R E P O R T

F O R

T H E

Q U A R T E R

E N D E D

31  D E C E M B E R 1998

anglo

LOCATION OF THE GOLD INTERESTS

IN NAMIBIA AND MALI

N

Western Deep

Levels East

Western Deep

Levels West

Ergo

Elandsrand

(incl. Deelkraal Section)

 Western Deep

Great Noligwa

(Vaal Reefs 8#)

Tau Lekoa

(Vaal Reefs 10#)

Kopanang

(Vaal Reefs 9#)

LOCATION OF THE

GOLD INTERESTS WITHIN

THE WITWATERSRAND BASIN

Tshepong

(Freegold 2 & 4)

Matjhabeng

(Western Holdings)

Joel (H. J. Joel)

* Sold with effect from 21 September 1998

Levels South

A LETTER FROM THE CHAIRMAN

AND THE CHIEF EXECUTIVE OFFICER

Dear shareholder

Looking back at 1998, AngloGold completed its transformation from eight listed companies to a single listed gold

company with its own, independent board of directors. The rigorous pursuit of global competitiveness for its South

African operations, initiated at the beginning of 1997 by the setting of cash cost and productivity targets, continued in

1998, as did the company's disposal of those shafts that did not meet our criteria. In 1998, 17 shafts were sold,

substantially completing the process. The consequence was a drop in production from 239 218 kilograms

(7. 7 million ounces) in 1997 to 215 377 kilograms (6. 9 million ounces) in 1998. This is a reduction of only 10 per cent

compared to the planned drop of 17 per cent and was brought about by increased labour productivity and better

mineral resource management. Together with organisational restructuring and a reduction in overheads, this resulted

in a cash cost decrease, year on year, of 2 per cent in rand terms to R40 439 per kilogram and in dollar terms from

$279 per ounce to $229 per ounce. In respect of the latter, we benefited partly from the weaker rand.

The company has produced a good set of results for the fourth quarter. In the context of a weak dollar gold price and

a strengthening rand, the company's hedging activities have produced a stable rand price of R61 296 per kilogram,

0, 4 per cent higher than the third quarter. Gold production showed a planned decline of 1 per cent. Critically, cash

costs were well controlled and showed a modest decline in rand per kilogram terms from R41 930 in the third quarter

to R41 203 in the December quarter, in spite of the drop in production. Productivity, measured in terms of grams of

gold produced per employee, registered a 5 per cent improvement quarter on quarter. The volume measured, however,

showed a 2 per cent decline.

Operating profit for the quarter increased by 6 per cent to R952 million. However, the available profit decreased by

16 per cent to 424 cents per share due to higher net capital expenditure. Headline earnings (on an International

Accounting Standards basis) increased by 41 per cent to 521 cents per share.

Available profit for the half-year increased from 770 cents per share to 927 cents per share while headline earnings

(on an IAS basis) increased by 31 per cent, from 677 cents per share to 890 cents.

The purchase of Minorco's five South and North American gold operations and related exploration activities will be

AngloGold's first major international acquisition. The management team is confident that these operations and

investments, which will be included from the start of 1999. will demonstrate that this is a value-enhancing purchase.

The gold price has traded at the low end of the $280-$300 range. While fears of large scale central banks selling have

diminished, the major recession in several East Asian economies, and in Japan, has had a negative impact on gold

jewellery consumption. Continued market liberalisation and growing physical jewellery and investment demands are

needed if the price is to move upwards.

AngloGold is committed to both joint and individual efforts to this end. Our initiatives to broaden and deepen producer

co-operation with bodies like the World Gold Council are evidence of this. So, too, is the renewed interest we are

taking in design excellence and innovation in the jewellery industry. In South Africa. we have launched the 'Riches of

Africa' gold jewellery design competition and. with the World Gold Council, the 'Gold for Eternity' gold design

competition in China and nine other Asian countries.

We are convinced that there is broad and solid demand for our product, with considerable potential for growth,

amongst hundreds of millions of individual consumers. We will do what we can to ensure dynamic and creative

responses to that growing demand.

 NICKY OPPENHEIMER                                                                                                                                  BOBBY GODSELL

Chairman                                                                                                                                                       Chief Executive Officer

2 February 1999

SUMMARY  OF OPERATIONS

Vaal River Operations

Operating profit at Great Noligwa rose by R17 million due to a 6 per cent decline in cash costs to R28 705 per
kilogram ($155 per ounce). The improved cash cost performance resulted from lower major expenditure and services
costs.

A 19 per cent rise in gold production at Kopanang, partially offset by a 6 per cent increase in production costs,
resulted in a 58 per cent increase in operating profit. However, due to increased production, cash costs declined to

R38 308 per kilogram ($206 per ounce).

Tau Lekoa's operating profit showed significant improvement to R20, 4 million due to a 7 per cent increase in gold
production and a 3 per cent decline in cash costs, achieved through lower services costs. Consequently, cash costs
improved to R51 746 per kilogram ($279 per ounce).

Surface operations showed a 19 per cent improvement in gold production due to higher grades and volume, and
contributed R14 million.

Productivity in terms of grams produced per employee decreased by 2 per cent at Great Noligwa, due to the
3 per cent drop in gold production. Kopanang improved its performance by 21 per cent on the back of a 19 per cent
increase in gold production. Tau Lekoa showed a 6 per cent improvement on the previous quarter, reflecting the
higher production.

At Moab Khotsong capital expenditure for the quarter was R53. 5 million, 39 per cent lower than the previous quarter
due mainly to revised phasing of the project.

Free State Operations

Operating profit at Bambanani improved by R22 million mainly as a result of an 18 per cent increase in gold
production. Cash costs declined to R45 039 per kilogram ($243 per ounce).

Tshepong posted a 20 per cent increase in gold production for the quarter. While production costs were 20 per cent
higher due to increased consumables, operating profit rose by R16 million. Cash costs were lower at R53 744 per
kilogram ($289 per ounce).

At Matjhabeng a 2 per cent decline in gold production and a 23 per cent increase in production costs resulted in a
drop in operating profit of R34, 1 million. Higher expenditure on production stores was the main contributor to cost

increases. Cash costs rose to R57 672 per kilogram ($311 per ounce).

At Joel, a 17 per cent improvement in gold production gave rise to higher operating profit of R10, 3 million. Production

improved due to an increase in grade and a reduction of gold inventory. Cash costs were lower at
R40 012 per kilogram ($216 per ounce).

Productivity, measured in grams produced per employee, improved by 21 per cent and 24 per cent at Bambanani and

Tshepong respectively. Matjhabeng maintained its productivity performance, while Joel improved by 8 per cent.

Capital expenditure of R41, 2 million for the Taung No. 1 shaft sinking and the decline at Taung No. 3 shaft is in line
with the previous quarter.

West Wits Operations

East Mine showed an R8 million improvement in operating profit due to an increase in revenue and a marginal
decrease in cash costs to R28 609 ($154).

Gold production at South Mine decreased by 14 per cent due to development (650m) being behind schedule.
Operating profit decreased by R16 million despite a drop in production costs of 4 per cent. Cash costs were higher at
R54 759 per kilogram ($295 per ounce). South Mine's capital expenditure for the quarter was 9 per cent higher at
R42, 1 million, R14. 1 million of which was for the gold plant's carbon in leach project.

Gold production at West Mine was 28 per cent lower due mainly to seismic damage to the tertiary shaft reported
during the quarter. Cash costs rose to R64 833 per kilogram ($349 per ounce), reflecting repair costs and lost
production. It is expected that repairs to the tertiary shaft will be completed by the end of March 1999.

Operating profit at Deelkraal fell by R8. 3 million due to a 13 per cent decrease in area mined and a consequent
decline of 7 per cent in gold produced. The drop in area mined is due to the up-grading of underground infrastructure,
which is currently under way. Cash costs rose to R59 528 per kilogram ($321 per ounce).

Operating profit at Elandsrand increased by R7 million due to lower production costs. Cash costs were down to
R42 193 per kilogram ($227 per ounce).

Productivity, measured in grams produced per employee, was maintained at East Mine and Elandsrand, South Mine 
reported a drop of 16 per cent, arising from lower gold production. The decrease of 28 per cent at West Mine was

due mainly to the problems associated with the tertiary shaft, while the infrastructural problems at Deelkraal resulted
in a 4 per cent decline.

Ergo 

Operating profit was maintained at the previous quarter's level despite a loss of volume through abnormally high
rainfall.

Cash costs increased to R42 171 per kilogram produced ($227 per ounce), mainly as a result of a 6 per cent decline
in gold production.

Capital expenditure increased by 21 per cent to R4, 1 million in order to establish the 6L2 Welgedacht pump station by
the first quarter of 1999.

International Operations 

The fourth quarter and the year 1998 are both exceptional periods in the mine life of Sadiola. In line with longer term
ore generation requirements and to meet the increased plant throughput capacity realised in the period, the quarter's
total tons mined increased by 55 per cent.

This supported a 12 per cent increase in plant tonnage treated, rendering 9 per cent more gold and an increased gold
operating profit of R59, 9 million.

Unit operating cash costs, before royalty, dropped 9 per cent to $99 per ounce for the 50 380 attributable ounces
produced in the quarter.

Progress on two projects -- the Farabakouta and Sadiola village relocations and the Yatela feasibility study - was very
encouraging as was the mineral exploration and extension programme on site. A modified slimes dam wall building
methodology - cycloned tailings upstream deposition - was adopted by year-end following 18 months of testwork.
Time and monitoring will establish if this is a viable long-term alternative compared to the more elaborate and costly
centre line downstream deposition methods.

In 1999 and subsequent years it is planned to generate some 171 000 attributable ounces per year at an increased

operating cash cost, before royalty, of $132 per ounce. This reflects the reality of a deepening open pit and somewhat
reduced yields but nevertheless remains a world-class outlook for a successful project to date.

In the fourth quarter, Navachab enjoyed a distinctly improved performance over the previous quarters of 1998 as the

benefits of operating the shallow satellite East Zone 3 pit partially offset the effect of slope stability recovery work
continuing in the main pit.

Tons treated and yield improved 3 per cent and 7 per cent respectively, yielding 10 per cent more gold, the second
such increase quarter on quarter. Higher production, coupled with good control, resulted in a 10 per cent unit decline
in operating cash costs to R44 377 per kilogram ($239 per ounce). This is budgeted to rise to R51 660 per kilogram in

1999 as the balance of the recovery work in the main pit is completed, including provision for a second ramp access.
Rand profit from operations could, however, almost double the attributable R7, 8 million achieved in 1998 and the mine

should be well set for real profitability in year 2000 for the balance of the original project mine life to 2004.

A feasibility study on the investment required to extend the open pit to exploit additional resources discovered at

Navachab will be reviewed by the Joint Venture Management Committee in March this year and the decision

communicated in the second quarter. A decision to proceed could extend the life of mine by 12 years.

Driefontein 

Attributable operating profit rose by 8 per cent over the previous quarter to R51, 9 million. This was due mainly to an

increase of 13 per cent in gold production, arising from higher grades at Nos 1 and 4 shafts and a 3 per cent increase

in area mined.

Productivity, measured in grams per employee, improved by 15 per cent due to higher gold production.

Capital expenditure increased by 14 per cent or R3. 2 million, the focus being on the establishment of infrastructure at
the Nos 1 and 5 shaft complexes in order to fully exploit gold resources above 50 level.

With the return of some measure of stability to international financial markets during the final quarter of 1998, the
gold market also steadied. The price opened the quarter relatively firmly at around US$296 per ounce, and traded

between US$300 and US$288 for the three months, closing around the bottom of that range. A similar pattern of
trading has been followed in the first weeks of 1999.

By comparison with the preceding quarter, which saw Russia move into debt default and financial crisis, with knock-on
damage to equity and financial markets worldwide, the final quarter of 1998 was relatively uneventful, A significant
disappointment in the quarter came with the turnaround of speculative short positions in gold on the New York
Comex. Since the second quarter of 1996, sentiment towards gold on that exchange has remained almost
consistently negative, with institutional and other investors on the Comex running net short positions amounting to
between 6, 5 to 7, 5 million ounces (202 to 230 tons of gold).

During October, growing political tension in the Middle East, and strong rumours of hedge buy-backs by Australian
gold producers (subsequently to be proved correct in the announcement by Normandy of the restructuring of their
hedge), saw investor sentiment turn favourable. Short positions on the Comex were bought back, and the exchange
moved into a small net long position on gold. Unlike earlier reversals on Comex, these buy-backs were carried out
carefully and without haste, and the result was a disappointingly mild impact on the gold price. The price rose by only
US$15 per ounce to touch briefly above US$300 an ounce. This failure of the metal to react to such a positive reversal
in sentiment attracted unfavourable comment from a number of analysts.

Currency markets saw a little more action, with a weaker dollar driving changes in a number of currencies. Early in the
quarter, the Rand strengthened by almost 10 per cent, from R6, 18 to R5, 50 to the US$ on the back of the fall in the
US currency, and on the back also of speculators closing short positions in the Rand. The recovery was not
sustainable, and the end of the quarter saw the local currency trading back around R5, 90 to the dollar. The
devaluation in the Brazilian currency early in 1999 pulled other emerging market currencies down with it, including the
Rand, and the new year has seen the Rand trade as weak as R6, 31 to the dollar.

Whilst the behaviour of the gold market in 1998 offered no high moments, it is encouraging that the price was
supported repeatedly during the year at around the low US$280's per ounce (around the bottom of the price range for

1998). However, the failure of gold to break out on the upside has caused several analysts to publish lower gold price

projections for 1999, and sentiment going into the new year is not particularly positive,

12 months ending
31 December

1999
2000

2001
2002
2003
2004 - 2008

The aggregate of US dollar priced contracts over the full duration of the hedge is 59 per cent.

Kilograms

sold

116 350

69 557
60 501
47 450

19 599
55 037

Ounces

sold

000

3 741
2 236

1 945
1 526

630

1 769

Forward price per

kilogram sold

R

63 998
75 800
82 697
91 137

104 375
137 876

Percentage

of positions

priced in US$

53
60
57
57
66
72

1. The audited results prepared in accordance with the appropriation method of accounting are reflected on pages 8

to 23. Those prepared in accordance with International Accounting Standards, which have also been audited,
appear on pages 24 to 39, and are included for illustrative purposes only.

The figures for the year ended December 1997 represent the information as if the group had existed for that year.

2. Attention is drawn to the announcements dated 8 and 24 December 1998 and the circular to members dated

12 January 1999, relating to the acquisition by AngloGold of the gold interests of Minorco for a consideration of
US$550 million A general meeting to obtain shareholders' approval of the transaction is scheduled to be held on

Wednesday, 3 February 1999.

Subject to all conditions precedent being met, the effective date of the transaction will be 1 January 1999.

3. During the quarter 10 200 ordinary shares were allotted in terms of the Share Incentive Scheme, thereby

increasing the number of ordinary shares in issue at 31 December 1998 to 97 853 199.

4. Earnings per share have been calculated using a weighted average number of ordinary shares in issue.

5. Orders placed and outstanding on capital contracts as at 31 December 1998 totalled R355, 8 million, equivalent to

US$ 60. 5 million at the rate of exchange ruling on 31 December 1998.

6. Final dividend No. 85 of 800 cents (for illustrative purposes equivalent to 132 US cents at the rate of exchange

ruling on 1 February 1999) (1997: 875 cents; 180 US cents) per share has been declared as follows:

1999

Declaration date

Last day to register for dividend
(and for changes of addresses or dividend instruction)

Registers closed from

to (inclusive)

Ex-dividend on Johannesburg, London and New York Stock Exchanges

Currency conversion date for sterling payments to shareholders paid from London

Dividend warrants posted

Payment date of dividend

Tuesday, 2 February

Friday, 19 February

Saturday, 20 February

Saturday, 27 February

Monday, 22 February

Monday, 22 February

Thursday, 25 March

Friday, 26 March

By order of the Board

N. F. OPPENHEIMER
Chairman

R. M. GODSELL
Chief Executive Officer

2 February 1999