In retrospect, 2001 will be seen as the year in which global gold industry consolidation gained momentum. AngloGold has been a proponent of and catalyst for consolidation as well as being an active acquirer and operator of long-life, low-cost world-class gold mining assets. In line with this strategy, the past three years have seen the company closing or selling operations approaching the end of their profitable lives to operators who are focused on ? and therefore better suited to ? operating and extracting value from these assets. By disposing of these assets AngloGold has generated resources ? in capital and management capacity ? which are more profitably applied elsewhere to the maximum benefit of shareholders.

The closure of mines nearing the end of their productive lives, particularly in Australia and South Africa, the sale of Deelkraal and Elandsrand at the end of 2000 (which became effective in February 2001) and the announcement of the sale of four mines in the Free State (effective from 1 January 2002), are all indicative of AngloGold's resolve to extract optimal value from its assets. The latter transaction also paves the way for further meaningful black empowerment in South Africa through both ownership and management of a substantial gold mining asset.

AngloGold's value-adding growth strategy remains a core focus going forward and it will continue to look for additional opportunities to develop its business through organic growth, focused exploration and a disciplined approach to opportunistic asset acquisitions and mergers.

Safety and health

The safety and health of employees remains fundamental to the sustainability of AngloGold's business. The company is committed to working with employees, trade unions and government bodies towards improving safety and health in the workplace. Considerable resources and effort are dedicated to identifying and implementing best practice across the company, as well as addressing specific problem areas as they arise. A core team of safety and health experts, located at the corporate office, reports to a board sub-committee on safety and health, and advises and assists the on-mine safety and health practitioners and mine management. Every fatal accident is subject to an executive review, over and above the region-specific, regulatory and mine-based investigations, in an effort to identify the root causes of fatalities and to prevent a recurrence.

Despite this effort, tragically, 45 employees lost their lives in the course of work across the company during 2001, 43 in the South Africa region where 92% of the company's employees are based. Although in absolute terms this is an improvement on the previous year, the company's Fatal Injury Frequency Rate (FIFR) rose slightly to 0.25 per million man hours worked. The Lost Time Injury Frequency Rate (LTIFR) on the other hand, continued its downward trend to 10.55.

Overall performance

From an operating perspective, the results for the year indicate a solid performance. The highlight of the year was the integration into AngloGold of the newly acquired and developed African operations ? Geita, Morila and Yatela ? and the excellent performance of these assets. The benefits derived from the region ? which now contributes 17% to operating profit, from 12% of production ? vindicate AngloGold's strategy of increasing geographic and orebody diversification. This strategy has seen gold production from outside South Africa, principally from low-cost surface and shallow mines, grow to 37% of operating profit and 49% of EBITDA.

The performance of the South American operations was on target, while the South Africa region was back on track with a good year overall. The performance of Great Noligwa, for example, indicates clearly that deep-level gold mining and high unit costs are not synonymous. This operation, which produced 21% of the South Africa region's gold in 2001, is AngloGold's largest and most profitable mine and, during the fourth quarter, produced 242,000oz at a cash cost of $97/oz.

The North American operations had a difficult year arising from weather-related and technical problems.

The Australia region performed in line with expectations and provided a solid base for both greenfields and brownfields exploration, as well as a platform for strategic growth in the region.

Overall, attributable gold production decreased by 4%, as anticipated, to 6.98Moz. This was partially offset by a 137% increase in production from the Africa region. Improvements in cost control and productivity, assisted by the devaluation of the rand, resulted in total cash costs improving by 16% from $213/oz to $178/oz, lifting operating profit to $522m.
 

Almir Silv?rio Nunes, at the Rego dos Carrapatos Ecological Park, Nova Lima, in Brazil. Almir was born in Nova Lima and has been working for Morro Velho's Mina Velha mine for almost 17 years. He started as a Miner, became an Operations Assistant, and is currently a Geological Assistant, working in the areas of underground surveying and sampling. Almir also represents the union at Morro Velho, having recently been elected its social director.

Outlook (2002)

Following the disposal of its Free State operations in the South Africa region and the closure of end-of-life assets, AngloGold expects annual production to reduce to 5.8Moz, at a cash cost of $154/oz. Overall, capital expenditure is expected to be $268m.

Dave Hodgson
Chief Operating Officer

Dick Fisher
Executive Officer: Technology, Safety and Health

Bob Micsak
Executive Officer: Environment

Neville Nicolau
Executive Officer: South Africa Region

South Africa

The South Africa region comprises seven underground operations located in two geographic areas ? the Vaal River area (Great Noligwa, Kopanang, Tau Lekoa and Moab Khotsong) and the West Wits area (Mponeng, Savuka and TauTona) ? and a surface metallurgical reclamation operation, Ergo. The mines in the third area ? the Free State (Bambanani, Joel, Tshepong, and Matjhabeng) ? were sold to an African Rainbow Minerals/ Harmony Joint Venture as announced in November 2001, with management passing to the joint venture on 1 January 2002.
 

Tonnes treated:
underground	15.3Mt
surface (including Ergo)	50.3Mt
Average grade:
underground	8.20g/t
surface (including Ergo)	0.32g/t
Gold production:	145,247kg
	4.7Moz
Total cash cost:	$184/oz
	R50,065/kg
Number of employees
(including contractors):	64,900
Capex during 2001:	$106m (R915m)

Safety and health

Safety and health remains a priority. During 2001, these operations ? employing on average about 65,000 employees (including contractors) during the year ? achieved further improvements. Despite the considerable resources and effort dedicated to improving safety, regrettably, 43 employees lost their lives in the course of work. Falls of ground accounted for close on 70% of all fatal accidents and about 31% of lost time injuries. Eliminating falls of ground has therefore been identified as a major focus for the year ahead, with a company-wide initiative to combat falls of ground ? in collaboration with unions and associations ? launched in late 2001, with the roll-out of the initiative planned for 2002.

Seismicity continued to have an adverse effect on the South African operations. AngloGold has embarked on a new research and development project, Hazmap, which will use multi-dimensional modelling to improve the ability to warn underground teams who may be exposed to undue risk as a result of seismic activity. ISS International, an AngloGold subsidiary, has been contracted to manage seismic monitoring.

Overall, the region achieved a FIFR of 0.28 and a LTIFR of 11.58. 

• Kopanang achieved a remarkable improvement in safety performance during the year, with the first fatality-free year in the mine's history and the achievement of two million fatality-free shifts in November.
   
• The Lower Carbon Leader section at TauTona, the world's deepest working level in a gold mine, has been free of fatal accidents for two years. The mine was awarded the Mine Health and Safety Council Safety Flag in the ultra-deep gold and platinum mine category for the second consecutive year.
   
• Moab Khotsong continues to perform well, with safety rates below the Ontario benchmark. The mine achieved one million fatality-free shifts in November.
   
• Great Noligwa achieved one million fatality-free shifts in August.
   
• Mponeng won the AngloGold Safety Shield which recognises the best performance relative to safety statistics achieved over the past five years.
   
• Savuka experienced a poor year in terms of safety, particularly in relation to falls of ground and corrective action plans have been implemented.
   
• Occupational health services were provided to employees at three fully-equipped regional occupational health centres, each staffed by an occupational medical practitioner, professional nurses, audiologists and other support staff. In addition, each mine has an occupational health nurse on site.
   
• There were 720 new cases of noise-induced hearing loss (NIHL) in 2001 (12 per 1,000 employees) and 373 employees were diagnosed as having occupational lung disease (6 per 1,000). The NIHL rate continues a downward trend and is now three times less than that recorded in 1998 ? a tribute to effective noise control engineering in AngloGold. More than 90% of rockdrills are now muffled as part of a major noise reduction programme.
   
• During 2001, there were 1,352 new cases of tuberculosis (TB) (23 per 1,000) which is an increase on 2000 (20 per 1,000). The increase in the incidence of TB is associated with HIV. Aurum Health Research, a subsidiary supported by the largest private sector health care service in southern Africa, Anglogold Health Service, continues to play a vital role in fine-tuning the company's world-class TB control programmes and it is hoped that TB rates have peaked.

LTIFR ? South Africa region

HIV/AIDS

HIV/AIDS remains a major economic, social and health care challenge in southern Africa. AngloGold's HIV/AIDS strategy has been developed over close on two decades and is arguably one of the leading responses to the epidemic by a South African company.

AngloGold's comprehensive response comprises two thrusts: the company aims to restrict the spread of AIDS through education, promotion of condom use and the effective treatment of sexually transmitted infections. On the other hand, the company cares for those infected through Voluntary Counselling and Testing (VCT), Wellness Clinics, the treatment of opportunistic infections and a compassionate ill-health retirement system for those who are no longer able to work. Ongoing fundamental research by Aurum Health directs and underpins the company's medical strategy.

(From front to back) Matthews Dikane (Process Team Leader), Jerry Lebona (Process Team Member) and Maja Leche (Learner Team Captain) are members of the Projek Katleho team with an incline raise climber and drill rig at Kopanang mine in South Africa. Combining the Afrikaans word (Projek) for project and the Sotho word (Katleho) for being successful, the project is aimed at developing mining structures and work practices best suited to a 21st century deep-level underground mine. Key thrusts of the project are a more safety conscious, efficient and productive management and labour structure, and the application of tried, tested and appropriate systems and technology. Matthews started his AngloGold career in 1987 as a Learner Diplomate and worked his way up to being appointed a Mine Overseer in February 2000 at Kopanang, while Jerry and Maja were selected for the project from other AngloGold mines. In addition to comprehensive and accredited technical training, process teams receive behavioural training to assist them to make decisions, thereby creating an environment where teams are responsible and accountable for their own actions. Each process team is structured around the total mining process so that the traditional functional separation between mining and engineering is broken down and employees are multi-skilled to perform a variety of tasks.

Production

The performance of the South African operations was pleasing during the year from a production and cost perspective, with many of the operations exceeding their targets. Gold production was down by 14% to 4.7Moz, as a result of the sale of Elandsrand and Deelkraal and continued downsizing at Matjhabeng. Operating profit increased by 11% during the year to $331m (R2,949m). Rand-denominated total cash costs increased slightly to R50,065/kg, despite the production decrease, while total cash costs in dollar terms were down 15% to $184/oz, aided by the devaluation of the rand.

The bi-annual wage negotiations were concluded during July and agreement was reached with the National Union of Mineworkers (NUM) for an average increase of 8% per annum for the majority of AngloGold employees. The deal locked in a two-year contract which is consistent with the company's goals of improving skills and productivity, especially for production crews. The net effect of the wage agreement (which came into effect in the third quarter) was well within the planning and performance parameters set for the South African business operations.

Productivity indices increased by 9% in terms of grams per employee (g/TEC), but decreased marginally in terms of square metres per employee (m²/TEC).
 

• Gold production at Great Noligwa was 3% higher at 1,004,000oz or 31,224kg aided by an improvement in grade and higher productivity. This was partially offset by a 9% lower Mine Call Factor (MCF). This reflects an excellent performance for the year, contributing more than $145m (R1,270m) to the operating profits of the company. Total cash costs decreased to $122/oz (R33,068/kg), despite higher cash operating costs arising from the replacement of major hoisting equipment in the first quarter. The mine's ageing shaft infrastructure will be upgraded further during the year ahead. The development of the Hypermine Project, involving the rapid development to raise lines and introduction of technology such as drill rigs and pack-in-a-pipe support systems that incorporates increased team training, should reduce the number of raise lines required for production and increase productivity.
   
• Gold production was up 3% to 494,000oz or 15,381kg and operating profits were well above target at Kopanang, as a result of higher mining volumes and despite a lower-than-anticipated reduction in grades. Total cash costs were down some 17% to $178/oz (R48,121/kg). Kopanang accounted for 11% of the region's gold production and contributed $41m (R362m) to operating profits during the year. The development of a major orepass system in the centre of the mining area is currently under way, along with a focus on improving the ventilation infrastructure.
  In addition to the testing and development of electric drills and other new technology, Kopanang is host to AngloGold's Projek Katleho which aims to use off-the-shelf technology and techniques for a 21st century workplace and workforce.
   
• TauTona yielded an excellent performance for the year. A focus on releasing gold inventory resulted in an improvement in grade, although seismicity had an impact on mining volumes, and winder and power problems in the lower Carbon Leader sections also affected production. Gold production was up 4% to 622,000oz or 19,355kg. Total cash costs were maintained at $154/oz (R42,347/kg). This mine accounted for some 13% of the region's gold production and contributed $68m (R593m) to operating profits during the year.
   
• Tau Lekoa turned in a solid performance for the year. Volume mined was down slightly (2%) and gold produced declined to 286,000oz or 8,899kg as a result of a combination of a lower mined value (4%) and a lower MCF (6%), planned and unexpected yield decreases, and the need to rectify certain safety concerns. Total cash costs were well maintained at $203/oz (R55,545/kg). Management focus on grade improvement resulted in a slow but steady return to normal operating performance levels by year-end.
   
• A lack of available face length continued to have an impact on mining volumes at Mponeng. The shortfall, together with the lower-than-expected face values, kept recovered gold at low levels for the first half of the year. Planned development to improve face length availability resulted in four additional raise lines coming into production in the second half of the year, restoring production flexibility and resulting in significantly increased gold production by year-end. Overall, gold production for the year was lower-than-expected at 366,000oz or 11,386kg, while total cash costs were maintained at $223/oz (R61,221/kg).
   
• Savuka had a slow start to the year, after a ten-day December break due to orepass problems and the need to address safety issues. Two seismic events in the shaft pillar area resulted in crews being moved to areas with much lower grades, with an overall impact on grade and volume mined. Production was back on track by the second quarter and performance for the year was satisfactory with gold production of 240,000oz or 7,476kg and a total cash cost of $248/oz (R68,209/kg).
   
• Gold production at Ergo was up at 332,000oz or 10,314kg, reflecting an excellent performance for the year. Higher head grades, increased clean-up activities at the Daggafontein plant (which closed in December) and improved metallurgical efficiencies resulted in an improvement in recovered grade. Total cash costs decreased to $215/oz (R58,884/kg).
   
• Development of Moab Khotsong continued as planned, with excavation of the 101 station in progress. (See Growth on page 20 for an overview of the project).
   
• Performance at Bambanani improved during the year although gold production remained at lower levels. Cost savings were achieved to offset reduced production, despite a transformer fire in April and a fire in the pillar area that resulted in lost production and the unavailability of certain working areas. Overall, the mine achieved gold production of 412,000oz or 12,816kg, at a total cash cost of $230/oz (R63,153/kg).

• Mining values continued to drop at Joel. This, together with lower mining volumes, had a negative impact on production. The mine was scaled back to 20,000m²/month in the first quarter and full calendar operation (FULCO) was discontinued with a consequent reduction in employee numbers. Although some cost savings became evident in the second quarter, the mine continued to be uneconomic for the balance of the year. The mine produced 127,000oz or 3,959kg of gold at a total cash cost of $345/oz (R93,463/kg). In light of grade variability at South shaft, sinking of North shaft was suspended in April, pending the results from additional boreholes which were drilled from surface to verify existing grade projections.
   
• Tshepong's performance continued to improve during the year with gold production of 382,500oz or 11,898kg. Total cash costs were down to $178/oz (R48,938/kg).
   
• Planned downscaling at Matjhabeng's Eland shaft and closure of the Sable and Nyala shafts resulted in decreased production of 188,000oz or 5,800kg, in line with the revised LOM plan. As expected, costs were lower but the effects were partially offset by an increase in expenditure arising from retrenchments. Total cash costs for the year were $236/oz (R63,542/kg).

Growth

Ongoing on-mine and near-mine exploration continued during the year.(See Exploration on page 40.)

Capital expenditure for the South Africa region was $106m (R915m) in 2001 and is expected to be about $101m (R1,115m) in 2002.

Several capital projects are under way: 

• In the first quarter, the board approved the rationalisation of the Mponeng Shaft Deepening Project into two projects, with the prospect of a third.
  
  In the first, the deepening of the Mponeng sub-shaft has been stopped at the 120 level and available ore reserves from the Ventersdorp Contact Reef (VCR) on the 113, 116 and 120 levels will be developed and mined at a capital cost of R1.3bn ($109m at current year closing exchange rate). Half of this has already been spent. The project is expected to add 3Moz to production, while extending the LOM by five years to 2012. Average cash costs over the remaining LOM should be in the region of $156/oz.
  
  In terms of the previous strategy, ore reserves remaining at TauTona after 2005 would have been mined from Mponeng. The revised TauTona Project has two main areas of focus, namely accessing and mining part of the shaft pillar and accessing and mining an area east of the Bank Dyke (previously part of the Mponeng mine plan), which will extend the LOM to 2011. This will require capital expenditure of some R462m ($39m at current year's closing exchange rate), R60m ($5m at current year closing exchange rate) of which has been spent to date. The project will add 2.3Moz of gold production, resulting in a total cash cost for the mine of $133/oz.
  
  A third possible project will involve accessing the mineral resource below 120 level as the VCR and Carbon Leader Reef (CLR) below 120 level have not been sterilised by the rationalisation decision. This revision to the original Mponeng Project into these two projects will reduce capex from R2.6bn ($217m at current year's closing exchange rate) to R1.8bn ($150m at current year closing exchange rate).
   
• The Moab Khotsong Project comprises the sinking of a new shaft down to 101 level (3,054m below surface) providing access to the Moab lease area (a resource containing 200t of gold). The shaft system has the capacity to hoist some 150,000t/month.
  
  The shaft system down to 103 level will be fully commissioned by 2003 and production will commence in the last quarter of 2003, reaching full production in 2006. The LOM extends to 2015. The total cost of the project is R3.8bn ($317m at current year closing exchange rate), with approximately R2.4bn ($201m at current year closing exchange rate) spent to date. The mine is expected to produce 4.5Moz of gold to 2015 at an average cash cost of $97/oz. Development is currently on schedule and within budget.

Sustainability

AngloGold's South Africa region aims to create a balance between the impact on the natural and social environments in which the company operates and the benefits that its employees, their communities and the country as a whole derive from its operations. 

• Water management remains a key area of focus. All operations registered their water uses with the Department of Water Affairs in line with recent legislation governing water utilisation. AngloGold's programme to decrease water utilisation gained momentum during the year, with water balances undertaken at all operations, and forming part of a comprehensive water use review. These will be refined during the year ahead and will become an effective tool to manage water usage. Overall, the region's water usage decreased by 7% compared with 2000.
   
• An environmental incident review system has been put in place in the same way in which the company investigates mining accidents. The newly introduced system focuses on thorough data collection and the development of remedial action plans to prevent incident recurrence.
   
• Environmental Management Programme Reports for all the operations were formally updated during the year.
   
• Financial provisions for the Free State assets, which were sold to the ARM/Harmony Joint Venture, were reviewed during the year and appropriate steps were taken to ensure that the Environmental Trust Funds associated with these mines were adequately provided for.
   
• Rehabilitation research, pioneered by the Free State operations, continued during the year. Despite the sale of these assets, AngloGold will have access to these test sites going forward to complete monitoring of progress, in line with the overall programme.
   
• The region has developed and implemented a Best Practices Guideline for cyanide usage at all operations. This includes the setting of all standards and procedures, together with an analysis of consumption and controls. An emergency cyanide treatment protocol, which includes emergency medical response and communications, has been implemented. AngloGold has also participated in and contributed to the global debate on cyanide management through its participation in the United Nations Environmental Programmes (UNEP) Paris Working Group, in conjunction with the International Council on Mining and Metals (ICMM). The region has also participated in the development of a protocol for the use, storage, transport and handling of cyanide with the Chamber of Mines of South Africa on behalf of the industry.
   
• In late 2001, an implementation guideline for the region's Environmental Management System (EMS) was developed to assist all operations establish their own EMS.

In its social investment initiatives, the company aims to deliver significant and lasting benefits to employees, communities and other stakeholders in partnership with governments, international agencies, labour, health and non-governmental organisations. 

• In South Africa, AngloGold's corporate social investment is directed by the AngloGold Fund and Educational Trust. During 2001, the Fund and Trust committed some $1.9m (R16.5m) to a range of initiatives. In all, some 262 projects were supported with the smallest grant of R1,000 and the largest single grant to the Ginsberg Primary School located in Zwelitsha, Eastern Cape Province, of some $139,000 (R1.2m). The Fund's philosophy is to back and support people and organisations who make a real difference in their own communities, and who are helping themselves to improve their circumstances. In this way the company reaches those people who have been marginalised from mainstream society and access to other sources of funding, while at the same time ensuring that the projects are sustainable in the medium and longer term. The main areas of investment, reflecting the most compelling needs of the region, are education, community health, health projects specifically relating to HIV/AIDS, skills development and welfare and development projects.
  
  Although the Fund supports projects which are of regional and national significance, there is an increasing effort to reach specifically those communities in which its employees reside or are drawn from. For this reason, the Eastern Cape Province derives a great deal of benefit. During the year, local area committees were set up in consultation with community leaders to address smaller and more immediate needs around the operations quickly and cost-effectively.

Outlook (2002)

Production during 2002 is expected to decrease by 27% to 3,394,000oz (105,600kg) at an average grade of 8.41g/t. Total cash costs should decrease to about $146/oz (R51,700/kg), depending on the value of the rand. 

• At Great Noligwa production is expected to decrease to 979,000oz or 30,500kg at a total cash cost of $105/oz (R37,000/kg) as grades decrease.
   
• At Kopanang production should increase to 516,000oz or 16,000kg at a total cash cost of $161/oz (R56,900/kg).
   
• At TauTona production is expected to increase to 629,000oz or 19,600kg at a total cash cost of $126/oz (R44,600/kg). Improving environmental conditions to enhance safety and productivity remains a priority at this deep, hot mine. The boxhole development system on the longwall mining layout will receive further attention during the year. A plan is in place to reduce the boxhole distance to the longwall by speeding up the development of the boxhole.
   
• At Tau Lekoa production is expected to increase to 320,000oz or 9,900kg at a total cash cost of $169/oz (R59,900/kg). A steady, planned increase in production at this mine of 30,100oz during the year will place some pressure on the infrastructure, with a programme to improve systems, such as horizontal transport, in place.
   
• At Mponeng production is expected to increase to 407,000oz or 12,700kg at a total cash cost of $171/oz (R60,400/kg) as additional face length becomes available. Ore reserves will be increased to 24 months to improve mining flexibility.
   
• At Savuka production is expected to increase to 249,000oz or 7,800kg at a total cash cost of $217/oz (R76,800/kg).
  
  Closure plans at the end of 2001 were reviewed in the light of the infrastructure requirements of TauTona and Mponeng, with the study concluding that closure was not appropriate and that the operation would be able to support further mining. As a result, a development plan will be undertaken during the coming year to increase stoping at Savuka mine. The project meets the AngloGold investment criteria while the ongoing use of the infrastructure ensures capital savings at both TauTona and Mponeng.
   
• At Ergo production is expected to decrease to 230,000oz or 7,200kg at a total cash cost of $193/oz (R68,200/kg). Ergo remains on track for closure in four years' time, although the viability of a number of dumps is being reviewed in the context of the higher gold price.
   
• The Moab Khotsong Project is expected to continue according to plan.

Cash costs 
per region ($/oz)

Attributable production ?
 South Africa region (Moz)

Cash costs ? South 
Africa region ($/oz)

Social investment ? SA region: Sector of investment (by value)

Social investment ? SA region: Investment by provinces (by value)

Capital expenditure ? South Africa region ($m)

Africa

The Africa region comprises Sadiola (38%), Yatela (40%) and Morila (40%) in Mali, Geita (50%) in Tanzania and Navachab (100%) in Namibia. It excludes the South African operations.
 

Attributable tonnes treated:	7.268Mt
Average grade:	3.71g/t
Attributable gold production:	868,000oz
Total cash cost:	$129/oz
Number of employees
(including contractors):	1,600
Attributable capex
during 2001:	$34m

Safety and health

Once again, the region performed well as far as safety is concerned and, despite three of the five operations being less than two years old (a period often associated with high accident frequency rates), accelerated focus on safety at the new operations resulted in the region recording a LTIFR of 1.30. Sadiola continues to set the benchmark for safety performance, having operated without a lost time injury since November 2000. 

• Safety performance at Geita improved, with no accidents reported in the last three quarters. These continued improvements can largely be attributed to an ongoing focus on safety in the workplace along with localised safety training. Geita achieved an integrated NOSA four-star rating in the third quarter.

• Navachab's safety performance was disappointing compared with the previous year, but still good by international standards. The mine was awarded the Namibian Chamber of Mines Award for Safety for the second consecutive year and retained its NOSA five-star rating.
   
• There was a marked turnaround in safety at Morila following the construction period. During the first year of production, operator training was an area of focus, while safety and health assessments were carried out in high-risk working areas.
   
• Sadiola produced another exceptional safety performance, remaining accident-free for the full year.
   

• Yatela's safety performance showed a marked improvement of over 50% during the second half of the year.

Delphinus Kaballega and Rebecca Stephen (Environmental Officers) at Geita. Part of their routine work programme is water quality monitoring across the mine lease area. Water samples are taken regularly from 66 surface and groundwater monitoring sites, including the Mtakuja River which was diverted around the main Geita pit, and at the small local port of Nungwe Bay on Lake Victoria, from which Geita draws water. All water samples are screened on site and then sent for a detailed analysis at an accredited laboratory in Johannesburg. Geita's commitment to responsible environmental management was rewarded during the year when it became the first AngloGold mine to be certified to ISO 14001, an internationally recognised standard for environmental management. This achievement demonstrates that it is possible to implement world-class standards of environmental management in a developing world context, given sufficient management commitment and resourcing. The achievement is all the more remarkable given that certification was achieved less than a year after the start of production.

Production

Attributable production increased significantly to a record 868,000oz from 366,000oz as a result of the inclusion of Geita's production from the first quarter and Yatela from the third quarter, as well as the incorporation of Morila for the full year. Total cash costs increased by 4% to $129/oz, primarily as a result of the inclusion of the higher cost operations, Geita and Yatela. Operating profit for the year rose 81% to $87m.

• Production performance at Geita exceeded expectations from the first quarter with 273,000oz produced at a total cash cost of $147/oz.
   
• Navachab maintained its trend of continued improvement throughout the year producing a record 87,000oz, at a total cash cost of $164/oz, reflecting a decrease of 12%. The mine achieved a record level of production of 23,000oz and total cash costs of $142/oz in the fourth quarter.
   
• Malian president Alpha Konar? officially opened Morila in February. Morila exceeded its target in the first full year of operation by producing 252,000oz. Total cash costs, at $103/oz, increased by 17% owing to a reduction in the proportion of high-grade, soft oxide material treated, which was replaced with lower grade sulphide ore. Recovered grade was down by 22% to 6.87g/t.
   
• Planned lower mill throughput, coupled with a 12% planned decline in the recovered grade reduced attributable gold production by 12% to 204,000oz at Sadiola. The decrease in production, together with increased waste mining to obtain additional oxide ore reserves and the treatment of lower grade ores, resulted in total cash costs rising by 15% to $131/oz.
   
• Construction and mining progressed exceptionally well at Yatela, with the mine being officially opened by Aboubacary Coulibary, the Malian Minister of Mines, on 8 September 2001. The ore treatment plant was commissioned in the first quarter, with mining production ahead of schedule. The first gold was produced on 9 May 2001, a month ahead of schedule and an estimated $5m below construction budget. Production build-up under operational management and a team of permanent employees commenced at the end of the second quarter. Attributable production of 52,000oz at a total cash cost of $149/oz reflects the third and fourth quarters only.

Growth

The exploration focus in Africa has been on delivering growth opportunities near or at existing operations and lease areas. The brownfields exploration programme has been highly successful, adding significant value at a low cost per ounce.

Capital expenditure for the Africa region was $34m in 2001 and is expected to be around $26m in 2002.

• Exciting prospects have been identified in Tanzania and Mali. (See Exploration on page 40.)
   
• Exploration in the oxide ores at Sadiola continues to yield good results and exploration drilling continues in the hard sulphide ore.
   
• An exploration programme at Navachab has been implemented to assess upside potential.

Sustainability

In Africa, where the AngloGold operations frequently constitute major economic forces in the areas in which they are located, there is a real opportunity for substantial and permanent improvement in the lives of local communities. Localisation programmes (whereby local people are trained and developed with skills through education and on-mine training) are an imperative for the region. Targets have been set by the company and development plans put in place to ensure that these targets are met.

• In June 2001, Geita received ISO 14001 certification. During the year, Geita's Environment, Health and Safety Management System was successfully extended to cover all on-lease exploration activity as minerals exploration has the potential to affect the safety and health of employees and local communities, and the environments in which they work and live. Significant effort and funds have also been expended over the past 12 months to rehabilitate areas in the Geita district where historical exploration activity (not undertaken by AngloGold) has not complied with standards.
   
• Geita has focused its community development initiatives in the areas of education, community infrastructure and health care. Since the start of mine construction in 1999, expenditure on health care (primarily upgrading of hospital/clinic facilities and equipment) has amounted to $80,000, with a further $100,000 being spent on education and training initiatives (including the building/extension of village schools and the establishment of the Nyakabale agricultural project).
   
• Morila spent a total of $459,000 on community development and social initiatives during 2001. Major capital projects undertaken included the upgrading of facilities and equipment for village schools in Sanso, Domba, Morila and Fingola, the establishment of 12 boreholes for community water supply, and bridge construction over the Diaratou River. Morila also extended funds to the Malian government towards sponsorship of the Africa Cup of Nations soccer tournament.
   
• In February 2001, Navachab funded the construction of five fully-equipped classrooms at the Ebenhaeser Primary School in Usab near Karibib. Navachab has fostered a constructive and co-operative relationship with local communities and has undertaken a number of community projects in conjunction with the Karibib municipality. Peer counsellors employed by the mine meet regularly with members of the local community to share information on issues such as substance abuse and HIV/AIDS, and financial assistance is provided to the counsellors.
   
• In late 2001, an Environmental Impact Assessment was undertaken at Sadiola to assess the environmental impacts likely to result from development of the Saprolitic Sulphides Project. This assessment will be used to modify Sadiola's existing Environmental Management System.
   
• The SEMOS Community Development Association, established in 1999 to coordinate development initiatives in the Sadiola region, has since been expanded to include the villages close to Yatela. The Community Development Association and associated Development Fund focus on macro-projects (involving large communities, entire villages or groups of villages in larger projects aimed at addressing community needs), micro-credit facilities (involving the provision of small loans to individuals and groups for entrepreneurial activities) and initiatives aimed at capacity building in the community.

  The Fund also supported an adult literacy programme in eight villages near Sadiola, as the first stage of a drive to build capacity in local communities.

Outlook (2002)

Attributable production is expected to be 6% higher (at 921,000oz), while total cash costs should increase by 11% to about $143/oz.

• At Geita attributable production is expected to reduce to 260,000oz, with total cash costs increasing by 29% to $190/oz, as a result of an increase in the LOM stripping ratio from 5.7 to 7.2 and higher treatment costs associated with the replacement of Nyankanga ore with ore from the Kukuluma pit.
   
• Morila's attributable production is budgeted to increase by 5% to 265,000oz, with total cash costs decreasing by 6% to $97/oz as plant throughput increases and economy of scale benefits are achieved. Higher grades should be accessed from the second pit after June 2002.
   
• At Navachab attributable production should decrease by 18% to 71,000oz, and total cash costs will increase by 18% to $194/oz as recovered grade is expected to decline by 18%. The devaluation of the Namibian dollar has prompted an assessment of a possible extension to the mine life.
   
• Sadiola's attributable production should increase by 2% to 208,000oz, while total cash costs will increase by 20% to $157/oz, owing mainly to increased treatment costs associated with the processing of saprolitic sulphide ore. A project is under way to convert the process plant to treat this ore from the first quarter of 2002, enabling the mine to sustain current volumes.
   
• Attributable production at Yatela should rise by 108% to 108,000oz, reflecting a full year of production. Total cash costs are likely to remain virtually unchanged at $148/oz.

Thys Sabbagha
Head: Africa Region (with effect from March 2002)

Peter Turner
Manager: Africa Region (until March 2002)

LTIFR ? Africa region

Attributable production ? Africa region (000oz)

Cash costs ? Africa region ($/oz)

Australia

The Australia region comprises wholly-owned mines at Sunrise Dam in Western Australia and Union Reefs in the Northern Territory, as well as joint venture operations at Boddington (33.33%) in Western Australia and Tanami (40%) in the Northern Territory.
 

Attributable tonnes treated:	8.0Mt
Average grade:	1.97g/t
Attributable gold production:	508,000oz
Total cash cost:	$194/oz
	(A$375/oz)
Number of employees
(including contractors):	700
Attributable capex
during 2001:	$42m (A$82m)

Safety and health

The region had a moderate year as far as safety and health is concerned, achieving a LTIFR of 13.47.

• At Sunrise Dam major highlights for the year include an external safety and health audit and, the launch of the "SafeGold" risk management system.
   
• The safety performance at Union Reefs has benefited from a change in culture, supported by the risk management activities.
   
• As Boddington approached closure, several high potential incidents indicated a possible loss of focus on safety management. A concerted high-profile campaign successfully stemmed this trend and the operation progressed to a safe closure at the end of November.
   
• The decision to close the Tanami mine early resulted in a loss of key personnel and a fall in morale, which had a negative impact on the safety performance.

Gino Sceghi, Director of Carey Mining and Relief Supervisor at Sunrise Dam. Gino, a resident of Laverton, travels from Laverton to Sunrise Dam to relieve the Mining Supervisor whilst he is on break. Carey Mining has been a contractor to Sunrise Dam since mining began five years ago. During 2001 the plant expansion cutback at Sunrise Dam was completed on schedule and within budget. Further drilling results indicate significant upside potential which could result in a doubling of the current resource base and further extensions to mine life.

Production

Attributable production decreased by 3% to 508,000oz, primarily owing to the closure of the Brocks Creek operation during late 2000, the early closure of the Tanami mine during 2001 and the abandonment of proposed underground mining to augment the Union Reefs mill feed. The Boddington mine ceased operations in the fourth quarter. Offsetting these reductions was a 31% increase in Sunrise Dam production following the commissioning of the expanded operation in May 2001. Operating profit decreased by 26% to $25m (A$48m), while total cash costs were down 14% to $194/oz (A$375/oz), mainly as a result of the decrease in production from the high-cost Tanami mine and improved performance at Union Reefs.

The corporate office was restructured and relocated from Melbourne to Perth during the first quarter. Reduced staffing levels and closer proximity to the mining operations resulted in savings of some $2.2m (A$4.3m), while the refocusing of the Australian exploration effort resulted in further savings.

• Gold production increased by 31% to 295,000oz at Sunrise Dam as the expansion to 2.5Mt/annum was completed in May, one month ahead of schedule. By year-end, with minimal capital expenditure, plant throughout had been further increased to 3Mt/annum. Total cash costs for the year fell to $153/oz (A$297/oz), despite deeper mining, processing of hard primary ore and higher diesel fuel prices. Mill throughput increased to 2.4Mt, while both headgrade and recovery declined marginally to 3.8g/t and 87% respectively. The major cutback in the Cleo pit was completed in November. The current open-pit operation will produce over 300,000oz/annum until 2008. The plant expansion project and the cutback were both completed within the respective $24m (A$46m) and $26m (A$51m) approved budgets. Production from the Megapit commenced during the fourth quarter at a total cash cost of $162/oz. Beyond this initial Megapit Expansion Project, drilling results indicate significant upside potential which could result in a doubling of the current resource base and further extensions to mine life.
   
• Options for Union Reefs were evaluated during the year, taking into account the continued underperformance of some orebodies. Production declined by 10% to 114,000oz, primarily as a result of lower throughput (2.6Mt) and lower headgrades. Total cash costs were reduced by 16% to $230/oz (A$445/oz). Because of the limited future value of the mine and in line with AngloGold's strategy of focusing on higher margin, long-life operations, various disposal options were considered and expressions of interest in the assets were sought. No meaningful offers were received.

  A review of the mine's operations was undertaken to ensure a more predictable performance for the remainder of the year and a significant improvement was achieved following implementation of a revised mining plan. The mine remains in closure mode and AngloGold will continue to manage it through to closure in late 2002 or early 2003.
   

• Attributable production at Boddington increased marginally to 78,000oz despite closure at the end of November. The main ore sources during the year were remnant oxide ore blocks and low-grade stockpiles, plus small high-grade primary ore sources. The plant was placed on care and maintenance pending commencement of the expansion project. Total cash costs fell to $190/oz (A$367/oz), with the low-cost gold from the plant clean-up offsetting the increased costs associated with accessing remaining small-volume ore blocks.
   
• Operations at Tanami were severely affected by heavy rains at the beginning of the year, resulting in early closure of the operation and an annual production decline of 56% to 21,000oz. Mining was terminated at the end of June and processing ceased during the third quarter when stockpiles were exhausted. Total cash costs increased to $278/oz (A$533/oz). The Tanami process plant has now been leased for treating third party ore.

Growth

On-mine and near-mine exploration continued around Sunrise Dam and Boddington and in the Tanami region, with the aim of discovering resources synergistic with existing mines of a suitable scale to warrant investment at greenfields sites. At Sunrise Dam and Boddington, new discoveries are progressively incorporated into the mine plan. Encouraging exploration results continue to be achieved from the Coyote region in the western Tanami. (See Exploration on page 40).

Capital expenditure for the Australia region was $42m (A$82m) in 2001. Total capital expenditure is expected to be in the region of $21m (A$40m) in 2002.

• The Boddington Expansion Project is one of the world's largest undeveloped gold deposits. The project has total ore reserves of 390Mt at 0.87g/t, containing 10.9Moz of gold of which 33.3% is attributable to AngloGold. A feasibility study completed during 2001 indicated that the development of the deposit would yield an attractive return and it is being considered by the joint venture partners. By year-end, agreement was reached on the principles of transferring the management of the mine and the expansion, which is currently managed by Worsley Alumina, to the Boddington Gold Mine Joint Venture partners. A decision on whether the project will proceed is expected during 2002.

Sustainability

Environmental management and compliance, as well as social issues, remained areas of importance in the region.

• The environmental management focus across the Australia region has been varied, with mine closure and rehabilitation plans for the Tanami and Union Reefs mines, an annual environmental management plan for Sunrise Dam and the care and maintenance plan for Boddington all being developed.
   
• Other key activities during the year include contributing to an understanding of the impact of the International Cyanide Code, environmental audits by statutory bodies at Sunrise Dam and Union Reefs, completion of the annual review of the Mineral Council of Australia's Code of Environmental Management, rehabilitation of waste dumps, implementation of waste minimisation strategies and sponsorship of research into project dormancy mechanisms of Australian native plant species.
   
• AngloGold Australia is committed to fostering long-term relationships with communities in the areas in which it operates. This frequently involves local indigenous communities. Programmes include training, employment and business support initiatives, which provide much needed employment opportunities for indigenous people living in remote areas. To heighten consciousness of indigenous traditions, many employees undergo cross-cultural training. AngloGold's leading position on indigenous relationships was demonstrated when the company was party to the first major native title consent determination handed down under the auspices of the new Western Australian government. AngloGold was also invited, as an industry representative, to participate in a parliamentary review of the State's land management regimes in terms of their convergence with the Native Title Act.

Outlook (2002)

Attributable production is expected to be lower at 456,000oz from 5.7Mt at an average grade of 2.7g/t. Total cash costs should decrease further to $178/oz (A$349/oz), as a larger proportion of total production is sourced from the low-cost Sunrise Dam mine and cost improvements are made at Union Reefs.

• AngloGold will work towards a decision in respect of the Boddington Expansion Project, which has the potential to produce 600,000oz of gold and 20,000t of copper/annum at a total cash cost below $153/oz (A$300/oz).
   
• Production at Sunrise Dam should increase by 19% to 351,000oz (attributable), at a total cash cost of $157/oz (A$309/oz).
   
• Union Reefs should produce 105,000oz at a total cash cost of $205/oz (A$402/oz).

Nigel Unwin
Executive Officer: Australia, Human Resources and Information Technology

LTIFR ? Australia region

Barrie Parker
Operating General Manager, Australia

Attributable production ? Australia region (000oz)

Cash costs ? Australia region ($/oz)

North America

The North America region comprises the Jerritt Canyon Joint Venture (70%) and the Cripple Creek & Victor Gold Mining Company (CC&V) (67% interest, with 100% interest in gold produced).
 

Attributable tonnes treated:	12.2Mt
Average grade:	1.27g/t
Attributable gold
production:	496,000oz
Total cash cost:	$211/oz
Number of employees
(including construction
contractors):	850
Attributable capex
during 2001:	$93m

Safety and health

Once again, the North American operations had an excellent year in respect of safety and health with no disabling injuries or fatalities. North America's LTIFR remained at a low 1.6 compared to the Ontario benchmark of 6.5.

• Jerritt Canyon's SSX mine was selected for the Mine Safety and Health Administration's highest award ? Sentinels of Safety ? as the safest underground metal group mine in the USA in 2000. The Smith and MCE mines also received Certificates of Achievement from the Mine Safety and Health Administration for achieving perfect safety records for the year 2000.

  The Nevada Mining Association presented numerous safety awards to Jerritt Canyon operations: first place to Murray Mine in the underground medium mine category for the second year in a row; first place to SSX Mine in the underground small mine category; second place tie to Smith and MCE in the underground small mine category; and third place to the Mine/Surface in the medium surface category.
   

• The Colorado Mining Association and the Colorado Division of Minerals and Geology recognised CC&V as the safest surface mine in the State of Colorado.

Production

Gold production remained constant at 496,000 attributable ounces. Operating profit decreased by 16% to $16m while total cash costs increased by 6% to $211/oz.

• At Jerritt Canyon production during the first and second quarters was higher than the same periods in 2000 as a result of toll milling of Cortez ore. Production during the second half of 2001 was maintained at the 2000 level, despite a fire in the roaster gas cleaning system, which caused a production loss of seven days, and unusually high snowfall in the fourth quarter, which resulted in lower mill tonnage. As a result, production was 14% higher at 282,000 attributable ounces, with total cash costs at $223/oz.
   
• Reduced crusher availability during the fourth quarter of 2000 had a negative impact on production at CC&V during the first half of 2001, while the second half of the year saw increases in tonnage mined and placed as new mining equipment was commissioned as part of the approved expansion project. Annual production was 14% lower than 2000 levels ? at 214,000 attributable ounces ? as irrigation and gold transport difficulties at the leach pad caused a significant growth in inventories to occur. Total cash costs rose in line with this to $187/oz.
   
• Excellent progress was made with the CC&V Expansion Project and several important milestones were reached. CC&V completed the Highway 67 relocation and bridge construction ahead of schedule and 6% under budget. The truck shop was also completed ahead of schedule and 5% under budget. Construction of the crushing facility and expanded leach pad is on schedule for completion in the third quarter of 2002 and within budget.

Growth

Capital expenditure for the North America region was $93m in 2001. Total capital expenditure is expected to be in the region of $79m in 2002.

• Approval for the $195m CC&V Expansion Project was given during the first quarter. The project will increase average annual gold production by 40% and extend the LOM from 2008 to at least until 2013, yielding an additional 2.8Moz. Average LOM cash costs are expected to be reduced from $227/oz to $174/oz. Project construction is proceeding according to schedule, with the mining fleet in place and leach pad performance being monitored. Approximately $119m of the capital expenditure has been spent or committed to date.

Sustainability

The corporate sustainability philosophy is reflected by several social investment initiatives designed to deliver significant and lasting benefits to employees, communities and other key stakeholders.

• Education initiatives remain a top priority. Financial and manpower contributions were made to an interactive science learning centre for elementary students and teachers in Nevada. The company also provided contributions to the Colorado School of Mines and the Mackay School of Mines for undergraduate student recruitment and retention.
   
• Expansion activities at CC&V included a state highway relocation. This project was cited by local and state officials as one of the best examples of a public and private co-operative effort to improve the safety of a state highway, while allowing for mine expansion. In addition, the design and construction of the new highway will encourage more tourism and economic development in the area.
   
• A significant number of hours and financial support were contributed to the initial planning and design of a new regional medical facility in rural Colorado which will serve as the primary health care facility for more than 21,000 people living in a 1,800 square mile area.
   
• The company continues to strongly encourage employee commitment to volunteerism and, as a result, employees volunteer more than 5,000 hours annually to many local causes and organisations.

Frankie Bates and Kim DiCamillo, Equipment Operators at Cripple Creek & Victor's East Cresson mine, have just completed a 12-hour night shift. Equipment operators are trained at CC&V to safely and productively operate these large haul trucks, snow ploughs and other support equipment. Haul truck operators must be patient by nature and pay enormous attention to detail. In the background are CC&V's 310t capacity EH4500 haul trucks, which are new additions to the fleet. This investment will allow CC&V to increase mine production to 60Mt/annum.

Outlook (2002)

Overall, production from the region is expected to increase to 579,000 attributable ounces at a total cash cost of $181/oz.

• During the first quarter of 2002, additional high-capacity trucks should be placed in service at CC&V as part of the expansion project. Mining is likely to increase from 31Mt in 2001 to 44Mt in 2002 and gold production should increase by 49% to 319,000oz. The new crusher is expected to be placed in service and operating at full capacity of 18Mt in the third quarter of 2002. Total cash costs are expected to be in the region of $156/oz.
   
• As Jerritt Canyon nears the end of its life, focus should remain on efficient operational performance and the development of effective closure plans. Cost-cutting initiatives implemented in 2001 should reduce Jerritt Canyon's total cash costs to $204/oz in 2002 and production will be reduced by 7% to 261,000oz as toll-milling of Cortez ore is completed.

LTIFR ? North America region

Jim Komadina
Executive Officer: North America Region

Attributable production ? North America region (000oz)

Cash costs ? North America region ($/oz)

South America

The South America region comprises the wholly-owned Morro Velho mines and the Serra Grande mine (50%) in Brazil, and the Cerro Vanguardia mine (46.25%) in southern Argentina.
 

Attributable tonnes treated:	1.7Mt
Average grade:	7.8g/t
Attributable gold production:	441,000oz
Total cash cost:	$134/oz
Number of employees
(including contractors):	2,300
Attributable capex
during 2001:	$20m

Safety and health

A fall of ground accident at Morro Velho's Mina Velha mine claimed the lives of two employees in April. Following this, a review of risk management procedures was conducted and the plans put in place yielded some rewards.

The region achieved a FIFR of 0.34 and a LTIFR of 8.16.

• After a disappointing start at Cerro Vanguardia, improving safety trends were recorded. Cerro Vanguardia is targeting a NOSA five-star rating in 2002, having achieved a four-star rating in October 2000.
   
• At Morro Velho there was a significant improvement in safety rates following the implementation of a new safety action plan, and this trend is expected to continue. The mine achieved a NOSA three-star rating in 2002.
   
• Serra Grande achieved a satisfactory safety performance, and received a NOSA four-star rating in January 2002.

Production

Attributable production was maintained at 441,000oz. A lower average grade was offset by a 3% increase in tonnages treated. Silver production increased by 35% to 997,000oz. Operating profit decreased by 9% at $63m, while total cash costs were down 7% to $134/oz as a result of improved production, cost-cutting initiatives, optimisation of stripping ratios, the devaluation of the Brazilian real and increased by-product sales at Cerro Vanguardia.

• Higher gold production (135,000oz) at Cerro Vanguardia, owing to a 10% increase in capacity to reach 900,000t/annum partially offset by lower grades, resulted in a strong performance. Total cash costs decreased to $133/oz. The primary intake of the crushing plant was replaced in September and a washing plant will be commissioned during the second quarter of 2002 to eliminate some of the problems experienced as a result of heavy rainfall. Some $327,000 was spent on a gravity circuit to improve silver recovery, with commissioning in January 2002.
   
• Production at Morro Velho decreased marginally to 209,000oz, while total cash costs decreased to $127/oz. Production at the Cuiab? mine improved as operating levels reached 2,270t/day by mid-year, reflecting a capacity increase of 3%. A new communications system was successfully installed while a hydraulic backfill system was implemented and is being optimised. Both systems will improve production and safety. Re-planning was undertaken at the Velha mine to improve safety conditions, including the revision of operating standards in all stopes, the reassessment of the geo-mechanics of each face, an increase in the operational cycles, a reduction in the production rate and an increase in the number of employees.
   
• At Serra Grande attributable production increased slightly to 96,000oz. The mine is operating at increased capacity of 730,000t/annum a total cash cost of $107/oz.

  The region is supporting the development of a full-scale cyanide recovery process, based on ion-exchange resin, which has the potential for application across AngloGold's operations. The project is being undertaken at the Federal University of Minas Gerais in Belo Horizonte, Brazil, and should it prove viable, will be followed by a pilot plant installation at the Queiroz plant in Nova Lima.

Growth

On-mine and near-mine exploration as well as greenfields exploration continued, with a particular focus on Argentina, Brazil and Peru. (See Exploration on page 40.)

Capital expenditure (attributable) for the South America region was $20m in 2001 and is expected to be around $37m in 2002.

• The potential for underground mining at Cerro Vanguardia is being investigated and an initial recommendation is expected in May.
   
• Work continued at Morro Velho's Amapari Project.
   
• The planned expansion of the Cuiab? mine, which would effectively increase production from 2,300 to 4,000t/day and increase gold production by 180,000oz/annum, is at the pre-feasibility stage. The targeted ore reserve is about 9Mt at 7.7g/t, equivalent to 2.2Moz of gold. Capital expenditure would be in the region of $140m and, should the project proceed, production would commence by 2006.
   
• Areas adjacent to the Serra Grande mine are being investigated to extend the life of this highly profitable operation. After an assessment of the area through an Airborne Electromagnetic survey in January/February, a drilling proposal for the adjacent areas will be presented.

Dom?cio Fidelis de Ara?jo, pictured in front of the Cuiab? Mine ropeway at Morro Velho. Born and raised in the nearby town of Caet?, Dom?cio has been working at Morro Velho for 12 years where he is currently a Load Haul Dump Operator. Morro Velho is one of the main employers in the area and has contributed greatly to the improvement of living standards for neighbouring communities. Behind him is a view of the 15km Cuiab? aerial ropeway, crossing the hilly region between the Cuiab? mine and the Queiroz plant, located in the town of Nova Lima. The ropeway has the capacity to transport 115t/hour using 270 buckets and travelling at a speed of 3.6m/sec and is a novel, low-cost innovation by the mine.

Sustainability

Environmental and social issues continued to be an area of importance.

• Cerro Vanguardia is currently in the process of ISO 14001 certification, only the second AngloGold mine to do so and one of the first in Argentina.
   
• Morro Velho's Engenho d'?gua Project, a small oxide deposit, located in Rio Acima City, about 25km from Nova Lima, was approved in terms of all environmental legislative requirements in July, following presentations to community members, environmental agencies and other authorities.

  Reclamation and revegetation of the Nova Lima metallurgical plant clean-up area was concluded during the year. Ongoing water quality monitoring of the drainage water and river (Ribeir?o Cardoso) will continue in line with legislative requirements.

  The approval process for the Morro Velho Environmental Corrective Licence is nearing completion and it is anticipated that a licence will be granted in 2002.

  Revegetation of affected areas at the Itajobi Corrego do S?tio Project, located in Santa B?rbara City (about 130km from Nova Lima), is almost complete. This open-pit, heap leach project will be operating by the end of 2002. The Minas Gerais Environmental Authorities have included this project in a "best practice" video to be released in 2002.

  Procedures to obtain the necessary environmental licences for the Amapari project are being expedited.
   

• The State Environmental Agency of Goi?s Province renewed Serra Grande's Environmental Operational Licence in November 2000.

  Serra Grande has initiated, in a partnership with IBAMA (the Brazilian Institute for the Environment), a programme for the breeding of native wildlife.

A large proportion of the region's community-directed social investment was made in the sectors of education (mainly environment and technical training), as well as in supporting health and leisure activities.

• Some 5,000 children participated in an environmental education programme at the Harry Oppenheimer Environmental Centre in Nova Lima, while 300 teachers were trained in environmental education. A further 250 individuals from State environmental agencies and community members participated in the programme.
   
• Amongst the community initiatives supported by the company was a "Children's Day" (Nova Lima) involving some 10,000 needy children. Other outreach initiatives include sponsorship of technical mining and health symposiums, donations of materials and clothing to schools and assistance to disadvantaged children as well as to sports teams. In Nova Lima, Morro Velho is supporting the city's recycling programme and has donated a building site for the recycling of materials.

Outlook (2002)

Attributable production is expected to be marginally lower (431,000oz), from 1.7Mt at an average grade of 7.7g/t. Total cash costs should decrease further to about $130/oz, reflecting increasing contributions from Cerro Vanguardia and a further reduction in corporate costs.

• At Cerro Vanguardia, a capacity increase to 900,000t/annum is envisaged, increasing gold production by 3% to 140,000oz (attributable), and total cash costs maintained at $133/oz. Initiatives to further decrease the stripping ratio are being investigated.
   
• Morro Velho should produce slightly less gold during the year (down 4% to 201,000oz) as the clean-up project at the Nova Lima plant was concluded in mid-2001. A higher total cash cost (up 8% to $137/oz) reflecting a reduction in by-product credits, and higher labour and maintenance costs, is anticipated.

  To compensate for the closure of the Santa Cruz mine in mid-2002, the Engehno d'?gua mine will come into production in March 2002. Engenho d'?gua is an open-pit mine with a LOM of 22 months.
   

• Serra Grande's production is likely to decline by 6% to 90,000oz (attributable) from lower grade ore, at a 6% higher total cash cost ($114/oz) as mining from the narrower quartz veins at Mina III increases. The outcome of a trial mechanised mining exercise to improve safety and lower costs is expected by the end of the first quarter.

for the year ended 31 December 2001

* Moab Khotsong is a new mine in its development phase. The mine is expected to commence production in 2003 and attain full production of 1.6Mt of ore treated per annum by 2006. LOM cash costs are expected to be $97/oz.
 

Roberto Carvalho Silva
Executive Officer: South America Region

LTIFR ? South America region

Attributable production ? South America region (000oz)

Cash costs ? South America region ($/oz)