

8,002

Yield

(4)

g/t

0.84

0.81

1.05

0.91

0.78

Produced

oz 000

538

389

332

266

248

Total gold produced

oz 000

6,052

5,616

5,939

6,983

7,243

– South Africa

oz 000

3,079

3,281

3,412

4,670

5,418

– Argentina

oz 000

211

209

179

136

132

– Australia

oz 000

410

432

502

508

524

– Brazil

oz 000

334

323

299

305

307

– Ghana

oz 000

485

–

– Guinea

oz 000

–

– Mali

oz 000

475

577

710

508

289

– Namibia

oz 000

– Tanzania

oz 000

570

331

290

273

–

– USA

oz 000

329

390

462

496

– Zimbabwe

oz 000

–

Price received

$/oz sold

394

363

303

287

308

Total cash costs

(5)

$/oz produced

268

214

150

166

200

Total production costs

(5)

$/oz produced

336

263

192

202

231

Capital expenditure

(5)

585

449

337

382

404

Monthly average number of employees

65,400

55,439

54,042

70,380

84,036

LTIFR

6.54

8.83

8.86

10.55

11.58

FIFR

0.19

0.29

0.31

0.25

0.23

Rand/dollar average exchange rate

6.44

7.55

10.48

8.62

6.78

Rand/dollar closing exchange rate

5.65

6.67

8.58

11.96

7.58

Australian dollar/dollar average exchange rate

1.36

1.54

1.84

1.93

1.70

Australian dollar/dollar closing exchange rate

1.28

1.33

1.79

1.96

1.80

(1)

Stripping ratio = (total tonnes mined – ore tonnes mined)/ore tonnes mined.

(2)

Tonnes placed onto leach pad.

(3)

Gold placed into leach pad inventory.

(4)

Gold placed/tonnes placed.

(5)

Restated to reflect the change in accounting treatment of ore reserve development expenditure.

for the year ended 31 December 2004

Summarised group operating results

Information on the group

AngloGold Ashanti, headquartered in Johannesburg, South Africa, is a
global gold company with a portfolio of long-life, relatively low-cost
assets and differing orebody types in key gold producing regions. The
company’s 22 operations are located in 10 countries (Argentina,
Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania
and the United States of America), and are supported by
extensive exploration activities. The combined Proved and Probable
Ore Reserves of the group amounted to 79 million ounces as at
31 December 2004.

AngloGold Ashanti is listed on the following securities exchanges:
Johannesburg (ANG), New York (AU), Australia (AGG) and Ghana
(AGA and AADS) as well as the London Stock Exchange (AGD),
Euronext Paris (VA) and Euronext Brussels (ANG).

AngloGold Ashanti Limited (Registration number 1944/017354/06) was
incorporated in the Republic of South Africa in 1944 under the name of
Vaal Reefs Exploration and Mining Company Limited and operates
under the South African Companies Act 61 of 1973, as amended. Its
principal executive office is located at 11 Diagonal Street,
Johannesburg, 2001, (P.O. Box 62117, Marshalltown, 2107), South
Africa (Telephone +27 11 637-6000).

History and development of the company

AngloGold Ashanti, as it conducts business today, was formed on
26 April 2004 following the business combination of AngloGold Limited
(AngloGold) with Ashanti Goldfields Company Limited (Ashanti), which
was incorporated in Ghana on 19 August 1974.

AngloGold Limited

AngloGold was formed in June 1998 through the consolidation of the
gold interests of Anglo American Corporation of South Africa Limited
(AAC) and its associated companies into a single, focused,
independent, gold company. Vaal Reefs Exploration and Mining
Company Limited (Vaal Reefs), the vehicle for the consolidation,
changed its name to AngloGold Limited and increased its authorised
share capital, effective 30 March 1998.

AngloGold then acquired, in share-for-share exchanges in terms of
South African schemes of arrangement and following shareholder
approval, all the issued share capital of East Rand Gold and Uranium
Company Limited; Eastvaal Gold Holdings Limited; Southvaal Holdings
Limited; Free State Consolidated Gold Mines Limited; Elandsrand Gold
Mining Company Limited; H.J. Joel Gold Mining Company Limited, and
Western Deep Levels Limited. A total of 51,038,968 ordinary shares
were issued to AAC and 66,010,118 ordinary shares to other
shareholders in exchange for their shares in these companies.

In private transactions with AAC and minority shareholders, other share
interests were acquired in Driefontein Consolidated Limited (17%);
Anmercosa Mining (West Africa) Limited (100%); Western Ultra Deep
Levels Limited (89%); Eastern Gold Holdings Limited (52%); Erongo
Mining and Exploration Company Limited (70%); and other sundry
share interests. In exchange, 25,734,446 ordinary shares were issued
to AAC and 957,920 ordinary shares to minority shareholders.
AngloGold also acquired gold exploration and mining rights
from AAC and other companies: 1,623,080 ordinary shares were

issued to AAC and 4,210,412 ordinary shares to other companies in
exchange. AngloGold also acquired from AAC and JCI all the rights
under service agreements relating to the companies listed above – from
AAC in exchange for 6,834,872 ordinary shares, and from JCI for
R62 million ($11 million).

The consolidation was approved by the required majorities of the
shareholders of AngloGold and the participating companies and
became effective on 1 January 1998 for accounting purposes.

Subsequent to its formation:

•

AngloGold purchased Minorco’s gold interests in North and South
America with effect from 31 March 1999;

•

with effect from 31 December 1999, AngloGold acquired Acacia
Resources in Australia;

•

with effect from 3 July 2000, AngloGold acquired a 40% interest in
the Morila mine in Mali from Randgold Resources Limited;

•

on 15 December 2000, AngloGold acquired a 50% interest in the
Geita mine in Tanzania from Ashanti Goldfields Company Limited;

•

in 2000, in support of its market development initiatives, AngloGold
acquired a 25% interest in OroAfrica, South Africa’s largest
manufacturer of gold jewellery, and a 33% holding in GoldAvenue,
an e-commerce business in gold, created jointly with JP Morgan
and Produits Artistiques de Metaux Precieux (PAMP). As at
December 2004, AngloGold Ashanti held 26.6% of OroAfrica. Gold
Avenue continued to sell gold jewellery by catalogue and website
until early 2004, after which it was wound-up;

•

on 9 April 2001, the sale to Harmony Gold Mining Company
Limited of the Elandsrand and Deelkraal mines became
unconditional;

•

in January 1998, the No. 2 Shaft Vaal River Operations was tributed
to African Rainbow Minerals (currently Harmony Gold Mining
Company Limited) (ARM) on the basis that 40% of all revenue, costs
and capital expenditure would be attributable to ARM, with the
balance to AngloGold. On 1 July 2001, AngloGold disposed of its
interests in No. 2 Shaft Vaal River Operations to ARM;

•

on 5 September 2001, AngloGold announced that it was to make
a take-over offer for Normandy Mining Limited (Normandy),
Australia’s largest listed gold mining company. This did not come
to fruition. Arising from the offer, 6,869,602 AngloGold ordinary
shares were issued. This excluded 143,630 AngloGold ordinary
shares issued under the top-up facility to Normandy shareholders.
The Normandy shares acquired were sold on the market on
21 January 2002;

•

on 1 January 2002, the sale of AngloGold’s Free State assets to
ARM and Harmony, through a jointly-owned company, for a net
consideration of R2,523 million ($229 million) (including tax payable
by AngloGold and net of contractual obligations), became effective;

•

during July 2002, AngloGold acquired 46.25% of the equity, as
well as the total loan assignment, of Cerro Vanguardia SA from
Pérez Companc International SA, for a net consideration of
$97 million, increasing its interest in Cerro Vanguardia to 92.5%;

•

AngloGold disposed of its wholly-owned subsidiary, Stone and
Allied Industries (O.F.S.) Limited, a stone-crushing company, to a
joint venture of existing management and a group of black
entrepreneurs, with effect from 1 October 2002, for a consideration
of R5 million;

•

on 23 May 2003, AngloGold announced that it had signed an
agreement to sell its wholly-owned Amapari Project to Mineração
Pedra Breanca do Amapari, for the total consideration of
$18.2 million;

•

on 6 June 2003, the sale to Helix Resources Limited of its interest
in the Gawler Craton, including the Tunkillia project, was finalised
for a consideration comprising cash of $500,000 (A$750,000),
1.25 million fully-paid Helix shares issued at A$0.20 per share and
1.25 million Helix options exercisable at A$0.25 per option before
30 November 2003, with an additional payment of $335,000
(A$500,000) deferred to the delineation of 350,000 ounces;

•

on 2 July 2003, AngloGold announced that it had concluded the
sale of its interest in the Jerritt Canyon Joint Venture to
Queenstake Resources USA Inc., effective 30 June 2003.
Queenstake paid the Jerritt Canyon Joint Venture partners,
AngloGold and Meridian Gold, $1.5 million in cash and 32 million
shares issued by a subsidiary, Queenstake Resources Limited,
with $6 million in deferred payments and $4 million in future
royalties. Queenstake accepted full closure and rehabilitation
liabilities. The shares acquired by AngloGold in this transaction,
were sold in November 2003;

•

on 8 July 2003, AngloGold disposed of its entire investment of
8,348,600 shares in East African Gold Mines Limited for a
consideration of $25 million and in the second half of
2003 AngloGold disposed of 952,481 shares in Randgold
Resources Limited for a consideration of $17 million;

•

on 18 September 2003, AngloGold acquired from Gold Fields
Limited a portion of the Driefontein mining area for a cash
consideration of R315 million ($48 million); and

•

on 24 November 2003, AngloGold announced the terms and
conditions for the sale of the Western Tanami Project to Tanami
Gold NL for a staged payment of A$9 million ($6 million), the
receipt of 25 million Tanami Gold NL shares and the payment of a
royalty based on production. The sales agreement was concluded
on 20 January 2004.

Ashanti Goldfields Company Limited

Ashanti Goldfields Corporation Limited was founded in 1897 to develop
a mining concession in the area of the operations at Obuasi. In 1969,
Ashanti became a wholly-owned subsidiary of Lonrho Plc, (later Lonmin
Plc, a UK-listed company which at that time had interests in mining,
hotels and general trade in Africa.)

The government of Ghana acquired 20% of Ashanti from Lonmin in
exchange for the extension of Ashanti’s mining lease over its
concession area. In 1972, the government of Ghana formed a
Ghanaian company to take over the assets, business and functions
formerly carried out by Ashanti, holding 55% of the outstanding shares.
Further developments include:

•

in 1994, as part of its divestiture policy, the government of Ghana
sold part of its holding at which time the company was listed
in Ghana;

•

in 1996, Ashanti acquired companies holding interests in the
Ayanfuri, Bibiani, Iduapriem, Siguiri and Freda-Rebecca properties
as well as an interest in what was then the Geita exploration
concession in Tanzania. This was followed by the acquisition in
1998 of SAMAX Gold Inc., the principal asset of which was the

other part of the interest in the Geita exploration concession
adjacent to Ashanti’s existing licence area;

•

in 1999/2000, the Geita mine was developed and, in 2000,
AngloGold acquired a 50% interest; and

•

in 2000, Ashanti acquired a 90% interest in the Teberebie mine,
adjacent to the Iduapriem mine.

From the end of 1999 to June 2002, commencing with a sharp rise in
the price of gold which led initially to a liquidity crisis, Ashanti engaged
in a process of financial restructuring with its banks, hedge
counterparties and noteholders. In June 2002, the company completed
a financial restructuring which involved entering into a new enlarged
revolving credit facility of $200 million: raising approximately
$41.8 million from the early exercise of 70.3% of its warrants (which
were previously issued to banks and hedge counterparties and which
were exchangeable for shares); reaching agreement with hedge
counterparties for continued margin-free trading; and raising
$75.0 million through the issue to its largest shareholder, Lonmin, of
mandatorily exchangeable notes, or MENs.

Business combination between AngloGold
and Ashanti

On 4 August 2003, AngloGold and Ashanti announced that they had
agreed the terms of a recommended business combination at an
exchange ratio of 0.26 AngloGold ordinary shares for every Ashanti
share. On the same date, AngloGold entered into the Lonmin Support
Deed, pursuant to which Lonmin, which held 27.6% of Ashanti's issued
share capital, agreed, among other things, to vote its Ashanti shares in
favour of the business combination.

After further discussions with AngloGold and careful, detailed
consideration of a competitive proposal, and following the increase by
AngloGold in the offer consideration from 0.26 to 0.29 ordinary shares,
the Ashanti board announced on 14 October 2003 that it was
recommending the improved final offer from AngloGold. On 28 October
2003, the government of Ghana, which held 16.8% of Ashanti's issued
share capital, announced its support for the AngloGold offer, as well as
the principal terms of a Stability Agreement which the government of
Ghana intended to enter into with AngloGold.

AngloGold and the government of Ghana agreed the terms of a Stability
Agreement, approved by the parliament of Ghana, to govern certain
aspects of the fiscal and regulatory framework under which AngloGold
Ashanti will operate in Ghana following the implementation of the
business combination.

Under the Stability Agreement, the government of Ghana agreed:

•

to extend the term of the mining lease relating to the Obuasi mine
until 2054 on terms existing prior to the business combination;

•

to maintain for a period of 15 years, the royalties payable by
Ashanti with respect to its mining operations in Ghana at a rate of
3% per annum of the total revenue from minerals obtained by
Ashanti from such mining operations;

•

to maintain the corporate tax rate for Ashanti and fix this rate for
each of its subsidiaries in Ghana at 30% for a period of 15 years;

•

that a sale of Ashanti or any of its subsidiaries’ assets located in
Ghana remain subject to the government’s approval;

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

•

to permit Ashanti and any or all of its subsidiaries in Ghana to
retain up to 80% of their exportation proceeds in foreign
currencies offshore, or if such foreign currency is held in Ghana, to
guarantee the availability of such foreign currency; and

•

to retain its special rights (Golden Share) under the provisions of
the mining law pertaining to the control of a mining company, in
respect of the Obuasi mine.

The government of Ghana also agreed that Ashanti's Ghanaian
operations will not be adversely affected by any new enactments or
orders or by changes to the level of payments of any customs or other
duties relating to mining operations, taxes, fees and other fiscal imports
or laws relating to exchange control, transfer of capital and dividend
remittance for a period of 15 years after the completion of the business
combination. In consideration of these agreements and undertakings,
AngloGold agreed to issue to the government of Ghana 2,658,000 new
AngloGold ordinary shares and to pay to the government of Ghana
$5 million in cash, promptly after the implementation of the business
combination. AngloGold also agreed to pay to the government of
Ghana, on the date of the completion of the business combination, an
additional $5 million in cash towards the transaction costs incurred by
the government of Ghana in its role as regulator of Ashanti.

In consideration of the agreements and undertakings contained in the
Stability Agreement, AngloGold also committed to:

•

the recapitalisation of the existing Obuasi Mine as well as to
undertake further exploration of Obuasi Deeps;

•

expenditure of $220 million on the existing Obuasi Mine over the
five-year period commencing 1 January 2004, which includes an
amount of $110 million in real terms, to be spent on underground
equipment, infrastructure and environmental and planning
systems for the existing Obuasi Mine;

•

conclude by 31 December 2008, the required exploration
programme and feasibility studies with regard to Obuasi Deeps, at
an estimated cost of $44 million;

•

for a period of two years, to not implement any new retrenchment
programme in Ghana (excluding individual dismissals made from
time-to-time) and to continue to apply Ashanti's existing and
approved retrenchment programmes; and

•

establish and/or maintain a community trust in Ghana to which
AngloGold will contribute a total amount of 1% of profits generated
in Ghana; and implement programmes pertaining to training,
malaria control and improvement of health, safety and working
conditions.

The business combination was effected by means of a scheme of
arrangement, under Ghanaian law, which required and obtained the
approval of Ashanti shareholders and the confirmation by the High
Court of Ghana. In terms of the scheme of arrangement, Ashanti
shareholders received 0.29 ordinary shares or 0.29 ADSs of AngloGold
for every Ashanti share or Ashanti GDS (Global Depositary Security)
held. The business combination became effective on 26 April 2004 after
the Court Order from the High Court of Ghana was lodged with the
Ghana Registrar of Companies. From the effective date, Ashanti
became a private company and AngloGold changed its name to
AngloGold Ashanti Limited following approval by its shareholders at a
general meeting held on 8 April 2004.

Recent developments – AngloGold Ashanti

Developments by the AngloGold Ashanti group post the business
combination include:

•

the $75 million MENs were redeemed following the business
combination;

•

the announcement on 1 July 2004 of the acquisition of a 29.9%
interest in Trans-Siberian Gold plc (TSG), through an equity
investment of approximately £17 million in two subscriptions for
ordinary shares. TSG is listed on the London Stock Exchange’s
Alternative Investment Market (AIM). On 23 December 2004, it
was announced that the second subscription would be delayed to
15 April 2005;

•

agreement was reached to sell Union Reefs Gold Mine’s assets to
the Burnside Joint Venture (comprising subsidiaries of Northern
Gold NL and Harmony) for a consideration of $4 million;

•

on 10 September 2004, agreement was reached to sell AngloGold
Ashanti’s entire interests in Ashanti Goldfields Zimbabwe Limited,
whose sole operating asset is the Freda-Rebecca Gold Mine, for
a consideration of $2.26 million, to Mwana Africa Holdings. The
sale was effective 1 September 2004;

•

in 2004, Queenstake approached the Jerritt Canyon Joint Venture
partners, AngloGold and Meridian Gold, about the possibility of
monetising all or at least a vast majority of the $6 million in deferred
payments and $4 million in future royalties. Based on an
agreement reached between the parties, AngloGold Ashanti was
paid on 25 August 2004 approximately $7 million for its portion of
the deferred payments and future royalties, thereby monetising all
outstanding obligations, except for a minor potential royalty
interest that AngloGold Ashanti retained;

•

agreement was reached to sell AngloGold Ashanti’s 40% equity
interest in Tameng Mining and Exploration (Pty) Limited of South
Africa (Tameng) to Mahube Mining (Pty) Limited for a cash
consideration of R20 million. Tameng owns certain mineral rights
to platinum group metals (PMGs) at M’Phatlele’s Location, farm
KS 457, on the northern limb of the Bushveld Complex in the
Limpopo Province in South Africa. The sale was effective
1 September 2004;

•

AngloGold Ashanti completed a substantial restructure of its
hedge book in January 2005. For full details, see Note 38 on
page 143; and

•

on 26 January 2005, AngloGold Ashanti signed a three-year
revolving credit facility for $700 million. For full details, see Note 39
on page 152.

Information on the group

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Directors and executive management

Executive directors

Mr RM Godsell (52)
BA, MA
Chief Executive Officer
Bobby Godsell was appointed to the AngloGold board as chief
executive officer in April 1998 and as chairman in December 2000. He
relinquished his role as chairman of AngloGold in May 2002. He is a
non-executive director of Anglo American plc. He is also a past
chairman of the World Gold Council.

Mr JG Best (56)
ACIS, ACIMA, MBA
Executive Director: Finance (Chief Financial Officer)
Jonathan Best was appointed finance director of AngloGold in April
1998. He has had 36 years of service with companies associated with
the mining industry.

Mr DL Hodgson (57)
BSc (Mining Engineering), BSc (Civil Engineering), BCom,
AMP (Harvard)
Chief Operating Officer
Dave Hodgson was appointed to the AngloGold board in November
2001 as chief operating officer. He was previously executive officer
responsible for AngloGold’s South Africa region. He has more than
31 years of mining experience.

Dr SE Jonah KBE (55)
Hon D Sc (Exeter), MSc (Mineral Production Management)
President
Dr Sam Jonah was appointed to the position of chief executive officer of
Ashanti Goldfields Company Limited in 1986. Dr Jonah had an honorary
knighthood conferred on him by Her Majesty, Queen Elizabeth II of Great
Britain, in 2003. He became president of AngloGold Ashanti in May 2004.

Mr KH Williams (56)
BA (Hons)
Executive Director: Marketing
Kelvin Williams was appointed marketing director of AngloGold in April
1998. He has 29 years of service in the gold mining industry. He is a
director and the immediate past chairman of Rand Refinery and is a
director of the World Gold Council.

Non-executive directors

Mr RP Edey (62)
FCA
Chairman and independent non-executive director
Russell Edey was appointed to the AngloGold board in April 1998 and
as deputy chairman in December 2000. In May 2002, he was
appointed chairman when Bobby Godsell relinquished this office.
Based in the United Kingdom, he is deputy chairman of NM Rothschild
Corporate Finance and a director of a number of other companies.

Dr TJ Motlatsi (53)
Hon D Soc Sc (Lesotho)
Deputy Chairman and independent non-executive director
James Motlatsi was appointed to the AngloGold board in April 1998 and
as deputy chairman in May 2002 upon Russell Edey being appointed
chairman. He has been associated with the South African mining industry
since 1970, and is a past president of the National Union of Mineworkers
(NUM). He is also chief executive officer of TEBA Ltd.

Mr FB Arisman (60)
MSc (Finance)
Independent non-executive director
Frank Arisman was appointed to the AngloGold board in April 1998. He
resides in New York and recently retired, after 32 years of service, from
JP Morgan Chase, where he held the position of managing director.

Mrs E le R Bradley (66)
BSc, MSc
Independent non-executive director
Elisabeth Bradley was appointed to the AngloGold board in April 1998.
She is non-executive chairman of Wesco Investments Ltd, Metair
Investments Ltd and Toyota South Africa (Pty) Ltd and a director of a
number of other companies. She is also deputy chairman of the South
African Institute of International Affairs.

Mr CB Brayshaw (69)
CA(SA), FCA
Independent non-executive director
Colin Brayshaw was appointed to the AngloGold board in April 1998.
He is a retired managing partner and chairman of Deloitte & Touche and
is a non-executive director of a number of other companies including
Anglo American Platinum Corporation Ltd, Datatec Ltd and Johnnic
Holdings Ltd.

Mr AW Lea (56)
BA (Hons)
Tony Lea was appointed to the AngloGold board in July 2001. He is
finance director of Anglo American plc.

Mr WA Nairn (60)
BSc (Mining Engineering)
Bill Nairn has been a member of the AngloGold board since January
2000. He was re-appointed to the board in May 2001, having
previously been alternate director to Tony Trahar. He is a former group
technical director of Anglo American plc.

Mr SR Thompson (45)
BA (Hons) (Geology)
Simon Thompson is the chief executive of Anglo American Base Metals
Division. He is also a director of the Anglo American Corporation of
South Africa Ltd, a member of the executive board of Anglo American
plc, chairman of the Exploration Division and a member of the executive
committee of the Industrial Minerals Division. Simon joined the
AngloGold Ashanti board in 2004.

Mr AJ Trahar (55)
BCom, CA(SA)
Tony Trahar was appointed to the AngloGold board in October 2000.
He is chief executive officer of Anglo American plc.

Mr PL Zim (44)
MCom
Lazarus Zim is chief executive officer of Anglo American Corporation of
South Africa Limited. He is also chairman of Anglo Operations Limited
and serves on a number of boards in the Anglo American Group
including Anglo American Platinum Corporation Ltd. Lazarus joined the
AngloGold Ashanti board in 2004.

Alternate directors

Mr DD Barber (52)
FCA, AMP (Harvard)
David Barber was appointed alternate director to Julian Ogilvie
Thompson in April 2002 and, following the retirement of Mr Ogilvie
Thompson, was appointed alternate director to Mr Zim in April 2004.
He is finance director of Anglo American Corporation of South Africa.

Mr AH Calver (57)
BSc (Hons) Engineering, MDP (UNISA), PMD (Harvard)
Harry Calver was appointed alternate director to Bill Nairn in May 2001.
He is head of engineering at Anglo American plc.

Mr PG Whitcutt (39)
BCom(Hons), CA(SA), MBA
Peter Whitcutt was appointed alternate director to Tony Lea in
October 2001. He is head of finance at Anglo American plc.

Executive officers

Ms MM Botsio-Phillips (47)
LLB, BL
General Counsel
Merene Botsio-Phillips joined Ashanti Goldfields Company Limited in 1995,
and was appointed to the board as executive director – general counsel in
1996. She was admitted to the English Bar in 1979 and is a member of
Gray’s Inns, the Ghana Bar and the International Bar Association.

Mr R Carvalho Silva (53)
BAcc, BCorp Admin
Deputy Chief Operating Officer (International)
Roberto Carvalho Silva joined the Anglo American group in Brazil in
1973 and was appointed president and chief executive officer of
AngloGold South America in January 1999. He became an executive
officer of AngloGold in February 2000 and was appointed a deputy
chief operating officer in January 2005.

Mr RN Duffy (41)
BCom, MBA
New Business Development
Richard Duffy joined Anglo American Corporation 18 years ago.
He became an executive officer of AngloGold in 1998 and was given the
business planning portfolio in November 2000. In 2004, on completion of
the business combination of AngloGold and Ashanti, Richard was
appointed an executive officer of AngloGold Ashanti.

Ms D Earp (43)
BCom, BAcc, CA(SA)
Corporate Accounting
Dawn Earp joined AngloGold in July 2000 from Anglo American where
she held the position as vice president, central finance. Dawn was
appointed to the position of executive officer in May 2004.

Mr BW Guenther (52)
BS Mining Engineering
Corporate Technical (Group)
Ben Guenther joined AngloGold as senior vice-president general
manager of Jerritt Canyon mine in Nevada. In 2000. He was seconded
to AngloGold’s Corporate Office in Johannesburg as head of mining. In
2001, he assumed some responsibilities for safety and health as well as
heading up the Corporate Technical Group. Ben was appointed an
executive officer in May 2004.

Mr RL Lazare (48)
BA HED
South Africa region
Robbie Lazare was appointed an executive officer in December 2004.
Prior to this he was the general manager of TauTona mine. He has
23 years experience in the mining industry.

Mr SJ Lenahan (49)
BSoc Sc, MSc
Corporate Affairs
Steve Lenahan has been working in the mining industry since 1978
when he started his career at De Beers. He was appointed investor
relations executive for AngloGold in 1998 and assumed responsibility
for corporate affairs in early 2001.

Mr MP Lynam (43)
BEng (Mech)
Treasury
Mark Lynam joined the Anglo American group in 1983 and has been
involved in hedging and treasury since 1990. In 1998, Mark joined
AngloGold as treasurer and was appointed to the positon of executive
officer in May 2004.

Mr NF Nicolau (45)
B-Tech (Min.Eng), MBA
Deputy Chief Operating Officer (Africa)
Neville Nicolau became the executive officer responsible for
AngloGold’s South Africa region in November 2001 and was appointed
a deputy chief operating officer in January 2005. He has 26 years of
mining experience.

Ms YZ Simelane (39)
BA LLB, FILPA, MAP
Managing Secretary
Yedwa Simelane joined AngloGold in November 2000 from the
Mineworkers’ Provident Fund where she was the senior manager of
the Fund. Yedwa was appointed to the position of executive officer in
May 2004.

Mr NW Unwin (52)
BA
Human Resources and Information Technology
Nigel Unwin has had many years of experience in the field of human
resources. He has been an executive officer since 1999.

Mr S Venkatakrishnan (39)
BCom, A.C.A (ICAI)
Deputy Chief Financial Officer
Srinivasan Venkatakrishnan (Venkat) was the finance director of Ashanti
Goldfields Company Limited from 2000 until the business combination
with AngloGold in 2004. Prior to joining Ashanti, Venkat worked as a
director in the Reorganisation Services division of Deloitte & Touche
in London.

Mr GF Wylie (52)
BSc Honours (Geology), MSc (Mining Engineering), Dip Mgmt
Exploration
Gordon Wylie began his career at Iscor in 1976 before moving to Anglo
American Corporation. In 1998 he became manager, Exploration and
Geology for AngloGold’s global operations. Gordon was appointed to
the position of executive officer in May 2004.

Company secretary

Mr CR Bull (58)
BCom
Chris Bull has been employed by the Anglo American Corporation group
for 39 years in various company secretarial positions. He was appointed
company secretary of AngloGold in 1998 and is responsible for ensuring
compliance with statutory and corporate governance requirements and the
regulations of the stock exchanges on which AngloGold Ashanti is listed.

Directors and executive management

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Business overview

Products

AngloGold Ashanti’s main product is gold. An insignificant portion of its
revenue is derived from the sales of silver, uranium oxide and sulphuric
acid. AngloGold Ashanti sells its products on world markets.

Gold market

The gold market is relatively liquid compared to many other commodity
markets. Physical demand for gold is primarily for fabrication purposes,
including jewellery (which accounts for almost 80% of fabricated
demand), electronics, dentistry, decorations, medals and official coins.
In addition, central banks, financial institutions and private individuals
buy, sell and hold gold bullion as an investment and as a store of value.

The use of gold as a store of value (a consequence of the tendency of
gold to retain its value in relative terms against basic goods and in times
of inflation and monetary crisis) and the large quantities of gold held for
this purpose in relation to annual mine production have meant that,
historically, the potential total supply of gold is far greater than demand.
Thus, while current supply and demand play some part in determining the
price of gold, this does not occur to the same extent with other
commodities. Instead, the gold price has from time to time been
significantly affected by macro-economic factors such as expectations of
inflation, interest rates, exchange rates, changes in reserve policy by
central banks and global or regional political and economic events. In
times of inflation and currency devaluation, gold is often seen as a refuge,
leading to increased purchases and support for the price of gold.

Interest rates affect the price of gold on several levels. High real rates of
interest increase the cost of holding gold and discourage physical
buying in developed economies. High US interest rates would also
make hedging or forward selling of gold attractive because of the higher
contango premiums available in the forward prices. Increased forward
selling in turn has an impact on the spot price at the time of such sales.
At a secondary level, changes to interest rates are viewed by market
participants as indicators of other economic changes (including
expectations of inflation), and have been used historically by market
participants to motivate decisions to buy or sell gold.

Changes in exchange rates against the dollar affect levels of demand
for gold in non-US economies. In South East Asia, for example, during
the mid-1990s strong local currencies encouraged robust gold demand
due to low real gold prices in local currencies. In contrast, when South
East Asian currencies fell sharply against the dollar in 1997, the local
currency values of gold increased proportionally, and wholesale selling
of the metal ensued in the region. Recoveries in Asian currencies since
1999, have resulted in a decline in gold prices in terms of these
currencies which in turn has led to a rise in gold demand to previous
levels. In the investment market, a strong dollar during the 1990s had a
negative effect on investment demand for gold in developed
economies. Since 2001, the weakness in the dollar has been seen as
a signal to buy gold.

While political and economic crises can have either a positive or negative
impact on gold, this is not inevitable. As a recent example of this, in 1998,
despite negative sentiment caused by the Russian financial crisis and
ensuing corrections in the capital markets worldwide, the price of gold

remained stable. By contrast, more recent political events have helped to
drive the gold price higher, particularly the war in Iraq.

The market in 2004

The return of investor interest in gold resulted in a sustained rise in the
gold price during the latter half of 2004. The gold price rose almost
uninterruptedly for three months to early December to $456.75 per
ounce, the highest price in almost 17 years. There was a measure of
correction after the price failed to rise above $460 per ounce, and the
price ended the year at $435 per ounce, up by 6% from the beginning
of 2004. The market has since corrected further to a low of $410 per
ounce, but buying interest has returned and the price rally of the past
three years appears intact.

The driving influence on investor sentiment was the weakening dollar,
particularly against the euro, but also against the Japanese yen. This
has been the case also for the past three and a half years and the
correlation between the rising dollar spot price of gold and the
weakening dollar against the euro reached a remarkable 97% over the
three months to December. While this does not mean that other factors
do not influence the gold market and the price of gold from time to time,
it does underline the primary influence of the health of the US currency
on the gold price in the current market cycle.

In this respect, the gold market differs from the parallel cycle of rising
base metal and commodity prices, which has also been influenced to
some extent by investor buying on the back of a weakening
US currency. However, prices of industrial metals are being driven
mainly by Chinese demand at present. The correlation between the
gold price and the weak dollar is an important one for the year ahead.
With market commentators and analysts uniformly forecasting a
weaker dollar at the end of 2005, these forecasts have translated to a
forecast for higher spot prices of gold as well. Any stabilisation or
recovery in the US currency would have the opposite effect on the gold
price in the current market.

Investment demand remains the instrument through which this
influence on the gold price is manifested. The role played by investors
and speculators in gold on the New York Comex has been
supplemented by the launch in the USA of the gold exchange-traded
fund, the streetTRACKS Gold Shares. The fund was created by the
World Gold Council in partnership with State Street Global Markets and
by early 2005 this fund had purchased on behalf of its investors over
140 tons of physical gold in the market. This level of investment is equal
to over 25% of the net long position in gold on the New York Comex.
On the Comex itself, during the year the total open position in gold
reached a record high of over 22 million ounces, or 685 tons. The net
long position remained consistently strong throughout the final quarter
of 2004, although it failed to reach the record high levels seen in early
April.

The average spot price of $409 per ounce for the year was $46 per
ounce or 13% stronger than the average for the previous year.
However, the rand strengthened against the dollar by some 15% during
this period, and the rand gold price enjoyed no benefit from the higher
dollar prices. The gold price in rands at the end of 2004 of R79,442 per
kilogram was over 10% (or R9,000 per kilogram) lower than the local

gold price at the beginning of 2004, and the average local price of
R84,400 per kilogram for 2004 was 4% lower than the average price
in 2003.

Currencies

The recovery in the dollar which began early in the first quarter of 2004
lasted well into the third quarter of the year. For over six months, the
US currency traded mostly between $1.20 and $1.25 to the euro, and
reached ¥115 during May 2004. The dollar’s strength during this time
was a result largely of purchases of dollar instruments by monetary
authorities in China and Japan. As this Asian intervention ended, so did
the recovery in the US currency, and the dollar’s devaluation resumed
late in the third quarter, and continued unbroken for four months, to
close 2004 at almost $1.36 to the euro and at ¥102. By the end of the
year, the euro had gained 8% and the yen 5% against the dollar
compared to their exchange rates at the beginning of 2004.

The cycle of dollar weakness continued as the market took the view
that the challenge of the US budget deficit was unlikely to be resolved
and the US currency would have to weaken in order to set in train the
economic corrections necessary to reduce the US deficits. This market
view was reinforced by the public announcement in mid-November by
Alan Greenspan, Chairman of the US Federal Reserve Bank, that the
current account deficit of the US was unsustainable and that the
willingness of foreign investors to finance that deficit through
investments in the US currency was finite. After this announcement, the
US currency went on to touch a record low of over $1.37 to the euro,
and also to lose ground against the yen. With the weaker dollar came
a stronger gold price, and the behaviour of gold as a currency trade
against the dollar was reinforced. Since the end of 2004, the dollar has
recovered somewhat against both the euro and the yen.

The South African rand has strengthened against the dollar by
significantly more than the dollar has weakened against other major
currencies. At its strongest point against the dollar (at the end of 2004),
the rand had gained 17% since the beginning of 2004. The local
currency also showed significant volatility during the year. While the rand
has been helped in 2004 by the weakening dollar, it has also benefited
from strong commodity prices and from sustained investor interest in the
South African economy. In addition, sound economic policies have
translated to sustained growth in the country and to a further upgrading
of the country’s sovereign risk rating by international ratings agencies.
While the value of the rand remains vulnerable to a recovery in the dollar,
or to specific event-driven reactions, it is otherwise likely to sustain its
strength against major currencies into 2005.

AngloGold Ashanti believes that the primary driver in gold continues to
be strong speculator and investor interest in the metal, driven by a
number of fundamental economic circumstances. Among these is the
anticipated further decline of the dollar.

The physical market for gold in the first half of 2004 showed some
positive adjustment, and some acceptance of higher gold prices. This
resulted in a slight recovery in demand and some slippage in supply,
and a physical market more in balance for that. In particular, in the
important area of demand for gold in jewellery, latest reports show
improved offtake in the Middle East (particularly in Turkey) and in South

East Asia (particularly Vietnam), and sustained demand in India. Set
against this demand performance, official sales of gold were lower in
2004, due in part to the process of renegotiation and extension of the
Washington Agreement for a further five years, and lower scrap sales.

A further contribution to an improved supply/demand balance is likely
to come from rising gold offtake in jewellery in China this year, the first
time in several years. This improvement has come with the completion
in 2003 of the deregulation of the gold jewellery market in China, and
the subsequent introduction by the World Gold Council of modern,
18-carat gold jewellery to metropolitan markets in China. This new
product is able to compete with platinum jewellery on price, colour and
design and it has been interesting to see growing sales of this new
product and a simultaneous fall in platinum jewellery sales in the China
mainland market during 2004.

Hedging

As at 31 December 2004, the net delta hedge position of AngloGold
Ashanti was 10.49 million ounces or 326.2 tons, valued at the spot
price of gold on that date of $434.70 per ounce. This net delta
position reflects a decrease over the year of 4.2 million ounces or
130 tons in the net combined size of the AngloGold Ashanti hedge
since the beginning of 2004 and the take-on of the Ashanti hedge in
April 2004. This decrease has been achieved by the active
management of hedge positions quarter by quarter, and a
restructuring and reduction of hedge commitments during the final
quarter of 2004. The marked-to-market value of the hedge position
as at 31 December 2004 was negative $1.16 billion. The group
continues to manage its hedged positions actively and to reduce
overall levels of pricing commitments in respect of future gold
production by the group.

Marketing channels

Gold produced by AngloGold Ashanti’s mining operations is processed
to saleable form at various precious metals refineries. Once refined to a
saleable product – either a large bar weighing approximately
12.5 kilograms and containing 99.5% gold, or smaller bars weighing
1.0 kilograms or less with a gold content of 99.5% and above – the
metal is sold directly by the refineries to bullion banks and the proceeds
are paid to the company.

Bullion banks are registered commercial banks that deal in gold. They
participate in the gold market by buying and selling gold and distribute
physical gold bullion bought from mining companies and refineries to
physical offtake markets worldwide. Bullion banks hold consignment
stocks in all major physical markets such as India or South East Asia
and finance such consignment stocks from the margins charged by
them to physical buyers, over and above the amounts paid by such
banks to mining companies for the gold.

Where forward sales contracts exist against which AngloGold Ashanti
elects to deliver physical product, the same channel of the refinery is
used, with the variation that the refinery does not sell the metal on its
behalf, but instead delivers the finished gold bars to the bullion bank
with which the group’s forward contract is held. The physical delivery
to the counterparty bank of the appropriate amount of gold fullfills

Business overview – Gold market

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

AngloGold Ashanti’s obligations under the forward contract, and
AngloGold Ashanti is paid by the relevant bullion bank with the price
fixed under the forward contract, rather than at the spot price of the
day.

Gold market development

The challenge for marketing gold is significant. This is especially so
given the fall in recent years in physical demand for gold, in part a result
of the rise in price and market volatility. Demand for gold jewellery in
many markets has declined materially in the past four years, with gold
jewellery sales losing ground against other luxury consumer goods,
particularly in developed markets.

AngloGold Ashanti is committed to developing the market for gold. The
group’s marketing programme aims to increase the desirability of its
product, to sustain and grow demand, and to support the deregulation
of the market in key economies.

During 2004, AngloGold Ashanti spent some $15 million on gold
marketing initiatives, of which 66% was spent through the World Gold
Council (WGC). Gold marketing expenditure by AngloGold Ashanti in
2003 and 2002 amounted to $19 million and $17 million, respectively.

Independently of its support for the WGC, AngloGold Ashanti is active
in a number of other marketing projects that support gold. It remains
the only gold group in the world to have committed this level of
resources to the marketing of the metal it produces.

Downstream initiatives have included GoldAvenue, an internet venture,
established between AngloGold Ashanti, JP Morgan Chase and Pamp
MKS of Geneva in 2000. This venture continued to sell gold jewellery by
catalogue and website until early 2004, after which it was wound up.

AngloGold Ashanti holds a 26.6% stake in OroAfrica, the largest
manufacturer of gold jewellery in South Africa, as an investment in the
downstream beneficiation of gold in South Africa. AngloGold Ashanti
and OroAfrica have co-operated in a number of projects, including
OroAfrica’s development and launch of an African gold jewellery brand.
An important strategic step has been the establishment of a Jewellery
Design Centre at OroAfrica at a cost of $250,000. The purpose of the
centre is to generate new gold jewellery designs, and to improve
product standards through technology, design and innovation. The
centre has been used during the past year to develop a new range of
gold jewellery with an African theme. The Design Centre was
commissioned by the South African Parliament in 2003 to manage the
fabrication of the new Parliamentary mace to celebrate the tenth year
of democracy in South Africa. The mace was successfully completed
and presented to Parliament in 2003.

Also in the area of design innovation, AngloGold Ashanti’s Riches of Africa
Gold Jewellery Design Competition was established in 1998 to showcase
South African jewellery designers, to enhance jewellery manufacturing
technical skills in South Africa and to support the local gold jewellery
industry. Training workshops for competition entrants are held each year,
while the award-winning works are exhibited and used in fashion shows
and other events both locally and abroad. The 2004 competition attracted
a record total of 459 entrants and a record number of student and

professional jewellers attended training workshops held by AngloGold
Ashanti in Johannesburg, Cape Town and Durban.

A bi-annual gold jewellery design competition in Brazil, the Designers
Forum, was launched by the group in South America in 2002. It was the
first such competition in that country. The competition generated
unprecedented interest in 2004, with a high quality of design and
craftsmanship and some 650 projects involved. From these, 33 pieces
were selected for the collection.

The Gold of Africa Museum was inaugurated in 2001 in Cape Town with
the permanent endowment of the Barbier Mueller collection of West
African gold objects purchased by the company in 1998. The Museum
also serves as a training facility in the jewellery industry in Cape Town. The
Museum continues to attract a growing number of visitors, and to provide
special visits for school groups in the Cape Town area.

AngloGold Ashanti and Mintek, South Africa’s national metallurgical
research organisation, launched Project AuTEK in 2002 to research and
develop industrial applications for gold. Project AuTEK has developed
a gold-based catalyst for the oxidation of carbon monoxide at ambient
temperature. Mintek has carried out pilot-scale catalyst production
tests. Negotiations for the commercial production of the catalyst have
commenced.

An important feature in many of AngloGold Ashanti’s marketing
projects has been the beneficiation of gold, particularly in South
Africa. AngloGold Ashanti’s commitment to adding value to gold
extends beyond mining and aims to contribute towards the
upliftment of people and the sustainability of communities.
AngloGold Ashanti remains a sponsor of the Atteridgeville Jewellery
Project, established in 2000 by the Vukani-Ubuntu Community
Development Project to create opportunities in the jewellery industry
in South Africa for the previously disadvantaged through training and
development. In 2004, the company also sponsored the expansion
of the Soweto Jewellery School to enable it to double its intake of
students from 2005.

The process of producing gold

The process of producing gold can be divided into six main phases:

•

finding the orebody;

•

creating access to the orebody;

•

removing the ore by mining or breaking the orebody;

•

transporting the broken material from the mining face to the plants
for treatment;

•

processing; and

•

refining.

This basic process applies to both underground and surface
operations.

Finding the orebody

AngloGold Ashanti’s global exploration programme generates targets
and undertakes exploration, on its own or in conjunction with joint
venture partners.

Creating access to the orebody

There are two types of mining which take place to access the orebody:

•

underground – a vertical or decline shaft (designed to transport
people and/or materials) is first sunk deep into the ground, after
which horizontal development takes place at various levels of the
main shaft or decline. This allows for further on-reef development of
specific mining areas where the orebody has been identified; and

•

open-pit – where the top layers of topsoil or rock are removed in a
process called ‘stripping’ to uncover the reef.

Removing the ore by mining or breaking the orebody

•

In underground mining, holes are drilled into the orebody, filled with
explosives and then blasted. The blasted ‘stopes’ or ‘faces’ are
then cleaned and the ore released is now ready to be transported
out of the mine.

•

In open-pit mining, drilling and blasting may also be necessary to
release the gold-bearing rock; excavators then load the material
onto the ore transport system.

Transporting the broken material from the mining
face to the plants for treatment

•

Underground ore is transported by means of vertical and/or
horizontal transport systems. Once on surface, conveyor belts
usually transport the ore to the treatment plants.

•

Open-pit mines transport ore to the treatment plants in vehicles
capable of hauling huge, heavy loads.

Services

Mining activities require extensive services, both on the surface and
underground, including:

•

mining engineering services;

•

mine planning;

•

ventilation;

•

provision of consumable resources;

•

engineering services;

•

financial, administration and human resource services; and

•

environmental/permitting services.

Processing

•

Comminution, which is the breaking up of ore to make gold
available for treatment. Conventionally, this process occurs in
multi-stage crushing and milling circuits. Modern technology is
based on large mills fed directly with run-of-mine material.

•

Gold ores can typically be classified into:
–

refractory ores, where the gold is locked within a sulphide
mineral and not readily available for recovery by the cyanidation
process; or

–

free milling, where the gold is readily available for recovery by
the cyanidation process.

•

Refractory ore treatment – after fine grinding the sulphide materials
are floated away from the barren gangue material to produce a
high-grade sulphide concentrate. The sulphide concentrate is
oxidised by either roasting as at AngloGold Ashanti Mineração or
bacterial oxidation (BIOX) as at Obuasi. The oxidation process
oxidises the sulphide minerals liberating the gold particles making
them amenable to recovery by the cyanidation process.

•

Free milling and oxidised refractory ores are processed for gold
recovery by agitator leaching the ore in an alkaline cyanide leach
solution followed generally by adsorption of the gold cyanide
complex onto activated carbon-in-pulp (CIP).

•

The alternative process is the heap-leach process. Generally
considered applicable to only high-tonnage, low-grade ore
deposits, AngloGold Ashanti has successfully applied this to
medium-grade deposits where the ore deposit tonnage cannot
economically justify constructing a process plant. Here, the run-of-
mine ore is crushed and placed on the leach. Low strength alkaline
cyanide solution is applied, generally as a drip, to the top of the
heap for periods of up to three months. The dissolved gold bearing
solution is collected from the base of the heap and transferred to
the carbon-in-solution (CIS) columns where the gold cyanide
complex is adsorbed onto activated carbon. The stripped solution
is recycled back to the top of the heaps.

•

Gold adsorbed onto activated carbon is recovered by a process of
re-dissolving the gold from the activated carbon (elution), followed
by precipitation in electro-winning cells and subsequent smelting
of that precipitate into bars that are shipped to the gold refineries.

•

The retreatment of tailing stockpile from previous decades’
operations is also practised by AngloGold Ashanti. The old tailings
are mined by water sluicing followed by agitator leaching in alkaline
cyanide solution and recovery of dissolved gold onto activated
carbon.

•

At AngloGold Ashanti operations, the major by-products produced
are:
–

silver, which is associated with gold in ratios ranging from 0.1 to
1 to 200:1 silver to gold

–

sulphuric acid which is produced by scrubbing the off gases
from the roasting plants; and

–

uranium which is recovered in a process which involves initial
acid leaching followed by recovery of the leached uranium onto
resin and subsequent stripping with ammonium hydroxide and
precipitation of crude yellow cake.

•

The tailings from the process operations are stored in designated
Tailings Storage Facilities designed to enhance water recovery and
prevent contaminant seepage into the environment.

Refining

The gold dust is then smelted into gold bars, which are transported to
a refinery for further refining, to as close to pure gold as possible – good
delivery status. This gives the assurance that the bar contains the
quantity and purity of gold as stamped on the bar.

Research and development – 2004

AngloGold Ashanti’s approach to research and development is a
combination of external private and collaborative research and in-house
research based at the operations.

The prime external collaborative research programmes include:

•

electric drilling: progress was made towards the end of the final
quarter of 2004 in several key performance areas. As drilling and
blasting is the fundamental rock-breaking process in deep-level,
narrow vein hard-rock mining, the overall objective of a more
energy-efficient stope will need to rely on moving away from

Business overview – the process of producing gold

compressed air as the primary energy source for this and several
other in-stope activities;

•

the AMIRA projects:
–

P9N which is essentially research into increasing efficiency
comminution;

–

P420c which is essentially research into the gravity and
leaching characteristics of gold extraction from both free milling
ores and refractory ores; and

–

P266d which is essentially research into improving the
performance of thickeners.

•

a University of British Columbia Canada, project researching the
use of thiosulphate as an alternative lixiviant to cyanide; and

•

the Mintek, Johannesburg, research project AuTEK, commissioned
to develop new industrial uses for gold. The principal fields being
catalysts, medical, biological and nanoparticle.

The primary in-house research programmes being carried out in
conjunction with private external technology suppliers are:

•

open-pit wall stability design aspects (including risk analysis
design) and continuous slope stability measurement;

•

use of GPS systems for drill blast hole location, truck monitoring
and management of ore placement on heaps;

•

the engineering design enhancement to the New Era Loco, an
operational energy modelling system;

•

a chiller performance software programme is being completed
as the final outstanding research project within the FutureMine
Programme;

•

AngloGold Ashanti’s wholly-owned subsidiary, ISS International
Ltd, (ISSI), remains a world leader in seismic monitoring of
mines, engineering structures and earthquakes. The company
initiates and undertakes both broad-based and focused
research and development in a continuing quest to enhance the

safety of those working in mining by developing effective
monitoring and warning technology systems. ISSI functions on
the international stage and its involvement in seismic matters
extends well beyond the mining environment;

•

the mine to mill and variations of that theme to improve blasting
efficiencies and effectiveness, monitor fragmentation and
improve energy efficiencies in process comminution practices.
The objective is to reduce energy and costs and improve
material-handling efficiencies; and

•

expert control systems in both the comminution circuits and
leaching/gold recovery circuits.

A company-wide decision has been taken to comply with the
International Cyanide Code. to this end, extensive cyanide speciation
studies have been conducted at the various plants in the South
African region in conjunction with Mintek (a South African
metallurgical research centre) to determine, on both a macro- and a
micro-scale, the environmental impacts of cyanide in the residue
material. This has facilitated a clearer understanding of the
environmental impacts of cyanide and has let to the implementation
of a strategy to ensure compliance with the requirements of the
International Cyanide Code.

Cyanide management covers the areas of:

–

consumption by installation of continuous cyanide and
cyanide WAD measuring devices with process control base
on a forward control loop;

–

cyanide recovery using the Hannah process system;

–

cyanide destruction using a number of proprietary
processes; and

–

cyanide destruction based on bacteria destruction of
cyanide compound.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations

Extensive reporting on occupational safety and health, the environment
and issues relating to sustainable development can be found in the
company’s Report to Society 2004, which is published simultaneously
with this report. This report is available on the company’s website at
www.AngloGoldAshanti.com or from the contact persons listed at the
end of the report.

Outlook

Production in 2005 is expected to increase to some 6.5 million ounces.
Capital expenditure is expected to be $655 million in 2005, mainly at the
South African, South American and former Ashanti operations.

Operations with
brownfields exploration

Sold and/or
closed operations

Greenfields
exploration areas

Exploration alliance areas
and offices

Jerritt Canyon

Cripple Creek

& Victor

Big Springs

Alaska

Canada

U.S.A.

Colombia

Peru

Free State

operations

Serra

Grande

AngloGold
Ashanti
Mineração

Navachab

Cerro Vanguardia

Namibia

SA Operations

Great Noligwa
Mponeng
TauTona
Savuka
Kopanang
Tau Lekoa
Moab Khotsong

(in development)

Ergo

South Africa

Zimbabwe

DRC

Freda-Rebecca

Tanzania

Geita

Tanami

Union Reefs

Australia

Boddington
(care and
maintenance)

Sunrise Dam

Philippines

Laos

China

Mongolia

Russia

Guinea

Siguiri

Sadiola

Yatela

Morila

Mali

Bibiani
Iduapriem &

Teberebie South

Obuasi

Ghana

Argentina

Brazil

Products, operation and geographic locations

AngloGold Ashanti’s main product is gold. An insignificant portion of its
revenue is derived from the sale of silver, uranium oxide and sulphuric
acid. AngloGold Ashanti sells its products on world markets.

Operating performance

Overall gold production in 2004 rose as a result of the combination of the
AngloGold assets with those of Ashanti, in line with the company’s
strategy of achieving geographic and orebody diversity. Gold production
for the year amounted to 6.052 million ounces, an increase of 8%. Gold
production from outside of South Africa – principally from low-cost
surface and shallow mines – rose by 27% to 2,973 million ounces.

Strong operating currencies against the dollar and rising cost of inputs
resulted in total cash costs increasing by 25% to $268 per ounce.

Capital expenditure for the year rose to $585 million. Of this,
$329 million (56%) was for maintenance capital expenditure and
$256 million (44%) for new projects.

Adjusted headline earnings decreased by 7% to $263 million.

Safety and health

Safety performance was the best ever recorded by the group, with all
major safety indicators improving. Regrettably, 32 employees lost their
lives in work-related accidents during the year, 31 of these at the South
African operations and one at the Morila mine in Mali.

The group’s fatal injury frequency rate (FIFR) was 0.19 per million man
hours worked, an improvement of 34% on the rate of 0.29 achieved the
previous year. The lost time injury frequency rate (LTIFR) also declined
significantly, by 26%, to 6.54 per million man hours from 8.83 the
previous year.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

South Africa

Key statistics

2004

2003

2002

Tonnes treated (Mt)

Underground

10.9

11.3

Surface

34.8

36.8

38.4

Average grade (g/t)

Underground

7.83

8.13

8.40

Surface

0.30

0.27

0.30

Gold production (000oz)

3,079

3,281

3,412

Total cash costs ($/oz)

291

227

138

Number of employees,
including contractors

43,282

46,274

45,772

Efficiencies (g/TEC)

252

214

218

Capital expenditure ($ million)

335

327

175

Location: AngloGold Ashanti’s South Africa region comprises seven
underground operations located in two geographic areas on the
Witwatersrand Basin:

•

the West Wits area, near Carletonville, straddles North West
Province and Gauteng, where the Mponeng, Savuka and TauTona
mines are located; and

•

the Vaal River area, near Klerksdorp and Orkney, in North West
Province and Free State, where the Great Noligwa, Kopanang, Tau
Lekoa and Moab Khotsong mines are located.

In addition, a surface metallurgical reclamation operation, Ergo, is
located near Johannesburg in the province of Gauteng. Ergo is due to
close during 2005.

Geology: The Witwatersrand Basin comprises a six-kilometre thick
sequence of interbedded argillaceous and arenaceous sediments that
extend laterally for some 300 kilometres north-east south-west and
100 kilometres north-west south-east on the Kaapvaal Craton. The
upper portion of the Basin, which contains the orebodies, out crops at

its northern extent near Johannesburg. Further west, south and east
the Witwatersrand Basin is overlain by up to four kilometres of
Archaean, Proterozoic and Mesozoic volcanic and sedimentary rocks.
The Witwatersrand Basin is late Archaean in age and is considered to
be around 2.7 to 2.8 billion years old.

In the Witwatersrand Basin, gold occurs in laterally extensive quartz
pebble conglomerate horizons or reefs, that are generally less than two
metres thick and are widely considered to represent laterally extensive
braided fluvial deposits. Separate fan systems were developed at
different entry points and these are preserved as distinct goldfields.
There is still much debate about the origin of the gold mineralisation in
the Witwatersrand Basin. Gold was generally considered to have been
deposited syngenetically with the conglomerates but there has been a
swing to an epigenetic theory of origin. However, the most fundamental
control to the gold distribution in the Basin remains the sedimentary
features, such as facies variations and channel directions. Gold

Great Noligwa
Kopanang
Tau Lekoa
Moab Khotsong

Savuka
TauTona
Mponeng

Ergo

Gauteng

Johannesburg

Eastern Cape

Free State

Cape
Town

North West

Welkom

Bloemfontein

SOUTH AFRICA

400km

Vaal River Operations

West Wits Operations

Carletonville

Klerksdorp

Operations

Durban

Review of operations – South Africa

generally occurs in native form often associated with pyrite and carbon,
with quartz being the main gangue mineral.

Operating performance:

Overall production fell by 6% to

3.079 million ounces with both volumes and yield being down. Total
cash costs rose by 28% to $291 per ounce, mainly as a result of the
continued strength of the South African rand and inflationary pressures.
The second year of a two-year wage agreement, which provides for an
average 7% increase in wages for the majority of employees, came into
effect from July 2004. In local currency terms, costs were well-
contained at R60,223 per kilogram, representing a 10% increase from
R54,624 per kilogram. While some cost savings were achieved at mine-
level, regional initiatives included rationalisation and restructuring of
AngloGold Health Services, commodity strategies, automation and
revised insurance rates.

Capital expenditure for 2004 was $335 million, 2% higher than the
previous year of $327 million. Expansion capital amounted to
$159 million, ore reserve development to $137 million and the balance
being stay-in-business capital. Expansion capital was primarily at Moab
Khotsong ($71 million), at Mponeng ($11 million) and at TauTona
($38 million).

West Wits

Description: The West Wits operations comprise the Mponeng,
Savuka and TauTona mines. Savuka and TauTona share a processing
plant, whereas Mponeng has its own individual processing plant. These
plants comprise crushers, mills, CIP and zinc precipitation and smelting
facilities.

Location: The West Wits operations are located near the town
of Carletonville in North West Province, south-west of Johannesburg.

Geology: Two reef horizons are exploited at the West Wits
operations, the Ventersdorp Contact Reef (VCR) located at the top of
the Central Rand Group and the Carbon Leader Reef (CLR) near the
base. The separation between the two reefs increases from east to
west from 400 metres to 900 metres, owing to unconformity in the
VCR. TauTona and Savuka exploit both reefs, whereas Mponeng only

mines the VCR. The structure is relatively simple; faults of greater than
70 metres are rare.

•

The CLR consists of one or more conglomerate units and varies
from several centimetres to more than three metres in thickness.

•

Regionally, the VCR dips at approximately 21°, but may vary
between 5° and 50°, accompanied by changes in thickness of the
conglomerate units. Where the conglomerate has the attitude of
the regional dip, it tends to be thick, well-developed and
accompanied by higher gold accumulations. Where the attitude
departs significantly from the regional dip, the reef is thin, varying
from several centimetres to more than three metres in thickness.

Operating review

Mponeng: Volumes mined decreased in the first quarter as a result of
a slow start to the year and a planned safety day which was called for
following four fatalities in February. A good recovery was made in the
second quarter, with a return to targeted levels by year-end to
counteract in particular the impact of high grade lock-up from recently
commenced ledging operations. A grade decline in the first quarter, as
a result of seismic damage to a number of high-grade panels, was
followed by expected declines in face value and dilution from
increased development rates. On average, the grade for the year was

Mponeng

2004

2003

2002

Pay limit (oz/t)

0.39

0.29

0.24

Pay limit (g/t)

13.26

10.08

7.54

Recovered grade (oz/t)

0.237

0.261

0.252

Recovered grade (g/t)

8.14

8.96

8.63

Gold production (000oz)

438

499

466

Total cash costs ($/oz)

322

221

144

Total production costs ($/oz)

386

269

209

Capital expenditure ($ million)

Total number of employees

5,876

6,169

5,693

Employees

5,164

5,374

5,237

Contractors

712

795

456

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – South Africa

8.14g/t, down some 9% on the previous year. Consequently gold
production decreased by 12% to 438,000 ounces.

Total cash costs increased by 46% to $322 per ounce on the back
of lower production, the strong rand and the mid-year wage
increase. In rand terms, total cash costs rose by 25% to R66,437 per
kilogram.

Adjusted operating profit at $11 million was significantly down. Capital
expenditure, mostly stay-in-business capital, of $62 million for the year,
was 10% lower than the previous year.

TauTona: Infrastructure failure and a reduction in face length in the first
quarter, which was partially offset by increased tramming and
accelerated cleaning activities, set the mine off to a poor start to the
year in respect of volumes mined. This was followed in the second
quarter by delays in negotiating a major fault and planned stoppages
for safety reasons, along with reduced face advance. Volumes
improved in the third quarter, along with increased face length and face
advance, but were impeded once more on several panels by seismicity
and planned stoppages related to rock mechanic issues. These factors,
together with dilution from increased development, resulted in the
average yield declining by 10% to 10.88g/t.

Gold production decreased by 12% to 568,000 ounces, reflecting
the lower tonnages. Revenues were negatively affected by the strong
rand and the mid-year wage increase. Total cash costs rose by 43%
to $245 per ounce in dollar terms, and by 23% to R50,531 per
kilogram in local currency. Adjusted operating profit was down by
42% to $58 million. Capital expenditure of $65 million was 19%
lower than in 2003. This was spent mostly on the below
120 level CLR project, the CLR pillar project and the VCR
development project.

Savuka: Tons milled declined by 20% as waste tons decreased in
line with decreased development as the mine reaches the of its life.
As a result, the yield improved to 6.19g/t despite the marginal
decrease in the in-situ mining grade owing to the channelised
nature of the orebody. Gold production declined by 16% to
158,000 ounces.

Gradual downsizing of the operation led to some labour cost saving,
although this was partially undermined by mid-year wage increases.
Total cash costs were well-contained, rising by 11% to $455 per
ounce; in rand terms total cash cost declined by 5% to R94,036 per
kilogram.

TauTona

2004

2003

2002

Pay limit (oz/t)

0.67

0.45

0.47

Pay limit (g/t)

23.01

15.48

14.54

Recovered grade (oz/t)

0.317

0.353

0.340

Recovered grade (g/t)

10.88

12.09

11.66

Gold production (000oz)

568

646

643

Total cash costs ($/oz)

245

171

117

Total production costs ($/oz)

311

207

143

Capital expenditure ($ million)

Total number of employees

5,498

5,457

5,715

Employees

4,673

4,794

5,397

Contractors

825

663

318

Savuka

2004

2003

2002

Pay limit (oz/t)

0.41

0.45

0.38

Pay limit (g/t)

14.17

15.28

11.90

Recovered grade (oz/t)

0.181

0.169

0.206

Recovered grade (g/t)

6.19

5.81

7.07

Gold production (000oz)

158

187

236

Total cash costs ($/oz)

455

411

231

Total production costs ($/oz)

523

467

257

Capital expenditure ($ million)

Total number of employees

3,229

4,529

4,910

Employees

3,001

4,122

4,396

Contractors

228

407

514

As a result, the adjusted operating loss was held to $18 million,
aided by lower rehabilitation charges on the extension to the life-of-
mine plan. Capital expenditure of $8 million, mainly on ore reserve
development, was down by 62% on the previous year.

Growth prospects

Mponeng Shaft Deepening Project: This project is to deepen the
sub-shaft system and provide access tunnels to the VCR horizon on
113, 116 and 120 levels (from 3,172 metres to 3,372 metres below
surface). AngloGold Ashanti expects the project to produce 4.8 million
ounces of gold over a period of 13 years to 2016. Total capital
expenditure is estimated at $207 million (at closing 2004 exchange
rate), with some $8 million (at closing 2004 exchange rate) remaining.
The average project cash cost over the life-of-mine is expected to be
approximately $226 per ounce in 2004 real terms. Progress continued
to be made on this project during 2004, with stoping operations
commencing in May 2004.

TauTona:

•

The CLR shaft pillar project allows for stoping operations up to the
infrastructural zone of influence. The project, from which production
commenced in 2004, is expected to produce 550,000 ounces of
gold over a period of 10 years, at a capital cost of $35 million
(converted at closing 2004 exchange rate). Approximately $29 million
(at closing 2004 exchange rate) has been spent to date. The
expected average project cash cost is $134 per ounce.

•

The VCR Development Project aims to access two distinct
reserve blocks on the VCR horizon, one situated north-east of the
shaft complex, and the other in the VCR pillar area situated outside
the zone of influence. The project will add some 300,000 ounces
to production, with a capital cost of $30 million (at closing 2004
exchange rate).

•

The CLR reserve block below 120 level, known as TauTona
below 120 level Project, is being accessed via a twin decline
system into its geographical centre, down to 125 level. The project
is expected to produce 2 million ounces of gold over a period of
nine years, with a project capital cost of $152 million (at closing
2004 exchange rate). The average project cash cost is expected to
be $203 per ounce. Progress is on schedule and production is due
to start in January 2007.

Outlook: Production at Mponeng in 2005 is expected to increase
by 7% to 470,000 ounces at a total cash cost of $295 per ounce,
with capital expenditure of $54 million.

Production at TauTona is expected to remain constant at 2004
levels of around 570,000 ounces in 2005, while total cash costs will
rise to $229 per ounce. Capital expenditure should amount to some
$66 million.

Production at Savuka is expected to remain at 2004 levels of around
160,000 ounces at a total cash cost of $404 per ounce, while the
downsizing of this operation continues. Minimal capital expenditure
is forecast at $7 million.

Vaal River

Description: AngloGold Ashanti’s Vaal River operations are located
in the original Vaal Reefs mining area of the Witwatersrand Basin and
comprise three operating mines, Great Noligwa, Kopanang and Tau
Lekoa, and a developing mine, Moab Khotsong.

The Vaal River complex also has four gold plants, one uranium plant
and one sulphuric acid plant. The Vaal River processing plants
include crushers, mills, CIP and electro-winning facilities, and are
able to treat between 180,000 and 420,000 tonnes of ore per month.
Although the Vaal River operations produce uranium oxide as a by-
product, the value is not significant relative to the value of gold
produced.

Location: The Vaal River operations are located near the towns of
Klerksdorp and Orkney in North West Province and Free State.

Geology: In order of importance, the reefs mined at the Vaal River
operations are the Vaal Reef, the VCR and the “C” Reef.

•

The Vaal Reef contains approximately 85% of the reserve
tonnage with mining grades between 10 and 20g/t. It comprises
a series of oligomictic conglomerates and quartzite packages
developed on successive unconformities. Several distinct facies
have been identified, each with its unique gold distribution and
grade characteristic.

Review of operations – South Africa

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – South Africa

•

The VCR has a lower grade than the Vaal Reef, and contains
approximately 15% of the estimated reserves. The economic
portion is mainly concentrated in the western part of the lease
area. It can take the form of a massive conglomerate, a pyritic
sand unit with intermittent pebble layers or a thin conglomerate
horizon. The reef is located at the contact between the
overlying Kliprivierberg Lavas of the Ventersdorp Super
Group and the underlying sediments of the Witwatersrand
Super Group which creates a distinctive seismic
reflector. The VCR is located up to one kilometre above the
Vaal Reef.

•

The “C” Reef is a thin, small pebble conglomerate with a
carbon-rich basal contact, located approximately 270 metres
above the Vaal Reef. It has less than 1% of the estimated
reserves with grades similar to the Vaal Reef, but more erratic.
The most significant structural features are the north-east
striking normal faults which dip to the north-west and south-
east, resulting in zones of fault loss.

Operating review

Great Noligwa: Volumes mined decreased as a result of fewer
production shifts in the first quarter, although improved face length

and advance resulted in an increase in the second half of the year.
The grade decreased marginally to 10.38g/t, in line with
expectations, as mining moved towards the extremities of the lease
area, and as the high grades experienced in the SV1 area in the first
quarter were not sustained. This was offset to some degree by an
improved mining mix.

As a result, gold production was down slightly, by 2% to
795,000 ounces. New cost saving initiatives and favourable
summer power tariffs towards year-end helped to maintain
total cash costs at $231 per ounce, despite the mid-year wage
increase. In local currency terms, total cash costs rose by 3% to
R47,820 per kilogram. Adjusted operating profit fell to $118 million.
Stay-in-business capital expenditure totalled $36 million, a decrease
of 14% on 2003.

Kopanang: Volumes mined were lower as a result of a slow start up
after the Christmas break, although they recovered later in the year,
particularly as five additional shifts were worked in the fourth quarter.
Overall, gold production decreased by 2% to 486,000 ounces. Efforts
to reduce reef/waste contamination contributed to better yields, as did
the lower volumes of tonnes treated. Grade increased slightly to
7.37g/t, in line with expectations.

Great Noligwa

2004

2003

2002

Pay limit (oz/t)

0.38

0.34

0.32

Pay limit (g/t)

13.01

11.53

9.96

Recovered grade (oz/t)

0.303

0.308

0.321

Recovered grade (g/t)

10.38

10.57

11.02

Gold production (000oz)

795

812

880

Total cash costs ($/oz)

231

193

105

Total production costs ($/oz)

260

213

120

Capital expenditure ($ million)

Total number of employees

7,100

7,821

9,269

Employees

6,192

6,819 8,356

Contractors

908

1,002

913

Kopanang

2004

2003

2002

Pay limit (oz/t)

0.39

0.32

0.35

Pay limit (g/t)

13.51

10.96

10.78

Recovered grade (oz/t)

0.215

0.206

0.211

Recovered grade (g/t)

7.37

7.07

7.23

Gold production (000oz)

486

497

511

Total cash costs ($/oz)

281

223

133

Total production costs ($/oz)

317

249

159

Capital expenditure ($ million)

Total number of employees

6,312

6,966

7,638

Employees

5,758

6,131

6,953

Contractors

554

835

685

Total cash costs were 26% higher at $281 per ounce, a function of higher
labour costs from mid-year, lower treatment costs and lower production.
In rand terms, total cash costs rose by 8% to R58,220 per kilogram.
Adjusted operating profit of $46 million reflects the impact of the lower
price and production. Capital expenditure of $38 million was 15% higher
than last year. Most of this expenditure was stay-in-business capital, with
a minor amount ($3 million) being spent on development of the Edom
ground.

Tau Lekoa: Tau Lekoa increased its volumes mined as a result of a 5%
increase in face length despite a 1% decrease in face advance. Plant
throughput was boosted owing to a clean-up of underground lock-up
after the Easter break and a redistribution of mining crews to allow the
mining of more panels per raise line. This was negated by a Department
of Minerals and Energy decision to stop work on Sundays for five
weeks after a fatal accident in June. Yield, however, declined by 9% to
3.87g/t, despite an improvement in mining mix.

As a result, production decreased to 293,000 ounces. Total cash costs
increased by 41% to $370 per ounce, or by 21% to R76,428 per
kilogram in local currency. The mine’s adjusted operating profit reduced
to a loss of $6 million in 2004. Capital expenditure of $25 million was
56% higher than in 2003, mainly stay-in-business capital.

Tau Lekoa

2004

2003

2002

Pay limit (oz/t)

0.18

0.14

Pay limit (g/t)

6.31

4.90

4.30

Recovered grade (oz/t)

0.113

0.124

0.130

Recovered grade (g/t)

3.87

4.24

4.45

Gold production (000oz)

293

322

311

Total cash costs ($/oz)

370

263

170

Total production costs ($/oz)

432

304

209

Capital expenditure ($ million)

Total number of employees

4,252

4,139

4,622

Employees

3,398

3,450

3,890

Contractors

854

689

732

Moab Khotsong: Moab Khotsong’s 9,000 ounces of production is not
included in the region’s production as the revenue is capitalised against
pre-production costs. Commercial production is scheduled for 2006.
Capital expenditure for the year amounted to $80 million, 21% more
than in 2003.

Review of operations – South Africa

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – South Africa

Growth prospects

Moab Khotsong, is the largest of South Africa’s current projects. Located
in the Vaal River area, the project involves sinking, constructing and
equipping the shaft systems to a depth of 3,130 metres below surface,
providing access tunnels to the reef horizon on 85, 95 and 101 levels, and
developing the necessary ore reserves. The project is expected to
produce 4.9 million ounces of gold from 7.75 million tonnes of milled ore
over 12 years. The project capital cost is estimated at $651 million (at end
2004 exchange rate), of which $585 million has been spent to date. The
main shaft extension has been completed following the shaft’s
commissioning in March 2003. Access development is progressing to
plan. The first raiseline has been established and stoping operations
began in November 2003. Moab Khotsong is forecast to reach
commercial production in 2006 and full production, at an average of 15.6
tonnes (502,000 ounces) per annum, is expected by 2010.

Outlook

As mining moves into lower grade areas, production at Great Noligwa
is expected to decrease by 2% to 782,000 ounces in 2005, at a total
cash cost of $256 per ounce. Capital expenditure during 2005 is
expected to be approximately $43 million.

In 2005, gold production at Kopanang is expected to decrease by 3%
to 471,000 ounces, at a total cash cost of $327 per ounce. The lower
production expected is in line with an anticipated 2% decline in face
advance as some complex geology is expected to be encountered.
Capital expenditure for the year ahead will be in the region of $37 million.

In 2005, production at Tau Lekoa is expected to rise to 311,000
ounces on improved recoveries. Total cash cost is anticipated to
increase to $377 per ounce. Capital expenditure is expected to be
approximately $21 million.

Development of the Moab Khotsong mine will continue with capital
expenditure of $79 million planned for the year.

Ergo

Description: AngloGold Ashanti’s Ergo operation, located in Gauteng,
re-treats tailings dams and sand to recover gold and produce sulphuric
acid using a secondary process. Since 1987, material has been treated
through two carbon-in-leach (CIL) plants, which are believed to be two

of the largest of their kind in the world. Ergo can only profitably treat
tailings dams if they exceed a certain grade and, as a result of the
expected rate of depletion of the higher grade material available, the
operation is expected to close during 2005.

Operating review: Tonnes treated improved at the beginning of the
year as higher volumes were reclaimed from the Withok tailings dam
and the 5L29 dam, and the lower rainfall led to reduced down-time.
From mid-year onwards, however, tonnes treated decreased as the
clean-up material became increasingly difficult to treat. This combined
with a slightly increased yield of 0.24g/t resulted in gold production
rising by 9% to 222,000 ounces.

Total cash costs rose by 11% to $389 per ounce mainly because of the
establishment of the 5L29 pump station and the reduced by-product
contributions from the acid circuit, together with lower production. The
latter losses were stemmed following the closure of the acid plant in the
third quarter and more efficient cyanide usage during the year. Total cash
costs in local currency decreased by 4% to R80,695 per kilogram. The
adjusted operating loss for the year rose to $7 million.

Outlook: Ergo is expected to cease operations during 2005.

Ergo

2004

2003

2002

Pay limit (oz/t)

0.01

Pay limit (g/t)

0.44

0.29

Recovered grade (oz/t)

0.007

0.006

0.007

Recovered grade (g/t)

0.24

0.20

0.25

Gold production (000oz)

222

203

264

Total cash costs ($/oz)

389

349

184

Total production costs ($/oz)

436

373

217

Capital expenditure ($ million)

–

Total number of employees

1,850

1,933

1,122

Employees

767

829

904

Contractors

1,083

1,104

218

Argentina

Cerro Vanguardia

Description: Cerro Vangaurdia consists of multiple small open-pits
with high stripping ratios. The orebodies comprise a series of
hydrothermal vein deposits containing vast quantities of silver, which is
produced as a by-product. Throughput has increased steadily since the
first gold was poured in September 1998, from an original design
capability of 1,800 tpd to the present level of 2,700 tpd. Cerro
Vanguardia’s lease area is 514km

Location: The Cerro Vanguardia operation is located to the north-west
of Puerto San Julian in the Province of Santa Cruz, Argentina. AngloGold
Ashanti has a 92.5% interest in the Cerro Vanguardia mine following the

acquisition of an additional 46.25% in July 2002. The Santa Cruz
Province has a 7.5% interest. The company owns the right to exploit the
deposit for 40 years based on the Usufruct Agreement signed in
December 1996. The operation, which was constructed at a total cost of
$270 million, was commissioned in the fourth quarter of 1998.

Geology: The oldest rocks in this part of Patagonia are of Precambrian-
Cambrian age. These are overlain by Permian and Triassic continental
clastic rocks which have been faulted into a series of horsts and grabens.
These are associated with both limited basaltic sills and dykes and with
calc-alkaline granite and granodiorite intrusions. Thick andesite flows of
Lower Jurassic age occur above these sedimentary units. A large volume
of rhyolitic ignimbrites was emplaced during the Middle and Upper
Jurassic age over an area of approximately 100,000km

. These volcanic

rocks include the Chon Aike formation ignimbrite units that host the gold-
bearing veins at Cerro Vanguardia. Post-mineral units include Cretaceous
and Tertiary rocks of both marine and continental origin, the Quaternary
La Avenida formation, the Patagonia gravel and the overlying La Angelita
basalt flows. These flows do not cover the area of the Cerro Vanguardia
veins.

Gold and silver mineralisation at Cerro Vanguardia occurs within a
vertical range of about 150 to 200 metres in a series of narrow,
banded quartz veins that occupy structures within the Chon Aike
ignimbrites. These veins form a typical structural pattern related to
major north-south (Concepcion) and east-west (Vanguardia) shears.
Two sets of veins have formed in response to this shearing; one set
strikes about N40W and generally dips 65 to 90° to the east; the
other set strikes about N75W and the veins dip 60 to 80° to the
south. They are typical of epithermal low-temperature, adularia-
sericite character and consist primarily of quartz in several forms as
massive quartz, banded chalcedonic quartz, and quartz-cemented
breccias. Dark bands in the quartz are due to finely disseminated
pyrite, now oxidised to limonite. The veins show sharp contacts with
the surrounding ignimbrite, which hosts narrow stockwork zones that
are weakly mineralised, and appear to have been cut by a sequence
of north-east trending faults that have southerly movement with no
appreciable lateral displacement.

Operating review: At Cerro Vanguardia (92.5% attributable), gold
production decreased in the first quarter, as a result of a planned
decline in tonnes mined and the treatment of lower grade ore.
Production recovered in the next two quarters as a result of the plant
upgrade and improved grades, and despite operational plant difficulties
in the third quarter, efforts to optimise the production mix of low and
high-grade pits to be mined at a higher stripping ratio, and dewatering
high-grade pits, were largely successful.

Overall, attributable gold production amounted to 211,000 ounces for
the year, up marginally on the previous year’s production of 209,000
ounces. The yield rose by 6% to 7.60g/t. Total cash costs rose by 9%
to $156 per ounce compared to $143 per ounce in 2003, mainly due
to new equipment rental, higher fuel consumption (as a result of
greater distance), higher royalty payments and higher inflation. These
were partially offset by a 65% higher silver by-product credit.
Attributable adjusted operating profit increased by 30% to $30 million
as a result.

Operations

1000km

Buenos Aires

Santa Fe

Cordoba

ARGENTINA

Bahia Blanca

Cerro Vanguardia

San Julian

Rio Gallegas

Review of operations – Argentina

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Argentina – Australia

Attributable capital expenditure for the year amounted to $12 million,
20% higher than the previous year. This was spent on mine
equipment, the raising of tailings dam and exploration.

Growth prospects: During 2005, drilling will continue on under-
explored veins within the greater licence area, while scoping studies will
be conducted to investigate potential high-grade underground and
attributable leachable low-grade ores.

Outlook: In 2005, attributable production at Cerro Vanguardia should
decrease to 204,000 ounces, at a total cash cost of $174 per ounce.
Attributable capital expenditure is expected to be in the region of
$10 million.

Cerro Vanguardia

2004

2003

2002

Pay limit (oz/t)

0.12

0.11

Pay limit (g/t)

4.05

4.28

3,88

Recovered grade (oz/t)

0.222

0.208

0.277

Recovered grade (g/t)

7.60

7.15

9.49

Gold production (000oz) – 100%

229

226

261

Gold production (000oz) – 92.5%

211

209

179

Total cash costs ($/oz)

156

143

104

Total production costs ($/oz)

274

261

203

Capital expenditure
($ million) – 100%

Capital expenditure
($ million) – 92.5%

Total number of employees

791

690

540

Employees

389

339

316

Contractors

402

351

224

Australia

Acquired at the end of 1999, the Australian operations (formerly Acacia
Resources Limited) comprise only one operation at present, the Sunrise
Dam Gold Mine in Western Australia (AngloGold Ashanti’s interest is
100%). Mining ceased at Union Reefs in the Northern Territory in the
third quarter of 2003, and Union Reefs’ assets were sold to the
Burnside Joint Venture in September 2004. The Boddington Gold Mine
in Western Australia (in which AngloGold Ashanti has a 33.33% interest)
is currently on care and maintenance, pending a decision to proceed
with the Boddington expansion project.

Operations

800km

Tasmania

South

Australia

New South

Wales

Queensland

Northern

Territory

Western

Australia

Laverton

Sunrise

Dam

Tanami

Union Reefs

Boddington
(care and
maintenance)

Tanami

Darwin

Sydney

Brisbane

Melbourne

Victoria

Kalgoorie

Perth

Sold and/or
closed operations

Adelaide

AUSTRALIA

Canberra

Sunrise Dam

Description: Sunrise Dam comprises a large open-pit and an
underground project. Mining is carried out by contractors and ore is
treated in a conventional gravity and leach process plant.

Location: Sunrise Dam gold mine lies some 220 kilometres north-north-
east of Kalgoorlie and 55 kilometres south of Laverton in Western Australia.

Geology: Following the purchase of the Sunrise lease from Placer
Dome in December 2002, AngloGold Ashanti now has control of the
entire mineralised system at Sunrise Dam. Gold ore at Sunrise Dam is
structurally and lithologically controlled within gently dipping high strain
shear zones (for example, Sunrise Shear) and steeply dipping brittle-
ductile low strain shear zones (for example, Western Shear). Host rocks
include andesitic volcanic rocks, volcanogenic sediments and magnetic
shales.

Operating review: After abnormally heavy rainfall limited access to
higher-grade ore in the pit early in the year, mining moved into the
higher-grade Watu section of the orebody. As a result, production
increased by 15% to a record 410,000 ounces. Recovered grade, at
3.46g/t was 11% higher than the previous year. Total cash costs
increased by 14% to $260 per ounce, as a result of remedial measures
taken to mitigate the effects of the rain in the first quarter, increased ore
transport costs, higher mining costs, and crusher maintenance
requirements.

The underground project at Sunrise Dam is progressing well, with
3,155 metres of underground capital development and 1,550 metres of
operational development completed during the year. The first gold was
produced from underground in the fourth quarter.

Adjusted operating profit was $62 million, up by 114% on 2003, as a
result of improved production levels and increased inventory. Capital
expenditure at $25 million, was 25% higher than the previous year, with
$17 million spent on underground development, $4 million on
brownfields exploration and the remaining $4 million on operations.

Growth prospects: Following a scoping study that was completed in
the first half of 2003, underground development commenced in the
fourth quarter of 2004. The three-year underground project, involving
the development of two declines and 125,000 metres of drilling from
surface and underground, will enable the underground potential for the
Sunrise Dam orebody to be fully explored.

Declines are being developed in the vicinity of defined underground
reserves, which will be mined through the course of the project. Deep
drilling to date has indicated that the sub-vertical, high-grade zones
that have been a feature of open-cut mining at Sunrise Dam continue
at depth. It is expected that the project will add significantly to
underground reserves and a decision on whether to proceed to full-
scale underground mining will be made early in 2007.

Outlook: Gold production is expected to increase to some
464,000 ounces in 2005, at a total cash cost of $274 per ounce.
Capital expenditure is expected to be in the order of $40 million
in 2005.

Sunrise Dam

2004

2003

2002

Pay limit (oz/t)

0.07

0.08

Pay limit (g/t)

2.14

2.26

2.37

Recovered grade (oz/t)

0.110

0.091

0.102

Recovered grade (g/t)

3.46

3.12

3.49

Gold production (000oz)

410

358

382

Total cash costs ($/oz)

260

228

177

Total production costs ($/oz)

326

295

227

Capital expenditure ($ million)

Total number of employees

356

316

365

Employees

112

Contractors

268

222

253

Review of operations – Australia

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Australia

Boddington

Description: Boddington gold mine, which closed at the end of 2001,
was an open-pit operation. Formerly operated by Worsley Alumina,
since September 2002 it has been managed by the Boddington Gold
Mine Management Company under the direction of the Boddington
joint venture partners, namely AngloGold Ashanti (33.33%), Newmont
Boddington (44.44%) and Newcrest Operations (22.22%).

Location: The operation is located approximately 100 kilometres
south-east of Perth.

Geology: Boddington is located in the Archaean Saddleback
greenstone belt in south-west Western Australia. The main zone of gold
mineralisation occurs reasonably continuously over a strike length of
over five kilometres and a width of about one kilometre. The oxide gold
mineralisation forms a semi-continuous blanket within the upper iron-
rich laterite, with more erratic gold distribution in the lower zones. The
basement rocks below the oxide zone host gold mineralisation with a
variety of geological styles, predominantly in andesitic volcanics and
diorite dykes.

Operating performance: In 2004, the plant was on care and
maintenance pending commencement of the Boddington expansion
project. Site activities included minor rehabilitation, plant preservation,
exploration and assistance with testwork for the feasibility study
update.

Work continued during the year on the Boddington expansion project
feasibility update. All three parties remain committed to completing the
study and proceeding with the project subject to satisfactory economic
criteria being met. Capital expenditure during 2004 amounted to
$3 million.

Growth prospects and outlook: A decision to proceed with the
Boddington expansion project is expected towards the end of 2005.
A feasibility study completed in 2000 was based on an operation
with a throughput of 25 million tonnes per annum, producing an
average of 600,000 ounces of gold and 22,500 tonnes of copper per
annum over a life-of-mine of 15 years, at an estimated attributable
capital cost of $192 million. The update of the study has pointed
towards a larger project with greater throughput, higher annual gold
production and longer mine life. This larger scale will reduce the
impact of higher costs in the region resulting from the current

minerals boom. Environmental approvals associated with the
expansion as defined by the 2000 feasibility study were received in
June 2002 and will remain valid for a period of five years. Subsequent
changes to the project may require a supplementary approval
process, which it is planned will be completed during the year.

Boddington

2004

2003

2002

Pay limit (oz/t)

–

Pay limit (g/t)

–

Recovered grade (oz/t)

–

Recovered grade (g/t)

–

Gold production (000oz) 100%

–

Gold production (000oz) 33.33%

–

Total cash costs ($/oz)

–

Total production costs ($/oz)

–

Capital expenditure
($ million) – 100%

–

Capital expenditure
($ million) – 33.33%

–

Total number of employees

Employees

Contractors

–

Union Reefs

AngloGold Ashanti sold its interests in the Union Reefs assets in August
2004 to the Burnside Joint Venture.

Description: Mining ceased at the Union Reefs open-pit operations
in the third quarter of 2003, and the treatment plant was placed on
care and maintenance. In the interim, closure and rehabilitation work
has continued.

Location: Union Reefs lies some 160 kilometres south-east of
Darwin, between the townships of Pine Creek and Adelaide River in
Northern Territory.

Union Reefs

2004

2003

2002

Pay limit (oz/t)

–

0.05

0.03

Pay limit (g/t)

–

1.61

1.05

Recovered grade (oz/t)

–

0.033

0.040

Recovered grade (g/t)

–

1.12

1.36

Gold production (000oz)

–

118

Total cash costs ($/oz)

–

272

224

Total production costs ($/oz)

–

283

273

Capital expenditure ($ million)

–

Total number of employees

132

187

Employees

Contractors

125

Brazil

AngloGold Ashanti’s operations in Brazil comprise the wholly-owned
AngloGold Ashanti Mineração (formerly Morro Velho) and a 50%
interest in the Mineração Serra Grande mines.

AngloGold Ashanti Mineração
(formerly Morro Velho)

Description: With the closing of the Mina Velha underground mine in
2003 and the Engenho D’Água open-pit in 2004, ore is currently being
sourced from the Cuiabá underground mine, (this ore is treated at the
Queiroz plant) and from the Córrego do Sítio heap-leach mine.

Location: AngloGold Ashanti Mineração has mining rights over 30,698
hectares in the state of Minas Gerais, in south-eastern Brazil. The
AngloGold Ashanti Mineração complex is located in the municipalities
of Nova Lima, Sabará and Santa Bárbara, near the city of Belo
Horizonte.

Geology: The area in which AngloGold Ashanti Mineração is located is
host to historic and current gold mining operations. This is in addition
to producing limestone and iron ore from a number of open-pit
operations, and is known as the Iron Quadrangle. The geology of the

Iron Quadrangle is composed of Proterozoic and Archaean volcano-
sedimentary sequences and Pre-Cambrian granitic complexes.

The host to the gold mineralisation is the volcano-sedimentary Nova Lima
Group (NLG) that occurs at the base of the Rio das Velhas SuperGroup
(RDVS). The upper sequence of the RDVS is the meta-sedimentary
Maquiné Group. Cuiabá mine, located at Sabara Municipality, has gold
mineralisation associated with sulphides and quartz veins in Banded
Ironstone Formation (BIF) and volcanic sequences.

At this mine, structural control and fluids flow ascension are the most
important factors for gold mineralisation with a common association
between large-scale shear zones and their associated structures.
Where BIF is mineralised, such as at AngloGold Ashanti Mineração, the
ore appears strongly stratiform due to the selective sulphidation of the
iron rich layers. Steeply plunging shear zones tend to control the ore
shoots, which commonly plunge parallel to intersections between the
shears and other structures.

Manaus

Operations

1000km

Belem

Crixas

Brasilia

BRAZIL

Recife

Salvador

AngloGold
Ashanti
Mineração

Serra Grande

Sao Paulo

Rio de Janeiro

Review of operations – Australia – Brazil

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Brazil

The controlling mineralisation structures are the apparent intersection of
thrust faults with tight isoclinal folds in a ductile environment. The host
rocks at AngloGold Ashanti Mineração are BIF, Lapa Seca and mafic
volcanics (principally basaltic). Mineralisation is due to the interaction of
low salinity CO

rich fluids with the high-iron BIF, basalts and

carbonaceous graphitic schists. Sulphide mineralisation consists of
pyrrhotite and arsenopyrite with subordinate pyrite and chalcopyrite; the
latter tends to occur as a late stage fracture fill and is not associated with
gold mineralisation. Wallrock alteration is typically carbonate, potassic
and silicic.

Operating performance: Gold production decreased early in the
year following a planned reduction in the ore treated on the closure
of the operations at Mina Velha and the Morro do Galo dump, and a
decline in the heap-leaching operations caused by heavy rains. This
was mitigated by increases in production from the Cuiabá mine,
including ore mined from the development below level 11, and an
increased contribution from Córrego do Sítio mine. Overall gold
production rose by 5% to 240,000 ounces. The average yield for the
year was 7.62g/t, 11% higher than in 2003.

Total cash costs decreased by 6% to $133 per ounce. A higher
sulphuric acid by-product credit (of 70%) and increased gold
production were partially offset by local currency appreciation and
higher inflation. Adjusted operating profit for the year was $45 million,
22% up on the previous year. Capital expenditure rose by 28% to $32
million, spent mainly on ongoing projects, and the Cuiabá expansion
in particular.

Growth prospects: The economic feasibility study for the Cuiabá
expansion project was concluded in December 2004 and approved by
the board in January 2005. The project aims to expand current
production of 830,000 tonnes to 1.3 million tonnes per annum at an
estimated capital cost of $121 million. The project deepens the shaft
from 11 level to 21 level and the additional infrastructure and ore
reserves will increase production from 190,000 ounces to 250,000
ounces per year within two years of the project’s completion to yield
1.86 million ounces in all over the additional six years of life.

The Lamego conceptual study is expected to be concluded in mid-
2005. The drilling campaign and work on the access ramp to the
Carruagem orebody are underway and expected to be completed

during 2006. The pre-feasibility study will begin in 2005 and is
scheduled for completion in late 2006.

Metallurgical testwork began at Córrego do Sítio in 2004 and work also
continued to open the underground orebodies. Drilling is to continue in
2005 as is work to open the drift connecting the Cachorro Bravo and
Carvoaria Velha orebodies, experimental mining, continuation of
metallurgical testwork and the start of the pre-feasibility study which is
expected to be concluded in 2006.

Outlook: Looking to 2005, attributable production is expected to increase
to 245,000 ounces as a result of higher production from the Cuiabá and
Córrego do Sítio mines. Total cash costs are forecast at $125 per ounce.
Capital expenditure is expected to increase to $71 million during 2005,
mainly on the Cuiabá expansion.

AngloGold Ashanti Mineração

2004

2003

2002

Pay limit (oz/t)

0.11

0.09

Pay limit (g/t)

3.85

3.16

3.25

Recovered grade (oz/t)

0.222

0.200

0.196

Recovered grade (g/t)

7.62

6.84

6.71

Gold production (000oz)

240

228

205

Total cash costs ($/oz)

133

141

131

Total production costs ($/oz)

191

199

193

Capital expenditure ($ million)

Total number of employees

2,243

2,236

1,928

Employees

1,222

1,286

1.341

Contractors

1,021

950

587

Serra Grande

Description: The Serra Grande joint venture (50% attributable to
AngloGold Ashanti) is co-owned with Kinross Gold Corporation. In
terms of the Serra Grande joint venture agreement, AngloGold Ashanti
manages the operation and has the right to access a maximum of 50%
of the earnings accrued and dividends paid by Serra Grande. The
operation comprises two underground mines, Mina III and Mina Nova.

Location: Serra Grande controls, or has an interest in, approximately
21,096 hectares in and around the Crixás mining district in the north-
western areas of the Goiás State, in central Brazil. The Serra Grande
operations are located 5 kilometres from the city of Crixás.

Geology: The deposits occur in the Rio Vermelho and Ribeirão das
Antes Formations of the Archaean Pilar de Goia’s Group which together
account for a large proportion of the Crixás Greenstone Belt in central
Brazil. The stratigraphy of the belt is dominated by basics and
ultrabasics in the lower sequences with volcano sedimentary units
forming the upper successions.

The gold deposits are hosted in a sequence of schists, volcanics and
carbonates occurring in a typical greenstone belt structural setting. The
host rocks are of the Pilar de Goiás Group of the Upper Archaean. Gold
mineralisation is associated with massive sulphides and vein quartz
material associated with graphitic and sericitic schists and dolomites.
The oreshoots plunge to the north-west with dips of between 6° and
35°. The stratigraphy is overturned and thrusts towards the east.

The greenstone belt lithologies are surrounded by Archaean tonalitic
gneiss and granodiorite. The metamorphosed sediments are
primarily composed of quartz, chlorite, sericite, graphitic and
garnetiferous schists. The carbonates have been metamorphosed to
ferroan dolomite marble with development of siderite and ankerite
veining in the surrounding wallrock, usually associated with quartz
veining. The basalts are relatively unaltered but do show pronounced
stretching with elongation of pillow structures evident. The
ultrabasics form the western edge of the belt and the basic volcanics
and sediments form the core of the unit. The northern edge of the
belt is in contact with a series of laminated quartzites and quartz
sericite schists of the Lower Proterozoic Araxa Group and a narrow
band of graphitic schists and intermediate to ultrabasic volcanics.
This latter group is known as the Allocthon Mina Dos Ingleses (AMDI)
and is host to a series of garimperos workings north of the town of
Crixás where the talc schists are mined. The general stratigraphy of
this unit is similar to that seen in the main greenstone belt although
at a smaller scale. However, the mineralisation in the northern area
exhibits a higher level of base metal mineralisation with sphalerite
and galena present.

Operating performance: Gold production (50% attributable)
decreased by 1% to 94,000 ounces for the year, a result of the lower
grade ore treated. Total cash costs increased by 23% to $134 per
ounce, owing to inflationary pressures and a strong local currency.

Adjusted operating profit (attributable) was marginally lower at
$18 million. Capital expenditure (attributable) of $4 million was spent
mostly on primary development, conversion of resources to reserves
and mine equipment.

Growth prospects: Exploration work to increase reserves continues at
Serra Grande. During 2004, the drilling of geophysical targets has
added two more years to the life-of-mine.

Outlook: Production at Serra Grande is expected to decrease by 5%
to 89,000 ounces in 2005, owing to lower grades. A total cash cost of
$138 per ounce is forecast. Attributable capital expenditure is expected
to be $6 million.

Serra Grande

2004

2003

2002

Pay limit (oz/t)

0.09

0.08

Pay limit (g/t)

3.17

2.78

2.85

Recovered grade (oz/t)

0.228

0.230

0.229

Recovered grade (g/t)

7.80

7.88

7.84

Gold production (000oz) – 100%

187

190

187

Gold production (000oz) – 50%

Total cash costs ($/oz)

134

109

100

Total production costs ($/oz)

178

163

158

Capital expenditure
($ million) -100%

Capital expenditure
($ million) – 50%

Total number of employees

710

642

630

Employees

514

519

511

Contractors

196

123

119

Ghana

The effective reporting period for the former Ashanti operations is the
eight months from May 2004 to December 2004.

Description: AngloGold Ashanti has three operations in Ghana: the
Obuasi mine (which comprises both surface and underground
operations), the Iduapriem mine (open-pit) and the Bibiani mine (open-
pit with underground development).

Obuasi

Description: Historically, Obuasi has been an underground mine,
although there was large-scale surface mining between 1996 and
2000. The mine normally has two active treatment plants: the sulphide
treatment plant to process underground ore and the tailings treatment
plant to handle tailings reclamation operations. A third plant, the oxide
treatment plant, which is used occasionally to batch treat remnant
open-pit ore and stockpiles, will be shut down at the end of 2006
following completion of oxide open-pit operations.

Location: The Obuasi mine is located in the Ashanti region of Ghana.

Geology: The gold deposits at Obuasi are part of a prominent gold belt
of Proterozoic (Birimian) volcano-sedimentary and igneous formations
which extend for a distance of approximately 300 kilometres in a north-
east south-west trend in south-western Ghana. Obuasi mineralisation is
shear zone related and there are three main structural trends hosting

Review of operations – Brazil – Ghana

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Ghana

gold mineralisation: the Obuasi trend, the Gyabunsu trend and the
Binsere trend. Two main ore types are mined:

•

quartz veins which consist mainly of quartz with free gold in
association with lesser amounts of various metal sulphides such
as iron, zinc, lead and copper. The gold particles are generally fine
grained and occasionally are visible to the naked eye. This ore type
is generally non-refractory; and

•

sulphide ore which is characterised by the inclusion of gold in the
crystal structure of a sulphide material. The gold in these ores is
fine grained and often locked in arsenopyrite. Higher gold grades
tend to be associated with finer grained arsenopyrite crystals.
Other prominent minerals include quartz, chlorite and sericite.
Sulphide ore is generally refractory.

Operating performance: Production at Obuasi was hampered for
most of the year by both insufficient trackless mining equipment and
developed and drilled underground ore reserves. This was exacerbated
by periodic ground instability and rock transfer problems which are
resolved as they occur. New trackless mining equipment was delivered
in September and, along with operator training programmes, is set to
incrementally boost tonnages. Re-organisation of the planning and
technical functions at Obuasi to restore production to planned levels in
2005 took place during the year. The new Mineral Resources
Management department is expected to contribute significantly to the
efficiency of the underground operations and to restoring production to
planned levels during 2005.

In 2004, adequate processing capacity was available to handle
underground ore deliveries and metallurgical recovery was in line with

plan. However, intermittent unplanned mill shut downs and mechanical
failures resulted in fluctuating throughput rates and process control
difficulties. In December, the SAG I mill motor failed and production had
to be redirected to the lower capacity SAG II mill until a new motor was
installed. During this period, throughput at the sulphide treatment plant
was constrained to approximately 4,500 tonnes per day.

The first phase of the process optimisation system control project for
the mill and flotation sections of the plant was successfully completed
in the fourth quarter of 2004. The second phase is expected to be
completed at the end of the first quarter of 2005 and should show
benefits through improved recovery starting in the second quarter.

During the period May to December 2004, gold production from
underground sources was 223,000 ounces, achieved from the
processing of 1,313,000 tonnes with an average yield of 5.27g/t.

Over the same period, gold production from the tailings retreatment
plant amounted to 19,000 ounces recovered from 969,000 tonnes of
material with a yield of 0.60g/t. Following the commissioning of the
Kokoteasua reclamation project in the third quarter of 2004, the yield
declined reflecting the lower grade and recovery expected from this
more recently deposited tailings dam.

Gold production from the oxide treatment plant, which handled a total
of 294,000 tonnes of material during the period under review, was
14,000 ounces from a yield of 1.49g/t.

Total gold production for the eight months May to December 2004 was
255,000 ounces from the processing of 2.6 million tonnes of material at
an average yield of 3.08g/t. Total cash costs of $305 per ounce were
negatively affected by a combination of high fixed costs and the lower-
than-planned levels of gold production.

The adjusted operating loss for the period was $15 million. Capital
expenditure in 2004 amounted to $32 million. The underground mine
was the major area of capital expenditure, specifically on mining
equipment, the BSVS shaft, primary development and exploration.
Other significant areas of capital expenditure included smaller
engineering and processing projects such as equipment replacement
and the mill processing optimisation system control project.

Obuasi

*2004

Pay limit (oz/t)

0.188

Pay limit (g/t)

6.43

Recovered grade (oz/t)

0.090

Recovered grade (g/t)

3.08

Gold production (000oz)

255

Total cash costs ($/oz)

305

Total production costs ($/oz)

426

Capital expenditure ($ million)

Total number of employees

6,747

Employees

6,029

Contractors

718

* For the eight months from May 2004.

Operations

300km

Sekondi
Takoradi

Accra

Kumasi

Tarkwa

Bibiani

Obuasi

Iduapriem

Teberebie

Tamale

Bolgatanga

GHANA

Lake
Volta

Growth prospects: A key aspect of the rationale for the business
combination between AngloGold and Ashanti is the development of the
deep-level ore deposits at the Obuasi mine currently referred to as Obuasi
Deeps. This development could potentially extend the life-of- mine to well
beyond 2040. However, this requires an investment of $44 million over the
next five years on further exploration and the necessary feasibility studies.
Depending upon the results, the full development of Obuasi Deeps may
proceed at the end of this five-year period but could take several years to
complete. Initial scoping studies have indicated that the development of
Obuasi Deeps will require an estimated capital expenditure of $570 million
in real terms over the anticipated life-of-mine.

Outlook: During 2005, AngloGold Ashanti will continue to work
towards improving the mine’s gold production to an annualised rate of
500,000 ounces and targeted total cash costs of around $253 per
ounce. Capital expenditure is expected to be $71 million.

Bibiani

Description: The Bibiani mine was restarted in 1998 as an open-pit mine
with a CIL plant. The mine had previously operated between 1903 and
1968 as an underground operation with minor surface quarrying
activities. In addition to the open-pit ores, resources at Bibiani include old
tailings dumps and underground mineral potential which is presently
being explored and evaluated.

Location: Bibiani is located in the Western Region of Ghana,
90 kilometres west of Kumasi.

Geology: The Bibiani gold deposit lies within Birimian metasediments
and related rocks which occur in the Proterozoic Sefwi Belt of southern
Ghana. Gold and gold-bearing sulphide mineralisation occurs in quartz-
filled shear zones and in altered rocks adjacent to those shears. The full
strike of the Bibiani structure is at least 4 kilometres. For metallurgical
classification there are three main ore types at Bibiani: primary, transition
and oxide. Further lithological classification gives four ore types: quartz
(generally high grade), stockwork (medium-high grade), phyllites and
porphyry (both low grade).

Operating performance: A highwall failure in the northern portion of
the main pit at Bibiani in November 2003, followed by the failure of the
south pit wall adjacent to the entrance of the underground portal in
October 2004, impacted negatively on gold production in 2004.
These failures resulted in the covering of ore in both sections of the
pit. The south wall slip temporarily restricted access to the
underground workings and the bottom of the main pit while the area
was being backfilled to buttress the failure zone. Towards the end of
the year, mining recommenced in the central portion of the pit but was
again suspended for safety reasons in mid-January 2005 as the
stability of the access ramp to the base of the pit had deteriorated.
Plans to ultimately recover the approximately 40,000 ounces sterilised
by the north slip by way of either a major north-west wall cut back or
by mining as part of the underground project, for which exploration
and feasibility study work are being evaluated.

In 2004, the geotechnical problems in the main pit resulted in the
unplanned processing of stockpile material that was both lower in grade
and metallurgically more complex. This combined with mechanical
problems on the milling and crushing circuit contributed to lower than
expected gold production.

As a result, a total of 105,000 ounces were produced from the
processing of 1,683,000 tonnes of material yielding 1.93g/t.

A new flash flotation and re-grind mill circuit commissioned in the first half
of the year to treat refractory ore had a positive impact on gold recoveries,
particularly the metallurgically more difficult stockpile material.

Exploratory drilling was undertaken on both the northern and
southern extremities of the Main pit whilst the main ramp was
developed down to 9 level and crosscuts established into the old
workings on the 6, 7, 8 and 9 levels in the Central section of the mine.
The old workings are presently being evaluated geologically and
geotechnically by a team of engineers and geologists and this
information combined with exploratory diamond drilling results is
being used in the preparation of a fully costed underground
production plan. A decision on the underground project is expected
to be made before the end of the third quarter of 2005.

The average total cash cost was $251 per ounce, while the adjusted
operating loss was $2 million. Capital expenditure was $7 million, mainly
on exploration and development work associated with the underground
project.

Growth prospects: Underground mine development and exploration
continues. The focus is on the immediate rehabilitation and geological
evaluation of the old workings and the exploration and subsequent
development of new mineralisation forming virgin ore blocks both to the
south and north of the main pit. Old tailings reclamation re-commenced
in December 2004 and is expected to deliver 4.7 million tonnes, at an
anticipated recovery grade of 0.60g/t over a period of three years.

Outlook: Gold production is expected to decrease to 101,000 ounces
in 2005, at a total cash cost of some $278 per ounce. Capital
expenditure, principally on exploration and underground development,
is expected to rise to $15 million subject to the successful outcome of
the feasibility study. In 2005, the smaller satellite pits will be mined out
and the processing plant will be fed with a mix of this ore, use of mine
stockpile material and old tailings.

Bibiani

*2004

Pay limit (oz/t)

0.020

Pay limit (g/t)

0.70

Recovered grade (oz/t)

0.056

Recovered grade (g/t)

1.93

Gold production (000oz)

105

Total cash costs ($/oz)

251

Total production costs ($/oz)

369

Capital expenditure ($ million)

Total number of employees

871

Employees

479

Contractors

392

* For the eight months from May 2004.

Review of operations – Ghana

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Ghana

Iduapriem

Description: AngloGold Ashanti has an 80% interest in the Iduapriem
gold mine, with the balance of 20% owned by the International Finance
Corporation. In June 2000, Ashanti acquired a 90% interest in the
Teberebie gold mine, which is adjacent to Iduapriem. The government
of Ghana has a 10% interest in Teberebie. The combined AngloGold
Ashanti interest is 85%. The Iduapriem and Teberebie properties are
adjacent to each other and are part of the Tarkwaian gold fields.

Location: Iduapriem mine is located in the Western Region of Ghana,
some 70 kilometres north of the coastal city of Takoradi, and
10 kilometres south-west of Tarkwa.

Geology: The Iduapriem and Teberebie gold mines are located along
the southern end of the Tarkwa basin. The mineralisation is contained
in the Banket Series of rocks within the Tarkwaian System of
Proterozoic age. The outcropping Banket Series of rocks in the mine
area form prominent, arcuate ridges extending southwards from
Tarkwa, westwards through Iduapriem and northwards towards
Teberebie.

Operating performance: Attributable gold production for the eight
months in which Iduapriem was part of AngloGold Ashanti was
125,000 ounces from both the CIP and heap-leach processing
facilities. Following the expansion of the CIP plant, which involved the
installation of an additional mill and an upgrade of downstream
processing circuits, throughput was affected by persistent mill and
crusher circuit engineering related problems throughout the year. Poor
grinding, cyclone and agitator performance caused high levels of leach
tank silting and reduced residence time, and resulted in recovery being
90.6% rather than the planned 94.5%.

Higher than expected maintenance costs were incurred on the crushing
and milling circuits as a result of abnormal component replacement and
spares and consumables consumption patterns and this, combined
with the impact of lower gold production, impacted on the cost per
ounce performance.

Between May and December 2004, CIP gold production was
121,000 ounces from the processing of 2,181,000 tonnes of ore yielding
1.72 g/t.

To help resolve these issues changes were made to the crushing and
milling circuits during the year to optimise the plant in its present
hardware configuration. In addition, with the installation of a trash
screen to reduce volumetric constraints in the CIL circuit, a fourth leach
tank was constructed to improve residence time and recovery.
However, the overall impact was an increase in the cost per tonne and
this in-turn impacted negatively on pit optimisation and ore reserves.

A mine-to-mill study is presently being undertaken to determine the
optimum performance of the existing plant and to examine other
options to reduce operating cost per tonne to levels that would allow

open-pit reserves to be increased and to enhance the NPV of these
deposits.

Following an economic evaluation which indicated that due to low
recoveries, the ores which were being heap-leached would be more
economically treated through the CIP plant, the crushing and stacking
of heap-leach ore was suspended in May 2004. For the period May to
December 2004, gold production was 3,000 ounces from the
9,000 tonnes stacked and the wash out of the pads.

Total cash costs at $303 per ounce were higher than planned, a result
of decreased production and high crushing and processing costs.
The adjusted operating loss was $5 million. Attributable capital
expenditure was $3 million, and was spent mainly on retro fitting work
on the CIP plant.

Growth prospects: In 2005, re-engineering studies principally
focused on the crushing and CIP plants, but covering the entire
business, will be undertaken with a view to reducing the cost per
tonne and increasing the number of ounces in the ore reserve and the
NPV of the properties.

A scoping study will also be undertaken to evaluate the economics of
exploiting the considerable low grade mineral resources of the GAG
and TGL properties which lie in the Tarkwain conglomerates extending
below the economic limit of the open-pits.

Outlook: Attributable gold production is expected to reach 206,000
ounces in 2005, at a total cash cost of $261 per ounce. Capital
expenditure of $21 million will principally be applied to increasing
throughput at the CIP plant.

Iduapriem

*2004

Pay limit (oz/t)

0.022

Pay limit (g/t)

0.76

Recovered grade (oz/t)

0.051

Recovered grade (g/t)

1.76

Gold production (000oz) – 100%

147

Gold production (000oz) – 85%

125

Total cash costs ($/oz)

303

Total production costs ($/oz)

423

Capital expenditure ($ million ) – 100%

Capital expenditure ($ million) – 85%

Total number of employees

1,306

Employees

709

Contractors

597

* For the eight months from May 2004.

Guinea

The effective reporting period for the former Ashanti operations is the
eight months from May 2004 to December 2004.

Siguiri

Description: AngloGold Ashanti has an 85% interest in the Siguiri mine
which is an open-pit operation. The balance of 15% is held by the
government of Guinea.

Location: The Siguiri gold mine is located in the Siguiri District in the
north-east of the Republic of Guinea, West Africa, approximately
850 kilometres from the capital city of Conakry. The nearest important
town is Siguiri (approximately 50,000 inhabitants), located on the banks
of the Niger River.

Geology: This concession is dominated by Proterozoic Birimian rocks
which consist of turbidite facies sedimentary sequences. Two main types
of gold deposits occur in the Siguiri basin and are mined. These are:
laterite or CAP mineralisation which occurs as aprons of colluvial or as
palaeochannels of alluvial lateritic gravel adjacent to, and immediately
above, in-situ mineralisation quartz-vein related mineralisation hosted in
meta-sediments with the better mineralisation associated with vein
stockworks that occur preferentially in the coarser, brittle siltstones and
sandstones. The mineralised rocks have been deeply weathered to over
100 metres in places to form saprolite or SAP mineralisation. The CAP
and SAP ore types were blended and processed using the heap-leach
method. The percentage of available CAP ore has decreased and the
new CIP plant will treat predominantly SAP ore.

Operating performance: Government embargoes on the sale of gold
and the import of fuel implemented during the second quarter of the
year had a significant impact on production. The embargoes were
subsequently lifted and discussions with government relating to certain
disputed claims and the renegotiation of the Convention de Base
continue. This was followed by an unexpected shortage of cement
supplies in the third quarter which resulted in reduced crushing and
stacking operations. Attributable gold production for the period
amounted to 83,000 ounces, at an average yield of 1.10g/t.

Good progress was made with the construction of the CIP plant, with
commissioning planned for the first quarter of 2005.

Total cash costs of $443 per ounce reflected the decreased production,
as well as increased transportation and power costs, a result of higher
fuel prices. Attributable adjusted operating loss was $14 million for the
period, while attributable capital expenditure rose to $48 million, largely
on the Siguiri CIP plant.

Growth prospects: The CIP project will transform Siguiri mine, from a
heap-leach only operation, constrained by limited economically
treatable mineral resources, to a property capable of economically
exploiting the saprolitic ores that extend below the base of the existing
pits and still have considerable exploration potential proximal to the
existing mine infrastructure.

Outlook: Attributable gold production in 2005 will be in the region of
264,000 ounces, at a total cash costs of $291 per ounce. Capital
expenditure is expected to be $10 million and will be spent on
completion of the CIP project and exploration of the concessions.

Siguiri

*2004

Pay limit (oz/t)

0.017

Pay limit (g/t)

0.59

Recovered grade (oz/t)

0.032

Recovered grade (g/t)

1.10

Gold production (000oz) – 100%

Gold production (000oz) – 85%

Total cash costs ($/oz)

443

Total production costs ($/oz)

534

Capital expenditure
($ million) – 100%

Capital expenditure
($ million) – 85%

Total number of employees

2,606

Employees

1,194

Contractors

1,412

* For the eight months from May 2004.

Mali

AngloGold Ashanti has three operations in the west African country of
Mali in partnership with other parties. These operations are Sadiola,
Yatela and Morila, which are all managed by AngloGold Ashanti.

Sadiola

Description: AngloGold Ashanti has a 38% interest in, and manages,
the Sadiola mine within the Sadiola exploitation area in western Mali.
The joint venture partners are IAMGOLD, a Canadian listed company
(38%), the government of Mali (18%), and the International Finance
Corporation (IFC) (6%).

Review of operations – Guinea – Mali

GUINEA

Siguiri

Labe

Dabola

Kankan

Conakry

200km

Operations

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Mali

Location: The mine is situated 77 kilometres south of Kayes, the
regional capital.

Geology: The Sadiola deposit occurs within an inlier of greenschist
facies metamorphosed Birimian rocks known as the Kenieba Window.
The specific rocks which host the mineralisation are marbles and
greywackes which have been intensely weathered to a maximum depth
of 200 metres. A series of north-south trending faults occur which are
the feeders to the Sadiola mineralisation. As a result of an east-west
regional compression event, deformation occurs along a north-south
striking marble-greywacke contact, increasing the porosity of this zone.
North-east striking structures which intersect the north-south contact,
have introduced mineralisation, mainly with the marble where the
porosity was greatest.

The Sadiola Hill deposit generally consists of two zones, an upper
oxidised cap and an underlying sulphide zone. From 1996 until 2002,
shallow, saprolite oxide ore from the Sadiola Hill pit was the primary ore
source. Since 2002, the deeper saprolitic sulphide ore has been mined
and in future will progressively replace the depleting oxide reserves.

Operating performance:

Production increased by 1% to

174,000 ounces as milled tonnages increased by 2% given a 3.6%
increase in overall milling utilisation. Total cash costs increased by 15%
to $242 per ounce, as production levels were undermined by higher
operating costs. Operating costs were adversely affected by the
weaker dollar, higher diesel prices and high reagent costs associated
with the increased treatment of sulphide ore and the more stringent
detoxification standards.

Attributable adjusted operating profit of $16 million was 2% lower with
increased production and a higher gold price being offset by the higher
operating cost. Capital expenditure for the year rose by 50% to
$6 million, mainly on exploration, residue pipeline and plant
modifications to improve the detoxification capacity.

Growth prospects: A generative study has identified potential oxide
targets on the Sadiola property, which will be investigated in 2005. Infill
drilling of the Deep Sulphide project located below the existing Sadiola
pit is now complete and modelling is ongoing. Conversion drilling of
inferred resources on the FE3 South deposit is now complete and
modelling of the orebody is under way.

Sadiola

2004

2003

2002

Pay limit (oz/t)

0.06

0.05

Pay limit (g/t)

1.76

1.68

1.71

Recovered grade (oz/t)

0.081

0.086

Recovered grade g/t

2.77

2.96

Gold production (000oz) 100%

459

452

480

Gold production (000oz) 38%

174

172

182

Total cash costs ($/oz)

242

210

163

Total production costs ($/oz)

301

275

241

Capital expenditure
($ million) 100%

Capital expenditure
($ million) 38%

Total number of employees

1,159

1,041

853

Employees

550

492

399

Contractors

609

549

454

500km

Sadiola

Yatela

Morila

Nioro

Kayes

Bamako

Segou

Tombouctou

Gao

MALI

Sikasso

Operations

Outlook: Attributable production at Sadiola is expected to decrease by 2%
to 170,000 ounces during 2005, at a total cash cost of about $260 per
ounce. Attributable capital expenditure is expected to be $13 million, an
increase of 113% on 2004. The main components of capital expenditure are
cyanide recovery and plant modifications, exploration, grid power and
mining infrastructure.

Yatela

Description: The Yatela mine is owned by Société d’Exploitation des
Mines d’Or de Yatela S.A., in which AngloGold Ashanti and IAMGOLD
each hold an effective 40% interest, with the government of Mali
holding 20%.

Location: Yatela is located some 25 kilometres north of Sadiola and
approximately 50 kilometres south-south-west of the town of Kayes,
the regional capital.

Geology: Yatela mineralisation occurs as a keel-shaped body in
Birimian metacarbonates. The keel is centred on a fault which was the
feeder for the original mesothermal mineralisation, with an associated
weakly mineralised diorite intrusion. Mineralisation occurs as a layer
along the flanks and in the bottom of the keel. The ore dips almost
vertically on the west limb and more gently towards the west on the
east limb, with tight closure to the south.

Operating performance: Gold production at Yatela (40% attributable)
rose by 11% to 97,000 ounces during the year, largely owing to an
increase of 11% in the tonnage stacked. The increased tonnage was
due to a 10% increase in overall utilisation of the treatment section.
Total cash costs at $255 per ounce were 9% higher than the previous
year, a result of the weaker dollar, as well as increased fuel prices.

Adjusted operating profit increased to $8 million, up 167% on the
previous year. Capital expenditure, at $3 million, declined by 50% year-
on-year: expenditure was primarily on the construction of leach pads
and payment of historical duties on fixed assets as the exoneration
period on import duties came to an end.

Growth prospects: An investigation into the potential for sulphide ore
below the existing Alamoutala deposit is ongoing.

Outlook: In 2005, Yatela is expected to produce 107,000 ounces, an
increase of 10%, at a total cash cost of $261 per ounce. Capital
expenditure attributable to AngloGold Ashanti is expected to remain
constant at $3 million, largely for leach pad construction.

Yatela

2004

2003

2002

Pay limit (oz/t)

0.06

0.07

Pay limit (g/t)

1.96

2.04

2.09

Stacked grade g/t

3.41

2.84

3.60

Stacked grade (oz/t)

0.099

0.083

0.105

Gold production (000oz) 100%

242

218

269

Gold production (000oz) 40%

107

Total cash costs ($/oz)

255

235

175

Total production costs ($/oz)

323

334

221

Capital expenditure
($ million) (100%)

Capital expenditure
($ million) (40%)

Total number of employees

1,033

926

755

Employees

208

190

157

Contractors

825

736

598

Morila

Description: AngloGold Ashanti and Randgold Resources Limited
each hold a 40% interest in the Morila Joint Venture, with the other 20%
held by the Malian government. Under the joint venture agreement,
AngloGold Ashanti is the operator of the mine.

Location: This mine is situated some 180 kilometres by road, south-east
of Bamako, the capital city of Mali (600 kilometres south-east of Sadiola).

Geology: Morila is a mesothermal flat lying shear-zone hosted deposit,
apart from steepening to the east against steep faulting. The deposit
lies within a sequence Birimian metal-arkoses of amphibolite
metamorphic grade. Mineralisation is characterised by silica-feldspar
alteration and sulphide mineralisation consists of arsenopyrite,
pyrrhotite, pyrite and chalocopyrite.

Review of operations – Mali

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Mali – Namibia

Operating performance: Tonnage milled initially fell short of budget
during the year. This was coupled with a decline in recovered grade as
lower grade mining blocks were encountered on the periphery of the
pit. Grades recovered towards year-end as mining moved into higher
grade zones in Pit 3. The new plant expansion project, which began
commissioning in March, provided further constraints resulting in
reduced levels of throughput and lower-than-planned recoveries. A
technical plan to address these issues was implemented, with
performance levels returning to those expected in the fourth quarter.
This was negated to some degree by the SAG mill gearbox
replacement which took 10 days to complete in August. The new
milling circuit reached its expansion design of 350,000tpm by mid-year.
Another setback in June was the industrial action experienced –
resulting in further loss of production – on the issue of a productivity
bonus relating to exceptionally high grades encountered at Morila in
2002. The tense industrial relations climate was resolved with a
settlement reached in November.

Total gold production for the year (40% attributable) reduced by 36% to
204,000 ounces, with the average yield falling to 4.44g/t. Total cash
costs rose to $184 per ounce as a result of lower recovered grades,
higher fuel prices and a weaker dollar.

Consequently, adjusted operating profit decreased by 53% to
$25 million. Capital expenditure for the year amounted to $2 million and
included the purchase of a crane, a drill rig and community
development projects.

Growth prospects: Exploration drilling of the Samacline area located
west of the Morila pit will continue in 2005, following up on the
encouraging drill results returned in 2004.

Outlook: In 2005, gold production is expected to increase to
258,000 ounces, at a total cash cost of $173 per ounce. Capital
expenditure will decline to $2 million.

Morila

2004

2003

2002

Pay limit (oz/t)

0.09

0.06

0.08

Pay limit (g/t)

2.81

2.14

2.46

Recovered grade (oz/t)

0.130

0.221

0.349

Recovered grade (g/t)

4.44

7.56

11.96

Gold production (000oz) 100%

510

794

1,052

Gold production (000oz) 40%

204

318

421

Total cash costs ($/oz)

184

108

Total production costs ($/oz)

263

179

142

Capital expenditure
($ million) 100%

Capital expenditure
($ million) 40%

Total number of employees

1,398

1,327

1,169

Employees

479

453

442

Contractors

919

874

727

Namibia

Navachab

Description: AngloGold Ashanti owns 100% of the Navachab open-
pit gold mine.

Location: Navachab is located near Karibib in Namibia, on the
southern west coast of Africa.

Geology: The Navachab deposit is hosted by Damaran greenschist-
amphibolite facies, calc-silicates, marbles and volcanoclastics. The
rocks have been intruded by granites, pegmatites and (quartz-porphyry
dykes) aplite and have also been deformed into a series of alternating

dome and basin structures. The mineralised zone forms a sheet-like
body which plunges at an angle of approximately 20° to the north-west.
The mineralisation is predominantly hosted in a sheeted vein set (±60%)
and a replacement skarn body (±40%).

The gold is very fine-grained and associated with pyrrhotite, and minor
to trace amounts of pyrite, chalcopyrite, maldonite and bismuthinite.
Approximately 80% of the gold is free milling.

Operating performance: Milled tonnages and recovered grade
dropped in the first half of the year as no ore was mined while the
operation made the transition to owner-mining, although stockpiles
were treated during this period. Tonnage throughput increased in the
second half of the year and ended 1% down on 2003 despite an
unscheduled shutdown for crusher repairs. Gold production for the
year amounted to 67,000 ounces, down by 8% on 2003, while the yield
fell by 9% to 1.59g/t.

Total cash costs, at $348 per ounce, were 27% higher than the
previous year, largely due to the weaker dollar, higher diesel prices and
lower grades. Good progress was made in improving volumes, grades
and efficiencies in the second half of the year. Adjusted operating profit
declined to $1 million. Capital expenditure of $21 million was
significantly higher than the previous year owing to the transition to
owner-mining.

Growth prospects: In the short term, mining of shallow ore adjacent
to the EZ3 pit will enhance growth, in the longer term a potential pit
expansion to fetch footwall mineralisation is being considered. Several
brownfields prospects are located within a trucking distance to the pit
and are currently under investigation.

Outlook: Gold production is expected to rise to 80,000 ounces in
2005, at a total cash cost of $277 per ounce. Capital expenditure
should decline by 96% to $1 million.

Navachab

2004

2003

2002

Pay limit (oz/t)

0.05

0.04

0.03

Pay limit (g/t)

1.46

1.38

1.02

Recovered grade (oz/t)

0.046

0.051

0.056

Recovered grade (g/t)

1.59

1.75

1.93

Gold production (000oz)

Total cash costs ($/oz)

348

274

147

Total production costs ($/oz)

389

296

162

Capital expenditure

($ million)

Total number of employees

251*

389

353

Employees

251

180

171

Contractors

–

209

182

* No mining labour, contract or otherwise, was on site during the first half

of 2004.

Review of operations – Namibia

300km

Okahandja

Navachab

Tsumeb

Windhoek

Walvis Bay

Luderitz

Keetmanshoop

Operations

Karibib

NAMIBIA

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – Tanzania

Tanzania

Geita

Description: Prior to April 2004, Geita was managed under the joint
venture agreement between Ashanti and AngloGold. Since the business
combination between the two companies, Geita is now a wholly-owned
subsidiary. Geita is a multi-pit operation, with a 6 million tpa CIL plant.

Location: The Geita mine is located 80 kilometres south-west of the
town of Mwanza.

Geology: Geita is an Archaean mesothermal mainly BIF-hosted deposit.
Mineralisation is located where auriferous fluids, which are interpreted to
have moved along shears often on BIF-diorite contacts, reacted with the
BIF. Some lower-grade mineralisation can occur in the diorite as well
(usually in association with BIF-hosted mineralisation), and approximately
20% of the gold is hosted in the diorite.

Operating performance: At Geita, attributable production increased by
72% to 570,000 ounces, largely as a result of the acquisition of the
remaining 50% of Geita on 26 April 2004. A year-on-year comparison of

Geita on a 100% basis shows an increase in gold production of 5% to
692,000 ounces as a result of a 4% increase in recovered grade
to 3.74g/t. Total cash costs increased by 37% to $250 per ounce due to
significant increases in mining contractor and diesel costs. Adjusted
operating profit fell by 32% to $23 million. Capital expenditure of
$13 million for the year was spent mainly on brownfields exploration,
sterilisation drilling, dewatering projects and plant improvements.

Growth prospects: Exploration from 2005 will focus on the identification
and generation of resources to the inferred category, from largely regional
targets developed in 2004. The life-of-mine production schedule will
dictate as and when these inferred resources are converted into reserves.
The underground potential of the Geita Trend will be investigated once
the optimisation of the open-pit/underground interface has been
completed.

Outlook: Gold production is set to decrease by 10% in 2005 to
628,000 ounces, at a total cash cost of $253 per ounce. Capital
expenditure should increase by 107% to $29 million, with the main capital
expenditure items being exploration, the purchase of an ore haulage fleet
and tailings dam upgrades. The feasibility of owner-mining will be
examined during 2005.

Geita

2004

2003

2002

Pay limit (oz/t)

0.09

0.06

0.07

Pay limit (g/t)

2.81

2.16

2.13

Recovered grade (oz/t)

0.109

0.105

0.106

Recovered grade (g/t)

3.74

3.60

3.62

Gold production (000oz) – 100%

692

661

579

Gold production (000oz) – 100%
attributable from May 2004

570

331

290

Total cash costs ($/oz)

250

183

175

Total production costs ($/oz)

328

223

228

Capital expenditure ($ million) 100%

Capital expenditure ($ million) 100%
attributable from May 2004

Total number of employees

2,256

2,080

1,737

Employees

661

643

580

Contractors

1,595

1,437

1,157

TANZANIA

Geita

Dar-es-Salaam

Operations

Lake
Nyasa

800km

Lake

Tanganyika

Lake

Victoria

Dodoma

Tanga

Arusha

Tabora

Kigoma

Mwanza

United States of America

AngloGold Ashanti’s gold assets in the USA comprise the wholly-
owned AngloGold Ashanti (Colorado) Corp., which holds a 67%
interest in the Cripple Creek & Victor Gold Mining Company (CC&V)
in Colorado with a 100% interest in gold produced. AngloGold
Ashanti’s stake in the Jerritt Canyon Joint Venture was sold to
Queenstake Resources USA Inc. with effect from 30 June 2003.
AngloGold Ashanti owns 100% of Big Springs in Nevada, which is
currently in the final stages of reclamation and closure.

Cripple Creek & Victor

Description: AngloGold Ashanti holds 67% of CC&V, with the
remaining 33% held by Golden Cycle Gold Corporation (Golden
Cycle). AngloGold Ashanti is the manager of the operation and is
entitled to receive 100% of the cash flow from the operation until
loans extended to the joint venture are repaid. CC&V is a low-cost,
low-grade open-pit operation.

Location: CC&V is located south-west of Colorado Springs in the state
of Colorado in the USA.

Geology: The Cripple Creek District is centred on a Tertiary-aged
diatreme-intrusive complex, approximately circular in shape covering
18.4km

, surrounded by older Precambrian rocks. The Precambrian

rocks consist of biotite gneiss and granodiorite which occur within a
larger quartz monzonite intrusion which is in turn intruded by granite.
The intersection of these four units and major faults formed an area
of weakness which subsequently facilitated the formation of the
Tertiary complex. The Tertiary intrusives range from syenite to
phonolite/ phonotephrite to lamprophyre. Fault structures are
generally near vertical and strike north-north-west to north-east.
These structures are commonly intruded by phonolite dykes and
appear to have acted as primary conduits for the mineralising
solutions. The north-east structures are more subtle, but appear to
control the locations of higher-grade pods of mineralisation which
occur at their intersection with the north-north-west system. High-
grade gold mineralisation is primarily associated with potassic and
pyritic alteration and occurs adjacent to the major structural zones.
The broader zones of disseminated mineralisation occur primarily as
halos around the stronger alteration in permeable wall rocks. The

average depth of oxidation is 120 metres and is best developed along
major structural zones. Individual orebodies can be tabular, irregular or
massive. Individual gold particles are generally less than 20 microns in
size and occur as native gold with pyrite or hydrous iron and
manganese oxides and as gold-silver tellurides, often in quartz-fluorite
veins. Silver is present but is economically unimportant.

Operating performance: Production increased by 16% to
329,000 ounces due to improved mine and crusher performance,
which resulted in more ounces placed and improved leach pad
performance. The mine and crusher reached and exceeded design
capacity during the year. This was despite the fact that the gyratory
crusher lost 10 operating days in December for major repairs.

Total cash costs rose to $220 per ounce, due to higher fuel and mine
maintenance (hydraulic shovel and haul truck) costs. Phase 4C of the
leach pad construction was completed in the fourth quarter of 2004,
bringing to conclusion the expansion project. Adjusted operating
profit at $7 million was 13% lower than the previous year, while
capital expenditure at $16 million fell by 33% when compared to the
previous year.

Growth prospects: The recently completed expansion project has
increased average annual gold production by 40% and extended the
life-of-mine from 2008 to at least 2013, thereby yielding an additional
2.8 million ounces of production over the life-of-mine.

Los

Angeles

Operations

Sold and/or
closed operations

San
Francisco

Washington

Chicago

Jerritt Canyon

Cripple Creek
& Victor

Big Springs

UNITED STATES OF AMERICA

1000km

New York

Denver

Colorado

Nevada

Review of operations – USA

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Review of operations – USA – Zimbabwe

Outlook: Gold production in 2005 is forecast to mirror 2004 levels at
about 330,000 ounces, at expected average total cash costs of $219 per
ounce. Decreased levels of capital expenditure are planned at $10 million
for 2005.

CC&V

2004

2003

2002

Pay limit (oz/t)

0.01

Pay limit (g/t)

0.34

Recovered grade (oz/t)

0.018

0.020

0.024

Recovered grade (g/t)

0.61

0.67

0.82

Gold production (000oz)

329

283

225

Total cash costs ($/oz)

220

199

187

Total production costs ($/oz)

300

310

306

Capital expenditure ($ million)

Total number of employees

387

447

572

Employees

313

326

314

Contractors

121

258

Jerritt Canyon

Description: AngloGold Ashanti (Nevada) Corp, formerly known as
AngloGold (Jerritt Canyon) Corp., and its partner Meridian Gold, sold its
stake in the Jerritt Canyon operation to Queenstake Resources with
effect from 30 June 2003. Under this agreement, Queenstake paid the
Jerritt Canyon Joint Venture partners $1.5 million in cash and 32 million
shares issued by a subsidiary, Queenstake Resources Limited, with
$6 million in deferred payments and $4 million in future royalties.
Queenstake accepted full closure and rehabilitation and other liabilities.
Ore production was drawn from four underground mines, Murray, SSX,
Smith and MCE.

Jerritt Canyon

*2003

2002

Pay limit (oz/t)

0.22

Pay limit (g/t)

7.55

Recovered grade (oz/t)

0.209

0.231

Recovered grade (g/t)

7.15

7.91

Gold production (000oz) 100%

153

338

Gold production (000oz) 70%

107

237

Total cash costs ($/oz)

270

249

Total production costs ($/oz)

366

348

Capital expenditure ($ million) 100%

Capital expenditure ($ million) 70%

Total number of employees

295

297

Employees

291

Contractors

* To 30 June 2003

In 2004, Queenstake approached the Jerritt Canyon joint venture partners
about the possibility of monetising all or the majority of the $6 million in
deferred payments and $4 million in future royalty payments. On 25
August 2004 and based on an agreement reached between the parties,
AngloGold Ashanti was paid approximately $7 million for its portion of the
deferred payments and future royalties, thereby monetising all outstanding
obligations, except for minor potential royalties interest that AngloGold
Ashanti retained.

Location: The Jerritt Canyon district is located in the north central
Independence Mountains, north-west of Elko, Nevada in the USA.

Operating performance and outlook: The operation was sold with
effect from 30 June 2003.

Zimbabwe

For the purposes of reporting, the effective period for Freda-Rebecca,
a former Ashanti operation, begins in May 2004. The mine was,
however, sold (see below) and is thus reported on for only four months.

Freda-Rebecca

Description: AngloGold Ashanti had a 100% interest in the Freda-
Rebecca underground mine, which it sold to South Africa-based
Mwana Africa Holdings for a consideration of $2 million with effect from
1 September 2004.

Location: The mine is located at Bindura, north of Harare, in Zimbabwe.

Operating performance: Gold production for the period was
9,000 ounces, at a total cash cost of $417 per ounce. Mining
operations were severely hampered by the unavailability of trackless
mining equipment and material resources. The operating loss for the
year amounted to $1 million, while capital expenditure was $1 million.

Freda-Rebecca

*2004

Pay limit (oz/t)

Pay limit (g/t)

Recovered grade (oz/t)

0.048

Recovered grade (g/t)

1.66

Gold production (000oz)

Total cash costs ($/oz)

417

Total production costs ($/oz)

589

Capital expenditure ($ million)

Total number of employees

745

Employees

687

Contractors

* For the four months from May 2004 to August 2004.

Outlook: The mine was sold with effect from 1 September 2004.

Sold and/or
closed operations

Bulawayo

ZIMBABWE

Lake

Kariba

Freda-Rebecca

Bindura

Harare

200km

Review of operations – Summary

Attributable Attributable

Attributable

Average

Attributable

adjusted cash

tonnes

grade

gold

Total cash

operating

treated/

recovered

production

costs

profit (loss)

milled (Mt)

(g/t)

(000oz)

($/oz)

(1)

($m)

(2)

2004

2003

2004

2003

2004

2003

2004

2003

2004

2003

2004

2003

South Africa

Vaal River
Great Noligwa

2.4

10.38

10.57

795

812

231

193

118

121

134

131

Kopanang

2.0

2.2

7.37

7.07

486

497

281

223

Tau Lekoa

2.4

3.87

4.24

293

322

370

263

(6)

Moab Khotsong

(3)

–

Ergo

28.7

30.9

0.24

0.20

222

203

389

349

(7)

(3)

(7)

(3)

West Wits
Mponeng

1.7

8.14

8.96

438

499

322

221

Savuka

0.8

1.0

6.19

5.81

158

187

455

411

(18)

(21)

(10)

(20)

TauTona

1.6

1.7

10.88

12.09

568

646

245

171

100

107

Argentina

Cerro Vanguardia (92.5%)

0.9

7.60

7.15

211

209

156

143

Australia

Sunrise Dam

3.7

3.6

3.46

3.12

410

358

260

228

Union Reefs

(4)

–

2.0

–

1.12

–

272

–

Brazil

AngloGold Ashanti Mineração

(5)

1.0

1.1

7.85

7.22

240

228

133

141

Serra Grande (50%)

0.4

7.80

7.88

134

109

Ghana

Bibiani

(6) (8)

1.7

–

1.93

–

105

–

251

–

(2)

–

Iduapriem (85%)

(6) (8)

2.2

–

1.72

–

125

–

303

–

(5)

–

Obuasi

(8) (11)

2.6

–

5.27

–

255

–

305

–

(15)

–

Guinea

Siguiri (85%)

(7) (8)

2.6

–

1.10

–

443

–

(14)

–

(13)

–

Mali

Morila (40%)

1.4

1.3

4.44

7.56

204

318

184

108

Sadiola (38%)

2.0

1.9

2.77

174

172

242

210

Yatela (40%)

(7)

1.1

1.0

3.41

2.84

255

235

Namibia

Navachab

1.3

1.59

1.75

348

274

Tanzania

Geita

(12)

4.8

2.9

3.74

3.60

570

331

250

183

USA

Cripple Creek & Victor

(7)

18.2

17.1

0.61

0.67

329

283

220

199

Jerritt Canyon (70%)

(9)

–

0.5

–

7.15

–

107

–

270

–

(5)

–

Zimbabwe

Freda-Rebecca

(8) (10)

0.1

–

1.66

–

417

–

(1)

–

(1)

2003 restated to reflect the change in accounting treatment of ore
reserve development expenditure.

(2)

Adjusted operating profit (loss) plus amortisation of tangible assets
less non-cash revenues.

(3)

All income and expenses will be capitalised until commercial
production is reached.

(4)

Union Reefs ceased production in February 2004.

(5)

The yield of AngloGold Ashanti Mineração represents underground
operations.

(6)

The yield of Bibiani and Iduapriem represents open-pit operations.

(7)

Siguiri, Yatela and Cripple Creek & Victor Joint Venture operations
yield reflects gold placed/tonnes placed.

(8)

Interest acquired 26 April 2004 with reporting from 1 May 2004.

(9)

Jerritt Canyon Joint Venture was sold effective 30 June 2003.

(10)

Freda-Rebecca was sold effective 1 September 2004.

(11)

The yield of Obuasi represents underground operations.

(12)

50% holding to 26 April 2004 and 100% from this date.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Rights to mine and title to properties

AngloGold Ashanti’s rights to own and exploit mineral reserves and
deposits are governed by the laws and regulations of the jurisdictions
in which the mineral properties are located.

Argentina

According to Argentinean mining legislation, mines are the private
property of the nation or a province, depending on where they are
located. Individuals are empowered to explore for, exploit and dispose
of mines as owners by means of a legal licence granted by competent
authority under the provisions of the Argentine Mining Code. The legal
licences granted for the exploitation of mines are valid for an
undetermined period, provided that the mining title holder complies
with the obligations settled in the Argentine Mining Code. In Argentina,
the usual ways of transferring rights over mining licences are: to sell the
licence; to lease it; or to assign the rights under such a licence by a
beneficial interest or Usufruct Agreement. In the case of Cerro
Vanguardia – AngloGold’s Ashanti operation in Argentina – the mining
title holder is its partner, Fomicruz, and due to the Usufruct Agreement
signed between them and Cerro Vanguardia SA on 27 December 1996,
the latter has the irrevocable right to the exploitation of the deposit for
a period of 40 years. This agreement expires on 27 December 2036.

Australia

In Australia, with few exceptions, all onshore mineral rights are reserved
by the government of the relevant State or Territory. Exploration for, and
mining of, minerals is regulated by the general mining legislation and
controlled by the mining ministry of each respective State or Territory.

Where native title has not been extinguished, native title legislation may
apply to the grant of tenure and some subsequent administrative
processes. Federal and State Aboriginal heritage legislation also
operates to protect special sites and areas from disturbance although
to date there has not been any adverse impact on any of AngloGold
Ashanti’s operating properties.

AngloGold Ashanti’s operating properties are located in the State of
Western Australia. The most common forms of tenure are exploration
and prospecting licences, mining leases and general purpose leases. In
most Australian states, if the holder of an exploration licence
establishes indications of an economic mineral deposit and complies
with the conditions of the grant, the holder of the exploration licence
has a priority right against all others to apply for a mining lease
which gives the holder exclusive mining rights with respect to minerals
on the property.

It is possible for an individual or entity person to own the surface of the
property and for another to own the mineral rights. Typically the
maximum initial term of a mining lease is 21 years, and the holder has
the right to renew the lease for a further period of 21 years. Subsequent
renewals are subject to the discretion of the respective State or
Territory’s minister responsible for mining rights. Mining leases can only
be assigned with the consent of the relevant minister.

Government royalties are payable as specified in the relevant legislation
in each State or Territory. A general purpose lease may also be granted
for one or more of a number of permitted purposes. These purposes
include erecting, placing and operating machinery and plant in
connection with mining operations, depositing or treating minerals or

tailings and using the land for any other specified purpose directly
connected with mining operations.

AngloGold Ashanti owns the mineral rights and has 21-year term mining
leases with rights of renewal to all of its mining areas in Australia, including
its proportionate share of joint venture operations, and both it and its joint
venture partners are fully authorised to conduct operations in accordance
with relevant laws and regulations. The mining leases cover the current
life-of-mine at AngloGold Ashanti’s operations in Australia.

Brazil

In Brazil, Mine Manifests (mining titles granted in 1936) and Mining
concessions (mining titles presently granted via an order signed by the
Secretary of Mines of the Ministry of Mines and Energy) are valid for an
undetermined period – until depletion of reserves – provided that the
mining title holder complies with current Brazilian mining legislation, as
well as with those requirements set out by the DNPM who acts as
inspecting entity for mining activities.

The difference between a Mine Manifest and a Mining Concession lies
in the legal nature of these two mining titles, since it is much more
difficult and complicated for the public administration to withdraw a
Mine Manifest than a Mining Concession, although, in practice, it is
possible for a manifest to be cancelled or to become extinct if the
abandonment of the mining operation is formally proven. All of
AngloGold Ashanti’s operations in Brazil have indefinite mining licences.

Ghana

Mining activities in Ghana are primarily regulated by the Minerals and
Mining Law 1986 (PNDCL 153) or the Mining Law. Under the
Constitution and the Mining Law, all minerals in Ghana in their natural
state are the property of the state and title to them is vested in the
President on behalf of and in trust for the people of Ghana, with rights
of prospecting, recovery and associated land usage being granted
under licence or lease.

A licence is required for the export or disposal of such minerals and the
government has a right of pre-emption over all such minerals. The
government of Ghana shall acquire, without payment, a 10% interest in
the rights and obligations of the mineral operations in relation to a
mineral right to reconnaissance, prospecting or mining, and shall have
the option to acquire a further 20% interest where any mineral is
discovered in commercial quantities, on terms agreed between the
government and the holder of the mining lease subject to arbitration if
the parties fail to agree.

A licence or lease granting a mineral right is required to prospect for or
mine a mineral in Ghana and the Minister of Energy and Mines has the
power to negotiate, grant, revoke, suspend or renew any mineral right,
subject to a power of disallowance exercisable within 30 days of such
grant, revocation, suspension or renewal by the Cabinet. The powers of
the Minister of Mines are to be exercised on the advice of the Minerals
Commission, which is responsible for regulating and managing the
utilisation of natural resources and co-ordinating policies relating to them.

The grant of a mining lease by the Minister of Mines is normally subject
to parliamentary ratification unless the mining lease falls into a class of
transactions exempted by parliament. A mineral right is deemed a

requisite and sufficient authority over the land in respect of which the
right is granted, although a separate licence is required for some other
activities, including the diversion of water, and additional consents may
be required for certain developments. A mineral right or interest therein
may not be transferred, assigned or otherwise dealt with in any other
manner without the Minister of Mines’ prior written approval.

Control of mining companies: The Minister of Mines has the power
to object to a person becoming or remaining a ‘‘shareholder controller’’,
a ‘‘majority shareholder controller’’ or an ‘‘indirect controller’’ of a
company which has been granted a mining lease if he considers that
the public interest would be prejudiced by the person concerned
becoming or remaining such a controller. In this context:

•

shareholder controller means a person who, either alone or with
certain others, is entitled to exercise or control the exercise of 20%
or more of the voting power at any general meeting of a mining
company or of any other company of which it is a subsidiary;

•

majority shareholder controller means a shareholder controller in
whose case the percentage referred to above also exceeds 50%;
and

•

indirect controller means a person in accordance with whose
directions or instructions the director of a mining company, or of
another company of which it is a subsidiary, or the shareholder
controllers of that mining company, are accustomed to act.

A person may not become a shareholder controller, a majority shareholder
controller or an indirect controller of a mining company unless he has
served written notice on the Minister of Mines of his intention to that effect
and the Minister of Mines consents to his becoming such a controller or
does not object within a period of six months.

Where a person becomes or continues to be a controller of the relevant
description after a notice of objection has been served on him, or is
otherwise in contravention of the procedures prescribed by the Mining
Law, the Minister of Mines may notify the controller that, until further
notice, any specified shares are subject to restrictions. The relevant
restrictions include restrictions on transfer, voting rights, receipt of
further shares and distributions. The Minister of Mines may apply to the
High Court to order the sale of any shares which are the subject of such
a restriction. There is no legal restriction on the foreign ownership of a
mining company.

Where a person, either alone or with others, acquires an interest in 5%
or more of the voting power of a mining company he is required to notify
the Minister of Mines. A person who is a controller of a mining company
must give notice of his ceasing to be such a controller before he
disposes of his interest. In addition, the mining company itself has to
give notice to the Minister of Mines of the fact that any person has
become or ceased to be a controller.

Violation of these provisions of the Mining Law is a criminal offence.
The law also gives the Minister of Mines power to investigate and report
on the ownership and control of any mining company.

The Mining Law also gives the government the right to acquire a special
share (Golden Share) in a mining company in order to protect the assets
of the relevant company and to reflect and further the intentions of the
provisions of the Mining Law relating to control of a mining company.
The government has retained its Golden Share in relation to the Obuasi
mine. See page 14 for details.

AngloGold and the government of Ghana agreed the terms of a
Stability Agreement to govern certain aspects of the fiscal and
regulatory framework under which AngloGold Ashanti will operate in
Ghana following the implementation of the business combination
between AngloGold Limited. The details of the Stability Agreement
as well as AngloGold Ashanti’s commitments are set out on pages
13 and 14.

Payments and allowances: The Mining Law provides that royalties
are payable by the holder of a mining lease to the State at rates of
between 3% and 12% of total minerals revenue, depending on a
formula set out in mineral royalty regulations. The formula is determined
by calculating the ratio of revenue minus operating costs, interest and
capital allowances to total revenue. A ratio of 30% or lower will attract
a royalty of 3%. For every 1% that the ratio exceeds 30%, the amount
of the royalty will increase by 0.0225% up to a maximum of 12%. The
laws of Ghana currently provide for income tax at a rate of 30%. The
Mining Law provides for an entitlement to certain specified capital
allowances and various additional fiscal and other benefits. However,
AngloGold Ashanti and the government of Ghana have entered into the
Stability Agreement with respect to the payment of royalties and taxes
as detailed previously.

In 2002, the Ghanaian tax legislation was changed so that unutilised
losses and capital allowances existing at 1 January 2001 can only be
carried forwards for five years. If not used by that time they will be lost.
Losses and capital allowances incurred after 1 January 2001 can be
carried forward without limit.

Retention of foreign earnings: Holders of mining leases have certain
limited rights to retain foreign exchange earnings overseas and to use
such earnings for the acquisition of machinery and equipment as well
as for certain other payments such as debt service payments and
dividends.

Where the net earnings of a holder of a mining lease are in foreign
currency, the holder is permitted to retain not less than 25% of foreign
exchange earnings in an external account for acquiring machinery and
equipment, spare parts and raw materials as well as for certain other
payments, such as dividend and debt service payments.

AngloGold Ashanti’s operations in Ghana are permitted to retain 80% of
its foreign exchange earnings in such an account. In addition, the
company has permission from the Bank of Ghana to retain and use
outside Ghana dollars required to meet payments to our hedge
counterparties which cannot be met from the cash resources of our
treasury company.

Leases: Mining leases may be applied for either by a prospecting
licence holder who has established the existence of minerals in
commercial quantities or by others who do not hold such licences, who
establish the same to the satisfaction of the Minister of Mines. Mining
leases are normally granted for a period not exceeding 30 years and the
holder may apply to the Minister of Mines for renewal, on such
conditions as the Minister of Mines may determine, for up to another
30 years. This period has been extended in terms of the Stability
Agreement. They are to have a maximum size (subject to derogation by
the President where it is considered to be in the national interest) of
50 km

for any grant and 150 km

in aggregate.

Rights to mine and title to properties

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

A holder may apply for an enlargement of the mining area, which, subject
to the Mining Law, the Minister of Mines may grant if satisfied that such
approval is in the national interest. The rights conferred by mining leases
include those to take all reasonable measures on or under the surface to
mine the mineral to which the mining lease relates, to erect necessary
equipment, plant and buildings, to prospect within the mining area and to
stack or dump mineral waste in an approved manner.

Reconnaissance and prospecting licences are normally granted for up
to 12 months and three years respectively, subject to renewal. A
detailed programme must be submitted for the recruitment and training
of Ghanaians with a view to achieving ‘localisation’, being the
replacement of expatriate personnel by Ghanaian personnel. In
addition, the holder must give preference to Ghanaian products and
personnel, to the maximum extent possible, consistent with safety,
efficiency and economy.

Prior notification to the Minister of Mines is required for ceasing,
suspending or curtailing production. Approval to such actions may
be given, subject to conditions determined on the advice of the
Minerals Commission.

There are also provisions relating to surrender, suspension and
cancellation of mineral rights in certain circumstances. The Minister of
Mines may suspend or cancel a mineral right if, among other things, the
holder: fails to make payments under the Mining Law when due; is in
breach of any provisions of the Mining Law or the conditions of the
mineral right or the provisions of any other enactment relating to mines
and minerals; becomes insolvent or bankrupt; makes a statement to
the Minister of Mines in relation to the mineral right which he knows, or
ought to have known to be false; or for any reason becomes ineligible
to apply for a mineral right under the provision of the Mining Law.

Except as otherwise provided in a specific mining lease, all immovable
assets of the holder under the mining lease vest in the State on
termination, as does all moveable property that is fully depreciated for
tax purposes. Moveable property that is not fully depreciated is to be
offered to the State at the depreciated cost. The holder must exercise
his rights subject to such limitations relating to surface rights as the
Minister of Mines may prescribe. Subject to the proper conduct of the
mining operations, the holder must affect as little as possible the
interest of any lawful occupier, whose grazing rights are retained but
who is precluded from erecting any building without the consent of the
holder (or, if such consent is unreasonably withheld, without the
consent of the Minister).

An owner or occupier of any land subject to a mineral right may apply
to the holder of the mineral right for compensation and the amount of
the compensation shall, subject to the approval of the land valuation
board, be determined by agreement between the parties concerned (or,
if they are unable to reach agreement, by the Minister of Mines in
consultation with the land valuation board). The Land Valuation Board
has in the past increased amounts of compensation payable to owners
and occupiers. The holder, in the exercise of his rights, is required to
have due regard to the effect of the mineral operations on the
environment and is to take such steps as may be necessary to prevent
pollution of the environment as a result of such operations.

A range of activities and breaches of the Mining Law, including
obstructing the government from exercising its pre-emption right and

conducting mining, prospecting or related activities otherwise than in
accordance with the Mining Law, constitute offences punishable by fine
or imprisonment. The maximum fine is 500,000 cedis (at the current
exchange rate, equivalent to approximately $50) and the maximum term
of imprisonment is two years.

Mining properties: The current mining lease for the Obuasi area was
granted by the government of Ghana on 5 March 1994. It grants mining
rights to land with an area of approximately 334 km

in the Amansie East

and Adansi West districts of the Ashanti region for a term of 30 years from
the date of the agreement. In addition, the application for a mining lease
over the adjacent 140km

has also been granted resulting in the total area

under mining lease conditions increasing to 474km

, the Lease Area. The

company is required to pay to the government of Ghana rent (subject to
review every five years, when the rent may be increased by up to 20%) at
a rate of approximately $5/km

and such royalties as are prescribed by

legislation, including royalties on timber felled within the Lease Area.

Bibiani had title to a 50km

mining lease for a period of 30 years to

18 May 2027. The terms and conditions of the lease are consistent with
similar leases granted in respect of Obuasi. With effect from 1 October
2001, the Bibiani mining lease was transferred to Ashanti Goldfields
Company Limited from Ashanti Goldfields (Bibiani) Limited.

Iduapriem Mining Lease: The company has title to the 33km

Iduapriem

mining lease granted on 19 April 1989 for a period of 30 years. The terms
and conditions of the lease are consistent with similar leases granted in
respect of the Obuasi mining lease.

Teberebie has two leases, one granted in February 1998 for a term of 30
years, and another granted in June 1992 for a term of 26 years. The
terms and conditions of these leases are consistent with similar leases
granted in respect of the Obuasi mining lease.

Proposed amendment to mining law: A bill has been drafted which, if
enacted, will replace and repeal the existing Minerals and Mining Law
1986 and all other regulations under it. The bill may never be enacted or,
if enacted, might be enacted with substantial modifications. For the most
part the bill consolidates with modifications the existing law.

The key material modifications to the current regime proposed in the
current draft are:

•

the right of the government to acquire a 10% ‘free-carried’ interest
in a mining company is to be amended so that in future it will be
acquired on terms prescribed or on terms to be agreed; the bill does
not currently prescribe any terms. In addition, the right of the
government to acquire a further 20% interest in the rights and
obligations of the mineral operations in relation to mineral rights is to
be deleted;

•

provisions for stability agreements to be entered into by the Minister
of Mines, on behalf of the Republic, with approval of parliament to
ensure that the holders of mining rights are not adversely affected by
changes in law for a period of 15 years and for development
agreements to be entered into, with the approval of parliament
between the Minister of Mines, on behalf of the Republic, and a
mining company where the proposed investment is greater than
$500 million to deal with, in addition to matters relating to
environmental liabilities the exercise of discretion and settlement
of disputes;

•

compensation principles for disturbance of an owner’s surface
rights;

•

proposals that royalties are payable by the holder of a mining lease
at a rate of 4% to replace the existing sliding scale of 3-12% for
gold produced from its mining operations; and

•

although the right of the government to be issued with a special
share in a mining company still exists, the consent of the special
shareholder will only be required for the disposal of a mining lease
and/or material assets, which are situated in Ghana.

Guinea

In Guinea, all mineral substances are the property of the state. Mining
activities are primarily regulated by the Mining Code, 1995. The right to
undertake mining operations can only be acquired by virtue of one of
the following mining titles: surveying permit, small-scale mining licence,
mining prospecting licence, mining licence or mining concession.

The holders of mining titles are guaranteed the right to dispose freely of
their assets and to organise their enterprises as they wish, the freedom
to engage and discharge staff in accordance with the regulations in
force, free movement of their staff and their products throughout
Guinea and freedom to dispose of their products in international
markets.

The group’s Guinea subsidiary, Société Ashanti Goldfields de Guiné
(SAG), has title to the Siguiri mining concession area which was granted
on 11 November 1993 for a period of 25 years. The agreement
provides for an eventual extension/renegotiation after 23 years for such
periods as may be required to exhaust economic ore reserves.

The original area granted encompassed 8,384km

which the subsidiary

was required to reduce to five or fewer single blocks of not less than
250km

per block totalling not more than 1,500km

by 11 November

1996. The retrocession reduced the Siguiri concession area to four
blocks totalling 1,495km

SAG has the exclusive right to explore and mine in the remaining Siguiri
concession area for a further 22-year period from 11 November 1996
under conditions detailed in a Convention de Base predating the new
Guinea Mining Code.

Key elements of the Convention de Base are:

•

the government of Guinea holds a 15% free-carried or non-
contributory interest; a royalty of 3% is payable on the value of
gold exported; a local development tax of 0.4% is payable on the
gross sales revenues; salaries of expatriate employees are subject
to a 10% income tax; mining goods imported into Guinea are
exempt from all import taxes and duties for the first two years of
commercial production; and

•

SAG is committed to adopt and progressively implement a plan for
the effective rehabilitation of the mining areas disturbed or affected
by operations.

The Convention de Base is subject to early termination if both parties
formally and expressly agree to do so, if all project activities are
voluntarily suspended for a continuous period of eight months or are
permanently abandoned by our subsidiary, or if SAG goes into voluntary
liquidation or is placed into liquidation by a court of competent
jurisdiction.

Mali

Mineral rights in Mali are governed by the Mining Act and Regulations
promulgated in 1991. Exploration is carried out under permits granted
by Ministerial Decree following application to the National Director of
Geology and Mines from the Ministry of Mines, Energy and Water
conveying exclusive title to conduct exploration. The permit is valid for
a three-year period and is renewable twice. A company applying (in an
area it selected) for such a permit must provide proof of technical and
financial capabilities.

An exploitation permit is required to mine a deposit located within the
exploration area. This permit grants exclusive title to mine for a
maximum period of 30 years (inclusive of renewals) and is granted by
the council of ministers following application to the national director of
mines.

Both permits referred to above include a Mining Convention
(convention d’établissement) covering exploration, mining, treatment
and marketing in a comprehensive document. This outlines the general
conditions with regard to exploration (work programme, fiscal and
customs regime) and exploitation (formation of a local limited liability
company and mining company, State shareholdings, the fiscal and
customs regime during construction and exploitation phases, exchange
controls, marketing of the product, accounting regime, training
programmes for local labour, protection of the environment,
reclamation, safety, hygiene, and settlement of disputes).

Application for an exploration permit is submitted to the national
director of mines based on various documents, including applicant
identification, locations, receipts for payment of fixed rights and surface
fees, and articles of association, together with a draft mining
convention. An inter-ministerial committee examines the applications
and one company is retained to do the exploration. This company then
negotiates a draft of the Mining Convention and the Minister of Mines
grants the exploration permit by an in-house decree published in the
Malian Gazette.

Once an economically viable deposit has been identified, an application
for an exploitation permit is submitted to the national director of mines.
This application must be made prior to the expiry of the exploration
permit. The application document must contain a map and co-
ordinates, a receipt for payment of fixed rights and surface fees and a
summary of technical and financial capabilities. The exploitation title is
granted following a thorough investigation.

AngloGold Ashanti has complied with all applicable requirements and
the relevant permits have been issued. Morila, Sadiola and Yatela have
30-year permits which expire in 2029, 2024 and 2030, respectively.

Namibia

Mineral rights in Namibia vest in the State. In order to prospect or mine,
the Ministry of Mines and Energy initially grants a prospecting licence
and on presentation of a feasibility study, a mining licence is then
granted taking into account the abilities of the company, including
mining, financial and technical capabilities, rehabilitation programmes
and payment of royalties. The relevant licence has been granted to
AngloGold Namibia (Pty) Ltd in respect of its mining and prospecting
activities in Namibia. The current 15-year licence which was to expire in
2003 has been renewed and extended for another 15 years to 2018.

Rights to mine and title to properties

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

South Africa

The Mineral and Petroleum Resources Development Act: In
October 2002, the president of South Africa assented to the Mineral
and Petroleum Resources Development Act (MPRDA), which was
passed by the parliament of South Africa in June 2002 and came into
effect on 1 May 2004. The MPRDA vests custodianship of South
Africa’s mineral rights in the State, which will issue prospecting rights or
mining rights to applicants in the future. Details relating to the MPRDA
and associated broad-based socio-economic empowerment charter
and related scorecard, as well as AngloGold Ashanti’s progress in
converting existing rights in terms of the new legislation are set out on
page 78.

Tanzania

Mineral rights in the United Republic of Tanzania are governed by the
Mining Act of 1998, and property and control over minerals are vested in
the United Republic of Tanzania. Prospecting for the mining of minerals,
except petroleum, may only be conducted under authority of a mineral
right granted by the Ministry of Energy and Minerals under this Act.

The three types of mineral rights most often encountered, which are
also those applicable to AngloGold Ashanti, are:

•

prospecting licences;

•

retention licences; and

•

mining licences.

A prospecting licence grants the holder thereof the exclusive right to
prospect in the area covered by the licence for all minerals, other than
building and gemstones, for a period of three years. Thereafter, the
licence is renewable for two further periods of two years each. On each
renewal of a prospecting licence, 50% of the area covered by the
licence must be relinquished. Before applying for a prospecting licence
a prospecting reconnaissance with a maximum of 5,000km

is issued

for a period of two years after which a three-year prospecting licence is
applied for. A company applying for a prospecting licence must, inter
alia, state the financial and technical resources available to it. A
retention licence can also be requested from the Minister, after the
expiration of the 3-2-2 year prospecting licence period, for reasons
ranging from funds to technical.

Mining is carried out through either a mining licence or a special mining
licence, both of which confer on the holder thereof the exclusive right
to conduct mining operations in or on the area covered by the licence.
A mining licence is granted for a period of 10 years and is renewable for
a further period of 10 years. A special mining licence is granted for a
period of 25 years and is renewable for a further period of 25 years. If
the holder of a prospecting licence has identified a mineral deposit
within the prospecting area which is potentially of commercial
significance, but it cannot be developed immediately by reason of
technical constraints, adverse market conditions or other economic
factors of a temporary character, it can apply for a retention licence
which will entitle the holder thereof to apply for a special mining licence
when it sees fit to proceed with mining operations.

A retention licence is valid for a period of five years and is thereafter
renewable for a single period of five years. A mineral right may be freely
assigned by the holder thereof to another person, except for a mining
licence, which must have the approval of the Ministry to be assigned.

However, this approval requirement for the assignment of a mining
licence will not apply if the mining licence is assigned to an affiliate
company of the holder or to a financial institution or bank as security for
any loan or guarantee in respect of mining operations.

A holder of a mineral right may enter into a development agreement
with the Ministry to guarantee the fiscal stability of a long-term mining
project and make special provision for the payment of royalties, taxes,
fees and other fiscal imposts.

AngloGold Ashanti has complied with all applicable requirements and
the relevant licences have been issued for 25 years and expire in 2024.

United States of America

Mineral rights, as well as surface rights, in the United States of America
are owned by private parties, state governments and the federal
government. Most land prospective for precious metals exploration,
development and mining are owned by the federal government and are
obtained through a system of self-initiated mining claim location
pursuant to the General Mining Law of 1872, as amended.

Individual states typically follow a lease system for state-owned
minerals. Private parties have the right to sell, lease or enter into other
agreements, such as joint ventures, with respect to minerals that they
own or control. All mining activities, regardless of whether they are
situated on privately- or publicly-owned lands, are regulated by a
myriad of federal, state and local laws, regulations, rules and
ordinances, which address various matters including environmental
protection, mitigation and rehabilitation.

Authorisations and permits setting forth the activities and restrictions
pertaining thereto are issued by the responsible governmental agencies
at all phases of mining activities.

The Cripple Creek & Victor Gold Mining Company joint venture is almost
entirely comprised of owned patented mining claims from public lands,
with a small percentage of private and state lands being leased. The total
area of control is approximately 7,100 acres. Patented claims vest
ownership in the holder, including the right to mine for an indefinite tenure.
All life-of-mine reserves are within these property controls. The mining
and rehabilitation permits issued by the State of Colorado are life-of-mine
permits.

An agreement was announced on 27 February 2003 wherein AngloGold
entered into a purchase and sale agreement with Queenstake for its
interest in the Jerritt Canyon Joint Venture. The agreement included inter
alia that Queenstake accept full closure and rehabilitation and other
liabilities. The transaction was concluded effective 30 June 2003. When
held prior to this date, the Jerritt Canyon Joint Venture property control
consisted of owned or leased unpatented mining claims covering 58,000
acres of public lands, and owned or leased property covering 21,000
acres of private lands. Ownership of unpatented mining claims for public
lands and ownership of private lands provided the joint venture with the
right to mine for an indefinite tenure. Leases of public or private property
rights to the joint venture also conveyed full mining rights and included
terms, which were indefinitely extended so long as operations continued.
All life-of-mine reserves were within those property controls. The mining
and rehabilitation permits issued by the State of Nevada and the US Forest
Service were life-of-mine permits.

Global exploration

In 2004, AngloGold Ashanti’s exploration activities continued to support
the group’s growth strategy, primarily to extend and replace existing
production ounces by sustaining or growing existing operations
(through brownfields exploration) and to discover new mines in new
areas (through greenfields exploration). Activities are focused on finding
long-life, economic orebodies by utilising multi-disciplinary teams and
appropriate state-of-the-art technology.

Exploration continued to focus around the group’s operations in
Argentina, Australia, Brazil, Ghana, Guinea, Tanzania, Mali, Namibia,
South Africa and the USA. In the more mature exploration areas in Africa,
Australia and Canada, the group's exploration activities were rationalised,
however, there was increased emphasis on the group’s new frontiers
exploration strategy with exploration teams active in the Democratic
Republic of Congo (DRC), Colombia, Alaska, South East Asia, China and
Russia. During the year, efforts were also focused on the rationalisation of
the Ashanti and AngloGold exploration portfolios in Africa.

The outcome is a more balanced exploration portfolio consisting of
mature and established areas and new prospective areas in under-
explored regions. In line with this strategy, the following initiatives were
concluded during the year:

•

an equity investment in Trans-Siberian Gold in Russia;

•

an equity investment and conclusion of a strategic alliance in the
Philippines with Red 5 Ltd; and

•

the conclusion of an exploration alliance with Oxiana Ltd in Laos.

2004 Exploration expenditure by country ($m)

Country

Brownfields

Greenfields

Total

South Africa

–

Argentina

–

Australia and SE Asia

Brazil

Ghana

Guinea

–

Mali

Namibia

–

Peru

–

Tanzania

United States

Corporate

New frontiers

Alaska

–

China

–

Colombia

–

DRC

–

Mongolia

–

Total

These initiatives demonstrate the group’s commitment to engaging
junior exploration companies and are aimed at unlocking the gold
potential by combining AngloGold Ashanti’s technical expertise with the
partner’s in-depth country knowledge and operating experience.

During the year, $37 million of exploration expenditure was incurred in
greenfields exploration in Colombia, Peru, Alaska, Mongolia, Mali,
Ghana and the DRC. Total exploration expenditure amounted to
$81 million, of which $44 million was spent on increasing and
converting near and in-mine resources. Brownfields exploration added
7.7 million attributable ounces to the global Mineral Resource at an
average cost of $5.58 per ounce. Exploration expenditure for 2005 is
expected to reach some $90 million.

Argentina

At Cerro Vanguardia in Argentina exploration continued to focus on the
delineation of additional Mineral Resources and added 260,000 ounces
to the Mineral Resource. Drilling of the Zorro, Gabriela and Liliana veins
highlighted continued upside in under-explored veins within the greater
licence area.

A number of properties held by Cerro Vanguardia in Patagonia were
farmed out to Exeter Resources. The properties cover a total area of
1,047 square kilometres in 39 individual tenements.

Australia

Drilling at Sunrise Dam focused on underground targets that are
accessible from the Daniel decline and added 140,000 ounces to the
Mineral Resource. Near-mine activities concentrated on delineating oxide
Mineral Resources to the north of the pit. The Jasper Hills tenements
situated 60 kilometres east of Sunrise Dam were acquired from Crescent
Gold Limited, formerly Apollo Gold. Strike extensions to the Lord Byron
deposit were drill tested with moderate results. Further regional targets
were also drill tested and require further follow-up.

At the Yamarna greenfields project in Western Australia (a joint venture
with Terra Gold Mining, formerly Aurex), diamond drilling tested various
targets in the southern area, intersecting extensive alteration with low
gold values. Aircore drilling in the northern area defined a large
geochemical anomaly requiring further testing.

At the Tropicana East project (a joint venture with Independence Group
NL), diamond drilling was in progress at the end of 2004 testing the
depth potential of previously identified mineralisation. Wide-spaced
geochemical sampling identified further targets that require follow up.

In the Northern Territory, AngloGold Ashanti and Newmont Australia
have agreed that AngloGold Ashanti will exit the Tanami Mine JV and
the Central Desert JV, which includes the Tanami Mill and associated
infrastructure and tenements.

A number of projects in Western Australia were divested in 2004 as
they did not meet AngloGold Ashanti’s target criteria.

Brazil

Brownfields activities in Brazil focused on properties in the Iron
Quadrangle. At Córrego do Sítio underground exploration access

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

development and surface and underground drilling at Cachorro Bravo
has identified an initial Mineral Resource of 3.9 million tonnes at 9.01g/t
for 1.1 million ounces. Drilling two kilometres to the north of Cachorro
Bravo at Carvoronia/Velha Bocaina confirmed the extension of
previously identified oxide mineralisation below the base of weathering,
over a down-plunge length of approximately 900 metres.

At the Lamego project near the Cuiabá mine, an exploration ramp is being
developed to access and explore the Carruagem (PA zone), which is
situated at the northern extremity of the Lamego fold structure. Drilling
confirmed multiple mineralised horizons at the southern extremity of the
Lamego structure at Cabecá da Pedra. Potential ore from Lamego is
planned to be added to the Cuiabá expansion project, which was
approved by the board in January 2005.

Three surface boreholes drilled in the Gandarela Project (joint venture
with IAMGOLD) in the Iron Quadrangle for conglomerate hosted gold
mineralisation failed to intersect the target horizon.

At the Tocantins project (a joint venture with IAMGOLD), situated
approximately 500 kilometres north-east of Crixás, follow up reverse
circulation (RC) and diamond drilling of three targets failed to generate
economic drill intercepts. AngloGold Ashanti is negotiating with
IAMGOLD to withdraw from the Gandarela joint venture and dilute its
participation at Tocantins.

At the Crixás mine (a joint venture with Kinross), surface drilling focused
on the delineation of potential open-pittable Mineral Resources within
the lease area. Mineralisation within the Forquilha Sul (Corpo IV) ore
shoot was established over a down-plunge length of over 1,100 metres
at grades of up to 7g/t, but no additional high-grade underground
Mineral Resources were discovered.

Canada

Limited exploration was conducted at the West End project within the
Red Lake area of Canada and the project will be farmed out.

China

A representative office has been established in Beijing to seek
exploration and business opportunities in China.

Colombia

Greenfields exploration in Colombia focused on several regional
reconnaissance programmes and has thus far generated a number of
targets for detailed follow-up and drilling in 2005.

Democratic Republic of Congo (DRC)

A field camp was established at Mongbwalu in the eastern DRC.
However, due to logistical issues the planned drilling programme at the
Kilo project was delayed until early 2005.

Ghana

In Ghana at Obuasi, underground exploration focused on the below
50 Level Deeps project where results from drilling remain encouraging.
Drilling of the West Lode sulphide orebody on the 32 Level project also
yielded positive results. A drilling contractor was selected to drill two

3,000 metre-deep surface holes in the Deeps project, with a further six
holes planned to complete the initial phase. Drilling is planned to
commence in the third quarter of 2005.

At Bibiani, exploration focused on locating additional underground
Mineral Resources along the main Bibiani structure. Results appear to be
encouraging on the northern extension of the deposit.

Limited greenfields work was completed in Ghana in the Hebron, Subriso
and Sefwi project areas, each within 60 kilometres of the Bibiani mine.

No exploration work was undertaken at Iduapriem.

Limited greenfields work was completed in Ghana in the Hebron,
Subriso and Sefwi project areas, each within 60 kilometres of the
Bibiani mine.

Guinea

At Siguiri, exploration focused on the delineation of additional
surface Mineral Resources adding 289,000 ounces to the Mineral
Resource from Kosise South and Kozan South. In 2005, target
generation will be directed both locally around the mine site and
regionally within the four blocks that make up the 1,500 km

concession.

Laos

An exploration alliance was established with Oxiana Limited targeting
new mineralisation in Laos.

Mali

Phase VII of the deep sulphide infill drilling programme at Sadiola
was completed. A pre-feasibility study to assess the economic potential
of the deep sulphides is planned to be completed by the end of 2005.

Satellite oxide exploration continued to produce positive results from
extension drilling between the FE3 and FE4 pits. At FE3 resource
modelling is in progress on the southern extension. Further target
generation within the Sadiola lease area has identified additional
oxide targets that require follow-up drilling in 2005. A total of
161,000 ounces have been added to the Mineral Resource at FE3
and FE4 by drilling. Additions from oxides however have been offset
by a decrease in the Mineral Resource from the Deep Sulphides due
to increased drilling information, new modelling and a revised
scoping study.

At Yatela, satellite oxide drilling on two geophysical targets situated
to the south of the pit produced negative results. Infill drilling at
KW18, situated 2 kilometres to the south-west of the pit, generated
21,000 ounces in the Inferred Mineral Resource category. Drill testing
of the sulphide potential below the existing oxide Mineral Resource
at Alamatoula intersected uneconomic gold values.

At Morila, a small Inferred Mineral Resource has been generated at
Domba, situated 8 kilometres north of the pit. Pit contiguous drilling
of the Morila Shear zone extension added 71,000 ounces to the
Mineral Resource. Drilling of the Samacline target to the north-west

of the pit intersected encouraging gold grades at depths between
300 and 500 metres below surface which will be followed up by
drilling. Drill testing of stratigraphic targets generated from regional
target generation in the lease area yielded negative results.

Follow-up rotary airblast and reverse circulation drilling was
completed in southern Mali at the Garalo, Kola and Kalaka
properties, with further follow-up drilling required at Kalaka in 2005.
Initial soil sampling programmes were completed on new permits
situated 120 kilometres north of Sadiola and at Bassala in southern
Mali, immediately west of the Kordieran and Kalana properties.

Mongolia

Two projects in the southern Gobi were drill tested with negative
results on the porphyry target at Ikh Shank, however, initial reverse
circulation and diamond drill hole results from Altan Uul are promising
and will require further testing. At the Tsagaan Tolgoi prospect
in north western Mongolia, reverse circulation drilling was
conducted on a mesothermal quartz vein system with results
pending. Further target generation and third party property
appraisals are continuing.

Namibia

At Navachab, drilling of Anomaly 16, situated 5 kilometres south-
west from the pit, delineated an initial Inferred Mineral Resource of
178,000 ounces at 1.03g/t. Further drilling is required to delineate
the strike and down dip potential. Drilling of the previously identified
mineralisation at Grid A, situated 5 kilometres north of the pit, yielded
positive results with Resource definition drilling in progress.
Exploration activities added 350,000 ounces to the Mineral Resource
in 2004.

Peru

Three prospects were drilled in Peru in 2004 and exploration
continued on further multi-disciplinary target generation, ground
truthing and third party property-scale investigations in several parts
of the country. Metallurgical studies and a scoping study
were completed at the La Rescatada project in southern Peru.
A 50% operational interest in La Rescatada was divested to
a local mining company Minera Aruntani. AngloGold Ashanti signed
a letter of intent with Absolut Resources to acquire all the rights to
AngloGold Ashanti’s exploration projects and a geochemical
database in Northern Peru. Under the agreement, AngloGold
Ashanti was issued shares and share warrants in the company. The
Pichacani property in southern Peru was optioned to Bear Creek,
which also acquired the Ninobamba silver project from AngloGold
Ashanti in 2003.

Philippines

In the Philippines, AngloGold Ashanti has taken an investment in
Red 5 Limited and formed a strategic alliance to explore their ground
holdings in the vicinity of the Siana project.

Russia

In Russia AngloGold Ashanti provided Trans-Siberian Gold plc with
geological input at both the Veduga and Asacha projects. Drilling is in
progress at both these projects in an effort to increase the Mineral
Resource.

South Africa

A scoping study of the Goedgenoeg project contiguous to Tau Lekoa
has indicated that the project will not be viable. Surface drilling at
Moab Khotsong intersected encouraging grades, confirming the
existing geological model. Further surface drilling is in progress to
evaluate the Vaal Reef to the south-west of Kopanang.

Tanzania

Diamond drilling of the Geita Hill down dip extension mineralisation
continued in order to optimise the open-pit and potential
underground interphase. Step-out drilling continued to the north-
east at Geita Hill, tracing gold mineralisation along strike and down
dip to define areas for infill drilling. Additional drilling information from
Nyankanga West and Geita Hill defined an additional
800,000 ounces to the Mineral Resource in 2004.

Exploration activities were temporarily suspended at the Kigosi North
(TanRange joint venture) prospect located 150 kilometres south-west
of Geita due to permitting issues.

United States

In the United States at CC&V in Colorado, drilling focused on resource
expansion at the Wild Horse Extension (WHEX) project. A total of
765,000 ounces were added to the Mineral Resource. Drill testing of
a new exploration target in the Hosier Pass area has identified a
sheeted-vein system which will be followed up in 2005.

After the cessation of Nevada greenfields activities in 2003,
the exploration office in the USA was relocated to Denver, Colorado.

Greenfield activities have expanded in the Alaska frontier region with
a major increase in land holdings and the drilling of three new district-
scale targets. Activities are focused in the Tintina Gold Belt with an
integrated target generation and evaluation programme. 2004 drill
projects included the ER and Eagle targets (JV with Rimfire Minerals)
and the Livengood target areas. The ER and Eagle results however,
did not meet the initial AngloGold Ashanti economic hurdle rates and
will be farmed out to third parties with claw-back options.

Reconnaissance work identified three new gold targets in the Pogo
region which will be drill tested in 2005.

Drilling at Livengood defined a large sub-economic gold system
which requires follow-up drilling in 2005.

Global exploration

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Mineral Resources and Ore Reserves

AngloGold Ashanti had Mineral Resources of 218.2Moz and Ore

Reserves of 78.9Moz as of 31 December 2004.

The year-on-year comparison listed below compares the combined

December 2003 Mineral Resources and Ore Reserves of both

AngloGold and Ashanti to the December 2004 figures of

AngloGold Ashanti.

Mineral Resources and Ore Reserves are reported in accordance with

the Australasian Code for Reporting of Mineral Resources and Ore

Reserves (JORC 2004), together with the South African Code for the

Reporting of Mineral Resources and Mineral Reserves

(SAMREC 2000). Mineral Resources are inclusive of the Ore Reserve

component.

Mineral Resources

The 2004 Mineral Resources reduced by 48.0Moz or 18% to

218.2 million ounces, including a depletion of 8.4 million ounces. The

single largest reduction in the Mineral Resource (37.8 million ounces)

occurred at Western Ultra Deep Levels (WUDL), mainly as a result of a

scoping study which indicated that the Mineral Resource did not show

reasonable economic potential given the capital requirements and current

costs. Other significant Mineral Resource reductions were the result of

modelling changes at Obuasi (2.9 million ounces), and the exclusion of

Goedgenoeg (2.5 million ounces) after scoping studies showed the

Mineral Resource did not have reasonable potential to be profitably

extracted in the future.

There were however some significant increases in Mineral Resource:

•

an increase of 4.2Moz at Mponeng due to transfers from WUDL

and increased values;

•

an increase of 3.5Moz at Moab Khotsong as a result of Moab

Extension being included;

•

an increase of 1.0Moz at AngloGold Ashanti Mineração as a result

of additions from Corrego do Sítio;

•

an increase of 0.7Moz at Navachab due to footwall mineralisation

and Anomaly 16; and

•

an increase of 0.7Moz at Siguiri due to the inclusion of low grade

stockpiles.

Ore Reserves

Ore Reserves show a year-on-year decrease of 5.0Moz to 78.9Moz.

Depletion totalled 7.6Moz during the year. Ore Reserves have been

determined at a gold price of $375 per ounce, with sensitivities at

$350 per ounce and $400 per ounce. In determining the economic

parameters to be used, AngloGold Ashanti has been guided by the

preferred position of the SEC in the USA, whereby the economic

parameters used are based on a three-year historical average. These

economic assumptions are regarded by AngloGold Ashanti’s

executive as being conservative when compared to their long-term

view. In respect of AngloGold Ashanti’s South African and Australian

assets, exchange rates of ZAR7.86 = $1 and A$1.43 = $1

respectively have been assumed. The Ore Reserves are relatively

insensitive to changes in gold price and exchange rates of up to

10%, positive or negative. The principal changes in AngloGold

Ashanti’s Ore Reserves, for reasons other than depletion, are

as follows:

•

an increase of 1.2Moz at Kopanang with Edom now being

included;

•

an increase of 1.1Moz at Geita due to extensions to the

Nyankanga, Lone Cone and Geita Hill orebodies resulting from

additional drilling. A planned relocation of the Nyankanga storm

water diversion channel has allowed for an additional cutback;

•

an increase of 0.9Moz at AngloGold Ashanti Mineração due to

new drilling information which resulted in the reclassification of

the Ore Reserves at Cuiabá down to 15 level;

•

an increase of 0.8Moz at Great Noligwa due to the inclusion of

the SV2 pillars;

•

an increase of 0.6Moz at Moab Khotsong due to increased area

to be mined and values;

•

an increase of 0.4Moz at CC&V due to the inclusion of the

Wildhorse Extension;

•

an increase of 0.2Moz at Siguiri due to additions of the Kami

North and Eureka North pits, and the planned treatment of low

grade stockpiles;

•

an increase of 0.2Moz at Savuka due to ground being transferred

from TauTona;

•

a decrease of 1.2Moz at Obuasi due to the removal of remnant

blocks, the Anyankyriem surface reserves and additional drilling

information;

•

a decrease of 0.6Moz at Tau Lekoa due to the exclusion of the

Above 800 Project;

•

a decrease of 0.6Moz at Iduapriem/Teberebie due to the removal

of the A Zone;

•

a decrease of 0.4Moz at TauTona due to reserves transferred to

Savuka and a lower Mine Call Factor; and

•

a decrease of 0.3Moz due to the sale of Freda-Rebecca.

AngloGold Ashanti will continue to pursue a strategy of increasing

value-adding reserves through expansion projects, brownfields and

greenfields exploration and acquisition of new assets.

Effect of the AngloGold Ashanti business combination

The Ore Reserves in respect of the AngloGold assets alone

decreased from 63.1Moz as at 31 December 2003 to 60.9Moz as at

31 December 2004, and Mineral Resources decreased from

212.7Moz to 170.7Moz. The effect of the business combination

AngloGold with Ashanti was therefore to increase Ore Reserves by

20.3Moz and Mineral Resources by 52.9Moz.

Audit of 2003 Mineral Resource and Ore Reserve statement

During the course of the year, the AngloGold Ashanti 2003 Mineral

Resource and Ore Reserve Statement was submitted to independent

consultants for review. The mineral resources and ore reserves from

eight of AngloGold Ashanti’s global operations were randomly

selected and subjected to review. The company has been informed

that the audit identified no material shortcomings in the process by

which AngloGold Ashanti’s reserves and resources were evaluated. It

is the company’s intention to repeat this process so that all its

operations will be audited over a three-year period. The audit of

those operations selected for review during 2005 is currently

in progress.

Competent persons

The information in this report that relates to exploration results, Mineral

Resources or Ore Reserves is based on information compiled by the

competent persons listed below. They are either members of the

Australian Institute of Mining and Metallurgy (AusIMM) or recognised

overseas professional organisations. They are all full-time employees of

the company.

The competent person for AngloGold Ashanti Exploration is:

•

GF Wylie, MSc (Mining Engineering), BSc (Hons) (Geology), Dip

Mgmt, AusIMM application pending, 28 years experience.

Competent persons for AngloGold Ashanti’s Mineral Resources are:

•

VA Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology),

MAusIMM, 19 years experience.

•

MF O’Brien, MSc (Mining Economics), BSc (Hons) (Geology), Dip

Data, Pr.Sci.Nat., MAusIMM, 25 years experience.

Competent persons for the AngloGold Ashanti’s Ore Reserves are:

•

C Brechtel, MSc (Mining Engineering), MAusIMM, 29 years

experience.

•

BW Guenther, BSc (Mining Engineering), MAusIMM, 24 years

experience.

•

DL Worrall, ACSM, MAusIMM, 24 years experience.

•

J van Zyl Visser, BSc (Mineral Resource Management), PLATO,

18 years experience.

The competent persons consent to the inclusion of the exploration,

Mineral Resources and Ore Reserves information in this report, in the

form and context in which it appears.

Notes

A detailed breakdown of the Mineral Resources and Ore Reserves is

available in a supplementary statistics document, provided in the

annual

report section of the AngloGold Ashanti website

(www.anglogoldashanti.com) and may be downloaded as PDF files using

Adobe Acrobat Reader. This information is also obtainable from the

AngloGold Ashanti offices at the addresses given at the back of this report.

Mineral Resources and Ore Reserves

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Ore Reserves by country

(as at 31 December 2004)

Metric

Imperial

Contained

Tonnes

Grade

gold

Tons

Grade

gold

million

g/t

tonnes

million

oz/t

Moz

South

Africa

Proved

30.9

5.21

160.8

34.0

0.152

5.2

Probable

256.8

4.11

1,056.7

283.1

0.120

34.0

Total

287.7

4.23

1,217.5

317.1

0.123

39.1

Argentina*

Proved

0.6

9.99

6.0

0.7

0.291

0.2

Probable

6.2

6.87

42.9

6.9

0.200

1.4

Total

6.9

7.15

49.0

7.6

0.209

1.6

Australia*

Proved

45.8

1.21

55.6

50.5

0.035

1.8

Probable

102.6

1.33

135.9

113.0

0.039

4.4

Total

148.4

1.29

191.5

163.6

0.038

6.2

Brazil*

Proved

3.3

6.58

21.4

3.6

0.192

0.7

Probable

8.6

7.59

65.5

9.5

0.221

2.1

Total

11.9

7.31

86.9

13.1

0.213

2.8

Ghana*

Proved

45.0

2.09

94.3

49.6

0.061

3.0

Probable

43.8

6.23

273.1

48.3

0.182

8.8

Total

88.9

4.13

367.3

98.0

0.120

11.8

Guinea*

Proved

21.6

0.77

16.6

23.9

0.022

0.5

Probable

32.7

1.10

35.9

36.0

0.032

1.2

Total

54.3

0.97

52.5

59.9

0.028

1.7

Mali*

Proved

8.1

2.74

22.1

8.9

0.080

0.7

Probable

15.0

3.31

49.7

16.6

0.097

1.6

Total

23.1

3.11

71.8

25.5

0.091

2.3

Namibia

Proved

0.9

1.09

1.0

0.032

0.0

Probable

6.9

2.06

14.2

7.6

0.060

0.5

Total

7.9

1.94

15.3

8.7

0.057

0.5

Tanzania

Proved

24.4

3.01

73.7

26.9

0.088

2.4

Probable

46.2

4.49

207.4

50.9

0.131

6.7

Total

70.6

3.98

281.1

77.9

0.116

9.0

USA*

Proved

47.9

1.07

51.2

52.8

0.031

1.6

Probable

73.9

0.94

69.4

81.5

0.027

2.2

Total

121.8

0.99

120.6

134.3

0.029

3.9

Totals*

Proved

228.6

2.20

502.7

252.0

0.064

16.2

Probable

592.8

3.29

1,950.8

653.4

0.096

62.7

Total

821.4

2.99

2,453.6

905.4

0.087

78.9

Reserves attributable to AngloGold Ashanti

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

Mineral Resources and Ore Reserves

Mineral Resources by country

(1)

(as at 31 December 2004)

Metric

Imperial

Contained

Tonnes

Grade

gold

Tons

Grade

gold

million

g/t

tonnes

million

oz/t

Moz

South Africa

(2)

Measured

90.3

5.13

463.1

99.5

0.150

14.9

Indicated

423.9

6.51

2,758.5

467.3

0.190

88.7

Inferred

135.3

3.08

417.1

149.1

0.090

13.4

Total

649.5

5.60

3,638.7

716.0

0.163

117.0

Argentina**

Measured

7.9

2.06

16.3

8.7

0.060

0.5

Indicated

19.4

3.77

73.3

21.4

0.110

2.4

Inferred

3.5

5.40

18.7

3.9

0.158

0.6

Total

30.8

3.52

108.3

34.0

0.103

3.5

Australia**

Measured

59.7

1.26

75.2

65.8

0.037

2.4

Indicated

146.0

1.26

184.4

160.9

0.037

5.9

Inferred

84.7

1.20

101.7

93.4

0.035

3.3

Total

290.3

1.24

361.3

320.0

0.036

11.6

Brazil**

Measured

8.1

6.73

54.6

8.9

0.196

1.8

Indicated

15.2

7.80

118.4

16.8

0.228

3.8

Inferred

23.0

7.22

165.9

25.4

0.211

5.3

Total

46.3

7.32

338.9

51.0

0.214

10.9

Ghana**

Measured

91.6

3.90

357.0

101.0

0.114

11.5

Indicated

74.0

5.10

377.4

81.6

0.149

12.1

Inferred

36.6

9.04

331.2

40.3

0.264

10.6

Total

202.2

5.27

1,065.7

222.9

0.154

34.3

Guinea**

Measured

32.6

0.78

25.4

35.9

0.023

0.8

Indicated

74.4

1.00

74.6

82.0

0.029

2.4

Inferred

25.7

1.18

30.4

28.3

0.034

1.0

Total

132.7

0.98

130.4

146.3

0.029

4.2

Mali**

Measured

16.5

2.10

34.6

18.2

0.061

1.1

Indicated

23.9

2.74

65.4

26.3

0.080

2.1

Inferred

36.6

2.12

77.4

40.3

0.062

2.5

Total

76.9

2.31

177.4

84.8

0.067

5.7

Namibia

Measured

9.2

0.73

6.7

10.1

0.021

0.2

Indicated

63.0

1.30

81.7

69.4

0.038

2.6

Inferred

65.6

1.13

74.4

72.3

0.033

2.4

Total

137.7

1.18

162.8

151.8

0.034

5.2

Tanzania

Measured

39.4

2.72

107.2

43.4

0.079

3.4

Indicated

103.3

3.66

377.7

113.9

0.107

12.1

Inferred

27.1

2.91

79.0

29.9

0.085

2.5

Total

169.8

3.32

563.9

187.2

0.097

18.1

USA

Measured

80.6

1.00

80.6

88.8

0.029

2.6

Indicated

122.8

0.96

117.3

135.4

0.028

3.8

Inferred

45.3

0.91

41.1

49.9

0.027

1.3

Total

248.7

0.96

239.0

274.1

0.028

7.7

Totals**

Measured

435.9

2.80

1,220.7

480.5

0.082

39.2

Indicated

1,065.8

3.97

4,228.7

1,174.8

0.116

136.0

Inferred

483.2

2.77

1,336.9

532.6

0.081

43.0

Total

1,984.9

3.42

6,786.4

2,188.0

0.100

218.2

Resources attributable to AngloGold Ashanti

(1)

Inclusive of the Ore Reserve component

(2)

It is anticipated that 10.7Moz of the South African Region’s published Mineral Resources will be taken up in stabilising pillars.

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

AngloGold Ashanti, with the exception of the newly acquired Ashanti
mines, reports a sound operating performance; however, this did not
translate into a better financial performance. The received gold price
increased by $31 per ounce. This was more than offset, however, by
the effect of stronger operating currencies in all countries, other than
the USA, and by increased operating costs primarily due to higher oil
and mining contractor costs.

Results for the year

•

Adjusted headline earnings decreased by 7% to $263 million or
105 US cps, from $282 million or 127 US cps in 2003.

•

Return on net capital employed decreased from 11% to 7%.

•

Return on equity decreased from 12% to 7%.

•

Gold production was 8% higher at 6.05 million ounces, largely
because of the business combination with Ashanti.

•

Total cash costs increased by 25% to $268 per ounce, largely
due to the impact of stronger operating currencies.

•

A final dividend of R1.80 per share or $0.30 per share
was declared, resulting in a total dividend of R3.50 or
$0.56 per ADS.

Exchange rates

The average exchange rate for the year ended 31 December 2004 was
R6.44:$1 compared with R7.55:$1 in 2003. The average Australian
dollar rate for 2004 was A$1.36:$1 compared with A$1.54:$1 in 2003.

Gold production

AngloGold Ashanti’s production for the year was 8% higher than that for
the previous year at 6.05 million ounces. This increase was largely a
result of the business combination with Ashanti and higher production
at Sunrise Dam and Cripple Creek & Victor. It was partially offset by the
closure of Union Reefs, a decrease in production at Morila due to lower
grades, and reduced production from all the underground operations in
South Africa.

Production from the South African operations decreased by 6% to
3.08Moz mainly as a result of the following:

•

a drop in the grades and volume mined at TauTona due to a
reduction in face advance as a result of geological complexity;

•

reduced volumes mined and lower grades at Mponeng compared
with exceptional efficiency in 2003;

•

a decrease in the volumes mined at Savuka as the mine nears
closure; and

•

unforeseen lower grades at Great Noligwa.

Attributable production of 211,000 ounces at Cerro Vanguardia in
Argentina was 1% higher than that for 2003.

Australia’s production was 22,000 ounces down on 2003 because of
the closure of Union Reefs which had contributed 74,000 ounces in the
previous year. Sunrise Dam’s production went up by 52,000 ounces to
410,000 ounces as a result of a 3% increase in tonnes treated and an
11% improvement in grade to 3.46g/t.

Production in Brazil increased by 3% to 334,000 ounces. At AngloGold
Ashanti Mineração (previously known as Morro Velho) production was 5%
higher at 240,000 ounces as a result of improved grades. This, however,
was partly offset by attributable production at Serra Grande which was 1%
down at 94,000 ounces as a result of the lower grade ore treated.

The Ghanaian operations produced 485,000 ounces for the eight
months to 31 December 2004. Production of 255,000 ounces at
Obuasi was hampered for most of the year by insufficient trackless
mining equipment and a lack of drilled underground ore reserves.
Production of 105,000 ounces at Bibiani was also hindered by
various pit wall failures in both the main and south pits. Lower
surface grade materials at Bibiani in the fourth quarter also reduced
overall mine yield. At Iduapriem, attributable production was 125,000
ounces for the period from May to December 2004.

At Siguiri in Guinea, attributable gold production for the eight months to
December 2004 declined to 83,000 ounces at an average yield of
1.10g/t. This was largely a consequence of the embargo imposed on
the mine during the second quarter.

Gold production in Mali decreased by 18% or 102,000 ounces to an
attributable 475,000 ounces. This was mostly a result of a 36% decline
in attributable production at Morila to 204,000 ounces. The average
yield decreased to 4.44g/t. Attributable gold production at Yatela rose
by 11% to 97,000 ounces, largely owing to an increase of 11% in the
tonnage stacked. At Sadiola, attributable production went up by 1% to
174,000 ounces as milled tonnages increased and overall milling
utilisation rose by 4%.

In Namibia, Navachab mine produced 67,000 ounces, which was 8%
down on 2003, while the yield fell by 9% to 1.59g/t. The drop in yield
and production was due to the limited availability of higher grade ore
during the transition to owner-mining.

At Geita in Tanzania, attributable gold production increased by 72% to
570,000 ounces, largely as a result of the business combination with
Ashanti. A year-on-year comparison of Geita on a 100% basis shows
an increase in gold production of 4% to 692,000 ounces as a result of
a 4% rise in recovered grade to 3.74g/t.

Gold production at Cripple Creek & Victor in the USA increased by 16%
to 329,000 ounces, mainly owing to higher recoveries from improved
crusher facilities, better chemistry on the leach pad and inventory
reduction which led to an improved solution head grade through the
processing plant.

Gold production at Freda-Rebecca in Zimbabwe was 9,000 ounces for
the four months to September 2004. The sale of this mine became
effective on 1 September 2004.

Income statement

Gold income

Gold production increased by 8% to 6.05Moz when compared to the
prior year. The average spot price of $409 per ounce for the year was
13% higher than that in 2003. However, in rand terms, the average spot

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Financial review

price was 4% lower at R84,857 per kilogram. The received gold price
increased by $31 per ounce or 9% to $394 per ounce.

Gold income increased by 18%, rising from $2,029 million in 2003 to
$2,396 million in 2004, primarily because of the improvement in the
received gold price and additional revenues arising from the business
combination with Ashanti. The Ashanti mines contributed some
$243 million over the eight months, or 10% of the total gold income for
the year to December 2004. Excluding the Ashanti mines and the
additional interest acquired in Geita, gold income went up by 2% to
$2,069 million.

Cost of sales

Cost of sales rose by 33% from $1,526 million in 2003 to
$2,022 million in 2004. The inclusion of Ashanti costs accounted for
$265 million. The residual is largely attributable to the strengthened
South African rand against the dollar and inflation. Inflation includes
increased mining contractor costs and higher diesel, fuel, transport
and electricity prices.

Cost of sales changes can be further analysed as follows:

•

total cash costs increased to $1,635 million in 2004 from
$1,294 million in 2003 (or from $214 per ounce (restated) to
$268 per ounce), despite the 8% increase in production to
6.05Moz in 2004. Of the $54 per ounce increase, $28 per ounce
relates to stronger operating currencies relative to the dollar,
$21 per ounce to inflation, and $6 per ounce to lower grades. Cost
savings initiatives in South Africa helped in negating the effect of the
Ashanti business combination on total cash costs;

AngloGold Ashanti reassessed the useful life of on-reef ore reserve
development expenditure with effect from 1 January 2004. The
impact of the reassessment is that costs are expensed over a
longer period than previously estimated. The effect of this change
on the current year’s results is a decrease in cash operating costs
of $94 million and an increase in amortisation of tangible
assets $40 million which resulted in a net decrease in total
production costs of $54 million. The effect on future periods is not
determinable;

•

retrenchment costs were $9 million in 2004 compared with
$4 million in 2003. The costs were incurred through a general cost-
efficiency drive and the downsizing of operations at Savuka and
Ergo, both of which are nearing the end of their lives;

•

rehabilitation and other non-cash costs increased by $19 million
compared with the previous year, largely because of changes to the
life-of-mine estimates in the South Africa region which necessitated
an additional provision of $13 million. The newly acquired Ashanti
mines contributed an additional $4 million to rehabilitation and
other non-cash costs;

•

the amortisation of tangible assets at $380 million was $148 million
higher than in 2003. This increase is largely attributable to the
amortisation of the Ashanti assets, which accounted for $93 million
of this amount. The balance relates mainly to the South African
operations and includes the change in accounting treatment of ore
reserve development expenditure, additional amortisation of the
Driefontein mineral rights, and changes to the life-of-mine
estimates; and

•

inventory increased by $18 million in 2004 compared to an increase
of $17 million in 2003. The favourable inventory movement was
mainly because of grade streaming at Sunrise Dam in Australia,
where more ore is being mined than milled and ore stockpiles are
therefore on the increase.

Other expenses

•

Corporate and other administration expenses increased by
$15 million on the previous year to $51 million, largely as a result of
costs associated with the Ashanti launch, integration activities, and
the incorporation of the former Ashanti corporate offices, which in
total amounted to some $10 million. In addition, corporate costs
were further adversely affected by the strengthening of local
currencies against the dollar in a largely rand-driven cost area.

•

Market development costs amounted to $15 million, of which 66%
was spent through the World Gold Council.

•

Exploration continued to focus around the operations in the
countries in which we operate, namely, Argentina, Australia, Brazil,
Ghana, Guinea, Tanzania, Mali, Namibia, South Africa and the USA.
In addition, exploration activities are moving to new prospects in
the Democratic Republic of Congo, Colombia, Peru, Alaska, China,
Mongolia and Russia. The spend for 2004 was $81 million of which
$44 million was for greenfields exploration. The increase of
$6 million on the previous year was a result of the incorporation of
the Ashanti exploration portfolio of $5 million, and additional
expenditure on the new frontier areas.

•

The amortisation of intangible assets remained fairly constant at
$31 million, compared to $29 million in the previous year.

•

During the year there was an impairment of various mining assets
and mineral rights in Australia totalling $1 million. Impairment in
2003 amounted to $44 million, comprising various exploration
assets in Australia ($9 million), Savuka mine in South Africa
($34 million) and mining equipment in South America ($1million).

•

Non-hedge derivatives recorded a loss in the current year of
$142 million compared with a profit of $119 million in the previous
year. The loss in the current year is explained by the revaluation of
non-hedge derivatives resulting from changes in the prevailing spot
gold price, exchange rates, interest rates and greater volatilities
compared with the previous year.

•

Other operating expenses include a post-retirement medical
provision in South Africa of $4 million, an additional pension plan
provision in South America of $2 million and the write-off of a loan
in South Africa of $2 million.

•

Other operating income includes the net income from investment
properties in South America of $1 million.

Operating profit

Operating profit decreased significantly in 2004 to $79 million, mainly
because of the increase in cost of sales and the losses incurred on non-
hedge derivatives discussed above. Adjusted operating profit
decreased by 22%, from $559 million to $434 million. This was mainly
owing to stronger operating currencies relative to the dollar which
reduced profits by $174 million; inflation, which reduced profits by
$110 million; lower grades, $34 million; lower volumes mined,
$36 million; and losses of $39 million arising from the Ashanti

Financial review

operations. The decline in profit was partly offset by a $31 per ounce
increase in the received gold price of $394 per ounce, which
contributed $183 million to profits, and the capitalisation of ore reserve
development costs, which contributed an additional $50 million.

The adjusted operating margin decreased from 27% in 2003 to 18%
this year, in line with the reduced adjusted operating profits. Cash
operating margin dropped to a lesser extent from 38% in 2003 to
32% in 2004, because of the increase in total cash costs. These
margins vary from operation to operation and are dependent on each
region’s adjusted operating profit (loss), amortisation of tangible
and intangible assets, gold sales (including realised non-hedge
derivatives) and non-cash revenues.

Profit attributable to equity shareholders

Profit attributable to equity shareholders includes the operating profit of
$79 million as well as the following:

•

interest received, which increased by $6 million to $44 million,
mainly as a result of interest earned on convertible bond proceeds;

•

other income, which includes growth in the Environmental
Rehabilitation Trust Fund of $5 million (compared with $4 million in
2003) and foreign exchange gains on transactions other than sales
amounting to $4 million (compared with a loss of $3 million in
2003). The foreign exchange gain in 2004 is mainly from the Brazil
region. The prior year also includes profits from associates after
taxation of $2 million;

•

profit from the disposal of assets and subsidiaries, including profit on
the disposal of Union Reefs in August 2004 of $2 million, profit on the
disposal of Western Tanami assets and Western Tanami Mine of
$3 million each, and profit on the disposal of various mineral rights
and exploration properties of $5 million;

•

finance costs, which increased by $30 million to $79 million, mainly
due to the interest on corporate and convertible bonds. The year-on-
year increase is after capitalising $11 million of the borrowing costs in
South Africa. The unwinding of the decommissioning obligation is
$8 million for the current year compared with $4 million the previous
year. The year-on-year increase is attributable to a progressively
higher decommissioning provision in the balance sheet;

•

the taxation charge, which decreased by $182 million year-on-year
to a $40 million credit in 2004. This is primarily because of reduced
earnings for the year and a change in the estimated deferred tax
rate, net of an underprovision in South Africa in 2003. This credit
has a substantial positive effect on the adjusted headline
earnings; and

•

the minorities’ share of earnings, which increased to $19 million
compared to $18 million the previous year. The increase in the
minorities’ share of the earnings, despite lower profits, is
attributable to the additional Ashanti minorities.

Cash flow

Operating activities

Cash generated from operations was derived from profits before
taxation of $60 million as set out in the income statement, adjusted for
changes in working capital and non-cash flow items. The most
significant non-cash flow items are the movement on non-hedge

derivatives of $185 million and the amortisation of tangible assets of
$380 million.

Cash generated from operations of $585 million was increased by
interest received of $37 million, and reduced by environmental and
other expenditure of $24 million, finance costs of $72 million and mining
and normal taxes of $34 million.

Net cash inflow from operating activities was $492 million in 2004,
which is 9% higher than the amount of $453 million recorded in 2003.
The increase was mainly the result of a reduction in taxation paid.

Investing activities

Funds of $453 million generated from operating activities were utilised
to grow the group by investing in capital projects amounting to
$585 million. Total capital expenditure during 2004 was $222 million
higher than in 2003, mainly due to the inclusion of Ashanti, which
added $106 million.

Capital expenditure in Namibia increased from $2 million in 2003 to
$21 million in 2004 with the conversion of Navachab from contractor-
mining to owner-mining. In South Africa, capital expenditure
increased by 39% to $335 million. This was primarily due to the
exchange rate, as the corresponding rand figure was 19% higher. In
Australia, capital expenditure increased from $21 million to
$28 million, primarily because of the Sunrise Dam underground
feasibility and trial mining project.

Capital expenditure in the USA decreased from $27 million to
$16 million as a result of the of higher expenditure in 2003 on the
expansion project at Cripple Creek & Victor as well as the sale of
Jerritt Canyon.

Investments acquired during 2004 include a 17.5% stake in Trans-Siberian
Gold at a cost of $16 million and a 12% interest in Red 5 at a cost of
$4 million. During 2004, the assets in Western Tanami were sold, for which
$3 million was received in cash and $4 million in shares in Tanami
Gold Mine.

Proceeds from the disposal of tangible assets amounted to $9 million.
This related to the disposal of assets in the Western Tanami Project and
the Union Reefs Gold Mine in Australia.

The acquisition of the Ashanti Goldfields Company Limited assets was
accounted for as a purchase business combination and the total value
of the assets acquired was funded through the issue of shares
amounting to $1,366 million and cash flow effects of $171 million
relating to transaction costs and funding, after adjusting for cash
acquired of $56 million.

Repayments of loans advanced included the purchase consideration in
respect of the Free State assets of $62 million, the Amapari project of
$16 million and Jerritt Canyon of $5 million.

Cash outflows resulting from the restructuring of the AngloGold Ashanti
hedge book amounted to $123 million.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

The net cash outflow after investment activities amounted to
$314 million.

Financing activities

The net cash flows from financing activities increased by
$211 million to an inflow of $104 million in 2004 (outflow of
$107 million in 2003).

•

Proceeds from borrowings during 2004 amounted to
$1,077 million, which included $991 million raised through the
issuance of $1 billion 2.375% convertible bonds in February
2004. The bond is convertible into American Depositary Shares
(ADSs) at a price of $65.00 per ADS up to 27 February 2009. The
proceeds of the issue, after payment of expenses, were utilised
by AngloGold Ashanti to refinance amounts outstanding under
credit facilities, to meet transaction costs in connection with the
business combination with Ashanti and for general corporate
purposes, including planned capital expenditure. The bond is
guaranteed by AngloGold Ashanti.

•

Repayment of borrowings includes $232 million on the
$400 million syndicated loan facility, $200 million on the
$600 million syndicated loan facility, $139 million on the former
Ashanti revolving credit facility, and $65 million on the Geita
Project Finance Facility. Other loan repayments comprise normal
scheduled payments in terms of loan agreements.

As a result of the business combination with Ashanti, $195 million in
additional debt was acquired.

Cash inflows resulting from the restructuring of the AngloGold Ashanti
hedge book amounted to $40 million in 2004.

Dividend payments totalling $198 million were made during the year.
The dividend paid in 2003 was $314 million. Dividends were financed
from the proceeds of operating activities.

The effect of exchange rate changes on cash was a positive
$17 million during 2004.

On 27 January 2005, AngloGold Ashanti announced the signing of a
new three-year loan facility agreement for $700 million to replace the
existing $600 million facility that matures in February 2005. The facility
will be used to repay the maturing facility of $600 million ($265 million
drawn as at 31 December 2004) and for general corporate purposes.
The new facility will reduce the group's cost of borrowings, as the
borrowing margin over LIBOR will reduce from 70 to 40 basis points.
The facility was arranged with a number of AngloGold Ashanti's
relationship banks. The company expects to finance the repayment of
debt scheduled to mature in 2005 from existing cash resources, cash
generated from future operations, its existing debt facilities and,
potentially, future debt facilities and debt instruments.

The net result of the operating, investing and financing activities
amounted to a net cash outflow of $210 million which, when deducted
from the opening balance of $505 million, and a positive translation of
$17 million, resulted in a closing cash and cash equivalents balance of
$312 million.

Hedging overview including restructuring of the AngloGold
Ashanti hedge book

AngloGold Ashanti actively manages its hedged commitments under
changing market circumstances. Following the completed
AngloGold Ashanti business combination, the combined hedge
books amounted to 12.5Moz at 30 June 2004. This had been
reduced to 10.49Moz ounces at year-end.

The company has previously indicated its intention to continue with
the reduction in hedging levels. The argument for this reduction has
been further supported by the company’s positive view of the gold
price in the current market cycle. The company believes that market
circumstances favourable for the gold price are likely to remain in
place for some time and that the gold price will continue to trade in
the current range, or higher.

A substantial restructuring of the hedge commenced in late
December 2004 and was completed in January 2005. This resulted
in a reduction in the net delta of the combined hedge by 2.2Moz
during the fourth quarter. The restructured hedge now represents
cover equal to 31% of five years’ production spread over a ten-
year period.

This improvement was achieved by the elimination of lower-priced
contracts from the hedge and cash injections of $83 million (net) into
the book in the final quarter of 2004 and an additional $76 million
(net) in January 2005.

The level of cover for 2005 is approximately 10% of projected
production for the year, while in 2006 it is approximately 17% of
projected production.

Balance sheet

On 23 April 2004, the High Court of Ghana confirmed the scheme of
arrangement between Ashanti and its shareholders pursuant to
which AngloGold would acquire the entire issued ordinary share
capital of Ashanti. The confirmation of the High Court was
lodged with the Registrar of Companies in Ghana on Monday,
26 April 2004, and the acquisition of Ashanti and the name change
to AngloGold Ashanti Limited became effective on 26 April 2004.
Ashanti Goldfields Company Limited has been consolidated from
this date.

On 10 September 2004, AngloGold Ashanti confirmed its agreement
to sell its entire interest in Ashanti Goldfields Zimbabwe Limited to
Mwana Africa Holdings (Pty) Limited for a deferred consideration of
$2 million, R15 million. The sole operating asset of Ashanti Goldfields
Zimbabwe Limited is the Freda-Rebecca gold mine. The sale of the
mine became effective on 1 September 2004.

Net debt to net capital employed remained constant year-on-
year at 21% compared to 20% in 2003. The increase in equity with the
issuing of shares for Ashanti was largely negated by the increase in
borrowings as a result of the issuing of convertible bonds.

Financial review

Recent developments

AngloGold Ashanti and Oxiana Limited form exploration
alliance

On 13 December 2004, AngloGold Ashanti announced that it had
entered into an exploration alliance with Oxiana Limited to explore for
gold in Laos. Laos is highly prospective for both gold and copper but
is under-explored. Projects generated will be owned jointly by
AngloGold Ashanti and Oxiana, with AngloGold Ashanti having an
option to earn an additional 10% equity in any project generated, by
either solely funding the first $10 million of expenditure where a
project is still to be drilled, or sole-funding through to completion of a
bankable feasibility study where a significant drill intersection has
already been made.

AngloGold Ashanti and Trans-Siberian Gold plc agree to
extend deadline

On 23 December 2004, AngloGold Ashanti announced that the
deadline to subscribe for the second tranche of new ordinary shares
in Trans-Siberian Gold plc had been extended from 31 December
2004 to 15 April 2005. The extension has been agreed because the

condition in the subscription agreement relating to the financing of
Trans-Siberian's Asacha project would not be satisfied by
31 December 2004.

AngloGold Ashanti approves expansion project at Cuiabá
in south-eastern Brazil

On 27 January 2005, AngloGold Ashanti announced that approval
had been given by its board for a $121 million expansion project at
the Cuiabá mine, in south-eastern Brazil. The project will focus on
deepening below the existing mine, thereby increasing production
from the current level of 190,000 ounces per year, to an estimated
250,000 ounces per year at a cost of $169 per ounce over the life of
the project, and will extend the life-of-mine profile by six years
to 2019.

Outlook

In 2005, production is estimated to be 6.5Moz at an average total cash
cost of $273 per ounce, assuming the following exchange rates:
R/$6.20:1; A$/$:0.77:1; BRL/$2.80:1 and Argentinean Peso/$3.00:1.
Capital expenditure is estimated at $655 million.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Directors’ approval

The annual financial statements and group annual financial statements for the year ended 31 December 2004 were approved by the board of directors
on 10 March 2005 and are signed on its behalf by:

Directors

RP Edey, Chairman

RM Godsell, Chief Executive Officer

JG Best, Executive Director: Finance

CB Brayshaw, Chairman: Audit and Corporate Governance Committee

Managing secretary

Ms YZ Simelane

Secretary’s certificate

In terms of Section 268G(d) of the Companies Act, 1973, I certify that the company has lodged with the Registrar of Companies all such returns as

are required of a public company in terms of the Act, and that all such returns are true, correct and up to date.

Ms YZ Simelane

Managing Secretary

Johannesburg

10 March 2005

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Report of the independent auditors
to the members of AngloGold Ashanti Limited

We have audited the annual financial statements and group annual financial statements of AngloGold Ashanti Limited set out on pages 68 to 171 and
page 178 for the year ended 31 December 2004. These financial statements are the responsibility of the company’s directors. Our responsibility is to
express an opinion on these financial statements based on our audit.

Scope

We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance that the annual financial statements are free of material misstatement.

An audit includes:

•

examining, on a test basis, evidence supporting the amounts and disclosures in the annual financial statements;

•

assessing the accounting principles used and significant estimates made by management; and

•

evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

Audit opinion

In our opinion the annual financial statements and group annual financial statements fairly present, in all material respects, the financial position of the
company and the group at 31 December 2004, and the results of operations and cash flows for the year then ended in accordance with International
Financial Reporting Standards and in the manner required by the Companies Act in South Africa.

Ernst & Young
Registered Accountants and Auditors
Chartered Accountants (SA)

Johannesburg
10 March 2005

Corporate governance

Chairman

Russell Edey

Independent director and chairman

Deputy chairman

Dr James Motlatsi

Independent director and deputy
chairman

Independent directors

Frank Arisman
Elisabeth Bradley
Colin Brayshaw
Russell Edey
Dr James Motlatsi

Independent in terms of JSE
Securities Exchange Listings
Requirements and US’ Sarbanes-
Oxley Act

Non-independent non-executive
directors

Tony Lea
Bill Nairn
Simon Thompson
Tony Trahar
Lazarus Zim

Executive directors

Bobby Godsell (chief executive officer)

Jonathan Best (finance)

Dave Hodgson (chief operating officer)

Dr Sam Jonah (president)

Kelvin Williams (marketing)

Total number of directors

Full biographical details, including

each director’s qualifications and year

of appointment to the board,

are available in the Directors and

executive management section

on pages 15

Appointment and retirement
of directors

Directors retire by rotation every

three years.

Board has the power to appoint new

directors but such directors must

resign and stand for election at the

next AGM following their appointment

by the board.

As of 2003, all new directors to

be properly screened by the

Nominations Committee

Mr Ogilvie Thompson and

Mr Oppenheimer did not stand

for re-election at the annual general

meeting held on 30 April 2004.

Their positions were taken up by

Mr Thompson and Mr Zim

Board Charter*

Sets out powers, responsibilities,

functions, delegation of authority, and

the areas of authority expressly

reserved for the board

Approved by the board 30 July 2003;

amended 27 October 2004

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Audit and Corporate Governance
Committee*

Members:

Colin Brayshaw (chairman)

Frank Arisman

Elisabeth Bradley

Russell Edey

Fully independent committee in terms

of JSE Securities Exchange Listings

Requirements and US’ Sarbanes-

Oxley Act

See page 72 below for details on the

committee

Employment Equity & Development
Committee

Members:
Dr James Motlatsi (chairman)
Frank Arisman
Bobby Godsell
Dave Hodgson
Bill Nairn
Lazarus Zim

Independent chairman

See page 73 below for details on the
committee

Executive Committee

Members:
Bobby Godsell (chairman)
Jonathan Best
Dr Sam Jonah
Dave Hodgson
Kelvin Williams
Neville Nicolau
Roberto Carvalho Silva
Srinivasan Venkatakrishnan

Executive management committee
comprising executive directors,
deputy CFO and deputy COOs

Investment Committee

Members:
Russell Edey (chairman)
Jonathan Best
Elisabeth Bradley
Dr Sam Jonah
Tony Lea
Bill Nairn
Simon Thompson
Kelvin Williams

Independent chairman

See page 73 below for details on the

committee

Market Development Committee

Members:
Elisabeth Bradley (chairman)
Frank Arisman
Bobby Godsell
Dr Sam Jonah
Dr James Motlatsi
Kelvin Williams
Lazarus Zim

Independent chairman

See page 73 below for details on the
committee

Nominations Committee*

Members:
Russell Edey (chairman)
Frank Arisman
Elisabeth Bradley
Colin Brayshaw
Dr James Motlatsi
Tony Trahar

Independent chairman

Majority independent {5 out of 6}

See page 73 below for details on the
committee

Corporate governance

Political Donations Committee

Members:
Dr James Motlatsi (chairman)
Elisabeth Bradley
Colin Brayshaw

Fully independent committee

Policy on Political Donations*

See page 73 below for details on the
committee

Remuneration Committee*

Members:
Russell Edey (chairman)
Colin Brayshaw
Tony Trahar

Independent chairman

Majority independent {2 out of 3}

See page 73 below for details on the
committee

Directors’ induction policy*

Approved by the board
30 January 2004

Fit and proper standards for directors
and company secretaries policy*

Approved by the board
30 January 2004

Professional advice for directors
policy*

Approved by the board
30 January 2004

Insider trading policy*

Policy approved 30 October 2002;
amended 28 July 2004

See page 72 below for details
on insider trading

Code of ethics for employees*

Principles of Business Conduct
approved by the board
30 January 2003

See page 83 below for details

on the code of ethics

Code of ethics for the chief executive
officer, principal financial officer and
senior financial officers*

Code approved by the board
30 July 2003

See page 83 below for details
on the code of ethics

Confidential reporting policy

Policy approved by the board
30 January 2004

See page 83 below for details
on the policy

Disclosures policy*

Policy approved by the Executive
Committee on 6 December 2004

See page 83 below for details
on the policy

* Policy/Committee Charter/Board Charter/Code available on the company website:

www.AngloGoldAshanti.com under About -> Corporate Governance -> Guidelines

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

In 2004, AngloGold Ashanti continued to build on the solid corporate
governance foundations laid down in previous years. AngloGold
Ashanti is fully compliant with the South African King Code on
Corporate Governance, 2002, (the King Code) except in a few areas
where the company has chosen not to comply. Areas of non-
compliance with the King Code are fully detailed below as required
by the Listings Requirements of the JSE Securities Exchange South
Africa (JSE). The company is fully compliant with applicable
corporate governance requirements of the United States’ Sarbanes-
Oxley Act.

Significant corporate governance milestones achieved during the year
include:

•

qualification on the inaugural JSE Sustainability Index;

•

qualifying third on the Edward Nathan & Friedland Sustainability
Index 2003;

•

recipient of a double award at the Institute of Chartered
Secretaries and Administrators of Southern Africa and JSE annual
report awards, in the categories of best report in the mining and
non-mining resources sector and best report from a Proudly South
African member;

•

finalisation of the appraisal process for evaluation of the board,
board committees and individual directors; and

•

finalisation of the Director’s Induction Pack, a file summarising the
history, activities and business of the company as well as the legal
obligations of directors.

The Board of Directors

AngloGold Ashanti is a controlled company with its parent company,
Anglo American plc, holding more than 50% of the company’s issued
share capital and is therefore, not subject to the director independence
requirements of the New York Stock Exchange (NYSE). The board
comprises a unitary board structure of 15 directors who assume
complete responsibility for the activities of the company, including the
total risk management framework of the company. The board has a
written charter that governs its powers, functions and responsibilities.
The board contains the mix of skills, experience and knowledge
required of a multinational gold company.

Directors’ retirement follows a staggered process with one-third of the
directors retiring every three years at the annual general meeting. A
curriculum vitae of those directors standing for re-election is placed
before shareholders at the AGM to help inform the process of re-
election. The board is empowered by the company’s articles of
association to appoint new directors provided such appointees retire at
the next AGM and stand for election by shareholders. A Nominations
Committee has been established as a sub-committee of the board to
help identify suitable candidates for appointment to the board.

At the annual general meeting held on 30 April 2004 Mr Ogilvie
Thompson and Mr Oppenheimer both retired and were replaced by
Mr Zim and Mr Thompson. The board also appointed Dr Jonah KBE as
an additional member of the board and president of AngloGold Ashanti
effective as from 1 May 2004. All new members were reviewed by the
Nominations Committee prior to their appointment as directors.

The executive directors are appointed by the board to oversee the
day-to-day running of the company through effective supervision of
management. Executive directors are held accountable by regular
reporting to the board, and their performance is measured against
pre-determined criteria as well as the performance of their respective
business units.

Only executive directors have contracts of employment with the
company. There are no contracts of service between the directors
and the company, or any of its subsidiaries that are terminable at
periods of notice exceeding one year and requiring the payment of
compensation. Non-executive directors do not hold service contracts
with the company.

Non-executive directors provide the board with invaluable and
balanced advice and experience that is independent of management
and the executive. The presence of five independent directors on the
board, and the critical role they play through representation on key
committees such as the Audit and Corporate Governance,
Nominations, Political Donations and Remuneration committees,
together with their calibre, experience and standing within the
company, ensures that the company’s interests are served
by impartial views that are separate of management and
shareholders.

In terms of board policy, a director will qualify as being independent
provided AngloGold Ashanti has not, over the preceding year, done
business in excess of $10 million or 5% of the company’s treasury
business with the employer of that director. Furthermore, in compliance
with JSE Listings Requirements an independent director must not be a
representative of a shareholder who has the ability to control or
materially influence management and/or the board; not have been
employed by the company or be the spouse of a person employed by
the company in an executive role in the past three years; not been an
adviser to the company other than in the capacity as a director of the
company; not be a material supplier, customer or have a material
contractual relationship with the company; and be free of any
relationship that could be seen to materially interfere with the
independence of that person. All five independent directors complied
with these requirements in 2004 and the board determined that such
directors have no material relationship with AngloGold Ashanti.

The board, its sub-committees, and the directors all completed an
evaluation process to review their effectiveness. The chairman of each
committee and the chairman of the board led the process of
evaluation of the committees and the board. The company secretary
played a critical role in this process. The evaluation of each non-
executive director’s performance was led by the board chairman,
while the assessment of the board chairman’s performance was led
by the deputy chairman of the board. The evaluation of the
performance of executive directors is performed by the Remuneration
Committee. For full details, see Remuneration Committee below.

A managing secretary and company secretary have been appointed
to assist the board in its deliberations, informing members of their
legal duties and ensuring, together with the executive directors and
senior management that its resolutions are carried out. Together with

Corporate governance

the investor relations department, the company secretarial function
also provides a direct communications link with investors and liaises
with the company’s share registrars on all issues affecting
shareholders. The company secretarial function, in consultation with
other departments, furthermore, provides mandatory information
required by various regulatory bodies and stock exchanges on which
the company is listed. The managing secretary and company
secretary are responsible for compliance with all the statutory
requirements in regard to the administration of the Share Incentive
Scheme. The managing secretary and company secretary ensure
that minutes of all shareholders’, board and board committees’
meetings are properly recorded in accordance with the South African
Companies Act of 1973. The company secretarial function also plays
a crucial role in the induction of new directors.

All members of the board have access to management and the
records of the company, as well as to external professional advisers
should the need arise.

Six board meetings took place during the course of 2004. All
directors attended four of the board meetings. Mr Brayshaw and
Mr Trahar were absent from one board meeting each. The non-
executive directors met in January 2005 in the absence of executive
directors and management.

AngloGold Ashanti does not permit directors and key employees
(that is, employees having access to price sensitive information) to
trade in company shares during closed periods. Directors and key
employees are required to follow a formal process before trading in
the company’s shares. Closed periods are in effect prior to the
publication of the quarterly, half-yearly and year-end results. Where
appropriate, a closed period is also effective during periods where
major transactions are being negotiated and a public announcement
is imminent.

Board sub-committees

To facilitate the activities and deliberations of the board, the board
has established a number of sub-committees, comprising members
of the board, with written terms of reference governing the powers,
functions and activities of each sub-committee. A description of
each sub-committee is provided below.

Members of the board committees have access to management and
the records of the company, as well as to external professional
advisers should the need arise.

The Audit and Corporate Governance Committee

The Audit and Corporate Governance Committee, inclusive of its
chairman, comprises four independent non-executive directors. As
required by the Sarbanes-Oxley Act, the board has resolved that
Mr Brayshaw is a financial expert. All members of the committee
have considerable financial knowledge and experience to help
oversee and guide the board and the company in respect of the audit
and corporate governance disciplines. The board considers it
unnecessary for the chief executive officer to attend meetings of the
committee, but should rather attend by invitation from the chairman

of the committee. The board has, further, considered that the board
chairman possesses invaluable experience and knowledge
warranting his membership of the committee.

The committee and the executive committee consider it
unnecessary for the group internal audit manager to report
administratively to the chief executive officer, and that she
should rather report administratively to the finance director and
functionally to the committee. The group internal audit manager
has unrestricted access to the chief executive, the board
chairman and the chairman of the committee, and is invited to attend
and report on her department’s activities at all committee meetings.
The board is confident that the unfettered access of the group
internal audit manager to key board members, and the direct and
regular reporting to the committee, together with her calibre,
experience and integrity, enables her to discharge her duties as
required by law and in fulfilment of her obligations to the company.
The function, duties and powers of the internal audit function, for
which the group internal audit manager is responsible, is governed
by a formal internal audit charter that has been approved by
the committee.

The committee meets regularly with the external audit partner, the
group’s internal audit manager and the executive officer: corporate
accounting, to review the audit plans of the internal and external
auditors, to ascertain the extent to which the scope of the audit can
be relied upon to detect weaknesses in internal controls and to
review the quarterly and half-yearly financial results, significant legal
matters affecting the company, the preliminary announcement of the
annual results and the annual financial statements, as well as all
statutory submissions of a financial nature, prior to approval by
the board.

The committee is furthermore, responsible for:

•

the appointment and dismissal of the external auditors;
determining and approving external auditors’ fees; overseeing
the work of the external auditors; determining all non-audit
work of the external auditors including consulting work, and
pre-approving non-audit fees to be paid to the external auditors;
and ensuring that the external auditors report regularly to the
committee;

•

overseeing the internal audit function; receiving regular report
back from group internal audit manager; appointment and
dismissal of group internal audit manager;

•

assessing and reviewing the company’s risk management
framework; and

•

monitoring the group’s corporate governance practices in
relation to regulatory requirements and guidelines.

The external auditors also meet with the committee members in the
absence of management and the chief executive officer and chief
financial officer.

The committee met on seven occasions during 2004. All members
of the committee attended five of the meetings. Mrs Bradley
and Mr Edey were each unable to attend one meeting of
the committee.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

The NYSE rules require that the board determine whether a
member of the committee’s simultaneous service on more than three
public companies’ audit committees impairs the ability of such a
member to effectively serve on a listed company’s audit committee.
Mr Brayshaw, the chairman of the committee, is a member of nine
other public companies’ audit committees and is chairman of seven
of them. Mrs Bradley is a member of four other public companies’
audit committees and is the chairman of one of them. Mr Brayshaw
is a retired managing partner and chairman of Deloitte & Touche,
while Mrs Bradley, who is semi-retired, has considerable financial
and accounting experience. The board is confident that the
experience, calibre and integrity of both Mr Brayshaw and
Mrs Bradley, together with their regular attendance and active
contribution at meetings of the committee, demonstrate their
commitment to the company’s affairs and particularly to the
deliberations of the committee.

The Employment Equity and Development Committee

The committee is responsible for overseeing the company’s
performance in respect of employment equity by taking into account
the legal requirements of applicable legislation and monitoring
targets set by the company. The committee is also responsible for
skills development of employees in a manner that seeks to retain
and develop talent, and to provide employees with the opportunity
to enhance their skills and knowledge. Mr Zim was appointed as
an additional member of the committee with effect from 1 August
2004. The committee met on four occasions during 2004. All
members of the committee attended one meeting. Mr Godsell,
Mr Nairn and Mr Zim were each unable to attend one meeting of
the committee.

The Executive Committee

The committee is responsible for overseeing the day-to-day
management of the company’s affairs and for executing the
decisions of the board. The Operations Committee, responsible for
overseeing the operational performance of the company, is a sub-
committee of the Executive Committee – see Other committees.

The Investment Committee

The committee is responsible for overseeing and reviewing strategic
investments of the company. Mr Thompson and Dr Jonah were
appointed as additional members of the committee with effect from
1 August and 26 July respectively. The committee met on two
occasions during 2004. All members, or their designated alternates,
attended one meeting of the committee. Mr Best and Mr Williams
were unable to attend one meeting each.

The Market Development Committee

The committee has been established to extend the influence of
AngloGold Ashanti as a major global gold company, in the
development of a broader gold business, both nationally and
internationally. Dr Jonah and Mr Zim were both appointed as
additional members to the committee with effect from 1 August
2004. The committee met on four occasions during 2004. All
members attended three meetings of the committee. Dr Motlatsi was
unable to attend one meeting of the committee.

The Nominations Committee

The appointment of directors is a matter for the board as a whole but
the committee is responsible for determining and recommending
suitable candidates to the board. The fit and proper standards policy
for directors guides this process. The committee is also responsible
for establishing and reviewing succession plans for members of the
board, and particularly that of the chief executive officer and board
Chairman. The committee met on two occasions during 2004.
Mr Trahar and Mr Brayshaw were each unable to attend one meeting
of the committee.

The Political Donations Committee

The Political Donations Committee comprises three independent non-
executive directors, and is chaired by the deputy chairman of the board.
The committee determines the funding of political parties in South
Africa in accordance with a formal policy adopted by the board on
29 April 2003 that sets the guiding principles for funding. The
committee did not meet in 2004, as a decision on funding for both
2003 and 2004 was made in December 2003.

The Remuneration Committee

The Remuneration Committee is responsible for evaluating the
performance of the executive directors and executive officers, and
setting appropriate remuneration for such officers of the company.
Full details of the company’s remuneration philosophy, the
committee’s deliberations during 2004, the remuneration payments
for all directors and information on the share incentive scheme are
available in the Remuneration Report at pages 85 to 87 of this annual
report. The performances of the executive directors are considered
relative to the prevailing business climate, market conditions as well
as annual evaluations to assess the level of achievement of key pre-
determined objectives. Bonuses paid to executive directors are a
reflection of the performance of each of the directors and the
company as a whole. Executive directors have elected to receive no
remuneration as directors of the company. The fees of non-executive
directors are fixed by shareholders at the annual general
meeting, and other than the fees they receive for their participation
on board committees and an allowance for travelling internationally
to attend board meetings, non-executive directors receive no further
payments from the company. The committee met on five occasions
during 2004. All members of the committee attended four of the
meetings. Mr Oppenheimer (at the time still a member of the board)
and Mr Trahar were each unable to attend one meeting of
the committee.

The Safety, Health and Sustainable Development
Committee

This committee is tasked with overseeing the company’s performance
in respect of safety, health and sustainable development, and for
establishing targets in relation to each of these areas. Mr Thompson
and Dr Jonah were appointed as additional members of the
committee with effect from 1 August 2004. The committee met on
four occasions during 2004. All members of the committee attended
two of the meetings. Mr Godsell was unable to attend one meeting of
the committee. Dr Motlatsi was unable to attend two meetings of
the committee.

Corporate governance

Other committees

In addition to the committees of the board mentioned above, the
executive committee has established a number of standing
committees to oversee the day to day management of the
company’s affairs. The Finance Committee which meets on a regular
basis, is chaired by the chief financial officer and comprises a
number of executive officers and senior management in the financial
and legal fields. It is tasked with monitoring all financial, legal and
administrative aspects of the company’s affairs. The Operations
Committee meets on a monthly basis, is chaired by the Chief
Operating Officer and comprises all executive officers of the
company and regional heads. The committee monitors and reviews
the operational performance of the company. The Treasury
Committee is chaired by an independent director, Mr Brayshaw, and
comprises executive officers and senior management in the financial
and marketing disciplines. It is responsible for reviewing and
evaluating market conditions, treasury operations and future
hedging strategies.

Risk management and internal controls

The board has ultimate responsibility for the total risk management
process within the group. The board reviews and approves the risk
strategy and policies that are formulated by the executive directors
and senior management. Management is accountable to the board
and has established a group-wide system of internal control to
manage significant group risk. This system assists the board in
discharging its responsibility for ensuring that the wide range of risks
associated with the group’s global operations are effectively managed
in support of the creation and preservation of shareholder wealth. The
risk management policies are communicated to all relevant
employees.

A full review of the risk, control and disclosure processes
is undertaken annually to ensure that all additional requirements
are incorporated into the system in the future. The systems are
in place and the focus is on ensuring that the requirements of the King
Code and the Sarbanes-Oxley Act are complied with timeously. In
conducting its annual review of the effectiveness of risk management,
the board considers the key findings from the ongoing monitoring and
reporting process, management assertions and independent
assurance reports. The board also takes account of material changes
and trends in the risk profile, and considers whether the control
system, including reporting, adequately supports the board in
achieving its risk management objectives. The board furthermore,
receives assurance from the Audit and Corporate Governance
Committee, which derives its information, in part, from regular internal
and external audit reports on risk and internal control throughout
the group.

The company has a sound system of internal control, based on the
group’s policies and guidelines, in all material subsidiaries and joint
ventures under its control. In respect of those entities in which
AngloGold Ashanti does not have a controlling interest, the directors
who represent AngloGold Ashanti on the boards of these entities,
seek assurance that significant risks are being managed.

The board is satisfied that there is an ongoing process for identifying,
evaluating and managing the significant risks and internal controls
faced by the group and if any weaknesses are identified, these are
promptly addressed.

The company’s chief executive and chief financial officers
are both required, in terms of the Sarbanes-Oxley Act, to certify on Form
20-F that its financial statements present a true and fair view, in all
material respects, of the company’s financial position, cash flows
and operational results, in accordance with relevant accounting
standards. The certificates further provide that both officers are
responsible for establishing and maintaining disclosure and internal
controls and procedures for financial reporting. The certification process
is pre-approved by the board of directors prior to filing of the Form 20-F
with the SEC.

Risk factors

In this section references to AngloGold Ashanti are to AngloGold
Ashanti Limited, or as appropriate, AngloGold Ashanti and its
consolidated subsidiaries and associate companies.

The risk factors set forth in this document have been organised into
three categories:

•

risks related to the gold mining industry generally;

•

risks related to AngloGold Ashanti's operations; and

•

risks related to AngloGold Ashanti’s ordinary shares and ADSs.

Risks related to the gold mining industry generally

The profitability of AngloGold Ashanti's operations and the
cash flows generated by these operations, are significantly
affected by changes in the market price for gold

The market price for gold can fluctuate. These fluctuations are caused
by factors beyond AngloGold Ashanti's control, including:

•

speculative positions taken by investors or traders in gold;

•

changes in the demand for gold used in jewellery, for industrial
uses and for investment;

•

changes in the supply of gold from production, disinvestment,
scrap and hedging;

•

financial market expectations regarding the rate of inflation;

•

the strength of the dollar (the currency in which the gold price
trades internationally) relative to other currencies;

•

changes in interest rates;

•

actual or expected gold sales by central banks and the IMF;

•

gold sales by gold producers in forward transactions;

•

global or regional political or economic events; and

•

costs of gold production in major gold-producing nations, such
as South Africa, the United States and Australia.

The price of gold is often subject to sharp, short-term changes
resulting from speculative activities. While the overall supply of and
demand for gold can affect its market price, because of the
considerable size of above-ground stocks of the metal in comparison
to other commodities, these factors typically do not affect the price in
the same manner or degree as the supply of and demand for other
commodities tend to affect their market price.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

The following table presents the annual high, low and average
afternoon fixing prices over the past 10 years, expressed in dollars,
for gold per ounce, on the London Bullion Market:

Year

High

Low

Average

1994

396

370

384

1995

396

372

384

1996

415

367

388

1997

367

283

331

1998

314

273

287

1999

340

252

278

2000

317

262

279

2001

298

253

271

2002

347

278

310

2003

417

320

364

2004

456

371

410

Source of data: Metals Week, Reuters and London Bullion Market Association

The table reveals a price volatility as low as $24 per ounce in 1995 and
as high as $97 per ounce in 2003. Price volatility appears to be
increasing with the gap between low and high being $69 per ounce,
$97 per ounce and $85 per ounce over the last three years.

On 24 February 2005, the afternoon fixing price of gold on the London
Bullion Market was $433.75 per ounce.

If revenue from gold sales falls below the cost of production for an
extended period, AngloGold Ashanti may experience losses and be
forced to curtail or suspend some or all of its capital projects and/or
operations and change its past dividend payment policies. In addition,
it would have to assess the economic impact of low gold prices on its
ability to recover any losses it may incur during that period and on its
ability to maintain adequate cash and accounting reserves.

Gold companies face many risks related to their operations

(including their exploration and development activities) that

may affect their cash flows and overall profitability

Uncertainty and cost of mineral exploration and acquisitions
Exploration activities are speculative and are often unproductive. These
activities also often require substantial expenditure to:

•

establish Ore Reserves through drilling and metallurgical and other
testing techniques;

•

determine metal content and metallurgical recovery processes to
extract metal from the ore; and

•

construct, renovate or expand mining and process facilities.

Once gold mineralisation is discovered it can take several years to
determine whether Ore Reserves exist. During this time the economic
feasibility of production may change.

AngloGold Ashanti considers from time to time the acquisition of Ore
Reserves, development properties and operating mines, either as
stand-alone assets or as part of companies. Its decisions to acquire
these properties have historically been based on a variety of factors

including historical operating results, estimates of and assumptions
about future reserves, cash and other operating costs, metal prices
and projected economic returns and evaluations of existing or
potential liabilities associated with the property and its operations.
Other than historical operating results, all of these parameters may
differ significantly from its estimates and assumptions. In addition,
there is intense competition for attractive properties.

As a result of these uncertainties, the exploration programmes and
acquisitions engaged in by AngloGold Ashanti may not result in the
expansion or replacement of the current production with new Ore
Reserves or operations. This could adversely affect its ongoing
business and financial position.

Development risks
AngloGold Ashanti's profitability depends, in part, on the actual economic
returns and the actual costs of developing mines, which may differ
significantly from its current estimates. The development of its mining
projects may be subject to unexpected problems and delays.

AngloGold Ashanti's decision to develop a mineral property is typically
based, in the case of an extension or, in the case of a new
development, on the results of a feasibility study. Feasibility studies
estimate the expected or anticipated project economic returns. These
estimates are based on assumptions about:

•

future gold and other metal prices;

•

anticipated tonnage, grades and metallurgical characteristics of
ore to be mined and processed;

•

anticipated recovery rates of gold and other metals from the ore;

•

anticipated capital expenditure and cash operating costs; and

•

the required return on investment.

Actual cash operating costs, production and economic returns may
differ significantly from those anticipated by such studies and
estimates. There are a number of uncertainties inherent in the
development and construction of an extension to an existing mine, or
in the development and construction of any new mine. These
uncertainties include, in addition to those discussed immediately
above:

•

the timing and cost, which can be considerable, of the
construction of mining and processing facilities;

•

the availability and cost of skilled labour, power, water and
transportation facilities;

•

the availability and cost of appropriate smelting and refining
arrangements;

•

the need to obtain necessary environmental and other
governmental permits and the timing of those permits; and

•

the availability of funds to finance construction and development
activities.

The costs, timing and complexities of mine development and
construction can increase because of the remote location of many
mining properties. New mining operations could experience
unexpected problems and delays during development, construction
and mine start-up. In addition, delays in the commencement of
mineral production could occur. Accordingly, AngloGold Ashanti's
future development activities may not result in the expansion or

Corporate governance

replacement of current production with new production, or one or
more of these new production sites or facilities may be less profitable
than currently anticipated or may not be profitable at all.

Ore Reserve estimation risks
AngloGold Ashanti's Ore Reserves described in this document are
the best estimates of AngloGold Ashanti's management as of the
dates stated and are reported in accordance with the requirements
of the SEC’s Industry Guide 7. In Australia and South Africa,
AngloGold Ashanti is legally required to publicly report Mineral
Resources and Ore Reserves in accordance with JORC 2004 and
SAMREC 2000, respectively. The SEC’s Industry Guide 7 does not
recognise Mineral Resources.

AngloGold Ashanti undertakes annual revisions to its respective
Mineral Resource and Ore Reserve estimates based upon actual
exploration and production results, depletion, new information and
fluctuations in production and economic parameters. These factors
may result in reductions in its Ore Reserve estimates, which could
adversely impact upon the life-of-mine plans and consequently the
total value of AngloGold Ashanti's mining asset base and, as a result,
could have a negative impact upon the market price of AngloGold
Ashanti’s ordinary shares and ADSs.

Mining industry risks
Gold mining is susceptible to numerous events that may have an
adverse impact on a gold mining business. These events include, but
are not limited to:

•

environmental hazards, including discharge of metals, pollutants
or hazardous chemicals;

•

industrial accidents;

•

underground fires;

•

labour disputes;

•

unexpected geological formations;

•

unanticipated ground and water conditions;

•

fall of ground accidents;

•

failure of mining pit slopes and tailings dam walls;

•

legal and regulatory restrictions and changes to such
restrictions;

•

seismic activity; and

•

other natural phenomena, such as floods or inclement weather
conditions.

The occurrence of one or more of these events may result in the
death of, or personal injury to, miners, the loss of mining equipment,
damage to or destruction of mineral properties or production
facilities, monetary losses, delays in production, environmental
damage and potential legal liabilities. As a result, AngloGold
Ashanti's operations could be affected and, if such effects were
material, its financial position could be adversely impacted to a
significant extent.

Seismic activity is of particular concern to the gold mining industry in
South Africa, in part because of the large percentage of deep-level
gold mines. To understand and manage this risk, AngloGold Ashanti
uses sophisticated seismic and rock mechanics technologies.
AngloGold Ashanti has had some success with these technologies in

identifying the possible location of future seismic activity and in the
development of mine layouts, support layouts and technologies and
mining methods to ameliorate seismic risk. Despite these
programmes and their success to date, seismic events have in the
past and may in the future cause employee injury and death and may
cause substantial damage to AngloGold Ashanti's operations both
within South Africa and elsewhere, which could have an adverse
impact on the future results of its operations and, consequently, its
financial condition.

Gold mining operations are subject to extensive health and
safety laws and regulations

Gold mining operations are subject to a variety of mine health and
safety laws and regulations depending upon the jurisdiction in which
they are located. These laws and regulations are formulated to
improve and to protect the safety and health of employees.

In complying with the mine health and safety laws and regulations to
which its operations are subject, AngloGold Ashanti has dedicated
resources in an attempt to achieve and to ensure the application
of international best practice in the management of health across
its operations, including medical surveillance systems. These
systems and policies have resulted in improvements in its safety
performance.

If these laws and regulations were to change and, if as a result,
material additional expenditure was required to comply with such new
laws and regulations, it could adversely affect AngloGold Ashanti's
financial position.

Gold mining companies are subject to environmental laws
and regulations

Gold mining companies are subject to environmental laws and
regulations in the various jurisdictions in which they operate. These
regulations establish limits and conditions on gold producers' ability
to conduct their operations. The cost of AngloGold Ashanti's
compliance with environmental laws and regulations has been
significant in the past.

Gold mining companies are required to close their operations and
rehabilitate the lands that they mine in accordance with
environmental laws and regulations. Estimates of the total ultimate
closure and rehabilitation costs for gold mining operations
are significant and based principally on current legal and
regulatory requirements that may change materially. Environmental
liabilities are accrued when they are known, probable and can be
reasonably estimated.

Environmental laws and regulations are continually changing and are
generally becoming more restrictive. If AngloGold Ashanti's
environmental compliance obligations were to change as a result of
changes in the laws and regulations or in certain assumptions it
makes to estimate liabilities, or if unanticipated conditions were
to arise in its operations, its expenses and provisions would increase
to reflect these changes. If material, these expenses and
provisions could adversely affect its results of operations and
financial position.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Risks related to AngloGold Ashanti's operations

AngloGold Ashanti faces many risks related to its operations that may
affect its cash flows and overall profitability.

AngloGold Ashanti's use of hedging instruments to protect
against low gold prices and exchange rate movements may
prevent it from realising all potential gains resulting from
subsequent gold price increases in the future

AngloGold Ashanti currently uses hedging instruments to fix the
selling price of a portion of its anticipated gold production and to
protect revenues against unfavourable gold price and exchange rate
movements. While the use of these instruments may protect against
a drop in gold prices and exchange rate movements, it will only do
so for a limited period of time and only to the extent that the hedge
remains in place. The use of these instruments may also prevent
AngloGold Ashanti from realising the positive impact on income from
any subsequent favourable increase in the price of gold on the
portion of production covered by the hedge and any subsequent
favourable exchange rate movements.

If the development of the deep-level ore deposits at Obuasi mine
is not economically feasible, there may be a material negative
impact on AngloGold Ashanti’s operations and financial
performance in the long term

A key aspect of the business combination of AngloGold and Ashanti
is the development of the deep-level extension of the existing
orebody at the Obuasi mine, otherwise referred to as the Obuasi
Deeps. This development could potentially extend the life of this
mine to well beyond 2020. In furtherance of this goal, AngloGold
Ashanti has commenced a process of investing $44 million over the
next five years on further exploration and feasibility studies necessary
to establish reserves and develop the most profitable extraction plan.
Depending upon these results, the full development of the Obuasi
Deeps may proceed in six to seven years time, but will take several
years to complete. Initial scoping studies have indicated that the
development of Obuasi Deeps will require an estimated capital
expenditure of $570 million in 2003 money terms over the
anticipated life of the mine.

If as a result of this further exploration and following the completion of
the feasibility studies, AngloGold Ashanti determines that the
development of the Obuasi Deeps is not economically feasible, such
determination may have a material negative impact on its operations
and financial performance in the long term. The funding of the
development of Obuasi Deeps will only proceed if it is determined to be
economically feasible.

In addition, if the feasibility studies indicate that the development of the
Obuasi Deeps is economically feasible, the actual economic returns
and the actual costs of development may differ significantly from the
assumptions and estimates used in the preliminary scoping studies
completed to date, as well as in the feasibility studies completed
following further exploration. This could have a negative impact on
AngloGold Ashanti’s return on its investment in the Obuasi Deeps and,
as a result, AngloGold Ashanti’s long-term profitability following the
business combination.

Benefits from integration of Ashanti’s operations with AngloGold
may not be achieved to the extent or within the time period that
is currently anticipated, and AngloGold Ashanti may encounter
costs and difficulties in integrating the Ashanti operations, which
would reduce or delay the realisation of increased revenues, cost
savings and operational benefits

Following the business combination, AngloGold Ashanti is in the
process of integrating the Ashanti operations with AngloGold’s
operations in order to increase revenues and earnings, and achieve
cost savings through enhanced growth opportunities and synergies.
AngloGold Ashanti may fail to reach the anticipated levels of production
and cost saving that it expects, or achieve these at a higher capital cost
than anticipated.

In addition, the need to deal with integration issues could also divert
management’s attention from day-to-day business.

Foreign exchange fluctuations could have a material impact on
AngloGold Ashanti's operating results and financial position

Since June 2002, the weakening of the dollar against the South African
rand, and, to a lesser extent, the Brazilian real, the Argentinean peso
and the Australian dollar has negatively impacted AngloGold Ashanti's
profitability. Conversely, in certain prior years, the devaluation of these
local currencies against the dollar has had a significant positive effect
on the profitability of its operations. Typically, revenues are derived in
dollars and production costs are largely incurred in the relevant local
currency. In 2004 and 2003, AngloGold Ashanti derived approximately
67% and 76%, respectively, of its revenues from these countries and
approximately 67% and 79%, respectively, of production costs in these
local currencies.

In 2004, the weakening of the dollar against these local currencies
accounted for nearly $28 per ounce, or 52% of the increase in total
cash costs compared with an increase in 2003 of $68 per ounce. In
addition, production costs in South African rand, Brazilian real,
Argentinean peso and Australian dollar were only modestly offset by the
effect of exchange rate movements on the price of imports
denominated in dollars, as imported products comprise a small
proportion of production costs in each of these countries.

AngloGold Ashanti's product, gold, is principally a dollar-priced
commodity and most of its revenues are realised in or linked to dollars.
The weakening of the dollar, without a corresponding increase in the
dollar price of gold against these local currencies results in lower
revenues and higher production costs in dollar terms. Conversely, the
strengthening of the dollar, without a corresponding decrease in the
dollar price of gold, against these local currencies yields significantly
higher revenues and lower production costs in dollar terms. If material,
these exchange rate movements may have an adverse impact on
AngloGold Ashanti's operating results. For example, due to the
strengthening of the South African rand against the dollar, production
costs at AngloGold Ashanti's South African operations increased in
dollar terms during both 2003 and 2004. These impacts have been
partially offset by the increase in the dollar price of gold, which increase
has been partially a function of dollar weakness.

Corporate governance

To a lesser extent, mainly as a result of its hedging instruments, a small
proportion of AngloGold Ashanti's revenues are denominated in South
African rand and Australian dollar, which may partially offset the effect
of the dollar's strength or weakness on AngloGold Ashanti's profitability.

In addition, due to its global operations and local foreign exchange
regulations, some of AngloGold Ashanti's funds are held in local
currencies, such as the South African rand and Australian dollar. The
dollar value of these currencies may be affected by exchange rate
fluctuations. If material, exchange rate movements may affect
AngloGold Ashanti's overall financial position.

Inflation may have a negative impact on AngloGold Ashanti's
results of operations

Most of AngloGold Ashanti's operations are located in countries that
have, during periods in the past, experienced high rates of inflation.
However, because it is unable to control the market price at which it
sells the gold it produces (except to the extent that it enters into forward
sales and other derivative contracts), it is possible that significantly
higher future inflation in the countries in which AngloGold Ashanti
operates may result in a consequent increase in future operational
costs in local currencies, without a concurrent devaluation of the local
currency of operations against the dollar or an increase in the dollar
price of gold. This could have a material adverse effect upon its results
of operations and financial condition.

While none of AngloGold Ashanti's specific operations are currently
materially adversely affected by inflation, significantly higher and
sustained inflation in the future, with a consequent increase in
operational costs, could result in operations being discontinued or
reduced or rationalised at higher cost mines.

Changes to mineral rights ownership regimes in South Africa,
where a significant portion of AngloGold Ashanti’s Mineral
Reserves and deposits are located, could have a material impact
on its financial position

AngloGold Ashanti’s rights to own and exploit Ore Reserves and
deposits are governed by the laws and regulations of the
jurisdictions in which the mineral properties are located. Currently, a
significant portion of its Ore Reserves and deposits are located in
South Africa.

On 1 May 2004 the Mineral and Petroleum Resources Development
Act, Act 28 of 2004 (MPRDA), came into effect and operation.

The MPRDA vests custodianship of South Africa’s mineral rights in the
State. The State issues prospecting rights or mining rights to applicants.
The former common law prospecting, mining and mineral rights are now
known as old order rights and the transitional arrangements provided in
the MPRDA give holders of such old order rights the opportunity to
convert their old order rights into new order rights.

Applicants have five years from 1 May 2004, in which to apply to
convert old order mining rights into new order mining rights. AngloGold
Ashanti submitted its application for conversion of its rights in July
2004. AngloGold Ashanti submitted mining work programmes that
substantiated the areas and period of the new order mining rights and

also demonstrated its compliance with the requirements of the Charter
as described below. A similar application was submitted to the relevant
government department for unused old order prospecting rights.
AngloGold Ashanti had one year from 1 May 2004 to apply for new
prospecting or mining rights for the unused old order rights. AngloGold
Ashanti will also apply for conversion of the old order prospecting rights
that are in use within two years of 1 May 2004. The Department of
Minerals and Energy is considering AngloGold Ashanti’s various
conversion applications.

AngloGold Ashanti also submitted two applications for new mining
rights to extend its mining areas at its TauTona and Kopanang mines.

Where new rights are obtained under the MPRDA, these rights may not
be equivalent to the old order rights. The area covered by the new rights
may be reduced by the State if it finds that the prospecting or mining
work programme submitted by an applicant does not substantiate the
need to retain the area covered by the old rights. The duration of the
new rights will no longer be perpetual but rather, in the case of new
mining rights, for a maximum of 30 years with renewals of up to 30
years each and, in the case of prospecting rights, up to five years with
one renewal of up to three years. The MPRDA provides for a retention
period after prospecting of up to three years with one renewal of up to
two years, subject to certain conditions, such as non-concentration of
resources, fair competition, and non-exclusion of others. In addition,
the new rights will only be transferable subject to the approval of the
Minister of Minerals and Energy. Mining or prospecting must
commence within one year or 120 days, respectively, of the mining right
or prospecting right becoming effective, and must be conducted
continuously and actively thereafter.

The new rights can be suspended or cancelled by the Minister of
Minerals and Energy on breach or, in the case of a mining right, on non-
optimal mining in accordance with the mining work programme.

The Department of Minerals and Energy has published the Broad-
Based Socio-Economic Empowerment Charter for the South African
Mining Industry (the Charter). The objectives of the Charter are to:

•

promote equitable access to the nation’s Mineral Resources to all
the people of South Africa;

•

substantially and meaningfully expand opportunities for historically
disadvantaged South Africans (HDSAs) (that is, any person,
category of persons or community, disadvantaged by unfair
discrimination before the Constitution of the Republic of South
Africa, 1993 came into operation) including women, to enter the
mining and minerals industry and to benefit from the exploitation of
the nation’s Mineral Resources;

•

utilise the existing skills base for the empowerment of HDSAs;

•

expand the skills base of HDSAs in order to serve the community;

•

promote employment and advance the social and economic
welfare of mining communities and the major labour sending
areas; and

•

promote beneficiation of South Africa’s mineral commodities.

The Charter and the relevant Scorecard require that every mining
company achieve 15% ownership by HDSAs of its South African
mining assets within five years, and 26% ownership within 10 years.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

It contemplates that this will be achieved by, among other things,
disposals of assets by mining companies to HDSAs on a willing seller
– willing buyer basis at fair market value. In addition, the Charter and
Scorecard require mining companies to formulate plans for achieving
employment equity at management level with a view to achieving 40%
participation by HDSAs in management and 10% participation by
women in the mining industry, each within five years. The State will
evaluate the company’s commitment to the different facets of
promoting the objectives of the Charter against the Scorecard when
considering applications for conversion of old order rights to new
order rights.

AngloGold Ashanti has completed a number of asset sales to
companies owned by HDSAs in the past five years. According to
AngloGold Ashanti’s estimates based on operating data for the
12 months ended 31 March 2004 – the period on which the
company’s licence conversion applications are based – these
transactions transfer 20% of its attributable units of production in
South Africa to HDSAs. However, the State is currently considering
AngloGold Ashanti’s rights conversion application. In addition,
AngloGold Ashanti is continuing to evaluate alternative ways in which
to achieve the objectives of the Charter through, for example, forms
of broad-based equity ownership by historically disadvantaged
entities, groups or individuals, including employee share ownership
and empowerment unit trusts. Further, the Scorecard allows for a
portion of “offset” against these HDSA ownership requirements
insofar as companies have facilitated downstream, value-adding
activities as regards the products they mine. AngloGold Ashanti
carries out such activities and is confident that these will be
recognised in terms of a framework currently being devised
by government.

AngloGold Ashanti believes that it has made significant progress
towards meeting the requirements of the Charter and the Scorecard
in human resource development, employment equity, mine
community and rural development, housing and living conditions,
procurement and beneficiation. It reflected these results when it
lodged its applications for new mining rights and conversions. Details
of the State’s methodology for calculating performance in regard to
beneficiation have, however, not yet been made public. Failure on
the part of AngloGold Ashanti to comply with the requirements of
the Charter and the Scorecard could subject it to negative
consequences.

AngloGold Ashanti may also incur expenses in giving additional effect
to the Charter and the Scorecard, including costs which it may incur
in facilitating the financing of initiatives towards ownership by HDSAs
as part of the industry wide commitment to assist such persons in
securing R100 billion of financing during the first five years of the
Charter’s life. There is furthermore no guarantee that any steps
AngloGold Ashanti has taken and might take to comply with the
Charter will ensure that it successfully acquires new order rights in
place of its old order rights. In addition, the terms of such new rights
may not be as favourable to AngloGold Ashanti as the terms
applicable to its existing rights. Based on present indications,
however, AngloGold Ashanti believes that it should acquire the new
order rights on reasonable terms.

The MPRDA also imposes on mining companies additional
responsibilities relating to environmental management and to
environmental damage, degradation or pollution resulting from their
prospecting or mining activities. AngloGold Ashanti has a policy of
evaluating, minimising and addressing the environmental
consequences of its activities and, consistent with this policy and the
MPRDA, conducts an annual review of the environmental costs and
liabilities associated with its South African operations in light of the
new, as well as existing, environmental requirements.

AngloGold Ashanti considers the new mineral rights regime in South
Africa to be a proper and appropriate method of dealing with the
country’s Mineral Resources and political legacy. The company believes
the new mineral rights regime is likely to play a significant part in
enhancing socio-economic stability and progress by encouraging
equitable participation in the economy and thereby, improving the lives
of those citizens previously disadvantaged by apartheid. A failure on the
part of government to have implemented such measures would have
endangered prospects for political and economic stability.

AngloGold Ashanti has made progress in adjusting the ownership
structure of its South African mining assets and the composition of its
management consistent with the Charter’s spirit. It believes that it is well
placed to meet the Charter’s targets in accordance with the Scorecard.

The South Africa government has announced that it is giving consideration to new legislation, in terms of which the new rights will be subject to a State royalty. The extent and basis of that royalty is unknown at present. The draft Mineral and Petroleum Royalty Bill, 2003, was released in March 2003 for comment and proposed a royalty payment of three percent of gross revenue per annum, payable quarterly, in the case of gold. Had the proposal become law, royalty payments would have commenced upon the conversion and granting of a new mining right. AngloGold Ashanti and other members of the South African mining community have submitted comments on the draft bill to the relevant authorities. These comments included recommendations for a profit- based, rather than a revenue-based, royalty and in order not to delay the conversion of mineral rights from old into new order rights, it was recommended that the proposed royalty should only become payable
from a fixed date being five years after the MPRDA took effect, that is 1 May 2009, which date is the final date for conversion of the old order into new order mining rights under the MPRDA. In addition, a reduction in the royalty rate from that proposed in the draft Mineral and Petroleum Royalty Bill has been proposed. On 18 February 2004, in the Budget Speech for the 2004 fiscal year, the South African Minister of Finance proposed several refinements to the draft Mineral and Petroleum Royalty Bill. These include a delay in the introduction of the royalty to five years after 1 May 2004, that is the date on which the MPRDA came into operation and confirmation of the South African government’s preference for a revenue based royalty. It was further indicated that the royalty regime would take cognisance of the mining sector’s diverse production and profitability dynamics with differential rates to apply to marginal mining operations. The introduction of the proposed royalty would, all else being equal, have an adverse impact upon AngloGold Ashanti’s profitability, as currently no royalty is payable to the State. However, the Finance Minister announced also that due to the new regulatory system for the mining rights in terms of the MPRDA and accompanying royalty dispensation

Corporate governance

under the draft Mineral and Petroleum Royalty Bill, it has become
imperative to holistically reassess the current fiscal regime as applicable
to the mining and petroleum industries in South Africa, including tax,
depreciation, rate differentiation for mining sectors, allowable deductions
and exemptions from secondary tax on companies in terms of South
Africa’s income tax laws. Also due for review is the gold mining tax
formula, which provides income tax exemption and relief from secondary
tax on companies for gold mines, despite the existence of profit. The
impact of these proposed reviews is unknown at this stage but may have
an adverse effect on AngloGold Ashanti’s profitability.

AngloGold Ashanti's Mineral Reserves and deposits and mining
operations are located in countries that face political and
economic risks

The mineral deposits and mining operations of AngloGold Ashanti are
located in some countries which have experienced to a greater or
lesser extent, political instability and economic uncertainty in the past.
In the past decade and more, South Africa, Ghana, Tanzania, Namibia,
Mali and Brazil have achieved greater political and economic stability.
Nevertheless, in all of the countries where AngloGold Ashanti operates,
government policy may be unpredictable on issues ranging from
environmental regulations to mineral rights ownership.

Any existing and new mining operations and projects AngloGold
Ashanti carries out in these countries are and will be subject to various
national and local laws, policies and regulations governing the
prospecting, developing and mining of Mineral Reserves, taxation,
exchange controls, investment approvals, employee relations and other
matters. If, in one or more of these countries, AngloGold Ashanti were
not able to obtain or maintain necessary permits, authorisations or
agreements to implement planned projects or continue its operations
under conditions or within time frames that make such plans and
operations economic, or if legal or fiscal regimes or the governing
political authorities change materially, its financial position could be
adversely affected.

In South Africa, on 18 February 2004, the Minister of Finance
announced in the Budget Speech the new regulatory system for the
mining rights as detailed in the previous risk factor.

In May 2004, the government of Guinea imposed an embargo on all
imports and exports by AngloGold Ashanti’s Siguiri mine including the
export of gold bullion and the import of diesel. The embargo has
subsequently been lifted by the Guinean government following
extensive discussions between itself and the management of
AngloGold Ashanti. Negotiations with the government in respect of the
Convention de Base are in progress and its outcome cannot be
predicted at this stage.

Labour disruptions in South Africa and other countries could
have an adverse effect on AngloGold Ashanti's operating results
and financial condition

As at 31 December 2004, approximately 69% (2003: 87%) of
AngloGold Ashanti's workforce was located in South Africa.

Approximately 87.5% of the workforce on its South African
operations is unionised, with the National Union of Mineworkers

(NUM) representing the majority of unionised workers. AngloGold
Ashanti's employees in some South American countries are also
highly unionised. Trade unions have a significant impact on
AngloGold Ashanti's labour relation climate as well as on social and
political reforms, most notably in South Africa. In 1987, the NUM
embarked on a three-week strike in support of a wage demand.
Since then labour relations between AngloGold Ashanti and the
industry have stablised and no significant strikes have occurred. This
is, in part, due to the presence of the representative unions and the
part they play in ensuring orderly collective bargaining. It has become
practice to negotiate wages and conditions of employment with the
unions every two years, through the Chamber of Mines of South
Africa. The most recent settlement negotiation was completed in July
2003, when the parties reached an agreement covering the period
from 1 July 2003 to 30 June 2005. Furthermore, AngloGold Ashanti
has instituted a number of processes at both mine and at company
level, whereby management and unions interact regularly and
address areas of difference as they arise.

Prior to the business combination with AngloGold, Ashanti and its
mining contractors also relied to a large degree on a unionised
workforce. In 1999, Ashanti experienced strikes at the Obuasi mine
in Ghana. There is a risk that strikes or other types of conflict with
unions or employees may occur at any one of AngloGold Ashanti’s
operations.

It is uncertain whether labour disruptions will be used to pursue
labour’s economic, political or social goals in the future. Should any
labour disruptions occur, if material, they could have an adverse
effect on AngloGold Ashanti's results of operations and financial
condition.

AngloGold Ashanti faces certain risks in dealing with HIV/AIDS
which may have an adverse effect on its operations

AIDS remains the major health care challenge faced by AngloGold
Ashanti's South African operations. Accurate prevalence data for
AIDS is not available. The South African workforce prevalence
studies indicate this may be as high as 30%, while at the operations
in Ghana, available data suggests a prevalence rate of 3.7%.
AngloGold Ashanti is continuing to develop and implement various
programmes aimed at helping those who have been infected with
HIV and preventing new infections. On 14 November 2002,
AngloGold Ashanti announced that it had begun implementing a
monitored pilot anti-retroviral therapy programme for volunteer
employees in South Africa who are infected with HIV. The pilot
programme involved offering a triple combination drug regimen,
known as a drug cocktail, to 200 Wellness Clinic patients that met
the medical eligibility criteria for starting treatment. From April 2003,
it commenced a roll-out of the treatment to all eligible employees
desiring it.

At this stage, the total cost of providing rigorous outcome-focused
disease management of employees with AIDS, including the
provision of an anti-retroviral drug cocktail, is an average $213 per
employee on treatment per month. It is not yet possible to develop
an accurate cost estimate of the programme in its entirety, given
uncertainties such as drug prices and the ultimate rate of employee

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

participation. AngloGold Ashanti does not expect the cost that it will
incur related to the prevention of HIV infection and the treatment of
AIDS to materially and adversely affect its operations and profitability.

Some of AngloGold Ashanti's power supplies are not always
reliable and have on occasion forced AngloGold Ashanti to halt
or curtail activities at its mines. Power fluctuations and power
cost increases may have a negative impact on AngloGold
Ashanti's profitability

Substantial portions of AngloGold Ashanti's mining operations in
Ghana are dependent for their electricity supply on hydro-electric
power supplied by the Volta River Authority (VRA), an entity controlled
by the government of Ghana, although AngloGold Ashanti also has
access to VRA electricity supply from a recently constructed smaller
thermal plant. The VRA's principal electricity generating facility is the
Akosombo Dam and during periods of below average water inflows
from the Volta reservoir, electricity supplies from the Akosombo Dam
may be curtailed, as occurred in 1998. In addition, this electricity
supply has been subject to voltage fluctuations, which can damage
AngloGold Ashanti's equipment. Other than short-term stand-by
generators, which are not sufficient to allow AngloGold Ashanti to
continue mining operations, AngloGold Ashanti has no means of
obtaining alternative power in the event of a supply shortage from the
VRA. The VRA also obtains power from neighbouring Cote d'Ivoire,
which has recently experienced some political instability and civil
unrest. These factors may cause interruptions in AngloGold Ashanti's
power supply or result in increases in the cost of power even if they
do not interrupt supply. AngloGold Ashanti's original agreement with
the VRA expired in May 2003 and negotiations with the VRA have
been concluded resulting in an increase of 11% in the applicable tariff
upon renewal of that agreement.

AngloGold Ashanti's mining operations in Guinea, Tanzania and Mali
are dependent on power supplied by outside contractors and supplies
of fuel being delivered by road. AngloGold Ashanti's power supply has
been disrupted in the past and AngloGold Ashanti has suffered
resulting production losses as a result of equipment failure.

The occurrence of events for which AngloGold Ashanti is not
insured or for which its insurance is inadequate may affect its
cash flows and overall profitability

AngloGold Ashanti maintains insurance to protect only against
catastrophic events which could have a significant adverse impact on its
operations and profitability. This insurance is maintained in amounts that
are believed to be reasonable depending upon the circumstances
surrounding each identified risk. However, AngloGold Ashanti's insurance
does not cover all potential risks associated with its business. In addition,
AngloGold Ashanti may elect not to have insurance for certain risks, due
to the high premiums associated with insuring those risks or for various
other reasons, including an assessment that the risks are remote.
Furthermore, AngloGold Ashanti may not be able to obtain insurance
coverage at acceptable premiums. AngloGold Ashanti has a captive
insurance company, namely AGRe Insurance Company Limited, which
participates at various levels in certain of the insurances maintained by
AngloGold Ashanti. The occurrence of events for which it is not insured
may adversely affect AngloGold Ashanti's cash flows and overall
profitability.

If securities litigation currently pending in the United States is not
resolved satisfactorily out of court, then any substantial damages
awarded to the plaintiffs by a court of law may affect AngloGold
Ashanti’s business and financial condition

The former Ashanti Goldfields Company Limited is currently subject to
litigation, including a consolidated class action lawsuit pending in the
United States alleging misstatements and non-disclosures in
connection with SEC filings and other public statements made by
Ashanti between 1997 and 1999 concerning Ashanti's hedging
programme. Negotiations are in progress to settle this litigation out of
court. There is no guarantee that a settlement can be reached in a
manner satisfactory to the parties involved.

Risks related to AngloGold Ashanti’s ordinary shares
and ADSs

Sales of large numbers of AngloGold Ashanti’s ordinary shares
and ADSs or the perception that these sales may occur, could
adversely affect the prevailing market price of such securities

The market price of AngloGold Ashanti’s ordinary shares or AngloGold
Ashanti ADSs could fall if large amounts of AngloGold Ashanti ordinary
shares or AngloGold Ashanti ADSs are sold in the public market, or
there is the perception in the marketplace that such sales could occur.
Holders of AngloGold Ashanti ordinary shares or AngloGold Ashanti
ADSs may decide to sell them at any time. Sales of ordinary shares or
ADSs, if substantial, or the perception that these sales may occur and
may be substantial, could exert downward pressure on the prevailing
market prices for the AngloGold Ashanti ordinary shares or AngloGold
Ashanti ADSs, causing their market prices to decline.

Fluctuations in the exchange rate of different currencies may
reduce the market value of AngloGold Ashanti's securities, as
well as the market value of any dividends or distributions paid by
AngloGold Ashanti

AngloGold Ashanti has historically declared all dividends in South African
rand. As a result, exchange rate movements may have affected and, may
continue to affect, respectively, the Australian dollar, the British pound, the
Ghanaian cedi and the dollar value of these dividends, as well as of any
other distributions paid by the relevant depositary to investors that hold
AngloGold Ashanti's securities. This may reduce the value of these
securities to investors. At the general meeting of AngloGold Ashanti's
shareholders held on 5 December 2002, a majority of its shareholders
passed a special resolution adopting a new Memorandum and Articles of
Association, which, among other things, allows for dividends and
distributions to be declared in any currency at the discretion of AngloGold
Ashanti's board, or its shareholders at a general meeting. If, and to the
extent AngloGold Ashanti declares dividends and distributions in dollars,
exchange rate movements will not affect the dollar value of any dividends
or distributions. Nevertheless, the Australian dollar, British pound and
Ghanaian cedi value of any dividend or distribution will continue to be
affected and the South African rand value of any dividend or distribution
will also be affected. If and to the extent dividends and distributions are
declared in South African rand, exchange rate movements will continue
to affect the Australian dollar, British pound, Ghanaian cedi and dollar
value of these dividends and the Australian dollar, British pound,
Ghanaian cedi and dollar market value of AngloGold Ashanti's securities
will continue to fluctuate with exchange rate movements.

Corporate governance

Employee and other stakeholder engagement

The company has a variety of strategies and structures in place that are
designed to promote constructive engagement with employees and
other stakeholders. Full details of the company’s initiatives and
practices in respect of stakeholder engagement are contained in the
AngloGold Ashanti Report to Society 2004, which is available
electronically on the company website.

Employment equity and development

In October 2004, AngloGold Ashanti submitted its fourth annual
employment equity report to the Department of Labour on progress
made with the implementation of the company’s employment equity
plan in respect of its South African operations. The 2004 report
indicates that continued progress has been made year-on-year.
Notably AngloGold Health Services, which has in the past submitted
its own report, has now been included in the 2004 figures in the table
below, and will be reported as such from now on. The employment
equity governance structures and monitoring processes have been

entrenched at company and business unit levels. A Mining Charter
Steering Committee has been established to lead and direct the
overall process of compliance with the charter. An external audit on
progress of equity issues was undertaken in 2004. The external
employment equity audit noted substantial progress in terms of
employment equity. The audit report highlighted the following
findings:

•

61% of the identified risk areas were satisfactorily resolved, the
challenge is to ensure that these achievements are sustained
particularly training and career development, talent retention
and performance management; and

•

35% of the risk areas were in progress, these include
performance management for lower levels, underground
toilets for women, mentoring and diversity awareness programmes.

Measures are being implemented to address these issues. The
following is a summary of the 2004 report as required by section
22(1) of the Employment Equity Act of 1998.

Legislators, senior officials

and managers

193

169

158

142

Professionals

981

117

742

104

239

909

747

162

Technicians and associate

professionals

1,979

416

1,157

164

242

822

1,697

321

1,196

166

501

Clerks

1,373

736

220

140

277

1,153

1,218

684

220

225

998

Craft and related trades

workers

3,852

1,743

1,617

247

245

2,235

3,583

1,629

1,733

173

1,850

Plant & machine operators

and assemblers

9,814

9,352

282

9,731

5,458

5,187

135

5,377

Elementary occupations

19,599

18,949

130

514

19,469

26,142

25,642

132

364

26,010

Total permanent

37,791

31,327

4,118

1,366

980

33,673

39,165

33,548

4,251

660

706

34,914

Non-permanent employees

8,328

7,254

880

183

7,448

7,996

7,085

730

155

7,266

Total

46,119

38,581

4,998

1,549

991

41,121

47,161

40,633

4,981

815

732

42,180

The category Blacks includes Coloureds and Indians. Included in the above are 636 (2003: 556) people with disabilities. The above employee numbers include
(2003: exclude) AngloGold Health Services.

* Total designated = HDSA (black male, black female and white female).

At 1 August

2004

2003

*Total

Occupational

Black

White

Black

White

desig-

Black

White

Black

White

desig-

categories

Total

male

male female female

nated

Total

male

male female female

nated

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Sustainable development

Sustainable development is a cornerstone of the AngloGold Ashanti
culture. The 2004 Report to Society is a reflection of the company’s
commitment to the environment, economy and communities in which
it operates. The report is primarily an interactive web-based
document that can be located at the company website –
www.anglogoldashanti.com/reports/social. Hard copies of the report
are available on request from the Corporate Affairs department.

The company is proud to have qualified for the inaugural JSE Socially
Responsible Investment Index 2003, and looks forward to participating
in the 2004 index, the results of which will be announced during the
course of 2005. The company was also rated third in the Edward
Nathan & Friedland (ENF) Sustainability Index.

Disclosures policy

AngloGold Ashanti subscribes to a policy of full, accurate and
consistent communication in respect of both its financial and operating
affairs. To this end the company has adopted a Disclosures Policy, the
object of which is to ensure compliance with the rules of the various
exchanges on which it is listed and provide timely, accurate and reliable
information fairly to all stakeholders including investors (and potential
investors), regulators and analysts.

As the business combination with Ashanti was completed during the
course of 2004, the policy was only adopted in December 2004 in
order to align the practices of the merged company. The policy is
publicly available from the company website.

Compliance with Section 303A.11 of the
NYSE Rules

Section 303A.11 of the NYSE Rules requires a foreign-listed
company on the exchange to identify significant differences between
its corporate governance practices and those of a domestic
company listed on the NYSE. The board does not comprise a
majority of independent directors as the company is a controlled
company and has adopted a different standard of director
independence as compared with the NYSE standard. The JSE rules

only require a sufficient number of independent directors. The NYSE
rules require fully independent nominations and remuneration
committees. In compliance with JSE rules the company has a
Nominations Committee and a Remuneration Committee. Both
committees comprise solely of non-executive directors, the majority
of whom are independent and are chaired by the independent board
chairman.

Electronic voting by shareholders

Shareholders are a key stakeholder of the company. In order to
empower shareholders to make their voices heard, and to fully
participate in critical decisions affecting the company, AngloGold
Ashanti is examining the feasibility of implementing an electronic voting
system which shareholders can access via the internet. The purpose of
implementing such a system is to provide shareholders with the
opportunity to take advantage of existing technology to electronically
vote on resolutions put forward at the annual general meeting.

Codes of ethics and whistle-blowing policy

In order to comply with the company’s obligations in terms of the
Sarbanes-Oxley Act and the King Code, and in the interests of good
governance, the company has adopted a code of ethics for employees,
a code of ethics for senior financial officers, and a whistle-blowing
policy that encourages employees and other stakeholders to
confidentially report acts of an unethical or illegal nature affecting the
company’s interests. Both codes and the whistle-blowing policy are
available on the company website.

Access to information

The company has complied with its obligations in terms of the South
African Promotion of Access to Information Act of 2000. The
company’s access to information manual is available from the company
website and the company secretarial department.

Sponsor

UBS acts as sponsor to the company in compliance with the Listings
Requirements of the JSE.

The Remuneration Committee determines and monitors executive

remuneration for the company. This it does through adherence to the

company’s Executive Remuneration Policy, which is to:

•

attract, reward and retain executives of the highest calibre;

•

align the behaviour and performance of executives with the

company’s strategic goals, in the overall interests of shareholders;

•

ensure the appropriate mix of short, medium and long-term rewards

and incentives, with the latter being closely linked to structured

company performance targets and strategic objectives; and

•

ensure that regional management is competitively rewarded within

a global remuneration policy, which recognises both local and

global markets.

In particular the Remuneration Committee is responsible for:

•

the remuneration packages for executive directors of the company

including, but not limited to, basic salary, performance-based short

and long-term incentives, pensions, and other benefits; and

•

the design and operation of the company’s executive share option

and other incentive schemes.

Membership of the Remuneration Committee

At the commencement of 2004, the following non-executive directors

were members of the committee:

•

Russell Edey (chairman);

•

Colin Brayshaw;

•

Nicky Oppenheimer;

•

Julian Ogilvie Thompson; and

•

Tony Trahar.

Messrs Oppenheimer and Ogilvie Thompson retired from the board of

AngloGold Ashanti on 29 April 2004 and from all board committees.

Five meetings of the Remuneration Committee were held in 2004.

Noting the resignation of Messrs Oppenheimer and Ogilvie Thompson

during the year, attendance by members at meetings was as follows:

Number of

Number

meetings held

attended

CB Brayshaw

RP Edey

NF Oppenheimer

J Ogilvie Thompson

AJ Trahar

All meetings of the committee are attended by the chief executive

officer and executive officer: human resources, except when their own

remuneration or benefits are being discussed. The services of Deloitte

& Touche are retained to act as independent, expert advisers on

executive remuneration.

The following principles are applied in determining executive
remuneration:

Annual remuneration should be a combination of base pay and
short, medium and long-term incentives, with salary comprising not
more than 50% of annual remuneration.

Salary should be set at the median for the relevant markets.

All incentive plans should align performance targets with
shareholder interests.

Executive director remuneration currently comprises the following
elements:

Basic salary, which is subject to annual review by the
Remuneration Committee and is set at the median of salaries in
similar companies in the relevant markets both in South Africa and
globally. The individual salaries of executive directors are reviewed
annually in light of their own performance, experience, responsibility
and company performance.

Annual bonus, which is determined by the achievement of a set of
stretching company and individual performance targets. The
company targets include earnings per share, cost control and
global production. The weighting of the respective contribution of
company and individual targets is 70% for company and 30% for
individual. Failure to achieve safety improvement targets results in
the reduction of bonuses for executive directors.

Share incentive scheme, which allows for an annual grant of
AngloGold Ashanti share options based on the achievement of pre-
determined performance targets similar to those used for the
annual bonus. Options granted are subject to the achievement of a
performance condition set by the Remuneration Committee and
are subject to a maximum equivalent to one times’ annual salary for
any executive director.

Pensions: all executive directors are members of the AngloGold
Ashanti Pension Fund, a defined benefit fund which guarantees a
pension on retirement equivalent to 2% of final salary per year of
service. Death and disability cover reflects best practice among
comparable employers in South Africa.

Other benefits:

Executive directors are members of

Discovery Health, which covers the director and his immediate
family.

All executive directors hold service contracts that are reviewed and
renewed annually. None of the service contracts have conditions which,
on termination, provide for salary or benefit payments, whether in cash
or in kind, in excess of one year.

Following additional research conducted by Deloitte & Touche on
behalf of AngloGold Ashanti, the committee has recommended the
discontinuation of the current share incentive scheme and the

Remuneration report

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Executive directors’ and executive officers’ remuneration

Pre-tax

Per- Pension

gains

formance-

scheme

All figures have been stated

contri-

Other

Sub

options

to the nearest R000

Salary

payments

(1)

butions

benefits

(2)

total

exercised Total

Executive directors’ remuneration 2004
RM Godsell (chief executive officer)

5,641

2,002

825

162

8,630

–

8,630

Best

2,983 1,758 440 169 5,350

– 5,350

Hodgson

2,983 958 440 45

4,426

–

4,426

Dr SE Jonah KBE (effective 1 June 2004)

2,967

918

–

318

4,203

–

4,203

Williams

3,089 836 458 104

4,487

7,179

11,666

Total

17,663 6,472 2,163 798

27,096 7,179

34,275

Executive officers’ remuneration 2004

Representing 13 executive officers

(3)

16,131

5,553

2,094

1,377

25,155

2,178

27,333

Executive directors’ remuneration 2003
RM Godsell (chief executive officer)

5,386

1,641

684

120

7,831

–

7,831

Best

2,862 743 365

53 4,023 4,932 8,955

Hodgson

2,862 743 365

61 4,031 1,845 5,876

Williams

2,972 769 380 102

4,223 291

4,514

Total

14,082 3,896 1,794 336

20,108 7,068

27,176

Executive officers’ remuneration 2003

Representing seven executive officers

9,624

2,941

927

886

14,378

6,330

20,708

Rounding may result in computational differences.

(1)

In order to more accurately disclose remuneration received/receivable by executive directors and executive officers, the tables above include the performance related payments calculated on the year’s financial results. The 2003 comparative figures have been restated accordingly.

(2)

Includes health care, leave encashment, reimbursement of travel expenses and relocation expenses.

(3)

Of the 13 executive officers, five were promoted effective 1 May 2004; two were employed effective 1 July 2004; and one was promoted effective 1 December 2004. Emoluments have only been disclosed from the various effective dates, except for performance related payments to be made in 2005 pertaining to 2004 results which reflects total amount.

introduction of a bonus share plan (BSP) with effect from 2005. The
options which have been granted under the scheme will remain
subject to the conditions under which they were granted. As noted in
last year’s report, an investigation was also conducted into the
introduction of a long-term incentive plan (LTIP).

The Remuneration Committee has therefore recommended the
introduction of a BSP and LTIP, subject to shareholder approval at the
annual general meeting to be held in 2005. The main reason for these
proposed changes to executive incentive plans is that the current
option scheme does not provide sufficient linkage between the interests
of shareholders and the efforts of executives or managers. There is also
little correlation between the efforts of executives and the success of
the option scheme.

Bonus share plan

Participants in the bonus share plan will receive an annual bonus, part
of which is paid in cash and part in shares, subject to the performance
targets of the plan being achieved. The share element vests after three

years, providing the participant is still in the company’s employment
at that time.

This will provide senior employees with a real stake in the company,
unlike share options, where vesting is dependent on factors outside of
their control. The vesting period of three years should also act as an
incentive for employees to stay with the company.

Long-term incentive plan

The Remuneration Committee proposes the introduction of an LTIP for
the most senior executives and managers in the company. The scheme
will reward participants through the granting of shares for the
achievement of stretched performance targets over a three-year period.
These targets will be based on the performance of earnings per share
(EPS) and relative total shareholder return (TSR), whereby the company
will need to outperform its gold company peers consistently.
Additionally, strategic business objectives will also need to be met, such
as the successful integration of Ashanti into AngloGold.

Remuneration report

Non-executive directors’ remuneration

The following table details fees and allowances paid to non-executive directors

All figures stated

2004

(1)

2003

to the nearest

Directors’

Committee

Travel

(2)

Directors’

Committee

Travel

R000 fees

fees

allowance

Total

fees

allowance

Total

RP Edey (chairman)

602 150 75 827 200 130 43 373

Dr TJ Motlatsi

(deputy chairman)

250 123

– 373 150 110 17 277

FB Arisman

99 123 52 274 100 75 45

220

Mrs E le R Bradley

107 137

– 244 100 110 17 227

CB Brayshaw

(3)

107 115

– 222

100 65 17

182

Dr VK Fung (resigned

30 April 2003)

– – – –

33 10 – 43

AW Lea

101 37 13

151

100 30 –

130

WA Nairn

107 123

– 230 100 110

– 210

NF Oppenheimer

(resigned 29 April 2004)

33 10 – 43

100 30 –

130

J Ogilvie Thompson

(resigned 29 April 2004)

33 10 – 43

100 30 –

130

SR Thompson (appointed

30 April 2004)

67 33 26

126

– – – –

AJ Trahar

107 37 –

144

100 30 –

130

PL Zim (appointed

30 April 2004)

73 33 –

106

– – – –

Total – non-executive

directors

1,686 931 166

2,783

1,183 730 139

2,052

Alternates

DD Barber

– – – – – –

PG Whitcutt

– – – – – 15 – 15

Total – alternate directors

– – – – – 15 17 32

Grand total

1,686 931 166

2,783

1,183 745 156

2,084

Rounding may result in computational differences

(1)

At the annual general meeting of shareholders held on 29 April 2004, shareholders approved an increase in directors' fees with effect from 1 May 2004 as follows:

–

Chairman

–

$130,000 (to 30 April 2004: R200,000) per annum

–

Deputy chairman

–

R300,000 (to 30 April 2004: R150,000) per annum

–

South African resident directors

–

R110,000 (to 30 April 2004: R100,000) per annum

–

Non-resident directors

–

$16,000 (to 30 April 2004: R100,000) per annum

(2)

A payment of a travel allowance of $4,000 (effective 1 May 2004) or $2,000 prior to this date, per meeting is made to non-executive directors who travel

internationally to attend board meetings. In addition, AngloGold Ashanti is liable for the payment of all travel costs.

(3)

In addition, Mr Brayshaw was paid a fee of R15,000 (2003: R15,000) by AGRe Insurance Company Limited, a wholly-owned subsidiary, as chairman of its audit

committee.

Executive directors do not receive payment of directors' fees or committee fees.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Share incentive scheme

Options to subscribe for ordinary shares in the company granted to, and exercised by, executive directors, executive officers and other managers
during the year to 31 December 2004 and subsequent to year-end.

Executive directors, executive officers and other managers

Total

Executive

Total

Godsell Best

Hodgson

Jonah

Williams

Directors

Officers**

Other**

Scheme

Granted as at 1 January 2004
Number

210,300

58,800

84,600

–

91,100

444,800

287,860

3,187,300

3,919,960

Average

exercise

price

per

–

131.27

171.38

166.27

–

141.00

145.22

181.80

214.16

203.96

Granted during the year
Number

14,000

12,000

8,000

50,000

8,000

92,000

57,600

1,051,400

1,201,000

Average exercise

price

per

–

228.00

221.00

228.00

224.20

228.00

227.71

Exercised during the year
Number

–

40,100

14,600

138,100

192,800

Average

exercise

price

per

–

104.00

116.20

118.88

115.58

Average market price per share
at

date

exercise

–

283.03

265.39

272.16

273.91

Pre-tax gain at date of exercise

–

7,178,916

2,178,212

21,168,311

30,525,439

Average

per

–

179.03

149.19

153.28

158.33

Lapsed during the year
Number

–

111,200

Average

exercise

price

per

–

235.59

Held at 31 December 2004
Number

224,300

70,800

92,600

50,000

59,000

496.700

330,860

3,989,400

4,816,960

Average

exercise

price

per

granted

–

137.31

180.98

171.60

221.00

177.94

163.18

192.74

220.51

212.69

Latest expiry date

1 November

1 May

1 November

2014

2014 2014

Subsequent to year-end (to 24 February 2005)
Exercised
Number

–

8,000

–

8,000

–

13,800

21,800

Average exercise price per share

– R

–

108.00

–

108.00

–

122.22

117.00

Average market price per share at
date

exercise

–

210.00

–

210.00

–

203.00

205.57

Pre-tax gain at date of exercise

–

816,000

–

816,000

–

1,114,748

1,930,748

Average per share

– R

–

102.00

–

102.00

–

80.78

88.57

Lapsed
Number

–

Average exercise priceper

–

Held at 24 February 2005
Number

62,800

224,300

92,600

50,000

59,000

488,700

330,860

3,975,600

4,795,160

Average exercise price per share

– R

137.31

190.27

171.60

221.00

177.94

164.08

192.74

220.85

213.12

Latest expiry date

1 November 1 November 1 November

1 May 1 November

1 November 1 November

2014

During the year, six senior managers were promoted to executive officers resulting in 112,460 options at an average strike price of R176.64 per option being transferred from the opening balance under “other" to the opening balance under "executive officers".

Directors’ report

On Friday, 23 April 2004, the High Court of Ghana confirmed the scheme of arrangement, in terms of which AngloGold Limited acquired the entire
issued share capital of Ashanti Goldfields Company Limited. The court order approving the scheme was lodged with the Registrar of Companies in
Ghana on Monday, 26 April 2004, thereby giving effect to the business combination the two companies. The name change to AngloGold Ashanti
Limited was similarly effective from this date.

Nature of business

AngloGold Ashanti Limited conducts mining operations in Africa, North and South America and Australia and undertakes exploration activities
worldwide. In addition, the company is involved in the manufacturing, marketing and selling of gold products, as well as the development of markets
for gold.

Holding company

The company's holding and ultimate holding companies are respectively:
– Anglo South Africa Capital (Proprietary) Limited
– Anglo American plc (incorporated in England and Wales)

The effective shareholding of Anglo American plc in the issued share capital of the company at the undermentioned dates was as follows:

24 February

31 December

2005

2004

2003

Ordinary shares held
Number

134,788,099

134,788,099 121,502,197

Percentage

50.96

50.97

54.45

Share capital

There was no change to the authorised share capital of the company during 2004. The authorised ordinary share capital of AngloGold Ashanti is
R100 million in 400 million shares of 25 South African cents each.

The following are the movements in the issued and unissued ordinary share capital from the beginning of the accounting period to the date of this
report.

Issued shares

2004

2003

Number

of shares

Rand

of shares

Rand

At 1 January

223,136,342 55,784,086

222,622,022 55,655,506

Issues during year
Issues in terms of business combination with Ashanti Goldfields Company Limited

41,133,752 10,283,438

– –

Exercise of options by participants in the
– AngloGold Share Incentive Scheme

192,800 48,200

508,020 127,005

– Acacia Employee Option Plan

– –

6,300 1,575

At 31 December

264,462,894 66,115,724

223,136,342 55,784,086

Issues subsequent to year-end
Exercise of options by participants in the AngloGold Share Incentive Scheme

21,800

5,450

At 24 February 2005

264,484,694

66,121,174

The A and B redeemable preference shares, all of which are held by Eastvaal Gold Holdings Limited (Eastvaal) and which may not be transferred, are
redeemable from the realisation of the assets relating to the Moab Lease area after cessation of mining operations in the area. The shares carry the
right to receive dividends equivalent to the profits (net of royalty, ongoing capital expenditure and taxation) from operations in the area.

Further details of the authorised and issued shares, as well as the share premium, are given in Note 28 to the group's financial statements.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Unissued shares

2004

2003

Number of shares

At 1 January

176,863,658

177,377,978

Issues during year

41,326,552

514,320

Gross unissued shares at 31 December

135,537,106

176,863,658

Issues subsequent to year-end

21,800

Gross unissued shares at 24 February 2005

135,515,306

Maximum number of shares set aside in terms of specific authorities

granted by shareholders for purposes of:

– the Share Incentive Scheme

7,273,329

– the 2.375% Guaranteed Convertible Bonds

15,384,615

Net unissued shares at 24 February 2005

112,857,362

Control of unissued shares

At a general meeting of shareholders held on 29 June 2004, shareholders approved, as a general authority, authorisation to the board of directors to

allot and issue, in their discretion, and for such purposes as they may determine, up to 10% of the authorised but unissued ordinary shares of

25 South African cents each in the share capital of the company (subject to the Companies Act and the JSE Listings Requirements) after setting aside

so many ordinary shares of 25 South African cents each as may be required to be allotted and issued by the company pursuant to the AngloGold

Share Incentive Scheme and for the purposes of the conversion of the $1billion, 2.375% Guaranteed Convertible Bonds issued by AngloGold

Holdings plc. This authority expires at the next annual general meeting of shareholders of the company.

Number of shares

Rand

Authorised share capital

400,000,000

100,000,000

Shares in issue at 29 June 2004

264,327,663

66,081,916

Unissued shares at 29 June 2004

135,672,337

33,918,084

Shares set aside in terms of:

– the AngloGold Share Incentive Scheme at 2.75% of shares in issue at 29 June 2004

7,269,011

1,817,253

– the 2.375% Guaranteed Convertible Bonds

15,384,615

3,846,154

Net unissued shares at 29 June 2004

113,018,711

28,254,677

Shares under the control of:

– the shareholders

90% of net unissued shares

101,716,840

25,429,210

– the board of directors

10% of net unissued shares

11,301,871

2,825,468

Shares issued in terms of the business combination with Ashanti pursuant to the aforementioned authority

75,731

18,933

Balance of shares under the control of directors at 31 December 2004

11,226,140

2,806,535

At the annual general meeting to be held on 29 April 2005, shareholders will be asked to consider an ordinary resolution placing 10% of unissued

ordinary shares, exclusive of the number of shares reserved for purposes of the Share Incentive Scheme, the Long-Term Incentive Plan and the Bonus

Share Plan (subject to the approval of these plans by shareholders) and the 2.375% Guaranteed Convertible Bonds as at that date, under the control

of the directors until the next annual general meeting.

In terms of the Listings Requirements of the JSE Securities Exchange South Africa (JSE), shareholders may, subject to certain conditions, authorise the

directors to issue the shares held under their control for cash other than by means of a rights offer to shareholders. In order that the directors of the company

may be placed in a position to take advantage of favourable circumstances which may arise for the issue of such shares for cash, without restriction, for

the benefit of the company, shareholders will be asked to consider an ordinary resolution to this effect at the forthcoming annual general meeting.

The company has not exercised the general approval to buy back shares from its issued ordinary share capital, granted at the annual general meeting

held on 29 April 2004. At the next annual general meeting shareholders will be asked to renew the general authority for the acquisition by the

company, or a subsidiary of the company, of its own shares.

Directors’ report

As AngloGold Ashanti is not incorporated in Australia, the acquisition of its shares by another company or person is not subject to the takeovers and

substantial holding provision of Chapter 6 of the Australian Corporations Act. However, the company is required to comply with those provisions in

the case of a bid for an Australian company.

American Depositary Shares

At 31 December 2004, the company had in issue through The Bank of New York as Depositary, and listed on the New York Stock Exchange (NYSE),

45,217,297 (2003: 36,753,386) American Depositary Shares (ADSs). Each ADS is equal to one ordinary share.

At 24 February 2005, there were 46,666,735 ADSs in issue and listed on the NYSE.

Ghanaian Depositary Shares

At 31 December 2004, the company had in issue through NTHC Limited as Depositary, and listed on the Ghanaian Stock Exchange (GSE),

22,246,200 Ghanaian Depositary Shares (GhDS). Every 100 GhDSs has one underlying AngloGold Ashanti ordinary share and carries the right to one

vote. There has been no change since 31 December 2004.

AngloGold Share Incentive Scheme

As approved by shareholders, AngloGold Ashanti operates a share incentive scheme for the purpose of providing an incentive to executive directors,

executive officers and managers of the company and its subsidiaries to identify themselves more closely with the fortunes of the group and its

continued growth, and also to promote the retention of such employees by giving them an opportunity to acquire shares in the company. Employees

participate in the scheme to the extent that they are granted options and accept them.

The maximum number of ordinary shares that may be allocated for the purposes of the scheme, equivalent to 2.75% of the total number of ordinary

shares in issue at that date is:

24 February 2005

31 December 2004

31 December 2003

7,273,329

7,272,730

6,136,249

The maximum aggregate number of ordinary shares which may be acquired by any one participant in the scheme is 300,000.

All options which have not been exercised within ten years from the date on which they were granted automatically lapse.

Non-executive directors are not eligible for participation in the share incentive scheme.

The share incentive scheme provides for the vesting of options, based on two separate criteria:

Time-related

The granting of time-related options was approved by shareholders at the general meeting held on 4 June 1998, and amended by shareholders at

the annual general meeting held on 30 April 2002.

Time-related options vest over a five year period from date of grant, and may be exercised in tranches of 20% each in years 2, 3 and 4 and 40% in

year five.

No further time-related options will be granted and all options granted hereunder will terminate on 1 February 2012, being the date on which the last

options granted under this criteria may be exercised or will lapse.

Performance-related options

The granting of performance-related options was approved by shareholders at the annual general meeting held on 30 April 2002.

Performance-related options granted vest in full, three years after date of grant, provided that the conditions on which the options were granted,

are met.

Subject to the approval by shareholders at the annual general meeting to be held on 29 April 2005 to the proposed introduction of the Long-Term

Incentive Plan and the Bonus Share Plan, no further performance-related options will be granted and all options granted hereunder will terminate on

1 November 2014, being the date on which the last options granted under this criteria may be exercised or will lapse. See Notice of the 61st Annual

General Meeting.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Summary

As is required to be disclosed in terms of the AngloGold Share Incentive Scheme and stock exchange regulations, the movement in respect of options

granted and the ordinary shares issued as a result of the exercise of options during the period 1 January 2004 to 24 February 2005 was as follows:

Options

Average exercise

Time-

Performance-

price per

Ordinary

Total

ordinary share

shares issued

At 1 January 2004

1,603,660

2,316,300

3,919,960

R203.96

2,047,340

Movement during year

– Granted

–

1,201,000

R227.01

– Exercised

192,800

–

192,800

R115.58

192,800

– Lapsed – terminations

19,800

91,400

111,200

R235.59

At 31 December 2004

1,391,060

3,425,900

4,816,960

R212.69

2,240,140

Subsequent to year-end

– Exercised

21,800

–

21,800

R117.00

21,800

– Lapsed – terminations

–

At 24 February 2005

1,369,260

3,425,900

4,795,160

R213.12

2,261,940

Analysis of options in issue at 24 February 2005:

Holding

Holders

Number

Value – R000

–

100

–

101

–

500

–

501

–

1,000

132

119,600

28,719

1,001

–

5,000

493

1,559,500

384,999

5,001

–

10,000

113

829,400

182,523

10,001

–

100,000

101

2,062,360

394,925

Over 100,000

224,300

30,798

Total

840

4,795,160

1,021,964

Financial results

The financial statements set out fully the financial position, results of operations and cash flows of the group and the company for the financial year

ended 31 December 2004. A synopsis of the financial results for the year is set out in the summarised group financial and operating results on

pages 8 to 11.

Review of operations

The performance of the various operations are comprehensively reviewed on pages 22 to 48.

Directors’ report

Dividends

Dividend policy

Dividends are proposed and approved by the board of directors of AngloGold Ashanti, based on the interim and year-end financial performance.

Dividends are recognised when declared by the board of directors of AngloGold Ashanti. AngloGold Ashanti expects to continue to pay dividends,

although there can be no assurance that dividends will be paid in the future or as to the particular amounts that will be paid from year to year. The

payments of future dividends will depend upon the Board’s ongoing assessment of AngloGold Ashanti’s earnings, financial condition, including its

cash needs, future earnings prospects and other factors.

Dividends paid since 1 January 2004

Final dividend

Interim dividend

Final dividend

number 95

number 96

number 97

Declaration date

29 January 2004

29 July 2004

26 January 2005

Last date to trade ordinary shares cum dividend

13 February 2004

13 August 2004

11 February 2005

Record date

20 February 2004

20 August 2004

18 February 2005

Amount paid per ordinary share

– South African currency (cents)

335

170

180

– United Kingdom currency (pence)

26.54

14.96

15.50

– Ghanaian currency (cedis)

–

2,484.82

2,683,08

Amount per CDI* – Australian currency (cents)

12.77

7.75

7.56

Payment date

27 February 2004

27 August 2004

25 February 2005

Amount per GhDS** – Ghanaian currency (cedis)

–

24.85

26.83

Payment date

–

30 August 2004

28 February 2005

Amount per ADS*** – United States currency (cents)

49.82

25.62

30.37

Payment date

8 March 2004

7 September 2004

7 March 2005

Rounding may result in computational differences

Each CDI (Chess Depositary Interest) is equal to one-fifth of one ordinary share

Each GhDS (Ghanaian Depositary Share) is equal to one-hundredth of one ordinary share

***

Each ADS (American Depositary Share) is equal to one ordinary share

Shareholders on the South African register who have dematerialised their ordinary shares receive payment of their dividends electronically, as provided

for by STRATE. For those shareholders who have not yet dematerialised their shares, or who may intend retaining their shareholding in the company

in certificated form, the company operates an electronic funds transmission service, whereby dividends may be electronically transferred to

shareholders’ bank accounts. These shareholders are encouraged to mandate this method of payment for all future dividends.

Borrowings

The company’s borrowing powers are unlimited. As at 31 December 2004, the group’s borrowings totalled $1,605 million, R9,062 million

(2003: $1,158 million, R7,723 million).

On 19 February 2004, AngloGold announced the launch of an offering of $900 million convertible bonds due 2009, subject to increase by up to

$100 million pursuant to an option, by its wholly-owned subsidiary, AngloGold Holdings plc. The bonds are guaranteed by AngloGold Ashanti. This

was followed by an announcement on 20 February 2004 which advised the pricing of the offering at 2.375%, while on 25 February 2004, AngloGold

announced that the bond managers had exercised the option to subscribe for additional bonds in a principal amount of $100 million, increasing the

offering to $1 billion. The offer closed and was settled on 27 February 2004.

Borrowings subsequent to the balance sheet

AngloGold Ashanti announced the signing of a new three-year $700 million revolving credit facility to replace the $600 million facility which matured

in February 2005. The new facility, which will be used for general corporate purposes, will reduce the group’s cost of borrowing with the borrowing

margin over LIBOR reducing from 70 basis points to 40 basis points. The facility was arranged with a number of AngloGold Ashanti’s local and

international relationship banks.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Assets acquired (disposed)

On 20 January 2004, AngloGold announced that it had received a cash payment of A$4 million ($3 million) and 25 million fully paid ordinary shares
from Tanami Gold NL in Australia, as consideration for Tanami Gold’s purchase of the Western Tanami Project. This follows an initial payment of
A$250,000 ($188,750) made on 24 November 2003 when the Heads of Agreement was signed by the companies.

On 26 April 2004, AngloGold acquired Ashanti Goldfields Company Limited as a purchase business combination. The assets acquired were funded
through the issue of shares amounting to $1,366 million, R9,297 million.

The agreement which was entered into for the sale of Union Reefs Gold Mine and associated assets and tenements which was announced on
14 November 2003, was subsequently terminated. On 5 August 2004, AngloGold Ashanti announced the sale of its Union Reefs assets to the
Burnside Joint Venture, comprising subsidiaries of Northern Gold NL (50%) and Harmony Gold Mining Company Limited (50%), for a total
consideration of A$4 million. The Burnside Joint Venture is responsible for all future obligations associated with the assets, including remaining site
rehabilitation and reclamation.

On 1 July 2004, AngloGold Ashanti announced that it had entered into an agreement with Trans-Siberian Gold plc for the ultimate acquisition of a
29.9% stake in the company through an equity investment of approximately £18 million ($32 million). The first tranche of ordinary shares of 17.5%
was acquired in July 2004. This first move into Russia allows AngloGold Ashanti the opportunity to establish an association with credible partners
familiar with the environment. On 23 December 2004, AngloGold Ashanti announced that the deadline to subscribe for the second tranche of ordinary
shares in Trans-Siberian Gold plc had been extended from 31 December 2004 to 15 April 2005. The extension has been agreed because the
condition in the subscription agreement relating to the financing of Trans-Siberian’s Asacha project would not be satisfied by 31 December 2004.

In a joint announcement on 10 September 2004, AngloGold Ashanti confirmed its agreement to sell its entire interest in Ashanti Goldfields Zimbabwe
Limited to Mwana Africa Holdings (Pty) Limited for a deferred consideration of $2 million, R15 million. The sole operating asset of Ashanti Goldfields
Zimbabwe Limited is the Freda-Rebecca Gold Mine.

On 11 October 2004, AngloGold Ashanti announced that it had signed an agreement with Philippines explorer Red 5 Limited to subscribe for a 12.3%
stake in the expanded issued capital of Red 5 for a cash consideration of A$5 million ($4 million). The placement will be used to fund the exploration
activities along strike from current mineral resources at the Siana Project, and to test the nearby porphyry gold-copper targets in the Surigao region
of the Republic of the Philippines.

On 13 December 2004, AngloGold Ashanti announced that it had entered into an exploration alliance with Oxiana Limited, to explore for gold in Laos.
Laos is highly prospective for both gold and copper, but is under-explored. Projects generated will be owned jointly by AngloGold Ashanti and Oxiana,
with AngloGold Ashanti having an option to earn an additional 10% equity in any project generated, by either sole funding the first $10 million of
expenditure where a project is still to be drilled, or sole funding through to completion of a bankable feasibility study where a significant drill intersection
has already been made. Payment was made in January 2005.

Investments

Particulars of the group’s principal subsidiaries and joint venture interests are presented on page 178.

Events subsequent to the balance sheet

On 26 January 2005, the AngloGold Ashanti board approved the $121m Cuiabá Deepening Project in Brazil, which is expected to increase production
from that mine from 190,000 ounces per year to 250,000 ounces per year within two years of the project’s completion. The Cuiabá life-of-mine should
be extended by six years and production over this period should increase by 1.86 million ounces.

Litigation

Save as disclosed in the Corporate Governance section of this Annual Report 2004 on page 81 under the risk factor entitled "If securities litigation
currently pending in the United States is not resolved satisfactorily out of court, then any substantial damages awarded to the plaintiffs by a court of
law may affect AngloGold Ashanti's business and financial condition", there are no legal or arbitration proceedings in which any member of the
AngloGold Ashanti group is or has been engaged, including any such proceedings which are pending or threatened of which AngloGold Ashanti is
aware, which may have, or have had during the 12 months preceding the date of this Annual Report 2004, a material effect on the group's
financial position.

Material change

There has been no material change in the financial or trading position of the AngloGold Ashanti group since the publication of its results for the quarter
and year ended 31 December 2004.

Directors’ report

Material resolutions

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

Nature of resolution

Effective date

AngloGold Ashanti Limited

Change of name to AngloGold Ashanti Limited

26 April 2004

Passed at the annual general meeting held on 29 April 2004:
Approval of increases in directors' remuneration:

1 May 2004

Directors to receive R110,000 (previously R100,000) per annum,
provided that directors who are non-residents of South Africa
will receive $16,000 per annum.
Fee payable to chairman of the board $130,000 (previously
R200,000) per annum, provided that the chairman is a
non-resident of South Africa.
Fee payable to deputy chairman of the board R300,000 (previously
R150,000) per annum.
Additional travelling allowance payable to directors who travel
internationally to attend board meetings $4,000
(previously $2,000).

General approval for the acquisition by the company, or a
subsidiary of the company, of its own shares.

11 May 2004

Subsidiaries
AngloGold Australia Limited

Change of name to AngloGold Ashanti Australia Limited

6 May 2004

AngloGold (Colorado) Corp.

Change of name to AngloGold Ashanti (Colorado) Corp.

24 September 2004

AngloGold North America Inc.

Change of name to AngloGold Ashanti North America Inc.

23 September 2004

AngloGold USA Incorporated

Change of name to AngloGold Ashanti USA Incorporated

22 September 2004

Ashanti Goldfields (Bibiani) Limited

Change of name to AngloGold Ashanti (Bibiani) Limited

25 August 2004

Ashanti Goldfields Company Limited Change of name to AngloGold Ashanti (Ghana) Limited

3 September 2004

Ghanaian-Australian
Goldfields Limited

Change of name to AngloGold Ashanti (Iduapriem) Limited

25 August 2004

Mineração AngloGold Ltda

Capital stock increase

5 January 2004

Capital stock increase

1 April 2004

Capital stock increase

1 October 2004

Change of name to AngloGold Ashanti Mineração Ltda

1 October 2004

Mineração Serra Grande S.A.

Capital stock increase

30 August 2004

S.M.I. Holdings Limited

Change of name to AngloGold Holdings Limited

2 February 2004

AngloGold Holdings Limited

Change of name to AngloGold Holdings plc

6 February 2004

Conversion from a private company to a public company

6 February 2004

AngloGold Holdings plc

Adoption of New Memorandum and Articles of Association

9 February 2004

Cancellation of Variable Rate Redeemable Non-Cumulative
Preference shares

9 February 2004

Capital increase

19 November 2004

Adoption of New Memorandum and Articles of Association

19 November 2004

General meetings

At the 60th annual general meeting held on 29 April 2004, shareholders passed ordinary resolutions relating to:

•

the adoption of the annual report for the year ended 31 December 2003;

•

the re-election of Mr JG Best, Mrs E le R Bradley and Mr AJ Trahar as directors of the company.

At the general meeting held on 29 June 2004, shareholders passed ordinary resolutions relating to:

•

the granting of a general authority placing 10% of the unissued ordinary shares of the company after setting aside sufficient shares attributable
to the share incentive scheme and guaranteed convertible bonds under the control of the directors;

•

the granting of a general authority to issue ordinary shares in the capital of the company for cash, subject to certain limitations in terms of the
Listings Requirements of the JSE; and

•

the granting of authority to issue shares for the conversion of the $1,000,000,000, 2.375% Guaranteed Convertible Bonds due 2009.

Details concerning the special resolutions passed by shareholders at this meeting are disclosed above.

Notice of the 61st annual general meeting, which is to be held in Cape Town at 11:00 on Friday, 29 April 2005, is enclosed as a separate document
with the Annual Report 2004. Additional copies of the notice of meeting may be obtained from the company’s corporate contacts and the share
registrars or may be accessed from the company’s website.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Directorate and secretary

The directors retiring by rotation at the forthcoming annual general meeting in terms of the articles of association are Mr CB Brayshaw,
Mr DL Hodgson, Mr AW Lea, Mr WA Nairn and Mr KH Williams. Mr Hodgson has advised that he will be retiring from the board, and therefore, has
not made himself available for re-election. However, Mr Brayshaw, Mr Lea, Mr Nairn and Mr Williams, being eligible, offer themselves for re-election.
In addition to the abovementioned directors, Dr SE Jonah, Mr SR Thompson and Mr PL Zim, who were appointed as directors during the year, are
due to retire at the annual general meeting and offer themselves for election.

Non-executive directors do not hold service contracts with the company. Mr Williams, who offers himself for re-election, holds a service contract with
the company, terminable on the giving of not less than six months notice.

The names of the directors and alternate directors of the company in office at the date of this report are listed on pages 15 and 16.

Biographies of the board of directors appear on pages 15 and 16.

There has been no change in the offices of managing secretary and company secretary whose names and business and postal addresses are set
out on the inside back cover of this report.

Directors’ interests in shares

The interests of the directors and alternate directors in the ordinary shares of the company at 31 December 2004, which did not individually exceed
1% of the company's issued ordinary share capital, were:

31 December 2004

31 December 2003

Beneficial

Non-

Direct

Indirect

beneficial

Direct

Indirect

beneficial

Executive directors
JG Best – – – – – –

RM Godsell

460 – –

DL Hodgson

– 430

–

430 – –

SE Jonah KBE

6,297 – – – – –

KH Williams

– 920

–

– 920

–

Total

6,757 1,350

– 460 1,350

–

Non-executive directors
FB Arisman

– 2,000

–

– 2,000

–

Mrs E le R Bradley

– 23,423 26,027

– 23,423 33,027

CB Brayshaw

– – –

RP Edey

– 1,000

–

– 1,000

–

AW Lea

– – –

Dr TJ Motlatsi

– – – – – –

WA Nairn

– – – – – –

J Ogilvie Thompson (resigned 29 April 2004)

– – – –

478

NF Oppenheimer (resigned 29 April 2004)

– – –

– –

8,726

SR Thompson

– – –

AJ Trahar

– – –

PL Zim

– – – – – –

Total

– 26,423 26,027

– 26,423 42,231

Alternate directors
DD Barber

– – –

AH Calver

– 46 – – 46 –

PG Whitcutt

– – –

Total

– 46 – – 46 –

Grand

total

6,757 27,819 26,027

460 27,819 42,231

There have been no changes in the above interests since 31 December 2004.

A register detailing directors’ and officers’ interests in contracts is available for inspection at the company’s registered and corporate office.

Directors’ report

Annual financial statements

The directors are required by the South African Companies Act to maintain adequate accounting records and are responsible for the preparation of
the annual financial statements which fairly present the state of affairs of the company and the AngloGold Ashanti group at the end of the financial
year, and the results of operations and cash flows for the year, in conformity with generally accepted accounting practice and in terms of the JSE
Listings Requirements.

In preparing the annual financial statements reflected in dollars and SA rands on pages 98 to 171, the group has complied with International Financial
Reporting Standards (IFRS) and has used appropriate accounting policies supported by reasonable and prudent judgements and estimates. The
directors are of the opinion that these financial statements fairly present the financial position of the company and the group at 31 December 2004,
and the results of their operations and cash flow information for the year then ended.

The directors have reviewed the group’s business plan and cash flow forecast for the year to 31 December 2005. On the basis of this review, and in
the light of the current financial position and existing borrowing facilities, the directors are satisfied that AngloGold Ashanti is a going concern and
have continued to adopt the going-concern basis in preparing the financial statements.

The external auditors, Ernst & Young, are responsible for independently auditing and reporting on the financial statements in conformity with South
African Auditing Standards, and the Companies Act. Their unqualified report on these financial statements appears on page 67.

To comply with requirements for reporting by non-US companies registered with the SEC, the company has prepared a set of financial statements
(Form 20-F) in accordance with US Generally Accepted Accounting Principles (US GAAP) which will be available from The Bank of New York to
holders of the company’s securities listed in the form of American Depositary Shares on the NYSE. Copies of the Form 20-F will also be available to
stakeholders and other interested parties upon request to the company’s corporate office or its contacts as listed on the back cover of this report. In
compliance with the requirements of the NYSE, a condensed consolidated income statement, balance sheet, statement of cash flows and brief
financial notes based on US GAAP are included on pages 172 to 175 in this report. A condensed reconciliation between IFRS and US GAAP is
supplied as supplementary information (pages 176 to 177).

In terms of the Sarbanes-Oxley Act, the chief executive officer and chief financial officer are required to complete a group certificate stating that the
financial statements and reports are not misleading and that they fairly present the financial condition, results of operations and cash flows in all
material respects. The design and effectiveness of the internal controls, including disclosure controls, are also included in the declaration. As part of
the process, a declaration is also made that all significant deficiencies and material weaknesses, fraud involving management or employees who play
a significant role in internal control and significant changes that could impact on the internal control environment, are disclosed to the Audit and
Corporate Governance Committee and the board.

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Annual financial statements contents

Group financial statements

Income statement

Balance sheet

100

Cash flow statement

101

Statement of changes in equity

102

Notes to the financial statements

104

Company financial statements

Income statement

153

Balance sheet

154

Cash flow statement

155

Statement of changes in equity

156

Notes to the financial statements

157

Condensed consolidated financial statements prepared
in accordance with US GAAP

172

Condensed consolidated income statement

173

Condensed consolidated balance sheet

174

Condensed consolidated cash flow statement

175

Condensed reconciliation between IFRS and US GAAP

176

Investment in principal subsidiaries and joint venture interests

178

Group income statement

15,922

16,150

Revenue

2,521

2,116

15,264

15,348

Gold income

2, 3

2,396

2,029

(11,458)

(12,933)

Cost of sales

(2,022)

(1,526)

3,806

2,415

374

503

(273)

(331)

Corporate administration and other expenses

(51)

(36)

(139)

(100)

Market development costs

(15)

(19)

(283)

Exploration costs

(44)

(38)

(221)

(200)

Amortisation of intangible assets

19, 20

(31)

(29)

(327)

(8)

Impairment of tangible assets

(1)

(44)

861

(786)

Non-hedge derivative (loss) gain

(142)

119

(122)

(78)

Other operating expenses

(12)

(14)

–

Other operating income

–

(122) –

Abnormal

items

–

(19)

3,180

638

Operating profit

423

285

Interest receivable

Other net income

Profit on disposal of assets and subsidiaries

331

–

Profit on disposal of investments

–

(384)

(563)

Finance costs and unwinding of decommissioning obligation

(87)

(53)

Fair value gains on interest rate swaps

3,546

517

Profit before taxation

472

(1,080)

174

Taxation

(142)

2,466

691

Profit after taxation

100

330

Allocated as follows

2,331

567

Equity Shareholders

312

130

124

Minority interest

–

Minority interest in abnormal items

–

2,466

691

100

330

2003

2004

Figures in million

Notes

2004

2003

SA Rands

US Dollars

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Adjustments to operating profit

The operating profit has been adjusted by the following to

arrive at adjusted operating profit:

3,180

638

Operating profit

423

273

331

Add: Corporate administration and other expenses

139

100

Add: Market development costs

283

Add: Exploration costs

221

200

Add: Amortisation of intangible assets

327

Add: Impairment of tangible assets

(438)

1,173

Less: Unrealised non-hedge derivatives

202

(63)

122

Add: Other operating expenses

–

(9)

Less: Other operating income

(1)

–

122

–

Add: Abnormal items

–

4,229

2,802

Adjusted operating profit

434

559

The profit attributable to equity shareholders has been adjusted

by the following to arrive at headline earnings and adjusted

headline earnings:

2,331

567

Profit attributable to equity shareholders

312

221

200

Amortisation of intangible assets

19, 20

327

Impairment of tangible assets

(75)

(88)

Profit on disposal of assets and subsidiaries

(13)

(10)

(331)

–

Profit on disposal of investments

–

(45)

(94)

Taxation on items above

(12)

2,379

703

Headline earnings

102

318

(476)

1,163

Unrealised non-hedge derivatives and fair value gains on

interest rate swaps

200

(69)

230

(222)

Deferred tax on unrealised non-hedge derivatives

(39)

2,133

1,644

Adjusted headline earnings

263

282

Earnings per ordinary share (cents)

1,046

226

Basic

140

1,042

225

Diluted

139

1,068

280

Headline

143

957

654

Adjusted headline

105

127

710

350

Dividends declared per ordinary share (cents)

101

1.3

1.9

Dividend cover based on adjusted headline earnings

1.9

1.3

2003

2004

Figures in million

Notes

2004

2003

SA Rands

US Dollars

Assets

Non-current assets

18,427

33,195

Tangible assets

5,880

2,764

2,749

2,347

Intangible assets

416

412

Investment in associate

223

Other investments

124

Inventories

630

1,055

Derivatives

187

1,000

601

Other non-current assets

106

151

22,981

37,588

6,659

3,447

Current assets

2,003

2,363

Inventories

419

300

1,461

1,747

Trade and other receivables

309

219

2,515

2,767

Derivatives

490

377

Current portion of other non-current assets

3,367

1,758

Cash and cash equivalents

312

505

9,405

8,640

1,531

1,410

32,386

46,228

Total assets

8,190

4,857

Equity and liabilities

10,852

18,228

Shareholders’ equity

3,229

1,628

354

327

Minority interests

11,206

18,555

3,287

1,681

Non-current liabilities

5,383

7,262

Borrowings

1,286

807

1,832

2,265

Provisions

402

275

2,194

2,716

Derivatives

481

329

3,986

7,605

Deferred taxation

1,347

598

13,395

19,848

3,516

2,009

Current liabilities

2,339

2,650

Trade and other payables

470

350

2,340

1,800

Current portion of borrowings

319

351

2,942

3,007

Derivatives

533

441

164

368

Taxation

7,785

7,825

1,387

1,167

21,180

27,673

Total liabilities

4,903

3,176

32,386

46,228

Total equity and liabilities

8,190

4,857

2003

2004

Figures in million

Notes

2004

2003

SA Rands

US Dollars

Group balance sheet

100

as at 31 December 2004

101

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Group cash flow statement

Cash flows from operating activities

15,712

15,928

Receipts from customers

2,480

2,075

(11,185)

(12,423)

Payments to suppliers and employees

(1,895)

(1,483)

4,527

3,505

Cash generated from operations

585

592

245

236

Interest received

(232)

(148)

Environmental contributions and expenditure

(24)

(31)

–

Dividends received from associates

–

(291)

(465)

Finance costs

(72)

(40)

681

–

Recoupments tax received: Free State assets

–

(681)

–

Recoupments tax paid: Free State assets

–

(91)

(780)

(218)

Taxation paid

(34)

(102)

3,478

2,910

Net cash inflow from operating activities

492

453

Cash flows from investing activities

Capital expenditure

(1,622)

(1,645)

– to expand operations

(256)

(215)

(1,122)

(2,119)

– to maintain operations

(329)

(148)

Proceeds from disposal of tangible assets

(8)

(127)

Other investments acquired

(20)

(1)

423

–

Proceeds from disposal of investments

–

(1,139)

(Acquisition) disposal of subsidiaries net of cash

(171)

(133)

(13)

Loans advanced

(2)

(19)

539

Repayment of loans advanced

–

(703)

Utilised in hedge restructure

(123)

–

(2,329)

(5,138)

Net cash outflow from investing activities

(806)

(307)

Cash flows from financing activities

Proceeds from issue of share capital

(2)

(1)

Share issue expenses

–

2,678

7,236

Proceeds from borrowings

1,077

362

(1,241)

(5,348)

Repayment of borrowings

(818)

(165)

(2,476)

(1,322)

Dividends paid

(198)

(314)

–

228

Proceeds from hedge restructure

–

(978)

815

Net cash inflow (outflow) from financing activities

104

(107)

171

(1,413)

Net (decrease) increase in cash and cash equivalents

(210)

(348)

(196)

Translation

3,544

3,367

Cash and cash equivalents at beginning of year

505

413

3,367

1,758

Net cash and cash equivalents at end of year

312

505

2003

2004

Figures in million

Notes

2004

2003

SA Rands

US Dollars

for the year ended 31 December 2004

Group statement of changes in equity

102

Balance at 31 December 2002

1,113

(185)

449

1,443

1,483

Profit after taxation

312 312 18

330

Dividends (Note 17)

(296) (296) (18)

(314)

Ordinary shares issued

Net loss on cash flow hedges

removed from equity and reported

in income

47 47

Net loss on cash flow hedges

(142)

(2)

(144)

Deferred taxation on cash flow

hedges

7 7 7

Net gain on available-for-sale

financial assets

15 15 15

Net gain on available-for-sale

financial assets removed from

equity and reported in income

(22)

At acquisition of subsidiaries

Translation

1 319

5 (156) (27) 112 254 (1)

253

Balance at 31 December 2003

8 1,442

–

21 (113) (307) 577 1,628

53 1,681

Profit after taxation

100

Dividends (Note 17)

(179)

(19)

(198)

Ordinary shares issued

1,367

1,369

Issue of convertible bonds

Net loss on cash flow hedges

removed from equity and reported

in income

134

Net loss on cash flow hedges

Deferred taxation on cash flow

hedges

(43)

Net gain on available-for-sale

financial assets

At acquisition of subsidiaries

Translation 2

543

(514)

(18)

107

109

Balance at 31 December 2004

3,352

(627)

(184)

570

3,229

3,287

Note 28

Attributable to equity holders of the group

Equity

Non-

Foreign

Other

Ordinary

Ordinary portion of

distri-

currency

compre-

Share-

share converti-

butable

trans-

hensive

Retained

holders’

Minority

Figures in million

capital

premium ble bond

reserves

(1)

lation

income

(2)

earnings

equity

interests

Equity

US Dollars

103

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Balance at 31 December 2002

9,551

–

138

360

(1,583)

3,853

12,375

347

12,722

Profit after taxation

2,331 2,331 135

2,466

Dividends (Note 17)

(2,336) (2,336) (140)

(2,476)

Ordinary shares issued

Net loss on cash flow hedges
removed from equity and reported
in income

375 375

380

Net loss on cash flow hedges

(956)

(18)

(974)

Deferred taxation on cash flow
hedges

(38) (38) (38)

Net gain on available-for-sale
financial assets

114 114 114

Net gain on available-for-sale
financial assets removed from
equity and reported in income

(174)

Net gain on repayment of net
investment

3 3

At acquisition of subsidiaries

103

Translation (1,118)

215

(903)

(78)

(981)

Balance at 31 December 2003

9,612

– 138 (755)

(2,047)

3,848

10,852 354

11,206

Profit after taxation

567

124

691

Dividends (Note 17)

(1,197)

(125)

(1,322)

Ordinary shares issued

9,309

9,319

Issue of convertible bonds

542

Net loss on cash flow hedges
removed from equity and
reported in income

864

867

Net gain (loss) on cash flow hedges

239

(3)

236

Deferred taxation on cash flow
hedges

(291)

Net gain on available-for-sale
financial assets

At acquisition of subsidiaries

Translation (78)

(2,784)

183

(2,679)

(44)

(2,723)

Balance at 31 December 2004

18,921

464

138

(3,539)

(1,040)

3,218

18,228

327

18,555

Note 28

(1)

Non-distributable reserves comprise a surplus on disposal of company shares of $24m, R138m.

(2)

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

Attributable to equity holders of the group

Equity

Non-

Foreign

Other

Ordinary

Ordinary portion of

distri-

currency

compre-

Share-

share converti-

butable

trans-

hensive Retained

holders’

Minority

Figures in million

capital

premium ble bond

reserves

(1)

lation

income

(2)

earnings

equity

interests

Equity

SA Rands

for the year ended 31 December 2004

Notes to the group financial statements

104

1 Accounting policies

The financial statements are prepared according to the historical
cost accounting convention, as modified by the revaluation of
certain financial instruments to fair value. The group's accounting
policies as set out below are consistent in all material respects with
those applied in the previous year, except for the early adoption of IFRIC
Interpretation 5: Rights to interests arising from decommissioning,
restoration and Environmental Rehabilitation Funds (refer Note 34).
These financial statements comply with International Financial
Reporting Standards (IFRS).

AngloGold Ashanti presents its consolidated financial statements
in US dollars. The group’s presentation currency is US dollars since the
majority of its sales are in dollars. The measurement currency of the
various entities within the group depends on where the entity operates
and reflects the economic substance of the underlying events and
circumstances of that entity.

The following method of translation has been used:

•

equity items other than profit attributable to equity shareholders at
the closing rate on each balance sheet date;

•

assets and liabilities at the closing rate on each balance sheet
date;

•

income, expenses and cash flows at the weighted average
exchange rate applicable to the month during which the
transactions take place; and

•

resulting exchange differences are included in equity.

To assist investors in South Africa, amounts have also been disclosed
in SA rands. This is supplementary to the information required by IFRS.
AngloGold Ashanti, the company, measures and presents its results in
SA rands.

Basis of consolidation

The group financial statements incorporate the financial statements of
the company, its subsidiaries and its proportionate interest in joint
ventures.

The financial statements of subsidiaries, the AngloGold Environmental
Rehabilitation Trust Fund and joint ventures, are prepared for the same
reporting period as the holding company, using the same accounting
policies.

Where an investment in a subsidiary or a joint venture is acquired or
disposed of during the financial year, its results are included from or to,
the date control became, or ceased to be, effective.

All intra-group transactions and balances are eliminated on consolidation.
Unearned profits that arise between group entities are eliminated.

Foreign entities

Assets and liabilities (both monetary and non-monetary) of foreign entities
are translated at the closing rate. Income statement items are translated
at a weighted average rate of exchange for the period. Exchange
differences are taken directly to a foreign currency translation reserve.

Joint ventures

A joint venture is an entity in which the group holds a long-term interest
and which is jointly controlled by the group and one or more other
venturers under a contractual arrangement. The group’s interest in a
jointly controlled entity is accounted for by proportionate consolidation.

Associates

The equity method of accounting is used for an investment over which
the group exercises significant influence and normally owns between
20% and 50% of the voting equity. Associates are equity accounted
from the effective dates of acquisition to the effective dates of disposal.

Results of associates are equity accounted from their most recent
audited annual financial statements or unaudited interim financial
statements. Any losses of associates are brought to account in the
consolidated financial statements until the investment in such
associates is written down to a nominal amount. Thereafter, losses are
accounted for only insofar as the group is committed to providing
financial support to such associates.

The carrying values of the investments in associates represent the cost
of each investment, including unamortised goodwill, the share of post-
acquisition retained earnings and losses and any other movements in
reserves. The carrying value of associates is reviewed on a regular basis
and if any impairment in value has occurred, it is written off in the period
in which these circumstances are identified.

Foreign currency transactions

Foreign currency transactions are recorded at the spot rate of
exchange on transaction date. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of
exchange ruling at the reporting date. Foreign exchange gains or losses
arising from foreign exchange transactions are included in the
determination of profit for the year. Foreign exchange differences in
foreign currency borrowings that provide a hedge against a net
investment in a foreign entity are taken directly to equity until the
disposal of the net investment, at which time, they are recognised in the
income statement.

Tangible assets

Tangible assets are recorded at cost less accumulated amortisation
and impairments. Cost includes pre-production expenditure incurred
during the development of a mine and the present value of future
decommissioning costs. Cost also includes finance charges capitalised
during the construction period where such expenditure is financed by
borrowings.

If there is an indication that the recoverable amount of any of the
tangible assets is less than the carrying value, the recoverable amount
is estimated and an allowance is made for the impairment in value.

Mine development costs
Capitalised mine development costs include expenditure incurred to
develop new orebodies, to define further mineralisation in existing
orebodies, to expand the capacity of a mine and to maintain production.

Mine development costs include acquired proved and probable mineral
resources at cost at acquisition date. Mine development costs are
amortised using the units-of-production method based on estimated
proved and probable mineral reserves. Amortisation is first charged on
new mining ventures from the date it is capable of commercial
production.

Proved and probable mineral reserves reflect estimated economically
recoverable quantities which can be recovered in future from known
mineral deposits. These reserves are amortised from the date on which
commercial production begins.

Stripping costs incurred in open-pit operations during the production
phase to remove additional waste are charged to operating costs on
the basis of the average life of mine stripping ratio and the average life
of mine costs per tonne. The average stripping ratio is calculated as the
number of tonnes of waste material expected to be removed during the
life of mine per tonne of ore mined. The average life of mine cost per
tonne is calculated as the total expected costs to be incurred to mine
the orebody divided by the number of tonnes expected to be mined.
The average life of mine stripping ratio and the average life of mine cost
per tonne is recalculated annually in the light of additional knowledge
and changes in estimates. Thus, the cost of stripping in any period will
be reflective of the average stripping rates for the orebody as a whole.
Changes in the life-of-mine stripping ratio are accounted for
prospectively as a change in estimate.

Mine infrastructure
Plant, equipment and buildings are amortised using the lesser of their
useful life or units-of-production method based on estimated proved
and probable mineral reserves.

Land
Land is not depreciated.

Mineral rights, dumps and exploration properties
Mineral rights are amortised using the units-of-production method
based on estimated proved and probable mineral reserves.

Dumps are amortised over the period of treatment.

Exploration properties include acquired properties that are believed to
contain value beyond proved and probable mineral reserves and are
recognised at cost. Exploration properties when proved and probable
are transferred to mine development costs at carrying value and are
amortised from the date on which commercial production begins.

Intangible assets

Acquisition and goodwill arising thereon
Where an investment in a subsidiary, joint venture or an associate is
made, any excess of the purchase price over the fair value of the
attributable mineral reserves, exploration properties and net assets is
recognised as goodwill.

Goodwill is amortised on a systematic basis over the lesser of the life of
the mine or 20 years. The unamortised balance is reviewed on a regular

basis and, if impairment in the value has occurred, it is written off in the
period in which the circumstances are identified.

Goodwill in respect of subsidiaries and proportionately consolidated
joint ventures is disclosed as goodwill. Goodwill relating to associates is
included within the carrying value of the investment in associates.

Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity and
are translated at the closing rate.

Royalty rate concession
The royalty rate concession with the government of Ghana was
capitalised at fair value at agreement date. Fair value represents a
present value of future royalty rate concessions over 15 years. The
royalty rate concession has been assessed to have a finite life and is
amortised under a straight-line method over a period of 15 years, the
period over which the concession runs. The related amortisation
expense is charged through the income statement. This intangible
asset is also tested for impairment where there is an indicator of
impairment.

Borrowing costs

Interest on borrowings relating to the financing of major capital projects
under construction is capitalised during the construction phase as part
of the cost of the project. Other borrowing costs are expensed as
incurred.

Leased assets

Assets subject to finance leases are capitalised at cost with the related
lease obligation recognised at the same amount. Capitalised leased
assets are depreciated over the shorter of their estimated useful lives
and the lease term. Finance lease payments are allocated, using the
effective interest rate method, between the lease finance cost, which is
included in finance costs, and the capital repayment, which reduces the
liability to the lessor.

Operating lease rentals are charged against operating profits in a
systematic manner related to the period the assets concerned will be
used.

Research and exploration expenditure

Research and exploration expenditure is expensed in the year in which
it is incurred. When it has been determined that a mineral property can
be economically developed, all further pre-production expenditure
incurred to develop such property is capitalised. Capitalisation of pre-
production expenditure ceases when the mining property is capable of
commercial production.

Inventories

Inventories are valued at the lower of cost and net realisable value after
appropriate allowances for redundant and slow moving items. Cost is
determined on the following bases:

•

gold in process is valued at the average total production cost at
the relevant stage of production;

•

gold on hand is valued on an average total production cost
method;

105

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

106

•

ore stockpiles are valued at the average moving cost of mining and
stockpiling the ore;

•

by-products, which include uranium oxide and sulphuric acid are
valued on an average total production cost method;

•

consumable stores are valued at average cost; and

•

heap-leach pad materials are measured on an average total
production cost basis. The cost of materials on the leach pad from
which gold is expected to be recovered in a period greater then
12 months is classified as a non-current asset.

A portion of the related depreciation, depletion and amortisation charge
is included in the cost of inventory.

Provisions

Provisions are recognised when the group has a present obligation,
whether legal or constructive, as a result of a past event for which it is
probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation.

AngloGold Ashanti does not recognise a contingent liability. A
contingent liability is disclosed when the possibility of an outflow of
resources embodying economic benefits is remote. A contingent asset
is also disclosed where an inflow of economic benefits is probable.

Employee benefits

The group operates post-retirement medical aid benefit plans, a
number of defined contribution pension plans and a defined benefit
pension plan.

Defined contribution plans
Contributions to defined contribution pension and provident funds in
respect of services during that year are recognised as an expense in
that year.

Defined benefit plan
The cost of providing benefits to the defined benefit pension plan is
determined using the projected unit credit actuarial valuation method.
The current service cost in respect of the defined benefit plan is
recognised as an expense in the current year. Actuarial gains and
losses are recognised as an expense or income systematically over the
expected remaining service period of employees participating in the
plan where the cumulative amount of such gains and losses exceeds
10% of the greater of the fair value of the plan assets and the present
value of the defined benefit obligation.

Post-retirement medical aid obligation
The cost of post-retirement benefits are made up of those obligations
which the group has towards current and retired employees.

The entitlement to these benefits for current employees is dependant
upon the employee remaining in service until retirement age. The cost
of providing benefits to the post-retirement medical benefit plan is
determined using the projected unit credit actuarial valuation method.
Actuarial gains and losses arising in the plan are recognised as income
or expense over the expected average remaining service lives of

employees participating in the plan where the cumulative amount of
such gains and losses exceeds 10% of the greater of the fair value of
the plan assets and the present value of the defined benefit
obligation.

Environmental expenditure

Long-term environmental obligations comprising decommissioning
and restoration are based on the group's environmental management
plans, in compliance with the current environmental and regulatory
requirements.

The environmental rehabilitation obligations in respect of the non-
South African operations are not funded through an established trust
fund. Bank guarantees and reclamation bonds are provided for some
of these liabilities.

Annual contributions are made to the AngloGold Environmental
Rehabilitation Trust, created in accordance with South African
statutory requirements, to fund the estimated cost of
rehabilitation during and at the end of the life of a mine. The fund is
recognised on the balance sheet at fair value.

The growth in the trust is included in income. AngloGold Ashanti is the
sole contributor to the fund and exercises full control through the
board of trustees, hence the fund is consolidated.

Decommissioning costs
The provision for decommissioning represents the cost that will arise
from rectifying damage caused before production commenced.

Decommissioning costs are provided for at the present value of the
expenditures expected to settle the obligation, using estimated cash
flows based on current prices. When this provision gives access to
future economic benefits, an asset is recognised and included within
mining infrastructure. The unwinding of the decommissioning
obligation is included in the income statement. The estimated future
costs of decommissioning obligations are regularly reviewed
and adjusted as appropriate for new circumstances or changes in law
or technology. The estimates are discounted at a pre-tax rate that
reflects current market assessments of the time value of money.

Gains from the expected disposal of assets are not taken into
account when determining the provision.

Restoration costs
The provision for restoration represents the cost of restoring site
damage after the commencement of production. Increases in the
provision are charged to the income statement as a cost of
production.

Gross restoration costs are estimated at the present value of the
expenditures expected to settle the obligation, using estimated cash
flows based on current prices. The estimates are discounted at a pre-
tax rate that reflects current market assessments of the time value
of money.

Notes to the group financial statements

Restoration costs are accrued and expensed over the operating life of
each mine using the units-of-production method based on estimated
proved and probable mineral reserves. Expenditure on ongoing
restoration costs is brought to account when incurred.

Revenue recognition

Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the group and the revenue can be reliably
measured. The following criteria must also be present:

•

the sale of mining products is recognised when the significant risks
and rewards of ownership of the products are transferred to the
buyer;

•

dividends are recognised when the right to receive payment is
established; and

•

interest is recognised on a time proportion basis, taking account
of the principal outstanding and the effective rate over the period
to maturity, when it is determined that such income will accrue to
the group.

Taxation

Deferred taxation is provided on all temporary differences at the
balance sheet date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.

Deferred tax assets are only recognised to the extent that it is probable
that the deductible temporary differences will reverse in the foreseeable
future and future taxable profit will be available against which the
temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that
sufficient future taxable profit will be available to allow all or part of the
deferred tax asset to be utilised.

A deferred tax liability is recognised for all taxable temporary differences
if it is probable that the temporary difference will not reverse in the
foreseeable future.

Deferred tax assets and liabilities are measured at future anticipated tax
rates, which have been enacted at the balance sheet date.

Current and deferred tax is recognised as income or expense and
included in the profit or loss for the period, except to the extent that the
tax arises from a transaction or event which is recognised, in the same
or a different period directly in equity; or a business combination that is
an acquisition.

Current taxation is measured on taxable income at the applicable
statutory rate.

Financial instruments

Financial instruments recognised on the balance sheet include
investments, convertible bonds, loans receivable, trade and other
receivables, cash and cash equivalents, borrowings, derivatives and
trade and other payables.

Financial instruments are initially measured at cost, including
transaction costs, when the group becomes a party to their contractual
arrangements. The subsequent measurement of financial instruments is
dealt with below.

A financial instrument or a portion of a financial instrument will be
derecognised and a gain or loss recognised when the company loses
the contractual rights or extinguishes the obligation associated with
such an instrument.

On derecognition of a financial asset, the difference between the
proceeds received or receivable and the carrying amount of the asset
is included in income.

On derecognition of a financial liability the difference between the
carrying amount of the liability extinguished or transferred to another
party and the amount paid for is included in income.

Derivatives
The group enters into derivatives to ensure a degree of price certainty
and to guarantee a minimum revenue on a portion of the future planned
gold production of its mines. In addition, the group enters into
derivatives to manage interest rate risk.

IAS39 (AC133) requires that derivatives be treated as follows:

•

commodity based (normal purchase or normal sale) contracts that
meet the requirements of IAS39 are recognised in earnings when
they are settled by physical delivery;

•

where the conditions in IAS39 for hedge accounting are met, the
derivative is recognised on the balance sheet as either a derivative
asset or derivative liability and recorded at fair value. For cash flow
hedges, the effective portion of fair value gains or losses are
recognised in equity (other comprehensive income) until the
underlying transaction occurs, then the gains or losses are
recognised in earnings. The ineffective portion of fair value gains
and losses is reported in earnings in the period to which they
relate. For fair value hedges, the gain or loss from changes in fair
value of the hedged item is reported in earnings, together with the
offsetting gains and losses from changes in fair value of the
hedging instrument; and

•

all other derivatives are subsequently measured at their estimated
fair value, with the changes in estimated fair value at each
reporting date being reported in earnings in the period to which
it relates.

The estimated fair values of derivatives are determined at discrete
points in time based on the relevant market information. These
estimates are calculated with reference to the market rates using
industry standard valuation techniques.

Investments
Listed investments, other than investments in subsidiaries, joint
ventures, and associates, are subsequently measured at fair value,
which is calculated by reference to the quoted selling price at the close
of business on the balance sheet date. Unlisted investments are shown
at fair value, and are calculated by reference to the directors’ valuation,
or at cost where fair value cannot be reliably measured. Investments in

107

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

108

subsidiaries, joint ventures and associates are carried at cost in the
investor’s separate financial statements.

Investments classified as available-for-sale financial assets are
subsequently measured at fair value, with changes in fair value
recognised in equity (other comprehensive income) in the period in
which they arise. These amounts are removed from equity and reported
in income when the asset is derecognised or when there is evidence
that the asset is impaired.

Other non-current assets
Other non-current assets are subsequently measured at amortised cost
using the effective interest rate method.

Trade and other receivables
Trade and other receivables originated by the group are subsequently
measured at amortised cost less allowance for doubtful debts.

Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand
deposits and short-term, highly liquid investments readily convertible to
known amounts of cash and subject to insignificant risk of changes in
value and are subsequently measured at cost.

Impairment of financial assets
At each balance sheet date an assessment is made of whether there is
any objective evidence of impairment of financial assets. If such
evidence exists, the estimated recoverable amount of that asset is
determined and any impairment loss recognised in income for the
difference between the recoverable amount and the carrying amount.

At each balance sheet date, an assessment is made of whether there
is any objective evidence of impairment of financial assets re-measured
to fair value. If such evidence exists, the cumulative net loss that had
been recognised directly in equity is removed from equity and
recognised in earnings for the period.

The amount of the loss is calculated as the difference between its
acquisition cost, net of any principal repayment and amortisation, and
current fair value or recoverable amounts less any impairment loss on
that asset previously recognised in earnings.

Financial liabilities
Financial liabilities, other than trading financial liabilities and derivatives,
are subsequently measured at amortised cost being the original
obligation less principal payments and amortisations. Trading financial
liabilities and derivatives are subsequently measured at fair value.

Convertible bonds
Convertible bonds issued are accounted for as compound financial
instruments and initially recognised as part-liability, part-equity. The
allocation is determined by assigning the residual amount to the equity
component after determining the value of the liability component. The
equity component is not remeasured. The liability component is carried
at amortised cost.

Investment property

Investment properties comprise land and are measured at cost. Land is
not depreciated.

2 Segmental information

Based on risks and returns the directors consider that the
primary reporting format is by business segment. The directors
consider that there is only one business segment being mining,
extraction and production of gold. Therefore the disclosures for
the primary segment have already been given in these financial
statements.

The secondary reporting format is by geographical analysis by origin
and destination.

Gold

Adjusted operating

Cash operating

income (m)

profit (loss) (m)

2004

2003

2004

2003

2004

2003

US Dollars

South Africa

1,205

1,179

221

317

335

370

Argentina

Australia

172

157

Brazil

158

147

107

Ghana

198

–

(22)

–

Guinea

–

(16)

–

(13)

–

Mali

188

205

113

Namibia

Tanzania

201

107

USA

105

128

Zimbabwe

–

(1)

–

Other

–

(6)

(7)

–

2,396

2,029

434

559

787

791

Notes to the group financial statements

Geographical analysis by origin is as follows:

109

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Gold

Adjusted operating

Cash operating

income (m)

profit (loss) (m)

2004

2003

2004

2003

2004

2003

SA Rands

South Africa

7,749

8,846

1,420

2,398

2,151

2,799

Argentina

620

606

202

192

370

389

Australia

1,099

1,187

390

248

555

422

Brazil

1,014

1,109

547

565

685

734

Ghana

1,257

–

(130)

–

128

–

Guinea

259

–

(93)

–

(81)

–

Mali

1,192

1,550

306

557

503

857

Namibia

176

198

Tanzania

1,285

787

150

242

372

334

USA

671

981

300

379

Zimbabwe

–

(9)

–

Other

–

(35)

(52)

(7)

15,348

15,264

2,802

4,229

5,051

5,968

Gold production

Average number

(oz 000)

(kg)

of employees

2004

2003

2004

2003

2004

2003

South Africa

3,079

3,281

95,772

102,053

45,200

48,078

Argentina

211

209

6,575

6,501

791

690

Australia

410

432

12,762

13,425

455

540

Brazil

334

323

10,382

10,039

2,686

2,666

Ghana

485

–

15,041

–

8,855

–

Guinea

–

2,565

–

2,335

–

Mali

475

577

14,789

17,930

1,413

1,297

Namibia

2,070

2,299

251

387

Tanzania

570

331

17,740

10,280

2,258

1,040

USA

329

390

10,234

12,141

411

741

Zimbabwe

–

293

–

745

–

6,052

5,616

188,223

174,668

65,400

55,439

for the year ended 31 December 2004

2 Segmental information (continued)

110

Notes to the group financial statements

Net operating

Total

Capital

assets

expenditure

(1)

2004

2003

2004

2003

2004

2003

US Dollars (m)

South Africa

1,867

1,311

2,666

1,930

335

327

Argentina

207

212

316

305

Australia

383

341

720

668

Brazil

218

192

348

285

Ghana

1,698

–

1,774

–

Guinea

197

–

242

–

Mali

248

244

322

326

Namibia

Tanzania

836

170

1,107

388

USA

380

388

409

418

Zimbabwe

–

Other

107

100

248

507

6,171

2,969

8,190

4,857

585

449

SA Rands (m)

South Africa

10,541

8,741

15,052

12,850

2,159

2,471

Argentina

1,166

1,410

1,784

2,035

Australia

2,164

2,273

4,062

4,457

182

159

Brazil

1,232

1,282

1,962

1,898

261

273

Ghana

9,585

–

10,016

–

269

–

Guinea

1,115

–

1,366

–

366

–

Mali

1,402

1,627

1,820

2,172

108

Namibia

172

216

200

134

Tanzania

4,719

1,135

6,248

2,587

USA

2,144

2,590

2,311

2,796

103

199

Zimbabwe

–

Other

595

666

1,391

3,391

34,835

19,797

46,228

32,386

3,764

3,396

(1)

2003 restated to reflect the change in accounting treatment of ore reserve development expenditure.

Geographical analysis by destination is as follows:

Gold income

2004 2003 2004 2003

US Dollars (m)

SA Rands (m)

South Africa

534

565

3,418

4,250

North America

777

271

4,972

2,038

Australia

115

464

867

Asia

161

121

1,031

907

Europe

455

569

2,916

4,280

United Kingdom

312

388

2,001

2,922

Africa

–

405

–

South America

–

141

–

2,396

2,029

15,348

15,264

2 Segmental information (continued)

111

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Revenue

Revenue consists of the following principal categories:

15,264

15,348

Gold income (Note 2)

2,396

2,029

373

517

Sale of uranium, silver and sulphuric acid

285

Interest receivable

15,922

16,150

2,521

2,116

Cost of sales

9,473

10,127

Cash operating costs

1,581

1,260

255

345

Other cash costs

9,728

10,472

Total cash costs

1,635

1,294

Retrenchment costs (Note 14)

196

Rehabilitation and other non-cash costs

9,852

10,728

Production costs

1,676

1,311

1,739

2,423

Amortisation of tangible assets (Notes 13, 18 and 34)

380

232

–

Amortisation of intangible assets (Note 19)

–

11,591

13,159

Total production costs

(1)

2,057

1,543

(133)

(226)

Increase in inventories

(35)

(17)

11,458

12,933

2,022

1,526

(1)

A reassessment has been made of the useful life of on-reef ore
reserve development expenditure with effect from 1 January 2004.
The impact of the reassessment is that costs are expensed over
a longer period than was previously estimated. The effect
of the change on the current year’s results is a decrease in cash
operating costs of $94m, R606m, an increase in amortisation of
tangible assets of $40m, R261m, resulting in a net decrease of
total production costs of $54m, R345m.

(1)

The effect on future periods is not determinable.

Exploration costs

477

519

Expenditure incurred during the year

(194)

(236)

Expenditure transferred to tangible assets

(37)

(25)

283

Other operating expenses

Other operating expenses is arrived at after taking account of:
Post-retirement medical expenses for disposed mines

101

and medical aid scheme losses

–

Write-off of loan

–

Shortfall in retirement provisions

Other operating income

–

Net income from investment properties

–

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

for the year ended 31 December 2004

8 Abnormal

items

Abnormal items consist of the following items:

214

–

Provision for post-retirement medical liability

–

(46)

–

Reversal of over-provisions in decommissioning (Note 30)

–

(7)

(46)

–

Reversal of over-provision in restoration (Note 30)

–

(7)

122

–

Abnormal items before taxation (Note 34)

–

Taxation

–

– Current taxation on foreign exchange losses on borrowings (Note 15)

–

120

–

– Deferred taxation (Note 15)

–

– provision for post-retirement medical liability

–

(42)

–

– over-provision in decommissioning and restoration liabilities

–

(6)

–

– deferred tax asset raised

–

(57)

–

Abnormal items after taxation

–

(8)

–

Minorities interest

–

(52)

–

Abnormal items after taxation and after minorities

–

(7)

Other net income

Other net income consists of the following principal categories:

Growth in AngloGold Environmental Rehabilitation Trust (Note 24)

Profit from associates after taxation (Note 20)

–

(23)

Exchange gain (loss) on transactions other than sales

(3)

10 Profit on disposal of assets and subsidiaries

–

Profit on disposal of Union Reefs Gold Mine

–

Profit on disposal of Western Tanami assets

–

Profit on disposal of Tanami Gold Mine

–

Profit on disposal of mineral rights and exploration properties

–

Disposal of Jerritt Canyon Joint Venture (Note 35)

–

(7)

–

Other

–

(Note 34)

11 Profit on disposal of investments

–

Sale of Queenstake Resources USA Inc shares

–

189

–

Sale of East African Gold Mines shares

–

125

–

Sale of Randgold Resources shares

–

(1)

–

Other

–

331

–

(Note 34)

–

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

112

Notes to the group financial statements

113

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

12 Finance costs and unwinding of

decommissioning obligation

231

Finance costs on bank loans and overdrafts

215

Finance costs on corporate bond

–

127

Finance costs on convertible bonds (Note 38)

(1)

–

Net finance costs on interest rate swap

(2)

Other finance costs

(3)

362

579

–

(67)

Less: amounts capitalised (Note 18)

(11)

–

362

512

Unwinding of decommissioning obligation (Note 30)

384

563

(Note 34)

(1)

The interest rate swap entered into against the convertible bonds
has been designated as a fair value hedge and is considered an
integral part of the bond. Accordingly, the finance cost on the
convertible bonds is disclosed after adjusting for the finance costs
and income under the swap.

(2)

Interest received on the interest rate swap entered into against the
corporate bond which has not been designated as a fair value
hedge was $13m, R83m (2003: $5m, R35m).

(3)

The 2003 comparative has been adjusted to separately disclose
the finance costs on the interest rate swap.

13 Profit before taxation

Profit before taxation is arrived at after taking account of:
Auditors’ remuneration

– Statutory audit fees

–

– Under provision prior year

–

– Other assurance services

–

Other professional services

(1)

–

(1)

Other professional services include valuations, internal audit,
consulting services, tax advisory services and remuneration
and technical reviews

Amortisation of tangible assets (Notes 4, 18 and 34)

1,694

2,364

Owned assets

371

226

Leased assets

1,739

2,423

380

232

Grants for educational and community development

102

Operating lease charges

At 31 December 2004, the group was committed to making the
following payments in respect of operating leases for amongst
others, hire of plant and machinery and land and buildings:

Expiry within

– One year

– Between 1-2 years

– Between 2-5 years

–

– After 5 years

–

111

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

14 Employee benefits

Employee benefits including executive directors' salaries, and

4,160

4,781

other benefits

(1)

742

551

Health care and medical scheme costs

297

296

– current medical expenses

227

114

– defined benefit post-retirement medical expenses

(1)

(Note 30)

Contributions to pension and provident plans

186

261

– defined contribution

– defined benefit (Note 30)

– defined benefit pension plan expense

Retrenchment costs (Note 4)

4,979

5,557

Included in cost of sales and other operating expenses

863

660

Defined benefit pension plan expense

– current service cost

106

– interest cost

(92)

(95)

– expected return on plan assets

(15)

(12)

–

– recognised past service cost

–

(3)

– actuarial (gain) loss

–

(Note 30)

Defined benefit post-retirement medical expense

– current service cost

–

107

– interest cost

–

(2)

– expected return on plan assets

–

134

– recognised past service cost

–

(4)

– actuarial gain

–

227

114

(Note 30)

Actual return on plan assets

120

219

South African defined benefit pension plan (Note 30)

Refer to Directors' report for details of directors' emoluments

(1)

The comparative figures are restated to reflect the defined
benefit medical expense portion previously included under
salaries and wages of $21m, R161m.

15 Taxation

Current taxation

–

Mining taxation

–

450

152

Non-mining taxation

229

Under provision prior year

–

Secondary tax on companies

–

(59)

–

Taxation on abnormal items (Note 8)

–

(8)

–

Capital gains tax

–

Disposal of assets – recoupment

–

526

397

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

114

Notes to the group financial statements

115

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

15 Taxation

(continued)

Deferred taxation

576

217

Temporary differences

230

(222)

Unrealised non-hedge derivatives

(39)

(120)

–

Taxation on abnormal items (Note 8)

–

(19)

(132)

–

Impairment

–

(18)

–

(566)

Change in estimated deferred taxation

(1)

(99)

–

554

(571)

(Note 31)

(106)

1,080

(174)

(40)

142

Tax reconciliation

A reconciliation of the future anticipated tax rate compared

to that charged in the income statement is set out in the

following table:

Future anticipated tax rate

(1)

Disallowable expenditure

Intangible assets amortised

Taxable non-mining income

–

(3)

Mining tax formula adjustment

(38)

Dividends received

–

(4)

Foreign income tax allowances and rate differentials

(23)

(14)

Previously unrecognised tax assets

(8)

(1)

Other

(15)

(3)

Change in estimated deferred tax rate

(169)

–

Under provision for prior year

–

Effective tax rate

(66)

Add back:

Change in estimated deferred tax rate

169

–

Under provision for prior year

(67)

–

Adjusted effective tax rate

(1)

During 2004, the estimates were revised in South Africa to reflect

the future anticipated taxation rate at the time the temporary

differences reverse.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

15 Taxation (continued)

Unutilised tax losses

The unutilised tax losses of the US operations which

1,394

1,085

are available for offset against future profits earned in the USA.

192

209

The unutilised tax losses of the South American operations which

449

–

are available for offset against future profits earned in these countries.

–

The unutilised tax losses of the Ghanaian and Guinean operations

which are available for offset against a future profits earned in these

–

745

countries.

132

–

1,843

1,830

324

276

Analysis of tax losses

Tax losses available to be used against future profits

–

745

– Utilisation required within 1 and 2 years

132

–

1,843

1,085

– Utlilisation in excess of 5 years

192

276

1,843

1,830

324

276

Utilised tax losses

–

Assessed losses utilised during the year

–

SA Cents

US Cents

16 Earnings per ordinary share

1,046

226

Basic

140

The calculation of basic earnings per ordinary share is based on

earnings attributable to equity shareholders of $81m, R567m (2003:

$312m, R2,331m) and 251,352,552 (2003: 222,836,574) shares

being the weighted average number of ordinary shares in issue

during the financial year.

1,068

280

Headline

143

Headline earnings removes items of a capital nature from the

calculation of earnings per share.

The calculation of headline earnings per ordinary share is based on

headline earnings of $102m, R703m (2003: $318m, R2,379m) and

251,352,552 (2003: 222,836,574) shares being the weighted

average number of ordinary shares in issue during the year.

2003

2004

2003

SA Rands

US Dollars

116

Notes to the group financial statements

117

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

16 Earnings per ordinary share (continued)

957

654

Adjusted headline earnings

105

127

This calculation is based on adjusted headline earnings of $263m,
R1,644m (2003: $282m, R2,133m) and 251,352,552 (2003:
222,836,574) shares being the weighted average number of ordinary
shares in issue during the financial year.

1,042

225

Diluted

139

The calculation of diluted earnings per ordinary share is based on
earnings attributable to equity shareholders of $81m, R567m (2003:
$312m, R2,331m) and 252,048,301 (2003: 223,717,575) shares
being the diluted number of ordinary shares.

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

251,352,552

222,836,574

Dilutive potential of share options

695,749

881,001

Diluted number of ordinary shares

252,048,301

223,717,575

The calculation of diluted earnings per share for 2004 did not
assume the effect of 15,384,615 shares issuable upon the
exercise of convertible bonds as their effects are anti-dilutive
for this period.

SA Rands

US Dollars

17 Dividends

Ordinary shares
No. 93 of 675 SA cents per ordinary share was declared on
30 January 2003 and paid on 28 February 2003 (82 US cents

1,500

–

per share).

–

183

No. 94 of 375 SA cents per ordinary share declared on 30 July 2003

836

–

and paid on 29 August 2003 (51 US cents per share).

–

113

No. 95 of 335 SA cents per ordinary share was declared on
29 January 2004 and paid on 27 February 2004 (50 US cents

–

748

per share).

111

–

No. 96 of 170 SA cents per ordinary share was declared on

–

449

29 July 2004 and paid on 27 August 2004 (26 US cents per share).

–

2,336

1,197

179

296

No. 97 of 180 SA cents per ordinary share was declared on

26 January 2005 and paid on 25 February 2005 (30 US cents

per share).

2003

2004

2003

SA Cents

US Cents

for the year ended 31 December 2004

118

Notes to the group financial statements

Tangible assets

Mineral

rights,

Mine

dumps and

development

Mine

exploration

Figures in million

costs

(1)

infrastructure

(1)

properties

(1)

Land

Total

US Dollars

Cost
Balance at beginning of year

2,391

1,622

546

4,574

Additions
– expand operations

185

–

245

– maintain operations

246

–

329

Disposals (11)

(6)

(14)

–

(31)

Acquisition of subsidiaries (Note 35)

1,616

918

–

2,592

Disposal of subsidiaries (Note 35)

(5)

–

(5)

Transfers and other movements

243

(166)

–

Finance costs capitalised (Note 12)

–

Translation 363

113

500

Balance at end of year

5,039

1,729

1,513

8,297

Accumulated amortisation
Balance at beginning of year

825

870

115

–

1,810

Amortisation for the year (Notes 4, 13 and 34)

248

–

380

Impairments (Note 34)

–

Disposals (14)

(5)

(1)

–

(20)

Transfers and other movements

138

(95)

–

Translation 123

–

196

Balance at end of year

1,320

926

171

–

2,417

Net book value at 31 December 2004

3,719

803

1,342

5,880

Net book value at 31 December 2003

1,566

752

431

2,764

SA Rands

Cost
Balance at beginning of year

15,944

10,819

3,637

104

30,504

Additions
– expand operations

1,197

217

164

–

1,578

– maintain operations

1,584

478

2,119

Disposals (73)

(39)

(90)

(3)

(205)

Acquisition of subsidiaries (Note 35)

10,998

396

6,245

–

17,639

Disposal of subsidiaries (Note 35)

(36)

–

(36)

Transfers and other movements

1,581

(1,068)

544

Finance costs capitalised (Note 12)

–

Translation (2,818)

(1,041)

(1,500)

(11)

(5,370)

Balance at end of year

28,444

9,762

8,540

46,840

Accumulated amortisation
Balance at beginning of year

5,504

5,796

776

12,077

Amortisation for the year (Notes 4, 13 and 34)

1,586

559

278

–

2,423

Impairments (Note 34)

–

Disposals (87)

(35)

(9)

–

(131)

Transfers and other movements

889

(609)

–

320

Translation (435)

(491)

(126)

–

(1,052)

Balance at end of year

7,458

5,220

966

13,645

Net book value at 31 December 2004

20,986

4,542

7,574

33,195

Net book value at 31 December 2003

10,440

5,023

2,861

103

18,427

Included in the amounts above for mine infrastructure are assets held under finance leases with a net book value of $78m, R439m (2003: $21m,
R143m).

Tangible assets with a carrying value of $204m, R1,153m (2003:$161m, R1,076m) are encumbered by project finance (Note 29).

(1)

Where applicable, the presentation or classification of an item has been amended to ensure comparability with the current period. The amendments
have been made to reclassify exploration properties as part of mineral rights, dumps and exploration properties and not part of mine development
costs or mine infrastructure as it is a more appropriate classification.

119

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

18 Tangible assets (continued)

Impairments include the following:
Australia
The impairment of various mining assets and mineral rights based

on the net realisable value.

Brazil

–

Impairment of equipment based on value in use

–

South Africa
Savuka based on the value in use and the relevant discount rate.
The impairment loss arose from the declining values of the

247

–

remaining ore reserves.

–

327

The capitalisation rate used to determine the amount of borrowing
costs eligible for capitalisation is 10.65%.

19 Intangible assets

Goodwill
Cost

4,241

3,811

Balance at beginning of year

571

494

(430)

(527)

Translation

3,811

3,284

Balance at end of year

582

571

Accumulated amortisation

1,031

1,062

Balance at beginning of year

159

120

216

196

Amortisation (Note 34)

(185)

(162)

Translation

1,062

1,096

Balance at end of year

194

159

2,749

2,188

Net book value

388

412

Royalty rate concession
Cost

–

201

Acquisition of subsidiaries (Note 35)

–

(35)

Translation

–

166

Balance at end of year

–

Accumulated amortisation

–

Amortisation (Notes 4 and 34)

–

(1)

Translation

–

Balance at end of year

–

159

Net book value

–

2,749

2,347

Total intangible assets

416

412

The government of Ghana agreed to a concession on the royalty

payments by maintaining a rate of 3% for 15 years.

120

Notes to the group financial statements

20 Investment in associate

The group has a 26.6% (2003: 26.6%) interest in Oro Group

(Proprietary) Limited which is involved in the manufacture and

wholesale of jewellery. The year-end of Oro Group (Proprietary)

Limited is 31 March. Equity accounting is based on the results

for the twelve months ended 30 September 2004.

The carrying value of the associate consists of:

Unlisted shares at cost less accumulated amortisation brought forward

Share of retained earnings brought forward

Profit after taxation (Note 9)

–

(9)

–

Dividends

–

(1)

Rand Refinery Limited became a subsidiary with effect

(116)

–

from 31 December 2003

–

(17)

(5)

(4)

Amortisation of intangible assets (Note 34)

(1)

–

Translation

Carrying value

Directors' valuation of unlisted associate

The group's effective share of certain balance sheet items of its

associate is as follows:

Non-current assets

Current assets

Total assets

Non-current liabilities

Current liabilities

Total equity and liabilities

Net assets

Reconciliation of the carrying value of investment in associate

with net assets:

Net assets

Intangible assets

Carrying value

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

121

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

21 Other investments

Listed investments

129

Balance at beginning of year

(1)

161

Additions

–

(246)

–

Disposals

–

(33)

–

Acquisitions and disposals (Note 35)

–

114

Fair value adjustments

–

(13)

(20)

Translation

–

162

Balance at end of year

162

Market value of listed investments

Unlisted investments

Balance at beginning of year

–

Additions

–

(6)

–

Disposals

–

(1)

(13)

(2)

Write-off of investments

–

(2)

(3)

Translation

–

Balance at end of year

Directors’ valuation of unlisted investments

Investment properties

Balance at beginning of year

–

Additions

–

(3)

Disposals

–

(11)

(6)

Translation

–

Balance at end of year

Directors’ valuation of investment properties

223

Total other investments

223

Total valuation (Note 38)

(1)

The 2003 comparative has been amended on adoption of IFRIC 5

with an amount of $3m, R19m (refer to change in accounting

policy, Note 24).

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

122

Notes to the group financial statements

22 Interest in joint ventures

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

Income statement

2,356

1,478

Gold income

230

312

(1,620)

(1,048)

Cost of sales

(163)

(215)

736

430

Non-hedge derivative gain

748

441

Operating profit

Other income

–

(60)

(27)

Finance costs

(4)

(8)

689

416

Profit before taxation

(48)

(72)

Taxation

(12)

(6)

641

344

Profit after taxation

Balance sheet
Non-current assets

2,413

773

Tangible assets

137

362

807

Intangible assets

121

–

Derivatives

–

100

–

Other non-current assets

–

Current assets

614

339

Inventories

500

361

Trade and other receivables

–

Derivatives

–

173

Cash and cash equivalents

4,641

1,614

Total assets

286

696

2,561

1,163

Equity

206

384

Non-current liabilities

380

141

Interest-bearing borrowings

Provisions

360

–

Derivatives

–

Current liabilities

787

141

Trade and other payables

118

400

107

Interest-bearing borrowings

–

Derivatives

–

4,641

1,614

Total equity and liabilities

286

696

Geita Gold Mining Limited was treated as a joint venture until
26 April 2004. As from this date, Geita has been treated as a 100%
subsidiary. Refer to page 178 for a list of joint ventures.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

123

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

23 Inventories

(1)

Current portion of inventories

253

299

Gold in process

Gold on hand

236

474

Ore stockpiles

671

609

Heap-leach inventory

108

101

326

130

By-products

1,563

1,574

Total metal inventories

279

234

440

789

Consumable stores

140

2,003

2,363

419

300

Non-current portion of inventories

124

Heap-leach inventory

2,050

2,487

Total inventories

441

307

(1)

Where the presentation or classification of an item has been
amended, comparative amounts have been reclassified to ensure
comparability with the current period. Amendments have been
made to separately disclose heap-leach inventory and to reclassify
a portion of the heap-leach inventory as non-current assets as they
are not convertible into cash and cash equivalents within the next
twelve months.

24 Change in accounting policy

AngloGold Environmental Rehabilitation Trust Fund

AngloGold Ashanti changed its accounting policy with respect to the
treatment of the AngloGold Environmental Rehabilitation Trust Fund
in accordance with IFRIC 5. The 2003 comparative has been
amended to reflect the underlying interests in the fund.

275

352

Balance at beginning of year

Contributions

Growth in AngloGold Environmental Rehabilitation Trust (Note 9)

–

Fair value adjustments

–

Translation

352

448

Reallocated in terms of IFRIC interpretation 5:

(19)

(42)

Listed investments

(7)

(3)

(333)

(406)

Other non-current assets (Note 25)

(71)

(50)

–

Balance at end of year

–

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

124

Notes to the group financial statements

25 Other non-current assets

Unsecured
Value Added Taxation relating to the acquisition of tangible assets

–

in South America – has no fixed repayment date

–

Defined benefit post-retirement medical net asset (Note 30)

–

Defined benefit pension net asset (Note 30)

–

Loans and receivables originated

179

Loans to joint venture partners – have no fixed repayment dates

Other

Deferred purchase consideration in respect of the sale of the

360

–

Free State assets

–

Deferred purchase consideration in respect of the sale of Jerritt

–

Canyon Joint Venture

–

589

166

Less: Current portion of other non-current assets included in

current assets

–

588

161

Available-for-sale
Fixed-term deposit required by legislation

(1)

– AngloGold Environmental

333

406

Rehabilitation Trust Fund (Note 24)

Environmental Protection Bond – fixed-term deposit required

–

by legislation

–

333

437

Secured

Loans and receivables originated
Deferred purchase consideration in respect of the sale of the

102

–

Amapari project

–

Other

–

137

–

Less: Current portion of other non-current assets included in

–

current assets

–

1,000

601

(Note 38)

106

151

(1)

Includes a fair value adjustment in the current year of $2m, R11m
(2003: nil). The 2003 comparative has been restated on adoption
of IFRIC 5 to reflect the underlying interests in the fund.

26 Trade and other receivables

336

273

Trade debtors

320

431

Prepayments and accrued income

181

262

Value added taxation

624

781

Other debtors

139

1,461

1,747

(Note 38)

309

219

27 Cash and cash equivalents

1,456

962

Cash and deposits on call

171

218

1,911

796

Money market instruments

141

287

3,367

1,758

(Note 38)

312

505

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

125

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

28 Share capital and premium

Share capital
Authorised

100

400,000,000 ordinary shares of 25 SA cents each

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

–

5,000,000 B redeemable preference shares of 1 SA cent each

–

101

Issued and fully paid
264,462,894 ordinary shares of 25 SA cents each (2003: 223,136,342

ordinary shares of 25 SA cents each)

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

–

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

–

(1)

Less: Redeemable preference shares held within the group

–

Share premium

9,924

19,233

Total share premium

3,405

1,495

(312)

Less: Held within the group

(53)

9,612

18,921

3,352

1,442

9,668

18,987

Share capital and premium

3,364

1,450

29 Borrowings

Unsecured

–

5,191

Convertible Bonds

(1)

920

–

Semi-annual coupons are paid at 2.375% per annum. The bonds are
convertible into ADSs up to February 2009 and is dollar-based.

2,052

2,057

Corporate Bond

(2)

364

308

Semi-annual coupons are payable at 10.5% per annum. The bond
is repayable on 28 August 2008 and is rand-based.

3,124

1,498

Syndicated loan facility ($600m)

(3)

265

469

Interest charged at LIBOR plus 0.7% per annum. Loan is repayable
in February 2005 and is dollar-based.

265

RMB International (Dublin) Limited

Interest charged at LIBOR plus 0.82% per annum. Loan is of a short-
term nature, has no fixed repayment date and is dollar-based.

–

Iduapriem – Syndicated Project Finance

–

Interest charged at LIBOR plus 2% per annum. Loan is repayable
semi annually and is dollar-based

–

Bank Belgolaise

–

Interest charged at LIBOR plus 1.5% per annum. Loan is repayable
in 24 equal monthly instalments commencing October 2005 and is
dollar-based.

Government of Mali

Interest charged at LIBOR plus 2% per annum. Loans are repayable
by March 2006 and are dollar-based.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

126

Notes to the group financial statements

29 Borrowings

(continued)

–

Precious Fields Estates Company Ltd

–

Annuity based repayments expiring October 2006. Loan is
dollar-based.

1,555

–

Syndicated loan facility ($400m)

–

233

–

Banco Europeu para a América Latina-Brussels

–

Australia and New Zealand Banking Group Limited

–

7,128

8,937

Total unsecured borrowings

1,583

1,069

Secured

Senstar Capital Corporation

Interest charged at an average rate of 6.91% per annum. Loans are
repayable in monthly instalments terminating in November 2009 and
are dollar-based.

Rolls Royce

Interest is index linked to the United Kingdom Consumer Price Index.
Loan is repayable in monthly instalments terminating in December
2010 and is dollar-based.

Investec

(4)

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

221

Geita Syndicated Project Finance

(5)

Interest charged at LIBOR plus 1.95% per annum. Loan is repayable
by June 2005 and is dollar-based.

Kudu Finance Company

Interest charged at LIBOR plus 2% per annum. Loan is repayable in
monthly instalments terminating in December 2010 and is dollar-
based.

158

–

Cerro Vanguardia Syndicated Project Finance

–

Morila Syndicated Project Finance

–

7,723

9,062

Total borrowings (Note 38)

1,605

1,158

2,340

1,800

Less: Current portion of borrowings included in current liabilities

319

351

5,383

7,262

Total long-term borrowings

1,286

807

Amounts falling due

2,340

1,800

Within one year

(3)

319

351

3,214

Between one and two years

482

2,138

7,220

Between two and five years

1,279

320

After five years

7,723

9,062

(Note 38)

1,605

1,158

Currency
The currencies in which the borrowings are denominated are
as follows:

5,621

7,005

US dollars

1,241

843

2,052

2,057

SA rands

364

308

–

Australian dollars

–

7,723

9,062

1,605

1,158

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

127

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

29 Borrowings

(continued)

Undrawn facilities
Undrawn borrowing facilities as at 31 December 2004 are as follows:

900

1,891

Syndicated loan ($600m) – dollar

335

135

201

221

Australia and New Zealand Banking Group Limited – Australian dollar

1,120

–

Syndicated loan ($400m) – dollar

–

168

2,221

2,112

374

333

(1)

Convertible Bonds

–

5,645

Senior unsecured fixed rate bonds

1,000

–

444

Less: Unamortised discount and bond issue costs

–

Less: Fair value hedge accounting adjustment as a result

–

of the interest rate swap

–

5,145

912

–

Add: Accrued interest

–

5,191

920

–

Convertible bonds were issued in February 2004 by AngloGold
Holdings Plc, a wholly owned subsidiary of AngloGold Ashanti. The
bonds are convertible into ADSs at a price of $65.00 per ADS up to
27 February 2009. The proceeds of the issue, after payment of
expenses, were utilised by AngloGold Ashanti to refinance amounts
outstanding under credit facilities, to meet transaction costs in
connection with the acquisition of Ashanti and for general corporate
purposes, including planned capital expenditure.

The net effect of the issue of the convertible bonds on earnings per
share amounts to 43 SA cents or 7 US cents per ordinary share for
the year.

(2)

Corporate Bond

2,000

Senior unsecured fixed rate bond

354

300

Less: Unamortised discount and bond issue costs

1,980

1,984

351

297

Add: Accrued interest

2,052

2,057

364

308

On 21 August 2003, AngloGold Ashanti launched and priced an
issue of senior unsecured fixed-rate bond in an aggregate
principal amount of $300m, R2,000m, with semi-annual coupons
payable at a rate of 10.5% per annum. This bond is repayable on
28 August 2008.

(3)

Syndicated loan facility ($600m)

This facility was repaid on 4 February 2005 and a new three-year
$700m syndicated facility was signed in January 2005 with an
interest charge of LIBOR plus 0.4% per annum.

(4)

Investec

Loan is guaranteed by AngloGold Ashanti Limited.

(5)

Geita Syndicated Project Finance

Secured by pledge over the shares in the project company.

The equipment financed by the other secured loans is used
as security for those loans.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

128

Notes to the group financial statements

30 Provisions

Defined benefit post-retirement medical provision

700

866

Balance at beginning of year

130

227

114

Charge to income statement (Note 14)

(56)

(118)

Utilised during the year

(18)

(8)

–

(11)

Transfers and other movements

(1)

(2)

–

(5)

(2)

Translation

866

849

150

130

The balance at the end of the year consists of:

850

849

South African post-retirement medical liability

150

128

North American post-retirement medical liability

–

(14)

Rand Refinery post-retirement medical net asset

(2)

–

866

849

150

130

–

Transferred to other non-current assets (Note 25)

–

866

863

Balance at end of year

152

130

The provision for post-retirement medical funding represents the
provision for health care benefits for employees and retired employees
and their registered dependants.

The post-retirement benefit costs are assessed in accordance with
the advice of independent professionally qualified actuaries. The
actuarial method used is the projected unit credit funding method.

The assumptions used in calculating the South African defined
benefit post-retirement medical obligation are as follows:

Discount rate

9.0

10.0

Expected increase in health care costs

5.0

The normal retirement age is 60 years, and fully eligible age is 55 years.

The last statutory valuation was performed as at 31 December 2002.
Calculations are performed in the years when a statutory valuation is
not performed and events and movements that could impact the
valuation between the date of the interim valuation performed at
30 September 2004 and the date of the balance sheet have been
considered. The South African post-retirement medical plan is an
unfunded plan.

The date of the next statutory actuarial valuation is 31 December 2005.

The assumptions used in calculating the North American defined
benefit post-retirement medical obligations are as follows:

Discount rate

6.0

6.2

Expected increase in health care costs

–

The Retiree Medical Plan is a non-contributory defined benefit plan.
This plan was last evaluated by independent actuaries in December
2002 who took into account reasonable long-term estimates of
increases in health care costs and mortality rates in determining the
obligations of AngloGold Ashanti North America under the Retiree
Medical Plan of $2m, R14m (2003: $2m, R16m) which are included in
post-retirement medical provisions. The Retiree Medical Plan is an
unfunded plan and is evaluated on an annual basis using the projected
benefit method.

The cost of providing benefits under the Retirement Plan and the
Retiree Medical Plan was insignificant in 2004 and 2003.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

129

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

30 Provisions (continued)

(1)

Rand Refinery defined benefit medical fund

–

Present value of fund obligation

–

(30)

Fair value of fund assets

(5)

–

(14)

Net asset recognised in balance sheet

(2)

–

Market value of plan assets

–

Plan assets are made up as follows:

–

Domestic fixed interest bonds

–

Cash

–

Movement in the balance sheet

–

(11)

Transfers and other movements

(2)

–

(3)

Income per income statement

–

(14)

Balance at end of year

(2)

–

Actual return on plan assets

–

Expected return on plan assets

–

Actuarial gain (loss) on plan assets

–

The assumptions used in calculating the Rand Refinery defined
benefit post-retirement medical obligation are as follows:

Discount rate

10.0

–

Expected increase in health care costs

8.0

–

Expected return on plan assets

10.0

–

South African defined benefit pension plan

–

Balance at beginning of year

–

Expense per income statement (Note 14)

(62)

(78)

Contributions paid – company

(13)

(8)

–

(44)

Transferred to other non-current assets (Note 25)

(8)

–

Defined benefit pension fund

1,089

1,218

Present value of fund obligation

216

163

(920)

(1,150)

Fair value of fund assets

(204)

(138)

169

(169)

(112)

Unrecognised actuarial loss

(20)

(25)

–

(44)

Net asset recognised in balance sheet

(8)

–

920

1,150

Market value of plan assets

204

138

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

130

Notes to the group financial statements

30 Provisions (continued)

Plan assets are made up as follows:

549

633

Domestic equities

112

Foreign equities

191

329

Domestic fixed interest bonds

Foreign fixed interest bonds

Cash

920

1,150

204

138

Actual return on plan assets

Expected return on plan assets (Note 14)

124

Actuarial gain on plan assets

120

219

(Note 14)

The assumptions used in calculating the South African defined

benefit pension plan obligation are as follows:

Discount rate

7.5

8.5

Pension increase

2.9

3.6

Rate of compensation increase

5.0

Expected return on plan assets

7.5

8.5

The rate of compensation increase assumption is 5%

for 2005 and 4% thereafter.

A statutory valuation of the defined benefit Pension Fund was

performed as at 31 December 2002, which showed that the Fund

was in deficit. The rate of the company contributions to the Fund was

reviewed and increased during the year. A formal additional funding

plan was submitted to and approved by the Financial Services

Board. According to the plan, the company funded $5m, R32m in

2004 and a further $30m, R167m in real terms will be funded from

2005 to 2011. In arriving at their conclusions, the actuaries took into

account reasonable long-term estimates of inflation, increases in

wages, salaries and pension as well as returns on investments.

Calculations for the pension fund’s financial position are carried out

in years when a statutory valuation is not performed and events and

movements that could impact on the valuation between the date of

the interim valuation performed at 30 September 2004 and the

balance sheet date have been considered.

The date of the next statutory actuarial valuation is 31 December 2005.

All South African pension funds are governed by the Pension Funds

Act of 1956 as amended.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

131

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

30 Provisions (continued)

South America Fundambràs defined pension plan

110

126

Present value of fund obligation

(77)

(86)

Fair value of fund assets

(15)

(11)

Unrecognised actuarial gain

Recognised in balance sheet

Market value of plan assets

Plan assets are made up as follows:

–

Domestic equities

–

Domestic fixed interest bonds

Property

–

Cash and other

–

Movement in balance sheet

Balance at beginning of year

Expense per the income statement

–

Contributions paid – company

–

(7)

Translation

–

Balance at end of year

Expected return on plan assets

Actuarial gain on plan assets

Actual return on plan assets

The assumptions used in calculating the above defined benefit
pension plan obligations are as follows:

Discount rate

11.3

Pension increase

7.1

Rate of compensation increase

5.0

Expected return on plan assets

11.3

On 30 November 1998, the defined benefit fund was converted to a
defined contribution fund with an actuarial liability of $6m, R51m.
The liability is revised annually by Mercer, the plan’s actuary. The
transfer of funds requires approval from the government (still in
progress) and is conditional on the full funding of the actuarial
liability. Refer to note 33 for details of the defined contribution fund.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

132

Notes to the group financial statements

30 Provisions (continued)

UK Ashanti Retired Staff Pension Scheme

–

Present value of fund obligation

–

(18)

Fair value of fund assets

(3)

–

(2)

Unrecognised actuarial loss

–

Recognised in balance sheet

–

Market value of plan assets

–

Plan assets are made up as follows:

–

Domestic equities

–

Foreign equities

–

Domestic fixed interest bonds

–

Cash

–

Movement in the balance sheet and actual and expected return
on the plan assets

(1)

No movements are disclosed for the balance sheet and the actual
and expected return on plan assets as the figures round to less
than one million dollars.

The assumptions used in calculating the above defined benefit
pension plan assets and obligation are as follows:

Discount rate

5.8

–

Pension increase

2.5

–

Expected return on plan assets

5.8

–

The date of the last statutory valuation was 1 January 2003. The
actuaries have performed calculations for the pension fund’s financial
position at 30 September 2004 and events and movements between
this date and the balance sheet date have been considered.

The date of the next statutory valuation will be 31 December 2005.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

133

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

30 Provisions (continued)

Obuasi mines Staff Pension Scheme
The scheme provides monthly payments in Ghanaian currency
(indexed to the dollar) to retirees until death. The benefits for the
scheme are based on the years of service and the compensation
levels of the covered retirees. The scheme is closed to new members
and all the scheme participants are retired. The scheme is unfunded
and accordingly, no assets related to the scheme are recorded.

–

Present value of fund obligation

–

Unrecognised actuarial gain

–

Recognised in balance sheet

–

Movement in balance sheet

–

Balance at beginning of year

–

Acquisition of subsidiaries (Note 35)

–

(13)

Translation

–

Balance at end of year

–

The assumptions used in calculating the above defined benefit
pension plan obligation are as follows:

Discount rate

4.0

–

Pension increase

4.5

–

The date of the last statutory valuation was 1 January 2003. The
actuaries have performed calculations of the pension fund’s financial
position at 30 September 2004 and events and movements between
this date and the balance sheet date have been considered.

The date of the next statutory valuation will be 31 December 2005.

Environmental rehabilitation obligations

Provision for decommissioning

405

326

Balance at beginning of year

(28)

148

Acquisition of subsidiaries (Note 35)

(4)

(2)

Change in estimates

(1)

–

Unwinding of decommissioning obligation (Note 12)

(46)

–

Reversal of over-provision (Note 8)

–

(7)

(25)

(43)

Translation

326

566

Balance at end of year

100

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

134

Notes to the group financial statements

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

30 Provisions (continued)

Provision for restoration

800

562

Balance at beginning of year

–

202

Acquisitions of subsidiaries (Note 35)

–

(160)

(10)

Disposal of subsidiaries (Note 35)

(1)

(21)

(46)

–

Reversal of over-provision (Note 8)

–

(7)

116

Charge to income statement

(39)

Change in estimates

(1)

(6)

(35)

(90)

Utilised during the year

(14)

(5)

(91)

(83)

Translation

562

658

Balance at end of year

117

Other provisions

Balance at beginning of year

102

Charge to income statement

(139)

(52)

Utilised during the year

(8)

(18)

(1)

(16)

Translation

–

Balance at end of year

(2)

Other provisions comprise the following:

Supplemental Employee Retirement Plan (SERP) for North America

(Note 33)

Provision for labour and civil claim court settlements for South America

(3)

(1)

The change in estimate relates to adjustments required as a result

of regulatory requirements. The effect of the change in estimates

for the current year is an increase in the decommissioning asset

of $13m, R84m and a decrease in the restoration expense

of $6m, R39m. The effect on future periods is not determinable.

(2)

The comparative figures have been restated for the transfer of the

South American pension as part of the defined benefit plans under

this note.

(3)

Other provisions consist of claims filed by former employees in

respect of loss of employment, work-related accident injuries

and diseases and closure costs of old tailings operations. The

liability is anticipated to unwind over the next two to five year

period.

1,832

2,265

Total provisions

402

275

135

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

31 Deferred taxation

Deferred taxation relating to temporary differences is made up

as follows:

Liabilities

4,703

8,977

Tangible assets

1,590

705

101

Inventories

155

445

Derivatives

114

160

Other

5,073

9,678

1,714

761

Assets

658

514

Provisions

390

358

Derivatives

–

1,042

Tax assets

184

–

159

Other

1,087

2,073

367

163

3,986

7,605

Deferred taxation liability

1,347

598

The movement on the deferred tax liability is as follows:

3,445

3,986

Balance at beginning of year

598

402

554

(571)

Income statement charge (Note 15)

(106)

291

Taxation of other comprehensive income

(7)

4,816

Acquisition of subsidiaries (Note 35)

708

–

(8)

Disposal of subsidiaries (Note 35)

(1)

–

(67)

(909)

Translation

105

126

3,986

7,605

Balance at end of year

1,347

598

32 Trade and other payables

676

974

Trade creditors

173

101

557

893

Accruals

158

791

783

Other creditors

139

118

Accrued purchase consideration for mineral rights acquired

315

–

from Gold Fields Limited

–

2,339

2,650

(Note 38)

470

350

Defined contribution retirement benefits

Australia

The region contributes to the Australian Retirement Fund for the provision of benefits to employees and their dependants on retirement,

disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the operation on

behalf of employees vary, with minimum contributions paid meeting compliance requirements under the Superannuation Guarantee legislation.

Members also have the option of contributing to approved personal superannuation funds. The contributions paid by the operation are legally

enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

136

Notes to the group financial statements

33.

Retirement benefits (continued)

Ghana and Guinea

AngloGold Ashanti’s operations in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans.

The funds are administrated by Celestine Baako and invested mainly in Ghana and Guinea government treasury instruments and other fixed-

interest deposits. The costs of these contributions were $2m, R12m during the eight-month period ended 31 December 2004.

Mali (Sadiola, Yatela and Morila)

The Malian operations do not have retirement schemes for employees. All employees (local and expatriate) contribute towards the government

social security fund, and the company also makes a contribution towards this fund. On retirement, Malian employees are entitled to a

retirement benefit from the Malian government. Expatriate employees are reimbursed only their contributions to the social security fund.

AngloGold Ashanti seconded employees in Mali remain members of the applicable pension or retirement fund in terms of their conditions of

employment with AngloGold Ashanti.

Namibia (Navachab)

Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual insurance company.

Both the company and the employees make contributions to this fund. AngloGold Ashanti seconded employees at Navachab remain

members of the applicable pension or retirement fund in terms of their conditions of employment with AngloGold Ashanti.

North America

Defined Contribution Plan – AngloGold Ashanti North America sponsors a 401(k) savings plan whereby employees may contribute up to 60%

of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti North America. AngloGold Ashanti North America's

contributions were $2m, R13m (2003: $2m, R15m) during the year.

Supplemental Employee Retirement Plan – Certain former employees of Minorco (USA) Inc. were covered under the Minorco (USA) Inc.

Supplemental Employee Retirement Plan (the SERP), a non-contributory defined benefit plan. The SERP was last evaluated by independent

actuaries in 2004 who took into account reasonable long-term estimates of inflation and mortality rates in determining the obligations of

AngloGold Ashanti North America under the SERP. This evaluation of the SERP reflected plan liabilities of $1m, R6m (2003: $1m, R6m) which

are included in other provisions (Note 30) in the balance sheet. The SERP is an unfunded plan. The SERP is evaluated on an annual basis

using the projected benefit method. The cost of providing benefits under the SERP for the year was nominal.

South Africa

South Africa contributes to various industry-based pension and provident retirement plans which cover substantially all employees and are

defined contribution plans. These plans are all funded and the assets of the schemes are held in administered funds separately from the

group’s assets. The cost of providing these benefits amounted to $29m, R187m (2003: $20m, R151m) during the year.

South America

In Brazil, the company operates a number of defined contribution arrangements for their employees. These arrangements are funded by the

operations (basic plan) and operations/employees (optional supplementary plan) and are embodied in a pension plan entity, Fundambrás

Sociedade de Previdència Privada, which is responsible for administering the funds and making arrangements to pay the benefits.

In December 2001, contributions started to be made to a new PGBL fund, a defined contribution plan similar to the American 401(k) type

plan, administered by Bradesco Previdencia e Seguros. The transfer of funds from Fundambrás to the PGBL requires approval from

governmental SPC agency (still in process) and is conditional on the full funding of the actuarial liability.

Tanzania (Geita)

Geita does not have a retirement scheme for employees. Tanzanian nationals contribute towards the government social security fund, and the

company also makes a contribution towards this fund. On retirement, employees are entitled to a retirement benefit from the Tanzanian

government. The company makes no contribution towards any retirement schemes for contracted expatriate employees. AngloGold Ashanti

seconded employees in Tanzania remain members of the applicable pension or retirement fund in terms of their conditions of employment

with AngloGold Ashanti.

137

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

34 Cash generated from operations

3,546

517

Profit before taxation

472

Adjusted for:

137

Non-cash movements

(449)

1,081

Movement on non-hedge derivatives

185

(65)

1,739

2,423

Amortisation of tangible assets (Notes 4, 13 and 18)

380

232

(325)

(144)

Deferred stripping

(21)

(43)

(285)

Interest receivable

(44)

(38)

122

–

Abnormal items (Note 8)

–

384

563

Finance costs and unwinding of decommissioning obligation (Note 12)

221

208

Amortisation of intangible assets (Notes 19 and 20)

327

Impairment of tangible assets (Note 18)

(331)

–

Profit on disposal of investments (Note 11)

–

(45)

(75)

(88)

Profit on disposal of assets and subsidiaries (Note 10)

(13)

(10)

(484)

(781)

Movements in working capital

(85)

(71)

4,527

3,505

585

592

Movements in working capital:

(165)

(1)

Increase in inventories

(56)

(87)

(4)

(Increase) decrease in trade and other receivables

(41)

(53)

(376)

(776)

Increase (decrease) in trade and other payables

(484)

(781)

(85)

(71)

35 Acquisitions and disposals

Acquisitions and disposals can be summarised as follows:

(34)

17,603

Tangible assets

2,587

(3)

–

201

Intangible assets

–

526

Inventories

–

Other non-current assets

–

302

Trade and other receivables

356

Cash and cash equivalents

(103)

(18)

Minority interests

(3)

(15)

(1,333)

Borrowings

(195)

188

(415)

Provisions

(61)

(14)

(4,808)

Deferred taxation

(707)

(2)

(44)

(1,612)

Trade and other payables

(233)

(7)

–

(25)

Taxation

(4)

–

106

10,805

Carrying value

1,591

(82)

–

Profit on disposal of assets and subsidiaries (Note 10)

–

(10)

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

for the year ended 31 December 2004

138

Notes to the group financial statements

35 Acquisitions and disposals (continued)

10,805

Net purchase consideration

1,591

–

(9,297)

Non-cash settlement – shares

(1,366)

–

(116)

–

Investments in associates

–

(17)

Deferred sale consideration

(58)

(356)

Cash and cash equivalents

(51)

(9)

–

(28)

Cash and cash equivalents reallocated to other non-current assets

(5)

–

Shares received in Queenstake Resources

–

(66)

1,139

Net cash flow on (acquisition) disposals

171

(10)

(66)

(1,139)

Net cash flow on (acquisition) disposals can be summarised as follows:

(171)

(10)

–

(1,139)

Purchase of Ashanti Goldfields Company Limited

(171)

–

Deferred sale consideration of Freda-Rebecca

–

(58)

–

Consolidation of Rand Refinery Limited

–

(9)

(8)

–

Net cash flow on disposal of Jerritt Canyon Joint Venture

–

(1)

Ashanti

Rand Goldfields

Goldfields

Rand

Refinery

Company

Refinery

Limited

Acquisitions comprise the following:

Limited

160

17,639

Tangible assets (Note 18)

2,592

–

201

Intangible assets (Note 19)

–

Other non-current assets

–

546

Inventories

312

Trade and other receivables

356

Cash and cash equivalents

(103)

(18)

Minority interests

(3)

(15)

–

(1,343)

Borrowings

(197)

–

(425)

Provisions (Note 30)

(62)

–

(14)

(4,816)

Deferred taxation (Note 31)

(708)

(2)

(49)

(1,635)

Trade and other payables

(236)

(7)

–

(25)

Taxation

(4)

–

116

10,820

Carrying value

1,593

–

Profit on disposal of assets and subsidiaries

–

116

10,820

Purchase consideration

1,593

–

(9,297)

Non cash settlement – shares

(1,366)

–

(116)

–

Investments in associates

–

(17)

(58)

(356)

Cash and cash equivalents

(51)

(9)

–

(28)

Term deposits included in other non-current assets

(5)

–

(58)

1,139

Cash flow on acquisition

171

(9)

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

139

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

35 Acquisitions and disposals (continued)

Jerritt

Canyon

Freda-

Canyon

Rebecca

Disposals comprise the following:

Rebecca

194

Tangible assets (Note 18)

Inventories

Trade and other receivables

(12)

(10)

Borrowings

(2)

(188)

(10)

Provisions (Note 30)

(1)

(25)

–

(8)

Deferred taxation (Note 31)

(1)

–

(5)

(23)

Trade and other payables

(3)

–

Carrying value

–

Profit on disposal of assets and subsidiaries

–

Sale consideration

(50)

(15)

Deferred sale consideration

(2)

(6)

(34)

–

Shares received in Queenstake Resources

–

(5)

–

Cash flow on disposal

–

On 23 April 2004, the High Court of Ghana confirmed the scheme of

arrangement between Ashanti Goldfields Company Limited and its

shareholders pursuant to which AngloGold would acquire the entire

issued ordinary share capital of Ashanti. The confirmation of the High

Court was lodged with the Registrar of Companies in Ghana on

Monday, 26 April 2004, and the acquisition of Ashanti and the

name change to AngloGold Ashanti Limited became effective on

26 April 2004.

The acquisition of the Ashanti Goldfields Company Limited assets

was accounted for as a purchase business combination. AngloGold

Ashanti has performed a preliminary purchase price allocation based

on independent appraisals. The purchase price allocation is in the

final stage of completion, awaiting a final assessment of contingent

and other liabilities, and is not expected to vary significantly from the

preliminary allocation.

On 10 September 2004, AngloGold Ashanti confirmed its agreement

to sell its entire interest in Ashanti Goldfields Zimbabwe Limited to

Mwana Africa Holdings (Pty) Limited for a deferred consideration of

$2m, R15m. The sole operating asset of Ashanti Goldfields

Zimbabwe Limited is the Freda-Rebecca Gold Mine.

Rand Refinery was consolidated from 31 December 2003. Prior to

this date, Rand Refinery was equity accounted. The change in status

was as a result of an ownership agreement giving AngloGold Ashanti

effective control.

AngloGold Ashanti sold its 70% interest in the Jerritt Canyon Joint

Venture effective 30 June 2003.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

140

Notes to the group financial statements

Related parties

(1)

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

2004

2003

Purchases

Amounts

Purchases

Amounts

from

owed to

from

owed to

Figures in million

parties

US Dollars

Holding company Anglo American plc

–

2 –

Fellow subsidiaries of the Anglo American plc group
Anglo Coal – a division of Anglo Operations Limited

1 –

– –

Boart Longyear Limited – mining services

9 1

11 1

Mondi Limited – timber

16 2

11 1

Scaw Metals – a division of Anglo Operations Limited –
steel and engineering

14 1

12 1

Joint ventures of AngloGold Ashanti Limited
Societe d’ Exploitation des Mines d’ Or de Sadiola S.A.

2 – 2 –

Societe d’ Exploitation des Mines d’ Or de Yatela S.A.

2 –

– –

Societe des Mines de Morila S.A.

– –

–

Associates
Rand Refinery Limited – gold refinery

(2)

2 –

SA Rands

Holding company Anglo American plc

–

14 –

Fellow subsidiaries of the Anglo American plc group
Anglo Coal – a division of Anglo Operations Limited

6 2

– –

Boart Longyear Limited – mining services

60 6

82 7

Mondi Limited – timber

101 10

86 7

Scaw Metals – a division of Anglo Operations Limited –
steel and engineering

91 5

87 7

Joint ventures of AngloGold Ashanti Limited
Societe d’ Exploitation des Mines d’ Or de Sadiola S.A.

12 2

11 –

Societe d’ Exploitation des Mines d’ Or de Yatela S.A.

10 1

1 –

Societe des Mines de Morila S.A.

1 1

– –

Associates
Rand Refinery Limited – gold refinery

(2)

18 –

Directors
Details relating to directors' emoluments and shareholdings in the company are disclosed in the remuneration and directors’ reports.

Shareholders
The principal shareholders of the company are detailed on page 178.

(1)

Where the presentation or classification of an item has been amended, comparative amounts have been reclassified to ensure comparability
with the current period. Transactions with Anglo American plc and Societe d’ Exploitation des Mines d’ Or de Sadiola S.A. previously omitted
have now been included in the prior period. The amendments have been made to provide the users of the financial statements with
additional information.

(2)

Rand Refinery was consolidated from 31 December 2003. Prior to this date, Rand Refinery was equity accounted.

141

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

37 Commitments and contingencies

Acquisition of tangible assets

653

835

Contracted for

148

4,181

3,716

Not contracted for

658

627

4,834

4,551

Authorised by the directors

806

725

Allocated for:
Expansion of operations

2,594

1,741

– within one year

308

389

553

833

– thereafter

148

3,147

2,574

456

472

Maintenance of operations

1,620

818

– within one year

145

243

1,159

– thereafter

205

1,687

1,977

350

253

This expenditure will be financed from existing cash resources and
future borrowings.

Contingent liabilities
The group has also given collateral to certain bankers for satisfactory
contract performance in relation to exploration and development

tenements and mining operations in Australia.

AngloGold Ashanti has provided a letter of credit for Geita Gold

127

107

Mining Ltd.

AngloGold Ashanti has a potential liability to pay the capital costs to
supply water and electricity to Navachab mine, should the mine close

–

prior to 2019.

–

AngloGold Ashanti has signed surety in favour of bankers on the

Yatela loan.

Discussions were held with the Malian government as to the
validity of tax claims including interest and penalties. The claims arose
due to new legislation that was in conflict with AngloGold Ashanti’s
prior mining convention stability agreements and different interpretations
of the legislation. The Malian Minister of Finance has ruled in favour of
Sadiola and Yatela and the amount of claims have been reduced from

–

$6m to $0.2m.

–

AngloGold Ashanti North America has a potential liability in respect of
preference claims from a third party. This is in respect of gold shipments
returned by the third party to AngloGold Ashanti North America, which
the bankruptcy trustee is claiming should not have been returned, and
final shipments that should not have been paid as the third party had

filed for protection under Chapter 11 of the US Bankruptcy Code.

Pursuant to the assignment of equipment leases to Queenstake
Resources USA Inc. as a result of the sale of the Jerritt Canyon Joint
Venture, AngloGold Ashanti North America has become
secondarily liable in the event of a default by Queenstake Resources
USA Inc. in performance of any of the lessees’ obligations arising under

–

the lease. These agreements have an approximate term of 3 years.

–

142

Notes to the group financial statements

37 Commitments and contingencies (continued)

AngloGold Ashanti North America has reclamation bonds with various
federal and governmental agencies, to cover potential rehabilitation
obligations. These obligations are guaranteed by AngloGold

160

169

Ashanti Limited.

Various equipment tax claim guarantees in South America.

–

AngloGold Ashanti has undertaken to re-export certain artifacts

–

temporarily imported into the country and whose custom and value

added tax was waived. The company will be required to pay if it fails

to comply with the re-export arrangements agreed with the South

African Revenue Service.

483

426

Discussions are underway in respect of a US class action brought
against the former Ashanti Goldfields Company Limited. The plaintiffs
allege non-disclosure and mis-statement regarding Ashanti Goldfields
Company Limited’s hedging position and hedging programme.
Although the company cannot make any assurances regarding the
final outcome of this claim, it is anticipated that it will have no material
financial effect on the company.

Financial risk management activities

In the normal course of its operations, the group is exposed to gold price, currency, interest rate, liquidity and credit risks. In order to manage
these risks, the group may enter into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire,
hold or issue derivatives for trading purposes. The group has developed a comprehensive risk management process to facilitate, control and
monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies,
counterpart limits, controlling and reporting structures.

Controlling risk in the group

The Executive Committee and the Treasury Committee are responsible for risk management activities within the group. The Treasury
Committee, chaired by the independent chairman of the AngloGold Ashanti Audit and Corporate Governance Committee, comprising
executive members and treasury executives, reviews and recommends to the Executive Committee all treasury counterparts, limits,
instruments and hedge strategies. The treasurer is responsible for managing investment, gold price, currency, liquidity and credit risk. Within
the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy, counterpart and
dealer limits and provides regular and detailed management reports.

Gold price and currency risk and cash flow hedging

Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The gold
market is predominately priced in US dollars which exposes the group to the risk that fluctuations in the SA rand/US dollar, Brazilian
real/US dollar, Argentinean peso/US dollar and Australian dollar/US dollar exchange rates may also have on current or future earnings.

A number of products, including derivatives, are used to manage well-defined gold price and foreign exchange risks that arise out of the
group's core business activities. Forward-sales contracts and call and put options are used by the group to protect itself from downward
fluctuations in the gold price. These derivatives may establish a minimum price for a portion of future production while maintaining the ability
to benefit from increases in the spot gold price for the majority of future gold production.

Some of the instruments described above are designated and accounted for as cash flow hedges. The hedge forecast transactions are
expected to occur over the next 10 years, in line with the maturity dates of the hedging instruments and will affect profit and loss
simultaneously in an equal and opposite way.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

143

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

Hedge book restructure

The group has an established practice of actively managing its hedged commitments under changing market circumstances. This is reflected
in the reduction of the book from its high of 17.8Moz at 31 December 2000 to 7.01Moz at 30 June 2004. At the level of 7.01Moz, the hedge
book had been reduced to cover an average of 22% of the annual production from AngloGold assets over the next five years. However,
following the business combination with Ashanti, the combined hedge books amounted to 12.7Moz as at the end of September 2004, and
the level of cover increased to 40% of five years' production of the group.

The group has previously indicated its intention to continue with the reduction in hedging levels. The argument for this reduction has been
further supported by the group’s positive view of the gold price in the current market cycle. The group believes that the market circumstances
favourable for the gold price are likely to remain in place for some time, and that the gold price will continue to trade in its current range, or
higher.

A substantial restructuring of the hedge was commenced in late December 2004 and completed in January 2005. This has resulted in a
reduction in the net delta of the combined hedge by some 2.2Moz or 69t of gold, down to a net hedge delta of 10.49Moz at 31 December
2004. The restructured hedge now represents cover equal to 31% of five years’ production spread over a ten-year period. The reduction of
2.2Moz in this one quarter is of the same order of magnitude as the substantial reduction achieved in hedge restructuring by AngloGold
through the second quarter of 2002.

Notwithstanding a spot price at 31 December 2004 that was $16/oz higher than that at 30 September 2004, the marked-to-market valuation
of the hedge book at the end of the year is almost unchanged quarter-on-quarter at negative $1,161m, compared with negative $1,139m at
the end of the third quarter. By comparison, the marked-to-market value of the now restructured book at the same spot price of $418.80/oz
at which the 30 September valuation was undertaken, would result in a negative value of $922m, reflecting a positive variance of $217m.

This improvement was achieved through a combination of the elimination from the hedge of lower-priced contracts and the cash injection of
$83m into the book in the final quarter of 2004, followed by a further $76m in January 2005.

The level of cover for 2005 is at approximately 10% of projected production for that year, while in 2006 it is at approximately 17% of projected
production.

In broad terms, the steps undertaken in the restructuring included:

•

the effective buy-back of poorly-priced forward and call option contracts in years 2005, 2006 and 2007 in order to remove the
concentration of hedging in these years following the incorporation of the Ashanti hedge book, and to increase exposure to the spot price
of gold in this period; and

•

the sale of new forward and call options contracts in the years beyond 2007 at higher gold prices than had been the case in the previous
hedge structure, and spread more evenly than in the previous hedge structure.

Because of the nature of the prevailing accounting treatment for derivative contracts, much of the restructuring of the hedge has been effected
by overlaying the existing hedge commitments with new contracts in order to achieve the effect of buying-back and replacing with new
contracts at different dates and rates. The cash earnings will reflect the significantly greater exposure of the company to the spot price during
2005 and 2006 in particular. Beyond these years, the significantly higher contracted prices in the restructured forward positions will provide
further benefit.

It is the intention of management to continue to actively manage the hedge book. This includes delivering into contracts, continuing to reduce
the size of the book, and continuing to seek the maximum economic benefit from the book.

As much of the impact of the restructuring as possible has been taken in the fourth quarter of 2004. What remained to be concluded of the
restructuring after the year-end was the apportionment of the net long position against existing short forward positions, and the roll-out of the
balance of the longer-dated new forward and option positions that complete the restructuring. The shortfall in the received price in relation to
the average spot price for the fourth quarter of 2004 was a consequence of both the bunching of Ashanti hedge contracts at year-end and
the restructuring of the hedge book, and a gap of this magnitude is not expected to recur in anticipated market conditions.

For the year ahead, it is the company's intention to track the spot price more closely than the previous quarter and to manage the hedge book
actively with the goal of moderating any negative impact on the price received of the remaining lower-priced hedge positions in the year.

Net delta open hedge position as at 31 December 2004

The group had the following net forward-pricing commitments outstanding against future production.

144

Notes to the group financial statements

Financial risk management activities (continued)

Table A: Summary: All open contracts in the group's gold hedge position as at 31 December 2004

Year

2005

2006

2007

2008

2009

2010-2014

Total

Dollar/Gold

Forward contracts

Amount (kg)

34,021

30,428

35,481

29,111

25,324

48,745

203,110

$/oz

$315

$338

$343

$363

$377

$395

$357

Restructure longs*

Amount (kg)

17,676

$/oz

$440

Put options purchased

Amount (kg)

3,381

5,481

1,455

10,317

$/oz

$347

$355

$292

$344

Put options sold

Amount (kg)

6,221

4,354

855

1,882

9,409

22,721

$/oz

$397

$339

$390

$400

$430

$400

Call options purchased

Amount (kg)

9,880

3,030

2,003

14,913

$/oz

$340

$353

$361

$345

Call options sold

Amount (kg)

29,490

18,017

20,375

26,179

22,852

57,604

174,517

$/oz

$363

$386

$372

$377

$399

$455

$403

Rand/Gold

Forward contracts

Amount (kg)

933

R/kg

R116,335

Put options purchased

Amount (kg)

1,875

R/kg

R93,602

Put options sold

Amount (kg)

8,025

1,400

9,425

R/kg

R80,840

R88,414

R81,965

Call options sold

Amount (kg)

12,657

4,517

311

2,986

5,972

26,443

R/kg

R88,509

R102,447

R108,123

R202,054

R223,756

R134,486

145

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

Table A: Summary: All open contracts in the group’s gold hedge position as at 31 December 2004

Year

2005

2006

2007

2008

2009

2010-2014

Total

Australian Dollar/Gold

Forward contracts
Amount (kg)

2,969

3,110

8,398

3,110

3,390

3,110

24,087

A$/oz

A$560

A$746

A$650

A$673

A$667

A$692

A$662

Put options purchased
Amount (kg)

1,244

A$/oz

A$585

Put options sold
Amount (kg)

2,644

A$/oz

A$565

Call options purchased
Amount (kg)

3,110

6,221

3,732

3,110

1,244

3,110

20,527

A$/oz

A$724

A$673

A$668

A$680

A$694

A$712

A$688

Call options sold
Amount (kg)

1,711

A$/oz

A$597

Total net gold
Delta (kg)**

32,280

44,577

57,531

52,221

47,107

92,492

326,208

Delta (oz)**

1,037,825

1,433,182

1,849,662

1,678,942

1,514,523

2,973,683

10,487,817

At 31 December 2004, the group was in the process of restructuring the hedge book and had acquired a long spot position in gold.
This long gold position will be applied to the restructure during the first quarter of 2005.

** The Delta of the hedge position indicated above, is the equivalent gold position that would have the same marked-to-market sensitivity

for a small change in the gold price. This is calculated using the Black-Scholes option formula with the ruling market prices, interest
rates and volatilities as at 31 December 2004.

Dollar/Silver

Put options purchased
Amount (kg)

43,545

130,635

$/oz

$7.11

$7.40

$7.21

Put options sold
Amount (kg)

43,545

130,635

$/oz

$6.02

$5.93

$5.99

Call options sold
Amount (kg)

43,545

130,635

$/oz

$8.11

$8.40

$8.21

146

Notes to the group financial statements

Financial risk management activities (continued)

Table B: Summary: All open contracts in the group’s currency hedge position at 31 December 2004

Year 2005

2006

2007

2008

2009

2010-2014

Total

Rand/Dollar (000)

Forward contracts

Amount ($)

130,509

R per $

R5.71

Call options sold

Amount ($)

65,000

R per $

R5.72

Australian Dollar (000)

Forward contracts

Amount ($)

55,237

39,222

94,459

$ Per A$

$0.59

$0.75

$0.65

Call options sold

Amount ($)

20,000

40,000

$ Per A$

$0.76

$0.74

$0.75

Brazilian Real (000)

Put options purchased

Amount ($)

600

BRL per $

BRL3.38

Put options sold

Amount ($)

600

BRL per $

BRL3.21

Call options sold

Amount ($)

600

BRL per $

BRL3.55

The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continually reviewed in the light of

changes in operational forecasts, market conditions and the group's hedging policy.

Forward sales contracts require the future delivery of gold at a specified price.

A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date.

A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a

predetermined date.

The marked-to-market value of all hedge transactions making up the hedge position was a negative $1.161bn (negative R6.58bn) as at

31 December 2004 (as at 31 December 2003: negative $663.7m – negative R4.4bn). These values were based on a gold price of $434.70/oz,

exchange rates of $1 = R5.67 and A$1 = $0.7745 and the prevailing market interest rates and volatilities at the time.

147

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Financial risk management activities (continued)

Net delta open hedge position

as at 25 January 2005

As at 25 January 2005, following further restructuring of the hedge book, the group had outstanding, the following forward-pricing commitments
against future production. The total net delta of the hedge on this date was 10.49Moz or 326t (at 31 December 2004: 10.49Moz or 326t).

The marked-to-market value of all hedge transactions making up the hedge positions was a negative $993m (negative R5.869bn) as at
25 January 2005 (as at 31 December 2004: $1.161bn or R6.583bn).

This value was based on a gold price of $426.35 per ounce, exchange rates of $1 = R5.93 and A$1 = $0.7710 and the prevailing market interest
rates and volatilities at 25 January 2005.

These marked-to-market valuations are in no way predictive of the future value of the hedge position, nor of the future impact on the revenue of the
company. The valuation represents the cost of buying all hedge contracts at the time of valuation, at market prices and rates available at the time.

Year 2005

2006

2007

2008

2009

2010-2014

Total

Dollar Gold

Forward contracts
Amount (kg)

8,127

19,510

32,993

30,076

26,288

53,566

170,560

$ per oz

$231

$336

$344

$365

$380

$402

$365

Put options purchased
Amount (kg)

9,135

8,592

1,455

19,182

$ per oz

$334

$345

$292

$336

Put options sold
Amount (kg)

6,221

4,354

855

1,882

9,409

22,721

$ per oz

$386

$339

$390

$400

$430

$397

Call options purchased
Amount (kg)

15,001

3,435

2,003

20,439

$ per oz

$338

$350

$361

$342

Call options sold
Amount (kg)

29,117

20,466

23,330

27,536

26,211

76,155

202,815

$ per oz

$366

$392

$381

$380

$407

$468

$416

Rand Gold

Forward contracts
Amount (kg)

933

Rand per oz

R116,335

Put options purchased
Amount (kg)

1,875

Rand per oz

R93,602

Put options sold
Amount (kg)

8,025

1,400

9,425

Rand per oz

R81,457

R88,414

R82,491

Call options purchased
Amount (kg)
Rand per oz

Call options sold
Amount (kg)

12,657

4,517

311

2,986

5,972

26,443

Rand per oz

R89,054

R102,447

R108,123

R202,054

R223,756

R135,747

148

Notes to the group financial statements

Financial risk management activities (continued)

Year 2005

2006

2007

2008

2009

2010-2014

Total

Australian Dollar Gold

Forward contracts
Amount (kg)

2,036

3,110

8,398

3,110

3,390

3,110

23,154

A$ per oz

A$573

A$746

A$650

A$673

A$667

A$692

A$667

Put options purchased
Amount (kg)

1,244

A$ per oz

A$585

Put options sold
Amount (kg)

3,110

A$ per oz

A$553

Call options purchased
Amount (kg)

3,110

6,221

3,732

3,110

1,244

3,110

20,527

A$ per oz

A$724

A$673

A$668

A$680

A$694

A$712

A$688

Call options sold
Amount (kg)

3,110

A$ per oz

A$577

Total net gold*
Delta (kg)

22,017

34,937

56,920

54,089

50,034

108,534

326,531

Delta (oz)

707,862

1,123,249

1,830,018

1,738,999

1,608,628

3,489,444

10,498,200

* The Delta of the hedge position indicated above, is the equivalent gold position that would have the same marked-to-market sensitivity for

a small change in the gold price. This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and
volatilities as at 25 January 2005.

Interest rate and liquidity risk

Fluctuations in interest rates impact on the value of short-term cash investments and financing activities, giving rise to interest rate risk.

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

The syndicated $600 million facility was repaid on 4 February 2005, and a new three-year $700 million syndicated facility was signed in
January 2005, with an interest rate of LIBOR plus 0.4% per annum.

The group has sufficient undrawn borrowing facilities available to fund working capital requirements.

Investment maturity profile

Fixed rate

Floating rate

investment

Effective

investment

Effective

amount

rate

amount rate

Maturity date

Currency

million

Less than one year

USD

1.6

134

1.9

ZAR

6.2

5.9

AUD

3.7

5.7

EUR

2.4

GHC

23,631

14.0

BRL

197

17.8

ARS

1.0

149

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

Borrowing maturity profile (Note 29)

Between

Within one year

one and two years

two and five years

After five years

Borrowings

Effective

Borrowings

Effective

Borrowings

Effective

Borrowings

Effective

amount

rate

amount

rate

amount

rate

amount

rate

Currency

million

306

3.5

6.2

926

2.4

3.7

ZAR

(1)

–

1,984

10.5

Interest rate risk

Fixed for less

Fixed for between

Fixed for greater

than one year

one and three years

than three years

Total

Borrowings

Effective

Borrowings

Effective

Borrowings

Effective

borrowings

amount

rate

amount

rate

amount

rate

amount

Currency

million

312

3.5

6.1

921

2.4

1,242

ZAR

(1)

–

1,984

10.5

2,057

(1)

Represents the interest accrual on the corporate bond as at 31 December 2004

Interest rate swaps

The group entered into a convertible interest rate swap. The swap is a derivative instrument as defined by IAS39 and has been designated as a

fair value hedge. The swap hedges the group’s exposure to fair value changes on the $1 billion convertible bond attributable to changes in interest

rates and has the effect of swapping the 2.375% fixed coupon into a LIBOR-based floating rate. The swap, like the bond, matures in February

2009, but has the additional feature that in the event of early conversion, the swap notional reduces in the same proportion. A derivative liability

and a corresponding reduction to long-term debt of $10m, R55m were recorded for the fair market value of the swap. As the swap is considered

an integral part of the bond, the interest expense on the convertible bond is disclosed after adjusting such expense for the interest income and

expense under the swap.

The group has vanilla interest rate swap agreements to convert $133m (R750m) of its $354m (R2,000m) fixed rate bond to variable rate debt.

The interest rate swap runs over the term of the bond and receives interest at a fixed rate of 10.5% and pays floating JIBAR (reset quarterly) plus

a spread of 0.915%.

This transaction matures in August 2008. The swap is subsequently re-measured at fair value, but is not designated as a fair value hedge. The

marked-to-market value of the transaction was a positive $8m (R45m) as at 31 December 2004.

Credit risk

Credit risk arises from the risk that a counterpart may default or not meet its obligations timeously. The group minimises credit risk by ensuring

that credit risk is spread over a number of counterparts. These counterparts are financial and banking institutions of good credit quality. Where

possible, management tries to ensure that netting agreements are in place.

Trade debtors comprise a small group of international companies. No provision for doubtful debts was made as the principal debtors continue to

be in a sound financial position.

The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit

standing of counterparts. The group believes that no concentration of credit exists.

150

Notes to the group financial statements

Financial risk management activities (continued)

Fair value of financial instruments

The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These

estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the group's financial instruments as at

31 December 2004 are as follows:

Type of instrument

2004

2003

Carrying

Fair

Carrying

Fair

Figures in million

amount

value

Amount

Value

US Dollars

Other investments (Note 21)

Other non-current assets (Note 25)

106

151

Trade and other receivables (Note 26)

309

219

Cash and cash equivalents (Note 27)

312

505

Borrowings (Note 29)

1,605

1,679

1,158

1,168

Trade and other payables (Note 32)

470

350

Derivatives comprise the following:

(337)

(1,161)

(299)

(659)

Forward sale commodity contracts

(172)

(666)

(225)

(350)

Option contracts

(177)

(507)

(84)

(319)

Foreign exchange contracts

Foreign exchange option contracts

(2)

Interest rate swaps

(2)

Type of instrument

2004

2003

Carrying

Fair

Carrying

Fair

Figures in million

amount

value

Amount

Value

SA Rands

Other investments (Note 21)

223

Other non-current assets (Note 25)

601

1,000

Trade and other receivables (Note 26)

1,747

1 461

Cash and cash equivalents (Note 27)

1,758

3 367

Borrowings (Note 29)

9,062

9,523

7 723

7 789

Trade and other payables (Note 32)

2,650

2 339

Derivatives comprise the following:

(1,901)

(6,583)

(1 991)

(4 394)

Forward sale commodity contracts

(972)

(3,787)

(1 497)

(2 331)

Option contracts

(998)

(2,865)

(560)

(2 129)

Foreign exchange contracts

Foreign exchange option contracts

(10)

Interest rate swaps

(11)

The fair value amounts include off-balance sheet designated hedges, which are not carried on the balance sheet and excluded from the

carrying amount. All other derivatives are carried at fair value.

151

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

Derivative maturity profile

2004

Total

Assets

Liabilities

US Dollars

Total

(337)

677

(1,014)

Less: Amounts to mature within 12 months of balance sheet date

(490)

533

Amounts to mature thereafter

(294)

187

(481)

SA Rands

Total

(1,901)

3,822

(5,723)

Less: Amounts to mature within 12 months of balance sheet date

240

(2,767)

3,007

Amounts to mature thereafter

(1,661)

1,055

(2,716)

2003

Total

Assets

Liabilities

US Dollars

Total

(299)

471

(770)

Less: Amounts to mature within 12 months of balance sheet date

(377)

441

Amounts to mature thereafter

(235)

(329)

SA Rands

Total

(1 991)

3 145

(5 136)

Less: Amounts to mature within 12 months of balance sheet date

427

(2 515)

2 942

Amounts to mature thereafter

(1 564)

630

(2 194)

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trade and other receivables, cash and cash equivalents and trade and other payables

The carrying amounts approximate fair value because of the short-term duration of these instruments.

Investments and other non-current assets

Listed investments are carried at market value while unlisted investments are carried at directors’ valuation. Other non-current assets are
carried at discounted value.

Borrowings

The fair values of listed fixed rate debt and the convertible bonds are shown at their market value. The remainder of debt re-prices on a short-
term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.

Derivatives

The fair values of derivatives are estimated based on the ruling market prices, volatilities and interest rates at 31 December 2004.

The group uses the Black-Scholes option pricing formula to value option contracts. One of the inputs into the model is the level of volatility.
These volatility levels are themselves not exchange traded and are not observable generally in the market. The group uses volatility input
supplied by one of the leading market participants, an international merchant bank. The group believes that no other possible alternative would
result in significantly different fair value estimations.

152

Notes to the group financial statements

Events after balance sheet date

$700m syndicated loan facility

AngloGold Ashanti Limited has signed a new three-year loan facility agreement for $700m to replace the $600m facility which matured in
February 2005. This facility will be used to repay the maturing facility and for general corporate purposes. The new facility will reduce the
group’s cost of borrowings, as the borrowing margin over LIBOR will reduce from 70 basis points to 40 basis points.

New expansion projects

On 26 January 2005, the AngloGold Ashanti board approved the $121m Cuiabá Deepening Project in Brazil, which is expected to increase
production from that mine from 190,000 ounces per year to 250,000 ounces per year within two years of the project’s completion. The Cuiabá
life-of-mine should be extended by six years and production over this period should increase by 1.86Moz.

Discontinued operations

The Ergo reclamation surface operation is to be discontinued during 2005. The operation forms part of South Africa under the segmental
reporting analysis. Ergo has reached the end of its economic useful life. After a detailed investigation of several options and scenarios,
management decided on 1 February 2005 that closure at the operation will commence on 31 March 2005. This is expected to be completed
before the end of 2005. The remaining available tonnage will be treated and cleaned through the tailings facility. The tangible assets have been
impaired and the liabilities are fully provided at $37m, R212m as detailed in the analysis below.

2003

2004

Figures in million

2004

2003

SA Rands

US Dollars

The discontinued operations include the following:

547

560

Revenue

(570)

(627)

Operating and closure expenses

(98)

(76)

Realised non-hedge derivatives

–

(21)

(42)

Loss before taxation

(7)

(3)

–

Taxation

–

(21)

(42)

Loss after taxation

(7)

(3)

Basic loss – cents per share

Diluted loss – cents per share

Net cash outflow from operating activities

–

Net cash outflow from investing activities

–

Net cash outflow from financing activities

–

Assets

Tangible assets – land

119

131

Environmental Rehabilitation Trust Fund

Gold inventory in process

131

141

Liabilities

104

138

Environmental rehabilitation

Post-retirement medical liability

Leave pay and bonus provisions

Current liabilities

177

212

During 2005 and until the final date of closure, it is estimated that the
operation will earn $15m, R108m in revenue, incur operational and closure
costs of $38m, R266m and consequently report a loss from the operating
and closure activities of $23m, R158m. This is equivalent to a basic loss of
9 US cents or 60 SA cents per share.

153

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Company income statement

Revenue

8,185

9,245

Gold income

7,749

8,845

Cost of sales

(6,774)

(6,762)

975

2,083

Corporate administration and other expenses

(297)

(283)

Market development costs

(79)

(115)

Net inter-company royalties, dividends and interest

–

(189)

Exploration costs

(144)

(128)

Amortisation of intangible assets

(5)

Impairment of tangible assets

Group 18

–

(247)

Non-hedge derivative (loss) gain

(523)

877

Other operating expenses

(27)

(101)

Abnormal items

–

(122)

Operating (loss) profit

(100)

1,770

Interest receivable

183

185

Other net income

Finance costs and unwinding of decommissioning obligation

(276)

(196)

Fair value gains on interest rate swaps

Profits on disposal of assets

–

Debt written off

–

(9)

(Loss) profit before taxation

(180)

1,808

Taxation

641

(767)

Profit after taxation

461

1,041

Figures in million

Notes

2004

2003

SA Rands

The company annual financial statements represent the South African operations and corporate office. These company annual financial statements

are a statutory requirement, and are accordingly presented in SA rands only.

154

as at 31 December 2004

Company balance sheet

Assets

Non-current assets

Tangible assets

10,644

9,161

Investment in associate

Group 20

Investments in subsidiaries

Page 178

14,813

7,257

Other investments

Investment in Environmental Rehabilitation Trust

265

230

Intra-group balances

144

832

Derivatives

966

572

Other non-current assets

369

26,945

18,485

Current assets

Inventories

420

389

Trade and other receivables

377

535

Derivatives

2,260

2,106

Current portion of other non-current assets

Cash and cash equivalents

1,886

3,150

4,917

Total assets

30,095

23,402

Equity and liabilities

Shareholders’ equity

17,551

8,409

Non-current liabilities

Borrowings

1,984

1,980

Provisions

1,366

1,174

Intra-group balances

1,338

2,094

Derivatives

928

959

Deferred taxation

2,821

3,413

8,437

9,620

Current liabilities

Trade and other payables

1,184

1,507

Current portion of borrowings

1,627

Derivatives

2,569

2,187

Taxation

281

4,107

5,373

Total liabilities

12,544

14,993

Total equity and liabilities

30,095

23,402

Figures in million

Notes

2004

2003

SA Rands

155

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Company cash flow statement

Cash flows from operating activities

Receipts from customers

8,048

8,952

Payments to suppliers and employees

(6,524)

(6,779)

Cash generated from operations

1,524

2,173

Interest received

142

149

Environmental contributions

(35)

(45)

Dividends received from associates

Group 20

–

Finance costs

(276)

(120)

Recoupments tax received: Free State assets

–

681

Recoupments tax paid: Free State assets

–

(681)

Taxation paid

–

(452)

Net cash inflow from operating activities

1,355

1,714

Cash flows from investing activities

Capital expenditure

– to expand operations

(1,022)

(545)

– to maintain operations

(1,083)

(1,302)

Proceeds from disposal of tangible assets

Proceeds from disposal of investments

–

Other investments acquired

(234)

(1)

Intra-group loans

2,000

871

Loans advanced

–

(2)

Repayment of loans advanced

402

Utilised in hedge restructure

(703)

–

Net cash (outflow) from investing activities

(636)

(966)

Cash flows from financing activities

Proceeds from issue of share capital

Share issue expenses

(1)

(2)

Proceeds from borrowings

229

2,184

Repayment of borrowings

(1,794)

(412)

Dividends paid

Group 17

(1,197)

(2,336)

Proceeds from hedge restructure

228

–

Net cash outflow from financing activities

(2,513)

(503)

Net (decrease) increase in cash and cash equivalents

(1,794)

245

Cash and cash equivalents at beginning of year

1,886

1,641

Net cash and cash equivalents at end of year

1,886

Figures in million

Notes

2004

2003

SA Rands

156

Company statement of changes in equity

Balance at 31 December 2002

9,863

141

(476)

(581)

832

9,836

Profit after taxation

1,041 1,041

Dividends (Group note 17)

(2,336)

Ordinary shares issued

Net loss on cash flow hedges removed

from equity and reported in income

85 85

Net gain on cash flow hedges

71 71

Deferred taxation on cash flow hedges

(92)

Net gain on repayment of net investment

Translation

(260)

Balance at 31 December 2003

57 9,924 141

(733)

(517)

(463)

8,409

Profit after taxation

461 461

Dividends (Group note 17)

(1,197)

Ordinary shares issued

9,309

9,319

Net loss on cash flow hedges removed

from equity and reported in income

276

Net gain on cash flow hedges

482

Deferred taxation on cash flow hedges

(278)

Translation

Balance at 31 December 2004

67 19,233

141

(654)

(37)

(1,199) 17,551

Note Group

Group

Note 28

(1)

Non-distributable reserves comprise a surplus on disposal of company shares within the group of R141m (2003: R141m). Foreign currency

translation represents a downward revaluation of foreign denominated loans and intra-group balances R654m (2003: R733m).

(2)

Other comprehensive income represents the effective portion of fair value gains or losses in respect of cash flow hedges until the underlying

transaction occurs, upon which the gains or losses are recognised in earnings.

Ordinary

and

Non-

Other

preference

distri-

Foreign

compre-

butable

currency

hensive

Retained

Figures in million

capital

premium

reserves

(1)

translation

(1)

Income

(2)

earnings

Equity

SA Rands

157

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Notes to the company financial statements

Revenue

Revenue consists of the following principal categories:

Gold income

7,749

8,845

Sale of uranium, silver and sulphuric acid

253

215

Interest receivable

183

185

8,185

9,245

Cost of sales

Cash operating costs

5,715

6,174

Other cash costs

Total cash costs

5,768

6,226

Retrenchment costs (Note 8)

Rehabilitation and other non-cash costs

165

Production costs

5,985

6,328

Amortisation of tangible assets (Notes 7,10 and 22)

753

415

Total production costs

(1)

6,738

6,743

Decrease in inventories

6,774

6,762

(1)

A reassessment has been made of the useful life of on-reef ore reserve development expenditure with
effect 1 January 2004. The impact of the reassessment is that costs are expensed over a longer period
than was previously estimated. The effect of the change on the current year’s results is a decrease in
cash operating costs of R606m, an increase in amortisation of tangible assets of R261m resulting in
a net decrease of total production costs of R345m.

(1)

The effect on future periods is not determinable.

Other operating expenses

Post-retirement medical expenses for disposed mines and medical aid scheme losses

101

Abnormal items

Abnormal items consist of the following items:

Provision for post-retirement medical liability

–

214

Reversal of over-provisions in decommissioning (Note 18)

–

(46)

Reversal of over-provisions in restoration (Note 18)

–

(46)

Abnormal items before taxation (Note 22)

–

122

Taxation

– Current taxation on foreign exchange losses on borrowings (Note 9)

–

(59)

– Deferred taxation (Note 9)

–

– provision for post-retirement medical liability

–

– over-provisions in decommissioning and restoration liabilities

–

(42)

Abnormal items after taxation

–

119

Figures in million

2004

2003

SA Rands

158

Other net income

Profit from associates after taxation (Note 22 and Group Note 20)

Foreign exchange loss on transactions other than sales

–

(2)

Finance costs and unwinding of decommissioning obligation

Finance costs on bank loans and overdrafts

Finance costs on corporate bond

215

Other finance costs

300

185

Less: amounts capitalised (Note 10)

(67)

–

233

185

Unwinding of decommissioning obligation (Note 18)

(Note 22)

276

196

(Loss) profit before taxation

(Loss) profit before taxation is arrived at after taking account of:

Auditors’ remuneration

– Statutory audit fees

– Under provision prior year

–

– Other assurance services

Other professional services

(1)

–

(1)

Other professional services include valuations, internal audit, consultancy services, tax advisory services

and remuneration and technical reviews.

Amortisation of tangible assets (Notes 2, 10 and 22)

Owned assets

753

415

Grants for educational and community development

Operating lease charges

At 31 December 2004, the company was committed to making the following payments in respect of

operating leases for amongst others, hire of plant and machinery and land and buildings:

Expiry within:

– One year

–

– Between 1-2 years

– Between 2-5 years

–

– After 5 years

–

Figures in million

2004

2003

SA Rands

Notes to the company financial statements

159

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Employee benefits

Employee benefits including executive directors' salaries and other benefits

3,479

3,197

Health care and medical scheme costs
– current medical expenses

217

246

– defined benefit post-retirement medical expense (Note 18)

116

226

Contributions to pension and provident plans
– defined contribution

187

151

– defined benefit

Retrenchment costs (Note 2)

Included in cost of sales and other operating expenses

4,085

3,909

Defined benefit pension plan expense
– current service cost

– interest cost

106

– expected return on plan assets

(95)

(92)

– recognised past service cost

–

– actuarial gain

(3)

–

(Note 18)

Defined benefit post-retirement medical expense
– current service cost

– interest cost

104

– recognised past service cost

134

(Note 18)

116

226

Actual return on plan assets
Defined benefit pension plan (Note 18)

219

120

Taxation

Current taxation

Mining taxation

–

Non-mining taxation

229

108

Under provision prior year

–

Taxation on abnormal items (Note 4)

–

(59)

Capital gains tax

–

Recoupments tax on Free State disposal

–

(6)

229

138

Deferred taxation

Temporary differences

132

512

Unrealised non-hedge derivatives

(199)

286

Taxation on abnormal items (Note 4)

–

(56)

Impairment

–

(113)

Change in estimated deferred tax rate

(1)

(803)

–

(Note 19)

(870)

629

(641)

767

(1)

During 2004 the estimates were revised to reflect the future anticipated taxation rate at the time
the temporary differences reverse.

Figures in million

2004

2003

SA Rands

160

Notes to the company financial statements

Taxation (continued)

Tax reconciliation

A reconciliation of the mining and non-mining tax rate compared with that charged in the income statement is set out in the following table:

2004

2003

Non-mining

Mining

Non-mining

Mining

Future anticipated tax rate

38 46

Disallowed expenditure

(2)

4 12

Non-mining losses transferred to mining taxation

–

(1)

Mining capital allowances without tax cover

–

(28)

– 4

Non-taxable profit based on Gold Formula

–

– 4

Dividends received

–

(13)

–

Taxable items not forming part of the income statement

(6)

(1)

12 –

Royalties

–

– (28)

Other

(2)

2 3

Impact of prior year under provisions

(33)

–

Change in estimated deferred tax rate

–

(154)

–

Effective tax rate

(5)

(129)

Add back:
Impact of prior year under provisions

–

Change in estimated deferred tax rate

–

154

–

Adjusted effective tax rate

Tangible assets

Mineral

rights,

Mine

dumps and

development

infra-

exploration

costs

structure

properties

Land

Total

SA Rands

Cost
Balance at beginning of year

11,046

3,438

699

15,203

Additions
– expand operations

829

188

–

1,022

– maintain operations

1,001

–

1,083

Transfers and other movements

(4)

–

Finance costs capitalised (Note 6)

–

Balance at end of year

13,009

3,704

706

17,439

Accumulated amortisation
Balance at beginning of year

3,672

2,260

110

–

6,042

Amortisation for the year
(Notes 2, 7 and 22)

627

–

753

Transfers and other movements

(19)

–

Balance at end of year

4,318

2,326

151

–

6,795

Net book value at 31 December 2004

8,691

1,378

555

10,644

Net book value at 31 December 2003

7,374

1,178

589

9,161

The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 10.65%.

161

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Other investments

Unlisted investments
Balance at beginning of year

Disposals

–

(1)

Balance at end of year (Note 25)

Directors’ valuation of unlisted investments

Inventories

Gold in process

165

201

Gold on hand

–

By-products

Total metal inventories

243

240

Consumable stores

177

149

420

389

AngloGold Environmental Rehabilitation Trust

Balance at beginning of year

230

185

Contributions

Balance at end of year

265

230

Other non-current assets

Unsecured
Defined benefit pension net asset (Note 18)

–

Loans and receivables originated
Deferred purchase consideration in respect of the sale of the Free State assets

–

360

Other

370

Less: Current portion of non-current assets included in current assets

Balance at end of year (Note 25)

369

Trade and other receivables

Trade debtors

120

Prepayments and accrued income

190

Value added taxation

Other debtors

191

148

(Note 25)

377

535

Figures in million

2004

2003

SA Rands

162

Notes to the company financial statements

Cash and cash equivalents

Cash and deposits on call

1,023

Money market instruments

–

863

(Note 25)

1,886

Borrowings

Unsecured

Corporate Bond

(1)

2,057

2,052

Syndicated loan facility

–

1,555

Total borrowings (Note 25)

2,057

3,607

Less: Current portion of borrowings included in current liabilities

1,627

Total long-term borrowings

1,984

1,980

Amounts falling due:

Within one year

1,627

Between two and five years

1,984

1,980

(Note 25)

2,057

3,607

Currency

The currency in which the borrowings are denominated is as follows:

SA rands

2,057

2,052

US dollars

–

1,555

2,057

3,607

Undrawn facilities

Undrawn borrowing facilities as at 31 December 2004 are as follows:

Syndicated loan – US dollar

–

1,120

(1)

Corporate bond

Senior unsecured fixed rate bond

2,000

Less: Unamortised discount and bond issue costs

1,984

1,980

Add: accrued interest

2,057

2,052

On 21 August 2003, AngloGold Ashanti launched and priced an issue of senior unsecured fixed

rate bond in an aggregate principal amount of R2,000m, with semi-annual coupons payable at a rate of

10.5% per annum. This bond is repayable on 28 August 2008.

Figures in million

2004

2003

SA Rands

163

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Provisions

Defined benefit post-retirement medical provision

Balance at beginning of year

850

680

Charge to income statement (Note 8)

116

226

Utilised during the year

(117)

(56)

Balance at end of year

849

850

The provision for post-retirement medical funding represents the provision for health care benefits

for employees and retired employees and their registered dependants.

The post-retirement benefit costs are assessed in accordance with the advice of independent

professionally qualified actuaries. The actuarial method used is the projected unit credit funding method.

The assumptions used in calculating the above defined benefit post-retirement medical obligation

are as follows:

Discount rate

9.0

10.0

Expected increase in health care costs

5.0

The normal retirement age is 60 years, and fully eligible age is 55 years.

The last statutory valuation was performed as at 31 December 2002. Calculations are performed in the

years when a statutory valuation is not performed and events and movements that could impact the

valuation between the date of the interim valuation performed at 30 September 2004 and the date of

the balance sheet have been considered. The South African post-retirement medical plan is an

unfunded plan.

The date of the next statutory actuarial valuation is 31 December 2005.

Defined benefit pension plan (Note 21)

Balance at beginning of year

–

Expense per income statement (Note 8)

Contributions paid – company

(78)

(62)

Transferred to other non-current assets (Note 14)

(44)

–

Defined benefit pension fund

Present value of fund obligation

1,218

1,089

Fair value of fund assets

(1,150)

(920)

169

Unrecognised actuarial loss

(112)

(169)

Recognised asset on balance sheet

(44)

–

Market value of plan assets (Group note 30)

1,150

920

Figures in million

2004

2003

SA Rands

164

Notes to the company financial statements

Provisions (continued)

Plan assets are made up as follows:
Domestic equities

633

549

Foreign equities

112

Domestic fixed interest bonds

329

191

Foreign fixed interest bonds

Cash

1,150

920

Actual return on plan assets
Expected return on plan assets

Actuarial gain on plan assets

124

(Note 8)

219

120

The assumptions used in calculating the above defined benefit pension plan obligation are as follows:

Discount rate

7.5

8.5

Pension increase

2.9

3.6

Rate of compensation increase

5.0

Expected return on plan assets

7.5

8.5

The rate of compensation increase assumption is 5% for 2005 and 4% thereafter.

A statutory valuation of the defined benefit pension fund was performed as at 31 December 2002, which
showed that the fund was in deficit. The rate of the company contribution to the fund was reviewed and
increased during the year. A formal additional funding plan was submitted and approved by the Financial
Services Board. According to this plan, the company funded R32m in 2004 and a further R167m in real
terms will be funded from 2005 to 2011. In arriving at their conclusions, the actuaries took into account
reasonable long-term estimates of inflation, increases in wages, salaries and pension as well as returns
on investments. Calculations for the pension fund’s financial position are carried out in years when a
statutory valuation is not performed and events and movements that could impact on the valuation
between the date of the interim valuation performed at 30 September 2004 and the balance sheet date
have been considered.

The date of the next statutory actuarial valuation is 31 December 2005.

All funds are governed by the Pension Funds Act of 1956 as amended.

Environmental rehabilitation obligations
Provision for decommissioning
Balance at beginning of year

191

226

Change in estimates

(1)

–

Unwinding of decommissioning obligation (Note 6)

Reversal of overprovision in decommissioning (Note 4)

–

(46)

Balance at the end of year

298

191

Provision for restoration
Balance at beginning of year

133

162

Reversal of overprovision (Note 4)

–

(46)

Charge to income statement

Balance at end of year

219

133

Total environmental rehabilitation obligation

517

324

Total provisions

1,366

1,174

(1)

The change in estimate relates to adjustments required as a result of regulatory requirements.
The effect of the change in estimates for the current year is an increase in the decommissioning asset
of R64m. The effect on future periods is not determinable.

Figures in million

2004

2003

SA Rands

165

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Deferred taxation

Deferred taxation relating to temporary differences is made up as follows:

Liabilities

Tangible assets

3,386

3,927

Inventories

Derivatives

159

119

Other

3,619

4,175

Assets

Provisions

411

498

Derivatives

257

264

Tax losses

130

–

798

762

Deferred taxation liability

2,821

3,413

The movement on the deferred tax liability is as follows:

Balance at beginning of year

3,413

2,692

Income statement charge (Note 9)

(870)

629

Taxation of other comprehensive income

278

Balance at end of year

2,821

3,413

Trade and other payables

Trade creditors

395

335

Accruals

218

142

Other creditors

571

715

Accrued purchase consideration for mineral rights acquired from Gold Fields Limited

–

315

(Note 25)

1,184

1,507

Defined contribution retirement benefits

South Africa contributes to various industry-based pension and provident retirement plans which cover
substantially all employees and are defined contribution plans. These plans are all funded and the assets
of the schemes are held in administered funds separately from the company’s assets. The cost of
providing these benefits amounted to R187m (2003: R151m) during the year.

Cash generated from operations

(Loss) profit before taxation

(180)

1,808

Adjusted for:
Non-cash movements

Movement on non-hedge derivatives

986

(633)

Amortisation of tangible assets (Notes 2, 7 and 10)

753

415

Interest receivable (Note 1)

(183)

(185)

Profit from associates after taxation (Note 5)

(1)

(12)

Abnormal items (Note 4)

–

122

Finance costs and unwinding of decommissioning obligation (Note 6)

276

196

Amortisation of intangible asset of associate

Impairment of tangible assets

–

247

Debt written off

–

Profit on disposal of assets

(4)

(10)

Movements in working capital

(225)

197

1,524

2,173

Figures in million

2004

2003

SA Rands

166

Notes to the company financial statements

Cash generated from operations (continued)

Movements in working capital:
(Increase) decrease in inventories

(30)

Decrease (increase) in trade and other receivables

(139)

(Decrease) increase in trade and other payables

(264)

328

(225)

197

Related parties

2004

2003

Purchases

Amounts

Purchases

Amounts

from

owed

from

owed

to related

Rands

parties

Holding company Anglo American plc

(1)

–

14 –

Fellow subsidiaries of the Anglo American plc group
Anglo Coal – a division of Anglo Operations Limited

– –

Boart Longyear Limited – mining services

77 7

Mondi Limited – timber

101

86 7

Scaw Metals – a division of Anglo Operations Limited
– steel and engineering

86 7

Associates
Rand Refinery Limited – gold refinery

(2)

18 –

Management fees, royalties and dividends from subsidiaries amounted to R31m (2003: R205m).

(1)

Where the presentation or classification of an item has been amended, comparative amounts have been reclassified to ensure comparability
with the current period. Transactions with Anglo American plc, previously omitted, have been included in the prior year. The amendments
have been made to provide users of the financial statements with additional information.

(2)

Rand Refinery was consolidated from 31 December 2003. Prior to this date, Rand Refinery was equity accounted.

Commitments

Figures in million

2004

2003

SA Rands

Acquisition of tangible assets
Contracted for

551

569

Not contracted for

3,195

2,856

Authorised by the directors

3,746

3,425

Allocated for:
Expansion of operations
– within one year

1,285

478

– thereafter

833

1,453

2,118

1,931

Maintenance of operations
– within one year

610

– thereafter

1,018

1,403

1,628

1,494

This expenditure will be financed from existing cash resources and future borrowings.

Figures in million

2004

2003

SA Rands

167

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities

In the normal course of its operations, the company is exposed to gold price, currency, interest rate, liquidity and credit risks. In order to

manage these risks, the company may enter into transactions which make use of both on- and off-balance sheet derivatives. The company

does not acquire, hold or issue derivatives for trading purposes. The company has developed a comprehensive risk management process to

facilitate, control and to monitor these risks. The board has approved and monitors this risk management process, inclusive of documented

treasury policies, counterpart limits, controlling and reporting structures.

Controlling risk in the company

The Executive Committee and the Treasury Committee are responsible for risk management activities within the company. The Treasury

Committee, chaired by the independent chairman of the AngloGold Ashanti Audit and Corporate Governance Committee, comprising

executive members and treasury executives, reviews and recommends to the Executive Committee all treasury counterparts, limits,

instruments and hedge strategies. The treasurer is responsible for managing investment, gold price, currency, liquidity and credit risk. Within

the treasury function, there is an independent risk function, which monitors adherence to treasury risk management policy, counterpart and

dealer limits and provides regular and detailed management reports.

Gold price and currency risk and cash flow hedging

Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The gold

market is predominately priced in dollars which exposes the company to the risk that fluctuations in the SA rand/US dollar exchange rates

may also have an adverse effect on current or future earnings.

A number of products, including derivatives, are used to manage well-defined gold price and foreign exchange risks that arise out of the

company's core business activities. Forward-sales contracts and call and put options are used by the company to protect itself from

downward fluctuations in the gold price. These derivatives may establish a minimum price for a portion of future production while maintaining

the ability to benefit from increases in the gold price for the majority of future gold production.

Some of the instruments described above are designated and accounted for as cash flow hedges. The hedge forecast transactions are

expected to occur over the next 10 years in line with the maturity dates of the hedging instruments and will affect profit and loss simultaneously

in an equal and opposite way.

168

Notes to the company financial statements

Financial risk management activities (continued)

Hedge book restructure

Refer note 38 in group financial statements.

Net delta open hedge position as at 31 December 2004

The company had the following net forward-pricing commitments outstanding against future production.

Table A: Summary: All open contracts in the company's gold hedge position at 31 December 2004

Year 2005

2006

2007

2008

2009

2010-2014

Total

Dollar/Gold

Forward contracts
Amount (kg)

31,319

9,055

106

4,588

5,964

10,964

61,996

$/oz

$397

$344

$810

$386

$440

$479

$408

Restructure longs*
Amount (kg)

17,676

$/oz

$440

Put options purchased
Amount (kg)

1,866

4,354

6,220

$/oz

$393

$372

$378

Put options sold
Amount (kg)

5,288

4,354

855

1,882

9,409

21,788

$/oz

$389

$339

$390

$400

$430

$398

Call options purchased
Amount (kg)

9,767

9,269

4,354

23,390

$/oz

$317

$327

$336

$325

Call options sold
Amount (kg)

16,983

19,261

18,203

18,390

20,147

55,846

148,830

$/oz

$345

$370

$371

$384

$404

$458

$407

Rand/Gold

Forward contracts
Amount (kg)

933

Amount R/kg

R116,335

Put options purchased
Amount (kg)

1,875

R/kg

R93,602

Put options sold
Amount (kg)

8,025

1,400

9,425

R/kg

R80,840

R88,414

R81,965

Call options sold
Amount (kg)

12,657

4,517

311

2,986

5,972

26,443

R/kg

R88,509

R102,447

R108,123

R202,054

R223,756

R134,486

Total net gold
Delta (kg)**

(28,290)

(345)

11,300

19,434

22,713

51,851

76,663

Delta (oz)**

(909,524)

(11,092)

363,295

624,803

730,223

1,667,010

2,464,715

* At 31 December 2004 the company was in the process of restructuring the hedge book and acquired a long spot position in gold. This

long gold position will be applied to the restructure during the first quarter of 2005.

** The delta position indicated above reflects the nominal amount of the option multiplied by the mathematical probability of the option being

exercised. This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities as at
31 December 2004.

169

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

Table B: Summary: All open contracts in the company’s currency hedge position at 31 December 2004

Year 2005

2006

2007

2008

2009

2010-2014

Total

Forward contracts

Amount ($)

130,509

R per $

R5.71

Call options sold

Amount ($)

65,000

R per $

R5.72

The mix of hedging instruments, the volume of production hedged and the tenor of the hedging book is continually reviewed in the light

of changes in operational forecasts, market conditions and the company's hedging policy.

Forward sales contracts require the future delivery of gold at a specified price.

A put option gives the put buyer the right, but not the obligation, to sell gold to the put seller at a predetermined price on a predetermined date.

A call option gives the call buyer the right, but not the obligation, to buy gold from the call seller at a predetermined price on a predetermined date.

Interest rate and liquidity risk

Refer Note 38 in group financial statements

Investment maturity profile

Fixed rate

Floating rate

investment

Effective

investment

Effective

amount

rate

amount rate

Maturity date

Currency

million

Less than one year

ZAR

–

6.0

Between

Borrowings maturity profile (Note 17)

Within one year

one and five years

Borrowings

Effective

Borrowings

Effective

amount

rate

amount rate

Currency

million

ZAR

(1)

–

1,984

10.5

Between

Interest rate risk

Within one year

one and five years

Borrowings

Effective

Borrowings

Effective

amount

rate

amount rate

Currency

million

ZAR

(1)

–

1,984

10.5

(1)

Represents the interest accrual on the corporate bond as at 31 December 2004

Interest rate swaps

Refer Note 38 in group financial statements

Credit Risk

Refer Note 38 in group financial statements

170

Notes to the company financial statements

Financial risk management activities (continued)

Fair value of financial instruments

The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. These

estimates involve uncertainties and cannot be determined with precision. The estimated fair values of the company’s financial instruments as

at 31 December 2004 are as follows:

Type of instrument

2004

2003

Carrying

Fair

Carrying

Fair

Figures in million

amount

value

Amount

Value

SA Rands

Other investments (Note 11)

Other non-current assets (Note 14)

369

Trade and other receivables (Note 15)

377

535

Cash and cash equivalents (Note 16)

1,886

Borrowings (Note 17)

2,057

2,207

3,607

3,673

Trade and other payables (Note 20)

1,184

1,507

Derivatives comprise the following:

(271)

(2,158)

(468)

(2,132)

Forward sale commodity contracts

172

121

(25)

Option contracts

(482)

(2,318)

(593)

(2,141)

Foreign exchange contracts

(3)

(5)

Foreign exchange option contracts

(3)

Interest rate swaps

The fair value amounts include off balance sheet designated hedges, which are not carried on the balance sheet and excluded from the

carrying amount. All other derivatives are carried at fair value.

Derivative maturity profile

2004

Figures in million

Total

Assets

Liabilities

SA Rands

Total

(271)

3,226

(3,497)

Less: Amounts to mature within 12 months of balance sheet date

309

(2,260)

2,569

Amounts to mature thereafter

966

(928)

2003

Figures in million

Total

Assets

Liabilities

SA Rands

Total

(468)

2,678 (3,146)

Less: Amounts to mature within 12 months of balance sheet date

(2,106)

2,187

Amounts to mature thereafter

(387)

572

(959)

171

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Financial risk management activities (continued)

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trade and other receivables, cash and cash equivalents and trade and other payables
The carrying amounts approximate fair value because of the short-term duration of these instruments.

Investments and other non-current assets
Listed investments are carried at market value while unlisted investments are carried at directors’ valuation. Other non-current assets are
carried at discounted value.

Borrowings
The fair value of listed fixed rate debt is shown at its market value. The remainder of debt re-prices on a short-term floating rate basis, and
accordingly the carrying amount is considered to approximate fair value.

Derivatives
The fair values of derivatives are estimated based on the ruling market prices, volatilities and interest rates at 31 December 2004.

The company uses the Black-Scholes option pricing formula to value option contracts. One of the inputs into the model is the level of volatility.
These volatility levels are themselves not exchange traded and are not observable generally in the market. The company uses volatility input
supplied by one of the leading market participants, an international merchant bank. The company believes that no other possible alternative
would result in significantly different fair value estimations.

Discontinued operations

The discontinued operations include the following:

Figures in million

2004

2003

SA Rands

Revenue

560

547

Operating and closure expenses

(627)

(570)

Realised non-hedge derivatives

Loss before taxation

(42)

(21)

Taxation

–

Loss after taxation

(42)

(21)

Basic loss – cents per share

Diluted loss – cents per share

Net cash outflow from operating activities

Net cash outflow from investing activities

–

Net cash outflow from financing activities

–

Assets
Tangible assets – land

Environmental Rehabilitation Trust Fund

131

119

Gold inventory in process

141

131

Liabilities
Environmental rehabilitation

138

104

Post-retirement medical liability

Leave pay and bonus provisions

Current liabilities

212

177

During 2005 and until the final date of closure, it is estimated that the operation will earn R108m in revenue, incur operational and closure
costs of R266m and consequently report a loss from the operating and closure activities of R158m. This is equivalent to a basic loss of 60 SA
cents per share.

172

US GAAP condensed consolidated financial statements

Condensed consolidated financial statements prepared in
accordance with US GAAP

AngloGold Ashanti provides as part of this Annual Report 2004, to all shareholders, condensed consolidated financial statements derived from and

presented in the manner detailed below.

Basis of presentation

The condensed consolidated financial statements have been derived from the group’s consolidated financial statements as prepared in accordance

with accounting principles generally accepted in the United States (US GAAP). US GAAP differs in certain material respects from International Financial

Reporting Standards (IFRS). The condensed consolidated financial statements do not include notes in support of the financial information presented

therein. The group’s audited consolidated financial statements prepared in accordance with US GAAP from which the condensed consolidated

financial statements have been derived, contain detailed notes prepared in accordance with US GAAP. The audited consolidated financial statements

prepared in accordance with US GAAP, together with related notes, are included under Item 18 in AngloGold Ashanti’s annual report on Form 20-F

filed with the United States Securities and Exchange Commission on or about 30 March 2005. The AngloGold Ashanti annual report on Form 20-F

for the year ended 31 December 2004 as filed with the United States Securities and Exchange Commission on or about 30 March 2005 is available

free of charge on EDGAR at www.sec.gov.

The condensed consolidated financial statements set forth below for each of the three years in the period ended 31 December 2004, and as at

31 December 2004 and 2003, have been derived from, and should be read in conjunction with the US GAAP financial statements included under

Item 18 in AngloGold Ashanti’s annual report on Form 20-F as filed with the United States Securities and Exchange Commission on or about

30 March 2005.

Stock split

Throughout the condensed consolidated financial statements presented herein, the number of AngloGold Ashanti ordinary shares and the calculation

of basic and diluted (loss) earnings per share information for AngloGold Ashanti have been adjusted retroactively to reflect AngloGold’s two-for-one

stock split and the issuance of a total of 278,196 AngloGold ordinary shares under AngloGold’s odd lot offer as approved at the general meeting of

AngloGold’s shareholders held on 5 December 2002.

173

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

for the year ended 31 December 2004

Condensed consolidated income statement

Derived from financial statements prepared in accordance with US GAAP

Sales and other income

2,488

2,062

1,799

Product sales

2,386

2,026

1,761

Interest, dividends and other income

102

Cost and expenses

2,500

1,651

1,369

Production costs

1,549

1,202

907

Exploration costs

Related party transactions

General and administrative

Royalties

Market development costs

Research and development

–

Depreciation, depletion and amortisation

508

321

333

Impairment of assets

–

Interest expense

101

Accretion expense

–

Employment severance costs

(Profit) loss on sale of assets

(14)

(55)

Non-hedge derivative loss (gains)

129

(119)

(73)

(Loss) income before equity income and income tax

(12)

411

430

Equity income in affiliates

–

(Loss) income before income tax provision

(12)

413

434

Deferred income and mining tax benefit (expensed)

130

(146)

(62)

Income before minority interest

118

267

372

Minority interest

(22)

(17)

(16)

Income before cumulative effect of accounting change

250

356

Cumulative effect of accounting change

–

(3)

–

Net income – applicable to common stockholders

247

356

Basic earnings per common share: (cents)

Before cumulative effect of accounting change

112

160

Cumulative effect of accounting change

–

(1)

–

Net income – applicable to common stockholders

111

160

Diluted earnings per common share: (cents)

Before cumulative effect of accounting change

112

160

Cumulative effect of accounting change

–

(1)

–

Net income – applicable to common stockholders

111

160

Weighted average number of common shares used in computation

251,352,552

222,836,574

221,883,567

Dividend per common share (cents)

133

113

These condensed financial statements should be read in conjunction with the company’s financial statements and footnotes filed on Form 20-F with

the United States Securities and Exchange Commission on or about 30 March 2005.

Year ended 31 December

2004

2003

2002

Figures in dollar millions, except for share data

174

US GAAP condensed consolidated financial statements

Condensed consolidated balance sheet

Derived from financial statements prepared in accordance with US GAAP

Assets

Current assets

1,539

1,413

Cash and cash equivalents

312

505

Receivables

800

605

Trade

Derivatives

490

377

Value added taxes

Other

229

154

Inventories

319

202

Materials on the leach pad

108

101

Property, plant and equipment, net

5,181

2,555

Acquired properties, net

1,751

936

Goodwill

600

410

Other intangibles, net

–

Derivatives

187

Materials on the leach pad

Other long-term assets

152

167

Total assets

9,460

5,582

Liabilities and stockholders’ equity

Current liabilities

1,494

1,202

Accounts payable and accrued liabilities

504

385

Derivatives

606

441

Short-term debt

319

351

Income and mining tax payable

Long-term debt

1,377

810

Derivatives

734

329

Deferred income and mining tax

1,545

845

Provision for environmental rehabilitation

217

134

Other accrued liabilities

Provision for pension and other post-retirement medical benefits

173

136

Minority interest

Commitments and contingencies
Stockholders’ equity

3,847

2,068

Common stock

Stock issued 2004 – 264,462,894 (2003 – 223,136,342)

Additional paid in capital

4,961

3,415

Accumulated deficit

(703)

(616)

Accumulated other comprehensive income

(421)

(740)

Total liabilities and stockholders’ equity

9,460

5,582

These condensed financial statements should be read in conjunction with the company’s financial statements and footnotes filed on Form 20-F with
the United States Securities and Exchange Commission on or about 30 March 2005.

As at 31 December

2004

2003

Figures in dollar millions

175

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

US GAAP condensed consolidated financial statements

for the year ended 31 December 2004

Condensed consolidated cash flow statement

Derived from financial statements prepared in accordance with US GAAP

Net cash provided by operating activities

492

453

594

Income before cumulative effect of accounting change

250

356

Reconciled to net cash provided by operations:

Profit on sale of assets

(14)

(55)

–

Depreciation, depletion and amortisation

508

321

333

Deferred stripping costs

(21)

(43)

(11)

Impairment of assets

–

Deferred income and mining tax

(196)

(62)

Other non-cash items

193

Net decrease in provision for environmental

rehabilitation and pension and other post-retirement medical benefits

(24)

(88)

(17)

Effect of changes in operating working capital items:

Receivables

(41)

(53)

(5)

Inventories

(56)

(87)

(54)

Accounts payable and accrued liabilities

Net cash used in investing activities

(993)

(307)

(91)

Cash acquired in acquisitions

Increase in non-current investments

(20)

(1)

(34)

Additions to property, plant and equipment

(585)

(363)

(271)

Proceeds on sale of mining assets

Proceeds on sale of investments

–

158

Cash outflows from hedge restructuring

(310)

–

Cash effects of acquisitions or disposals

(227)

– Proceeds

(227)

– Contractual obligations

–

(24)

Loans receivable advanced

(2)

(19)

(5)

Loans receivable repaid

Net cash generated (used) in financing activities

291

(107)

(356)

Net repayments of short-term debt

(528)

(46)

(616)

Issuance of stock

Net proceeds of long-term debt

787

243

502

Cash inflows from hedge restructuring

227

–

Dividends paid

(198)

(314)

(260)

Net (decrease) increase in cash and cash equivalents

(210)

147

Effect of exchange rate changes on cash

Cash and cash equivalents – 1 January

505

413

191

Cash and cash equivalents – 31 December

312

505

413

These condensed financial statements should be read in conjunction with the company’s financial statements and footnotes filed on Form 20-F with

the United States Securities and Exchange Commission on or about 30 March 2005.

Year ended 31 December

2004

2003

2002

Figures in dollar millions

176

US GAAP condensed consolidated financial statements

Condensed reconciliation between IFRS and US GAAP

Results for the year ended and as at 31 December 2004

AngloGold Ashanti provides, supplemental to the condensed consolidated financial statements, a reconciliation from its IFRS to US GAAP results.

This reconciliation is provided for illustrative purposes only, as AngloGold Ashanti prepares consolidated financial statements prepared in accordance

with US GAAP, together with related notes, which are included under Item 18 in AngloGold Ashanti’s annual report on Form 20-F filed with the United

States Securities and Exchange Commission on or about 30 March 2005.

Year ended 31 December

Notes

2004

2003

2002

Figures in dollar millions

Income statement information

Net profit attributable to equity shareholders as per IFRS

312

332

Adjusted for:

Amortisation of acquired properties (ore reserves)

and mining assets

(127)

(89)

(88)

IFRS exceptional loss reversed

–

Impairment of assets

(2)

(34)

–

Actuarial surplus (shortfall) on pension and other post-retirement medical expenses

III

–

Goodwill adjustments

Normandy transaction costs

–

(11)

Stock compensation expense

(4)

–

Convertible bond adjustments

–

Other

VII

(18)

(20)

Sub-total

253

254

Adjustments made to taxation charge

VIII

(4)

103

Adjusted profit after taxation

249

357

Cumulative effect of accounting changes

–

(3)

–

Minority adjustments

(3)

(1)

Net income applicable to common stockholders as per US GAAP

247

356

As at 31 December

Notes

2004

2003

Figures in dollar millions

Balance sheet information

Net assets as per IFRS

3,229

1,628

Adjusted for:

Acquired properties (ore reserves)

1,751

936

Mining assets

(699)

(209)

Intangibles

212

(2)

Convertible bond adjustments

(68)

–

Deferred taxation

VIII

(232)

(282)

Derivatives

(326)

–

Pension and other post-retirement medical benefits

III

(2)

(1)

Other

VII

(18)

(2)

Stockholders’ equity as per US GAAP

3,847

2,068

Supplemental information to the condensed consolidated financial statements.

177

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

US GAAP condensed consolidated financial statements

Condensed reconciliation between IFRS and US GAAP

Results for the year ended and as at 31 December 2004

Differences in accounting treatment between IFRS and US GAAP which have a significant effect on AngloGold Ashanti are noted below:

I Business combinations (including acquired properties and goodwill)

Under IFRS at the formation of AngloGold on 29 June 1998, the acquisition of the participating companies and the interests in the share interest
companies were accounted for using the pooling of interest method. Under US GAAP the original formation of AngloGold did not qualify as a “pooling
of interest” and therefore the formation transaction was accounted for as a business combination. Subsequent acquisitions have been accounted for
as business combinations under both IFRS and US GAAP.

Both IFRS and US GAAP require the purchase consideration to be allocated to the net assets acquired at their fair value on the date of acquisition.
Under IFRS any excess of the purchase price over the fair value of the attributable mineral reserves and net assets is recognised as goodwill. Goodwill
which represents resources is amortised on a systematic basis which recognises the depletion of resources over the lesser of the LOM or 20 years.

Under US GAAP, the purchase consideration is allocated to the net assets acquired according to the assets and liabilities respective fair value,
including acquired properties which is amortised over the LOM. Where the purchase price cannot be attributed to the assets acquired, it is allocated
to goodwill and amortised on a straight line basis over the lesser of the LOM or 20 years until 31 December 2001. In accordance with the provisions
of SFAS 142, goodwill is no longer amortised but reviewed annually for impairment effective from 1 January 2002.

In cases where traded equity securities are exchanged as consideration, IFRS requires the fair value of the consideration to be determined based on
market value at the date of the exchange transaction. The date of acquisition is considered to be when effective control over the acquired assets and
liabilities is obtained.

US GAAP requires that the fair value of such transactions be determined by the average trading price of a few days before and after the date at which
the terms and conditions of the transaction are agreed to and announced.

II IFRS exceptional loss reversed

Represents the reversal of the loss on disposal of the Free State assets recorded in IFRS in 2002. Under US GAAP, the value of the Free State assets
were written down in 2001 to the net selling price per the sale agreement.

III Pension and other post-retirement medical benefits

Under IFRS, pension and other post-retirement medical benefits are accounted for in accordance with the provisions of IAS 19. Under US GAAP
these benefits are accounted for in accordance with the provisions of SFAS 87 and SFAS 106.

Under IFRS, only the contractual liability for post-retirement is accounted for. Under US GAAP, both the contractual and the liability in excess of
contributions made by plan members are accounted for. The adjustment to post-retirement medical benefits refers to the actuarial valuation as
calculated by independent actuaries.

IV Normandy transaction costs

Under IFRS, the transaction costs relating to the Normandy bid were charged to share premium. Under US GAAP, these expenses are expensed as
an aborted business combination.

V Stock compensation expense

Under US GAAP performance-related options are accounted for as variable compensation awards in accordance with Accounting Principles Board
Opinion No. 25 (APB No. 25). A compensation expense is calculated at the end of each reporting period until the performance obligation has been
met or waived. Compensation expense will vary based on the fluctuations of the underlying stock price in excess of the exercise price.

VI Convertible bonds

Under IFRS, convertible bonds are initially recognised as compound financial instruments, with a portion classified as equity and the rest as a liability.
Under US GAAP, the entire instrument is recorded as a liability and the amortisation of the discount is limited to the amortisation of issue costs.

VII Other

Other consists of other differences between IFRS and US GAAP that are considered too insignificant to be quantified individually.

VIII Income taxes

Reflects the tax impact of the differences between IFRS and US GAAP.

IX Cumulative effect of accounting changes

Asset retirement obligations

The $3m (net of provision for deferred taxation) cumulative effect of change in accounting policy represents the transitional adjustment resulting from
the adoption of SFAS 143 on 1 January 2003. Under IFRS, accounting for provisions and contingencies is dealt with in IAS 37.

Supplemental information to the condensed consolidated financial statements.

Investment in principal subsidiaries and joint venture interests

178

Nature of

Shares held

Percentage held

Book value

Net loan account

business

2004 2003 2004

2003

2004

2003

2004

2003

% % Rm Rm Rm Rm

Direct investments

Advanced Mining Software Limited

40,000

100

(12)

(11)

AGRe Insurance Company Limited

100

–

AngloGold American Investments Limited

(1)

1,001

100

849

928

(39)

AngloGold Ashanti USA Incorporated

(5)

100

–

100

–

768

–

500

–

100

–

655

–

AngloGold Geita Holdings Limited

(1)

–

2,513

–

71.53

–

1,394

–

AngloGold Health Service (Pty) Limited

100

–

AngloGold Holdings plc

(2)

2,077,313,678

–

100

–

11,192

–

(393)

–

AngloGold Offshore Investments Limited

(1)

5,000,000

5,001,000

100

272

3,858

–

(1,054)

–

43,251*

–

100

–

Eastvaal Gold Holdings Limited

454,464,000

100

917

(604)

Masakhisane Investment Limited

100

–

Nuclear Fuels Corporation of SA (Pty) Limited

1,450,000

100

(63)

–

Nufcor International Limited

(9)

3,000,000

–

Rand Refinery Limited

208,471

53.03

116

–

Southvaal Holdings Limited

26,000,000

100

(3)

(67)

Indirect investments

AG Mali Holdings 1 Limited

(1)

10,002

–

100

–

AG Mali Holdings 2 Limited

(1)

10,002

–

100

–

AngloGold Argentina Limited

(1)

100

–

AngloGold Argentina S.A.

(6)

1,331,093

100

–

AngloGold Ashanti Australia Limited

(8)

257,462,077

100

–

AngloGold Ashanti (Colorado) Corp.

(5)

1,250

100

–

AngloGold Ashanti (Ghana) Limited

(13)

132,419,585

–

100

–

AngloGold Ashanti (Iduapriem) Limited

(13)

53,010

–

AngloGold Ashanti Mineração Ltda

(7)

22,194,302,378

6,250,151,071

100

–

AngloGold Ashanti (Nevada) Corp.

(5)

100

–

AngloGold Ashanti North America Inc.

(5)

7,902

100

–

504

AngloGold Ashanti USA Incorporated

(5)

–

100

–

100

–

AngloGold Australia Investment Holdings Limited

(1)

1,000

2,000

100

–

43,251*

–

100

–

AngloGold Australia (Sunrise Dam) Pty Limited

(8)

100

–

AngloGold Brasil Ltda

(7)

8,827,437,875

100

–

AngloGold Brazil Limited

(1)

100

–

AngloGold CV 1 Limited

(1)

11,002

–

100

–

AngloGold CV 2 Limited

(1)

1,002

–

100

–

AngloGold CV 3 Limited

(1)

1,002

–

100

–

AngloGold Finance Australia Holdings Limited

(10)

1,002

100

–

43,251*

–

100

–

AngloGold Finance Australia Limited

(10)

1,002

100

–

43,251*

–

100

–

AngloGold Geita Holdings Limited

(1)

3,513

1,000

100

28.47

–

AngloGold Holdings plc

(2)

–

5,000

–

100

–

1,024,840,886*

201,600*

100

–

AngloGold Investments Australasia Limited

(1)

1,000

2,000

100

–

43,251*

–

100

–

AngloGold Investments Australia Pty Ltd

(8)

100

–

AngloGold Investments (Sadex) Limited

(1)

1,000'A'

100

–

AngloGold Morila Holdings Limited

(1)

1,000

100

–

AngloGold Namibia (Pty) Ltd

(3)

10,000

100

–

AngloGold North American Holdings Limited

(1)

100

–

AngloGold Offshore Investments Limited

(1)

422,510,000*

–

100

–

AngloGold South America Limited

(1)

488,000

100

–

(153)

(193)

AngloGold South American Holdings Limited

(1)

100

–

Ashanti Goldfields Belgium S.A.

(16)

2,500

–

100

–

Ashanti Goldfields (Cayman) Limited

(17)

–

100

–

Ashanti Goldfields Holding (Luxembourg) S.A.

(15)

3,000,000

–

100

–

Ashanti Goldfields Services Limited

(9)

588,409

–

100

–

Ashanti Goldfields Teberebie Limited

(17)

–

100

–

Ashanti Goldfields Zimbabwe Limited

(14)

265,570,717

–

100

–

179

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Nature of

Shares held

Percentage held

Book value

Net loan account

business

2004 2003 2004

2003

2004

2003

2004

2003

% % Rm Rm Rm Rm

Australian Mining & Finance Pty Limited

(8)

–

100

–

Cerro Vanguardia S.A.

(6)

13,875,000

92.50

–

Chevaning Mining Company Limited

(9)

1,000

–

100

–

Cluff Holdings Pvt Limited

(14)

100

–

100

–

Cluff Mineral Exploration Limited

(9)

500,000

–

100

–

Cluff Oil Limited

(9)

19,646,377

9,823,188

100

–

Cluff Resources Limited

(9)

93,638,562

46,819,281

100

–

Cripple Creek & Victor Gold Mining Company

(USA joint venture)

–

Erongo Holdings Limited

(1)

13,334'A'

100

–

(10)

(13)

Geita Gold Mining Limited

(11)

100

–

Golden Shamrock Mines Limited

(8)

2,000,000

–

100

–

GSM Gold S.A.

(15)

325,000

–

100

–

Mineração Serra Grande S.A.

(7)

499,999,997

–

Morila Limited

(19)

–

Pioneer Goldfields Limited

(18)

75,000,000

–

100

–

Sadiola Exploration Limited

(1)

5,000 'A'

–

Societé Ashanti Goldfields de Guinée S.A.

(12)

3,486,134

–

Teberebie Goldfields Limited

(13)

1,860,000

–

Joint ventures

Société des Mines de Morila S.A.

(4)

400

–

Société d'Exploitation des Mines d'Or de Sadiola S.A.

(4)

38,000

–

Société d'Exploitation des Mines d'Or de Yatela S.A.

(4)

400

–

BGM Management Company Pty Ltd

(8)

3‘B’

3'B'

33.33

–

14,813

7,257

(1,194)

(1,262)

Nature of business

Countries of incorporation

A – Mining

+ Republic of South Africa

(7)

Brazil

(14)

Zimbabwe

B – Investment holding

(1)

British Virgin Islands

(8)

Australia

(15)

Luxembourg

C – Software development

(2)

Isle of Man

(9)

United Kingdom

(16)

Belgium

D – Market agent

(3)

Namibia

(10)

Malta

(17)

Cayman Islands

E – Health care

(4)

Mali

(11)

Tanzania

(18)

Guernsey

F – Short-term insurance and re-assurance

(5)

United States of America

(12)

Guinea

(19)

Jersey

G – Precious metal refining

(6)

Argentina

(13)

Ghana

* Indicates preference shares

** The year-ends of Rand Refinery Limited and Nufcor International Limited are 30 September and 30 June respectively. AngloGold Ashanti does not consider these companies significantly material subsidiaries requiring an alignment of year-end.

The aggregate interest in the net profits and losses in subsidiaries are as follows:

$ m

2004

2003

Net profits

323

274

Net losses

(320)

(95)

179

Glossary of terms

180

Abnormal item

This is a material item possessing a high degree of abnormality which
arises from events or transactions that fall within the ordinary activities
of the reporting entity and which are not expected to reoccur.

Adjusted headline earnings

Headline earnings excluding unrealised non-hedge derivatives and fair
value gains (losses) on interest rate swaps and deferred tax thereon.

Adjusted operating profit

Operating profit adjusted to exclude corporate administration and other
expenses, market development costs, exploration costs, amortisation
of intangible and tangible assets, impairment of tangible assets,
unrealised non-hedge derivatives, other operating expenses, other
operating income and abnormal items.

Adjusted operating margin

Adjusted operating profit divided by gold sales including realised non-
hedge derivatives.

Average number of employees

The monthly average attributable number of employees and
contractors employed during the year, where contractors are defined as
individuals who have entered into a fixed-term contract of employment
with a group company or subsidiary.

By-products

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

Capital expenditure

Total capital expenditure on tangible assets to maintain and expand
operations.

Cash operating margin

Cash operating profit divided by gold sales including realised non-
hedge derivatives.

Cash operating profit

Adjusted operating profit (loss) plus amortisation of intangible and
tangible assets less non-cash revenues.

Dividend cover

Adjusted headline earnings per ordinary share divided by dividends per
ordinary share.

Effective tax rate

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

EBITDA

Profit before taxation, net interest, growth in the Environmental
Rehabilitation Trust Fund, amortisation of tangible and intangible

assets, impairment of tangible assets, profit (loss) on disposal of assets

and subsidiaries, profit (loss) on disposal of investments; foreign

exchange gain (loss) on transactions other than sales, unwinding of the

decommissioning obligation, unrealised non-hedge derivatives, and fair

value gains (losses) on interest rate swaps.

Equity

Shareholders’ equity adjusted for other comprehensive income and

deferred taxation. Where average equity is referred to, this is calculated

by averaging the figures at the beginning and the end of the financial

year.

Free cash flow

Net cash inflow from operating activities less capital expenditure to

maintain operations.

Grade

The quantity of gold contained within a unit weight of gold-bearing

material generally expressed in ounces per short ton of ore (oz/t), or

grams per metric tonne (g/t).

Interest cover

EBITDA divided by finance costs adjusted for the equity portion of the

convertible bonds.

Life-of-mine (LOM)

Number of years that the operation is planning to mine and treat ore,

and is taken from the current mine plan.

Market capitalisation

Number of ordinary shares in issue at close of business on

31 December multiplied by the closing share price as quoted on the

JSE Securities Exchange South Africa.

Milling

A process of reducing broken ore to a size at which concentrating can

be undertaken.

Mineral reserves

A mineral reserve is the economically mineable material derived from a

measured and/or indicated mineral resource. It is inclusive of diluting

materials and allows for losses that may occur when the material is

mined. Appropriate assessments have been carried out, including

consideration of, and modification by, realistically assumed mining,

metallurgical, economic, marketing, legal, environmental, social and

governmental factors. These assessments demonstrate at the time of

reporting that extraction is reasonably justified. Mineral reserves are

sub-divided in order of increasing confidence into probable mineral

reserves and proved mineral reserves.

181

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Mineral resources and ore reserves

Mineral resources and ore reserves are reported in accordance with the
Australasian code for reporting for mineral resources and ore reserves
(JORC 2004) together with the South African code for reporting the
mineral resources and mineral reserves (SAMREC 2000).

Net asset value

Shareholders’ equity divided by shares in issue.

Net capital employed

Equity plus minority interests, interest-bearing borrowings, less cash
and cash equivalents. Where average net capital employed is referred
to, this is the average of the figures at the beginning and the end of the
financial year.

Net operating assets

Tangible assets, current and non-current portion of inventories, trade
and other receivables (excluding value added taxation), less trade and
other payables.

Net debt

Borrowings less cash and cash equivalents.

Net tangible asset value per share

Shareholders’ equity less intangible assets, divided by the number of
ordinary shares in issue.

Non-hedge derivative gain (loss)

Derivatives that are neither designated as meeting the normal sale
exemption under IAS39, nor designated as cash flow hedges.

Operating margin %

Adjusted operating profit as a percentage of gold income including
realised non-hedge derivatives.

Ounces (oz) (troy)

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

Price received ($/oz and R/kg)

Attributable gold income including realised non-hedge derivatives
divided by attributable ounces/kilograms sold.

Realised non-hedge derivatives

Represents the income statement effect of non-hedge derivatives that
settled during the current period.

Rehabilitation

The process of restoring mined land to allow an appropriate post-
mining use. Rehabilitation standards are determined amongst others by
the South African Department of Minerals and Energy, the US Bureau
of Land Management, the US Environmental Protection Agency, and

the Australian Minerals Industry Code for Environmental Management,
and address ground and surface water, topsoil, final slope gradient,
waste handling and re-vegetation issues.

Region

Defines the operational management divisions within AngloGold
Ashanti and these are South Africa, Argentina, Australia, Brazil, Ghana,
Guinea, Mali, Namibia, Tanzania, United States of America and
Zimbabwe.

Return on net capital

Adjusted headline earnings before finance costs expressed as a
percentage of average net capital employed, adjusted for the timing of
acquisitions and disposals and projects in progress but not generating
an income.

Return on equity

Adjusted headline earnings expressed as a percentage of the average
equity, adjusted for the timing of acquisitions and disposals and
projects in progress but not generating an income.

Stripping ratio

The number of units of unpayable material that must be mined to
expose one unit of ore.

Total cash costs

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

Total cash costs per ounce are the attributable total cash costs divided
by the attributable ounces of gold produced.

Total production costs

Total cash costs including amortisation, retrenchment, rehabilitation
and other non-cash costs. Corporate administration, capital and
exploration costs are excluded.

Total production costs per ounce are the attributable total production
costs divided by the attributable ounces of gold produced.

Unrealised non-hedge derivatives

This represents the change in fair value of all open non-hedge
derivative positions from the previous reporting date to the current
reporting date.

Weighted average number of ordinary shares
in issue

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

182

Glossary of terms

Abbreviations

United States dollars

Australian dollars

ADS

American Depositary Share

ADR

American Depositary Receipt

ARS

Argentinean peso

ASX

Australian Stock Exchange

BRL

Brazilian real

Billion

capex

Capital expenditure

CDI

Chess Depositary Interests

CHF

Swiss francs

CLR

Carbon Leader Reef

FCFA

Communauté Financiére Africaine Francs

FIFR

Fatal injury frequency rate per million hours worked

Grams

g/t

Grams per tonne

g/TEC

Grams per total employee costed

GHC

Ghanaian cedi

GhDS

Ghanaian Depositary Share

GSE

Ghana Stock Exchange

JORC

Australasian Code for Reporting of Mineral
Resources and Ore Reserves

JIBAR

Johannesburg interbank agreed rate

JSE

JSE Securities Exchange South Africa

King Code

South African King Code on Corporate
Governance, 2002

Kilograms

LSE

London Stock Exchange

LIBOR

London interbank offer rate

LOM

Life-of-mine

LTIFR

Lost-time injury frequency rate per million hours
worked*

/TEC

Square metres per total employee costed

Metre or million, depending on the context

Moz

Million ounces

Million tonnes or tons

Mtpa

Million tonnes/tons per annum

Namibian dollars

NOSA

National Occupational Safety Association

NYSE

New York Stock Exchange

Ounces (troy)

oz/t

Ounces per ton

R or ZAR

South African rands

RIFR

Reportable injury frequency rate per million hours
worked

SAMREC

South African Code for the Reporting of Mineral
Resources and Mineral Reserves

SEC

United States Securities and Exchange
Commission

SRP

Securities Regulation Panel of the JSE

SOX

Sarbanes-Oxley Act of 2002

Tons (short) or tonnes (metric)

tpm

Tonnes/tons per month

tpa

Tonnes/tons per annum

tpd

Tonnes/tons per day

VCR

Ventersdorp Contact Reef

VCT

Voluntary counselling and testing

* Note that AngloGold Ashanti utilises the strictest definition in reporting Lost-time injuries in that it includes all disabling injuries (where an individual

is unable to return to his place of regular work the next calendar day after the injury) and restricted work cases (where the individual may be at work,
but unable to perform full or regular duties on the next calendar day after the injury) within this definition.

Rounding of figures in this report may result in computational discrepancies.

183

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Stock exchange listings

The primary listing of the company's ordinary shares is on the JSE Securities Exchange South Africa (JSE). Its ordinary shares are also listed on stock
exchanges in London, Paris and Ghana, as well as being quoted in Brussels in the form of International Depositary Receipts (IDRs), in New York in
the form of American Depositary Shares (ADSs), in Australia, in the form of Clearing House Electronic Subregister System Depositary Interests (CDIs)
and in Ghana, in the form of Ghana Depositary Shares (GhDSs).

Stock exchange information at 31 December

2004

2003

2002

2001

2000

JSE Securities Exchange South Africa (Share code: ANG)
Rands per share:
Market price

– high

319.00

339.00 347.00 248.00 192.50

– low

192.05

191.00 200.00 104.20 93.00

– year end

199.01

313.99 290.50 211.00 110.50

Shares traded

– 000

102,811

88,025

117,543 91,318 49,804

London Stock Exchange (Share code: AGD)
Pounds per share:
Market price

– high

26.45

23.68 23.26 13.90 17.76

– low

14.77

16.58 4.20 9.13 8.57

– year end

19.25

26.42 10.54 12.09 9.73

Shares traded

– 000

19,769

1,187 8,643

18,862 4,984

Euronext Paris (Share code: VA)
Euros per share:
Market price

– high

37.92

41.23 37.73 25.00 28.90

– low

24.90

24.10 18.78 14.26 14.10

– year end

26.60

38.00 33.00 19.53 15.93

Shares traded

– 000

1,552

841 1,917 1,678 1,894

Ghana Stock Exchange (Share code: AGA)
(listing commenced 27 April 2004)
Cedis per share:
Market price

– high

300,000

– – – –

– low

300,000

– – – –

– year end

300,000

– – – –

Shares traded

– 000

– – – –

Euronext Brussels (Share code: ANG)
Euros per IDR:
Market price

– high

37.78

40.50 37.50 24.90 24.98

– low

25.00

24.10 32.00 14.52 14.28

– year end

27.00

36.55 32.05 20.25 15.93

IDRs traded

– 000

477

973 3,138 1,638 2,004

Each IDR is equal to one ordinary share

New York Stock Exchange (Share code: AU)
US dollars per ADS:
Market price

– high

48.25

49.95 35.33 22.34 28.69

– low

29.91

32.80 17.62 13.15 12.25

– year end

36.35

46.70 34.26 18.06 14.94

ADSs traded

– 000

225,286

249,791 210,933 106,231 46,940

Each ADS is equal to one ordinary share

Australian Stock Exchange (Share code: AGG)
Australian dollars per CDI:
Market price

– high

12.60

13.55

12.00 8.00 8.68

– low

8.60

8.61 7.00 4.80 4.75

– year end

9.40

12.80

12.00 7.55 5.48

CDIs traded

– 000

875

12,788 6,758 62,576 17,830

Each CDI is equal to one-fifth of one ordinary share

Ghana Stock Exchange (Share code: AADS)
(listing commenced 27 April 2004)
Cedis per GhDS:
Market price

– high

3,006

– – – –

– low

3,000

– – – –

– year end

3,006

– – – –

GhDSs traded

– 000

– – – –

Each GhDS is equal to one-hundredth of one ordinary share

Shareholders’ information

184

Shareholders’ information

Australian Stock Exchange Listing Rules

The following disclosures are made pursuant to the Listing Rules of the Australian Stock Exchange and according to information available to the

directors:

The 20 largest holders of the ordinary share capital of the company as at 28 January 2005 were:

Ordinary shares held

Top 20 shareholders as at 28 January 2005

Number

Anglo American plc (Main Holdings and other related funds)

134,850,739

50.99

Bank of New York Unrestricted Depositary Receipts

26,318,329

9.95

JP Morgan Chase (Custodian)

18,589,659

7.03

Bank of New York (Custodian)

10,689,737

4.04

ANZ Nominees Limited

10,481,716

3.96

Government of Ghana

9,031,650

3.41

Public Investment Commissioners

6,356,804

2.40

Soges Fiducem SA

3.464,711

1.31

Sanlam Group

3,222,453

1.22

State Street Bank & Trust Co (Custodian)

3,009,961

1.14

National Nominees Limited

1,648,864

0.62

Euroclear SA

1,513,297

0.57

Liberty Group

1,501,942

0.57

Mines Pension Fund

1,413,868

0.53

Old Mutual Group

1,328,469

0.50

Investors Bank & Trust Company (Custodian)

1,145,807

0.43

SIS SegainterSettle AG (Custodian)

1,124,842

0.43

Engineering Industries Pension Fund

901,889

0.34

Citibank (Custodian)

836,326

0.32

Transnet Pension Fund

685,106

0.26

The above list of shareholders may not necessarily reflect the beneficial shareholders.

Analysis of ordinary shareholdings at 28 January 2005

Number of

% of total

Number of

% of shares

Size of shareholding

shareholders

issued

1 – 100 8,939

46.44

476,529

0.18

101 – 500 7,129

37.03

1,674,136

0.63

501 – 1,000 1,383

7.18

1,013,177

0.38

1,001 – 5,000 1,168

6.07

2,494,575

0.94

5,001 – 10,000 196

1.02

1,395,472

0.53

10,001 – 100,000 342

1.78

9,728,938

3.68

Over 100,000

0.48

247,689,867

93.66

Total

19,250

100.00

264,472,694

100.00

185

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Shareholder spread

as at 28 January 2005

Pursuant to the Listings Requirements of the JSE, with the best knowledge of the directors and after reasonable enquiry, the spread of shareholders

was as follows:

Class

Number of holders

Ordinary shares

Non-public shareholders:

Directors

0.04

Anglo American plc

0.01

Government of Ghana

0.01

Public shareholders

19,240

99.94

Total

19,250

100.00

redeemable preference shares

}

All shares are held by a wholly-owned subsidiary company

redeemable preference shares

Major shareholders

as at 24 February 2005

According to information available to the directors, the following are the only shareholders beneficially holding, directly or indirectly, in excess of 5%

of the ordinary share capital of the company:

Ordinary shares held

24 February 2005

31 December 2004

31 December 2003

Number %

Anglo American plc

134,788,099

50.96

134,788,099

50.97

121,502,197

54.45

The Bank of New York*

46,666,735

17.64

45,217,297

17.10

36,753,386

16.47

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

Voting rights

The articles of association provide that every member present at a meeting in person or, in the case of a body corporate, represented, is entitled to

one vote only on a show of hands. Upon a poll, members present or any duly appointed proxy shall have one vote for every share held. There are no

limitations on the right of non-South African shareholders to hold or exercise voting rights attaching to any shares of the company. CDI holders are

not entitled to vote in person at meetings, but may vote by way of proxy.

Options granted in terms of share incentive schemes do not carry a right to vote.

186

Shareholders’ information

Shareholders’ diary

Financial year-end

31 December 2004

Annual financial statements

posting on or about

30 March 2005

Annual general meeting

11:00 SA time

29 April 2005

Quarterly reports

Released on or about

– Quarter ended 31 March 2005

29 April 2005

– Quarter ended 30 June 2005

29 July 2005

– Quarter ended 30 September 2005

27 October 2005

– Quarter ended 31 December 2005

31 January 2006

Dividends

Last date

to trade

Date

ordinary

Payment

Dividend

date to

Dividend number

declared

cum dividend

shareholders

ADS holders

GhDS holders

Final – number 97

26 January 2005

11 February 2005

25 February 2005

7 March 2005

28 February 2005

Interim – number 98

28 July 2005*

12 August 2005*

26 August 2005*

5 September 2005*

29 August 2005*

Final – number 99

30 January 2006*

17 February 2006*

3 March 2006*

13 March 2006*

6 March 2006*

* Approximate dates.

The dividend policy is detailed in the Directors’ report.

Currency conversion guide

at 31 December

One rand was equal to:

2004

2003

Australian dollar

0.23

0.20

Euro

0.13

0.12

Japanese yen

18.10

16.08

Swiss franc

0.20

0.19

British pound

0.09

0.08

US dollar

0.18

0.15

ANGLOGOLD ASHANTI ANNUAL REPORT 2004

Administrative information

for the year ended 31 December 2004

AngloGold Ashanti Limited

(formerly: AngloGold Limited)

Registration No. 1944/017354/06
Incorporated in the Republic of South Africa
ISIN: ZAE000043485
Share codes:

JSE:

ANG

LSE:

AGD

NYSE:

ASX:

AGG

GSE (shares):

AGA

GSE (GhDS):

AADS

Euronext Paris

Euronext Brussels:

ANG

JSE Sponsor:

UBS

Auditors:

Ernst & Young

Registered and Corporate

11 Diagonal Street
Johannesburg 2001
(PO Box 62117, Marshalltown 2107)
South Africa
Telephone: +27 11 637 6000
Fax: +27 11 637 6624

Australia

Level 13, St Martins Tower
44 St George’s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4604
Fax: +61 8 9425 4662

Ghana

Gold House
Patrice Lumumba Road
(PO Box 2665)
Accra
Ghana
Telephone: +233 21 772190
Fax: +233 21 778155

United Kingdom Secretaries

St James’s Corporate Services Limited
6 St James’s Place
London SW1A 1NP
England
Telephone: +44 20 7499 3916
Fax: +44 20 7491 1989

Directors

Executive

RM Godsell (Chief Executive Officer)
JG Best
DL Hodgson
Dr SE Johah

†

KBE

KH Williams

Non-Executive

RP Edey* (Chairman)
Dr TJ Motlatsi (Deputy Chairman)
FB Arisman

Mrs E le R Bradley
CB Brayshaw
AW Lea (Alternate: PG Whitcutt)
WA Nairn (Alternate: AH Calver*)
SR Thompson*
AJ Trahar
PL Zim (Alternate: DD Barber)

*British

American

†

Ghanaian

Officers

Managing Secretary: Ms YZ Simelane
Company Secretary: CR Bull

Contacts

South Africa

Steve Lenahan
Telephone: +27 11 637 6248
Fax: +27 11 637 6400
E-mail: slenahan@AngloGoldAshanti.com

Michael Clements
Telephone: +27 11 637 6647
Fax: +27 11 637 6400
E-mail: mclements@AngloGoldAshanti.com

United States of America

Charles Carter
Telephone: (800) 417 9255 (toll free in USA
and Canada)
or +1 212 750 7999
Fax: +1 212 750 5626
E-mail: cecarter@AngloGoldAshanti.com

Australia

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

General E-mail enquiries

investors@AngloGoldAshanti.com

AngloGold Ashanti website
http://www.AngloGoldAshanti.com

Share Registrars

South Africa

Computershare Investor Services 2004 (Pty)
Limited
Ground Floor, 70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown 2107)
South Africa
Telephone: 0861 100 724 (in SA)
Fax: +27 11 688 5222
web.queries@computershare.co.za

United Kingdom

Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
England
Telephone: +44 870 702 0001
Fax: +44 870 703 6119

Australia

Computershare Investor Services Pty Limited
Level 2, 45 St George’s Terrace
Perth, WA 6000
(GPO Box D182 Perth WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 7010 (in Australia)
Fax: +61 8 9323 2033

Ghana

NTHC Limited*
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Telephone: +233 21 238492-3
Fax: +233 21 229975

*GhDS registrars

ADR Depositary

The Bank of New York (“BoNY”)
Investor Services, PO Box 11258
Church Street Station
New York, NY 10286-1258
United States of America
Telephone: +1 888 269 2377 (Toll free
in USA) or +9 610 382 7836 outside USA)
E-mail: shareowners@bankofny.com
Website: http://www.stockbny.com

Global BuyDIRECT

BoNY maintains a direct share purchase and

dividend reinvestment plan for AngloGold

Ashanti.

Telephone: +1-888-BNY-ADRS

The Annual Report 2004 is available in printed or CD format from the contacts whose details appear above or on the Internet at the above website
address. In addition, AngloGold Ashanti has produced the Form 20-F (a report required by the Securities and Exchange Commission in the United
States), copies of which are available on or about 30 March 2005, free of charge on EDGAR at www.sec.gov, or from the contacts detailed herein.

Supplementary information on Mineral Resources, Ore Reserves and development, prepared on a business unit basis, is obtainable from the above
sources as well as in PDF format on the AngloGold Ashanti website. Plans of the South Africa region underground workings are also available on request.

Annual
Report

w w w . a n g l o g o l d a s h a n t i . c o m

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has

duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AngloGold Ashanti Limited

Date MARCH 30, 2005

By: /s/ C R BULL

Name: C R Bull
Title: Company Secretary