Anglo American Corp - Re Schemes of Arrangement

RNS No 1996c
ANGLO AMERICAN CORPORATION OF SOUTH AFRICA LIMITED
30th March 1998


ANGLO AMERICAN CORPORATION OF SOUTH AFRICA LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 01/05309/06)
("Anglo American")
ANGLO AMERICAN GOLD INVESTMENT COMPANY LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 05/09084/06)
("Amgold")
DE BEERS CONSOLIDATED MINES LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 11/00007/06)
("De Beers")
(together "the Promoters")

JCI LIMITED
 (Incorporated in the Republic of South Africa, 
Registration number 66/08888/06)
("JCI")

VAAL REEFS EXPLORATION AND MINING COMPANY LIMITED
("Vaal Reefs")
(Incorporated in the Republic of South Africa, 
Registration number 05/17354/06)
(to become Anglogold Limited)

EAST RAND GOLD AND URANIUM COMPANY LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 71/07001/06)
("Ergo")
EASTVAAL GOLD HOLDINGS LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 91/04409/06)
("Eastvaal")
ELANDSRAND GOLD MINING COMPANY LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 74/01477/06)
("Elandsrand")
FREE STATE CONSOLIDATED GOLD MINES LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 05/28210/06)
("Freegold")
HJ JOEL GOLD MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa, 
Registration number 85/01995/06)
("Joel")
SOUTHVAAL HOLDINGS LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 66/11806/06)
("Southvaal")
WESTERN DEEP LEVELS LIMITED 
(Incorporated in the Republic of South Africa, 
Registration number 57/02349/06)
("Western Deeps")
(together "the Participating Companies")



A GOLD COMPANY FOR THE 21st CENTURY

ANGLOGOLD: THE BENEFITS

Operational

The world's biggest gold producer - 6 million recovered ounces per year

A significant in situ reserve base of 134 million ounces, including the
attributable reserves from Driefontein 

A total resource base of 418 million ounces, comprising :

- existing operations - 196 million ounces 
- selected mineral rights - 59,7 million ounces
- extensions to the Vaal Reefs operations - 10,9 million ounces
- extensions to Western Deeps through Western Ultra Deep Levels - 48,8
  million ounces

share interests - 25,9 million ounces
- Sadiola - 2,2 million attributable ounces
- Navachab - 2,3 million attributable ounces
- 21,5 per cent stake in Driefontein - 21,4 million attributable
  resource ounces


other  "blue sky" mineral rights in South Africa, which are considered
uneconomic at the current gold price  - 133,5 million ounces

exploration rights in other African countries, including current reserves of
2,7 million ounces

Both open-pit and deep level mining operations, thereby creating a diversified
operational risk profile

Commitment to developing operations and exploration activity worldwide,
thereby creating a diversified country risk profile

Inclusion of Minorco gold interests under discussion


Financial

For the investor - capital re-investment and dividend flow

Globally competitive cash and total costs

Access to capital based on an ungeared balance sheet



Corporate Governance

A majority of non-executive directors, most of whom will be independent of the
major shareholder

No service agreements with Anglo American

World class operational, managerial, technical, financial and marketing
expertise

On 25 November last year, it was announced that Anglo American was promoting
the formation of Anglogold - a globally active gold mining and exploration
company. 

Vaal Reefs - to be renamed Anglogold Limited ("Anglogold") today, 30 March
1998, - will be the vehicle into which Anglogold and the Participating
Companies will be merged and gold mineral rights, share interests and service
agreements acquired from Anglo American and companies associated with it ("the
Overall Transaction").


FINAL RATIOS

The preliminary exchange ratios published on 26 November 1997 have been
examined by independent financial advisers - Standard Corporate and Merchant
Bank  ("SCMB") on behalf of Elandsrand, Ergo, Freegold and Western Deeps;
FirstCorp Merchant Bank Limited ("FirstCorp") on behalf of Amgold, Eastvaal
and Southvaal; and SBC Warburg Dillon Read on behalf of Anglogold  - in the
light of, inter alia, information provided by the independent technical
adviser, Steffen, Robertson and Kirsten Consulting Engineers (Pty) Limited
("SRK").  

Subsequent to signing the JCI agreement on 12 March 1998 with respect to the
JCI transaction - detailed below (which, upon fulfillment of the conditions
precedent, will result in a change of control of Joel), the Joel board will
appoint an independent financial adviser to advise it as to whether the terms
and conditions of the proposed scheme and the exchange ratio of 1.33 Anglogold
ordinary shares for every 100 Joel ordinary shares are fair and reasonable to
the shareholders of Joel.  An announcement by the Joel board in this regard
will be made in due course.

SCMB, in considering its responsibilities to shareholders of Elandsrand, Ergo,
Freegold and Western Deeps, recommended that the preliminary exchange ratios
for Elandsrand and Western Deeps did not adequately reflect the valuations of
these companies relative to Anglogold, and so the exchange ratios for these
companies have been adjusted accordingly.  Following further discussion, it
was decided that the Eastvaal preliminary exchange ratio should also be
adjusted.

The reasons for the adjustments are detailed below:

Eastvaal

During 1997, shareholders were advised that the structure of the ore body at
No 11 shaft was under review, following the successful completion of a 3D
seismic survey over the lease area. The structural results of this review,
together with the method of accessing the deeper reserves of the shaft, were
presented to investors after the announcement of the financial year-end
results in Johannesburg on 22 January 1998.

The estimation of reserves, revision of the capital estimates and review of
working costs have now been completed.  The ore reserves reflect a 9 per cent
improvement on the reserves published in the 1996 annual report, from 341 to
371 tons of contained gold. While there is a slight decrease in tonnage, there
is a 3,4 grams/ton increase in the in situ grade. However, this contained gold
will take longer to access than was originally anticipated.

The revised layout should reduce capital expenditure by R300 million and allow
for a more efficient hoisting operation, thereby decreasing travelling times
to the working faces.  This improved hoisting efficiency should flow through
as lower unit costs and result, ultimately, in an increase in the project
value.

Elandsrand

When the plan was initially proposed regarding the incorporation of Deelkraal
Gold Mining Company Limited ("Deelkraal") into Elandsrand it was assumed that,
although certain improvements would be achieved immediately, it would take
approximately two years to effect a complete turnaround.  It is now believed
that the time required to effect the turnaround might have been over-estimated
and that the quantum of the synergies which could ultimately be achieved as a
result of the merger may have been under-estimated.  In addition, the
Deelkraal workforce has been reduced by 20 per cent without any effect on gold
production and this has had a noticeable, positive effect on unit costs of
production.  Consequently, it is believed that the Deelkraal turnaround has
already been largely achieved and this should be reflected in the improved
Deelkraal operating results for the quarter ending 31 March 1998.

Western Deeps

After the seismic events in May 1996, production was intentionally slowed at
Western Deeps in order to reconfigure the face-shapes and revise the
life-of-mine plan.  This reconfiguration took some time to achieve and
consequently Western Deeps' operating results, with the exception of the
second six months of 1997 (which were not available to the market at the time
of the initial announcement of the ratios), have been somewhat depressed. 
Production is now back on schedule and Western Deeps is currently
outperforming its target.  It is believed that these factors could have led to
the market undervaluing Western Deeps relative to Anglogold.

The preliminary exchange ratios for Ergo, Freegold, Joel and Southvaal have
not been adjusted.


The final exchange ratios, therefore, are as follows:


                           Preliminary       Final exchange  Based on
                           exchange ratios*  ratios          final
                                                             exchange
                                                             ratios

Company                    Number of         Number of       Expected  
                           Anglogold         Anglogold       Number
                           ordinary shares   ordinary shares of 
                           per 100 shares    per 100 shares  Anglogold
                           held                              ordinary
                                                             shares to
                                                             be issued
                                                           (millions)**

Eastvaal                       2,13             2,30         7,2
Elandsrand                     6,56             8,50         9,7
Ergo                           2,80             2,80         1,4
Freegold                      11,59            11,59        13,2
Joel                           1,33             1,33         4,8
Southvaal                     40,08            40,08         7,5
Western Deeps                 47,35            53,00        14,7

Total                                                       58,5

*       Preliminary exchange ratios were, as indicated in the announcement
published on 26 November 1997, determined on the basis of the simple average
of the closing prices on the Johannesburg Stock Exchange ("JSE") for the 30
trading days up to and including 21 November 1997

**       Total number of shares has been calculated as if all the
sub-transactions constituting the Overall Transaction were successful

Following the adjustments to the exchange ratios, SCMB is of the opinion that
the terms and conditions of the schemes are fair and reasonable to the
shareholders of Elandsrand, Ergo, Freegold and Western Deeps; FirstCorp is of
the opinion that the terms and conditions of the schemes are fair and
reasonable to the shareholders of Eastvaal and Southvaal, and is of the
opinion that the schemes, insofar as they relate to Amgold, are fair and
reasonable.  SBC Warburg Dillon Read is of the opinion that the Overall
Transaction, which includes the Joel exchange ratio, is fair and reasonable to
the shareholders of Anglogold.  In forming these opinions, the independent
financial advisers considered a variety of valuation methodologies including
discounted cash flow valuations of Anglogold and the Participating Companies;
industry valuation benchmarks; historical share prices and volumes of shares
traded; the value of the gold mineral rights, service agreements and share
interests acquired by Anglogold as part of the Overall Transaction, and
current economic, regulatory, market and other conditions.  As mentioned
above, the Joel board will publish an announcement on the Joel exchange ratio
in due course.


MECHANICS OF THE OVERALL TRANSACTION

The Overall Transaction comprises:

the schemes of arrangement;
 
the alternative offers;

the acquisition of the gold mineral rights;

the acquisition of the share interests; and

the cession and assignment of the service agreements.

The implementation of the Overall Transaction is subject to the fulfillment of
the conditions precedent outlined below.

Where Anglogold ordinary shares are to be issued in terms of the Overall
Transaction, such shares have been valued at a price of 19 500 cents per
share, being the closing price of an Anglogold ordinary share on the JSE on 31
December 1997, the day before the proposed effective date of the Overall
Transaction.

THE SCHEMES OF ARRANGEMENT

Anglogold will propose schemes of arrangement ("schemes") in terms of Section
311 of the South African Companies Act, No. 61 of 1973 (as amended) ("the
Companies Act") between the Participating Companies and their respective
shareholders in terms of which the Participating Companies will, on
implementation of the schemes, become wholly owned subsidiaries of Anglogold. 
Shareholders of the Participating Companies will receive Anglogold ordinary
shares in accordance with the final exchange ratios set out above.
 

THE ALTERNATIVE OFFERS

In view of the possibility of a scheme not proceeding for any reason, an offer
referred to as the alternative offer, will be made to the shareholders of the
relevant Participating Company, other than Joel (Note:  the alternative offers
will not be made in any area of jurisdiction where it is illegal to make such
offers without complying with the formalities required by such jurisdiction
and with which the offers do not comply).  An alternative offer in relation to
Joel will only be made if the acquisition of JCI's share interest in Joel by
Anglo American and companies associated with it becomes unconditional.  Anglo
American and companies associated with it have undertaken to accept each such
offer that becomes effective.

If the relevant scheme does not proceed and, as a result, an alternative offer
becomes effective, accepting shareholders will receive the same number of
Anglogold shares as they would have received under the relevant scheme.  The
alternative offer will become effective from the date of notification in the
press and remain open for a period of not less than 21 days, which period,
with the consent of the Securities Regulation Panel ("the SRP"),  Anglogold
may extend from time to time.

In the event of an acceptance in respect of 90 per cent of the shares held by
the offerees in terms of Section 440K of the Companies Act, the compulsory
purchase provisions of that section will be applied by Anglogold in respect of
the relevant Participating Company.

GOLD MINERAL RIGHTS

Anglogold will acquire from the Promoters those mineral rights in South Africa
which relate principally to gold, at a value determined by SCMB.  

Anglogold will purchase selected mineral rights in South Africa outright as
they are either contiguous to its enlarged operations or are regarded as
highly prospective.  They will be acquired for the agreed value of R165
million through the issue of 846 154 Anglogold ordinary shares.

The remaining gold mineral rights in South Africa, approximating an area of    
2 000 km2, are to be acquired by Anglogold for:

an upfront payment of R1,96 million satisfied by the issue of 10 051 Anglogold
ordinary shares; 

a royalty of 20 per cent of pre-tax profits, or a 15 per cent equity
participation in the project for no further consideration, at the discretion
of the relevant vendors, should these mineral rights be exploited; and

a share of the profits to the vendors should these mineral rights be disposed
of by Anglogold.  This profit share would be 95 per cent in the first year,
reducing by 5 per cent per annum to 75 per cent in the fifth year and
thereafter.

The mineral rights to be acquired by Anglogold in Africa but outside South
Africa have been valued by SCMB and include the following:

assets in Tanzania valued at R382,5 million, which comprise joint ventures on
44 gold prospecting licences in Tanzania with local and international
companies, together with 12 licences held in the name of the Tanzanian
companies.  Current prospecting indicates that the defined resources could
increase considerably.  This is to be settled by the issue of 1 961 744
Anglogold ordinary shares; and 

permits in Senegal and other African countries, for which the consideration
has been determined as follows:

an upfront payment of R19,5 million to be settled by the issue of 99 897
Anglogold ordinary shares; 

a 20 per cent share of the after tax profits if the area is exploited, which
is convertible into a 20 per cent equity participation for no further
consideration at the vendors' discretion; and

a 20 per cent share of the after tax profit to the vendors on the sale of the
properties, if the profit share has not been converted into equity.

SCMB is of the opinion that the values of the gold mineral rights as outlined
above are fair and reasonable in the context of the Overall Transaction.

SERVICE AGREEMENTS

Anglo American's service agreements with the companies which will form part of
Anglogold will be ceded and assigned to Anglogold.  The valuation of the
service agreements between Anglo American and Anglogold, the Participating
Companies and certain unlisted companies was determined by SBC Warburg Dillon
Read, the independent financial adviser to Anglogold.  The consideration of
R666,4 million in respect of these service agreements, which also includes
R3,6 million in respect of the service agreement between Anglo American and
Erongo Mining and Exploration Company Limited, as valued by SCMB, will be
satisfied by the issue of 3 417 436 Anglogold ordinary shares.  The
consideration for the cession and assignment of the service agreement  between
Anglo American and Anglogold will only be settled in shares with the consent
of Anglogold shareholders, failing which the consideration will be paid in
cash plus interest.  Furthermore, as part of the transaction with JCI,
Anglogold will acquire the service agreement between JCI and Joel for R50
million in cash and will pay R12,5 million in cash as a reimbursement for
JCI's costs of re-organisation and restructuring.



DRIEFONTEIN

Anglogold will acquire the 18,7 per cent interest in Driefontein Consolidated
Limited's ("Driefontein") shares held by Anglo American, Amgold and De Beers
for a consideration to be settled by the issue of 5 553 595 Anglogold ordinary
shares, in the ratio of 14,59 Anglogold ordinary shares for every 100
Driefontein shares held.  SCMB, the independent merchant bank, has determined
that this exchange ratio is fair and reasonable.  In addition, Anglogold will
acquire a 0,4 per cent indirect interest in Driefontein through its
acquisition of 89,4 per cent of Western Ultra Deep Levels Limited from Anglo
American and companies associated with it.  The direct and indirect share
interest acquired of 19,1 per cent of Driefontein, when aggregated with the
interest currently held by Anglogold, will result in Anglogold holding an
interest of 21,5 per cent in Driefontein.


UNLISTED SHARE INTERESTS

Unlisted share interests will be acquired by Anglogold at values determined by
SCMB, as set out below:

                                                  Value    Total number 
                                                  Rand     of Anglogold
                                                  millions ordinary
                                                           shares to
                                                           be issued
100% of Anmercosa Mining (West Africa) Limited 
which holds a 38 per cent interest in La Societe 
d'Exploitation des Mines d'Or de Sadiola SA ("SEMOS") 
(the company that was established in 1994 to 
exploit the Sadiola Hill and other gold deposits 
in the SEMOS Exploitation Area situated in western 
Mali) and a 50% interest in Sadiola Exploration 
Limited (the company that effects gold exploration 
outside the SEMOS Exploitation Area, but within 
the Sadiola region).                                875,3   4 488 891


100% of Erongo Mining and Exploration Company 
Limited  ("Erongo"), which holds a 70% joint 
venture interest in the Navachab Venture 
situated in Namibia.                                 71,4     366 154

51,7% of Eastern Gold Holdings Limited, which 
has an entitlement to royalties from the profit 
generated from the Freegold 3 mine.                  71,8     368 172

89,4% of Western Ultra Deep Levels Limited, 
which holds mineral rights approximating 49km2
in the Carletonville area, south of the current 
West Wits line, and interests in Elandsrand, 
Western Deeps and Driefontein.                      442,5   2 269 335

Other share interests                                 5,7      29 487

Total                                             1 466,7   7 522 039

In addition to the above, Anglogold will acquire:

                                                      Value US dollar
                                                             millions

100% of Anmercosa Services Mali SA which provides 
services to SEMOS                                                12,3

Subordinated loan to SEMOS                                      105,8

Other loans                                                       3,9

Total                                                           122,0


which will be discharged in the form of an equivalent US Dollar denominated
interest bearing loan account against Anglogold.

SCMB is of the opinion that the values of the share interests detailed above
are fair and reasonable in the context of the Overall Transaction.


MINORCO'S GOLD INTERESTS

It was announced on 25 November 1997 that Anglogold was to approach Minorco to
explore the possibility of a combination with Minorco's gold interests located
in North and South America, the Far East and Australasia. Discussions are now
in progress with Minorco in order to develop such a transaction which would
significantly enhance Anglogold's global production and exploration portfolio.

THE JCI TRANSACTION

The agreement in principle with JCI, published on 26 November 1997, has been
amended as was published on 13 March 1998.  In terms of the revised
transaction ("the JCI transaction"), subject to conditions precedent outlined
below, JCI will exchange its:

60 per cent interest in Joel; and

its 3,0 per cent interest in Anglo American Platinum Corporation Limited

for a 21 per cent interest in Lonrho plc ("Lonrho") held by Anglo American and
De Beers.  Anglogold will acquire the JCI service agreement with Joel for R50
million in cash and will pay R12,5 million in cash as a reimbursement for
JCI's costs of re-organisation and restructuring.  The difference in the value
of the assets exchanged will be settled by a cash payment of R219 million from
JCI to Anglo American and De Beers.

Anglo American and De Beers will then inject the Joel shares acquired from
JCI, together with their and Amgold's existing shareholding in Joel, into
Anglogold for Anglogold ordinary shares ("the Joel sub-transaction").

FUTURE RELATIONSHIP BETWEEN ANGLO AMERICAN AND ANGLOGOLD

Anglogold will be the vehicle through which Anglo American will invest in
future exploration and in mining of gold worldwide.  On completion of the
Overall Transaction, Anglo American and its subsidiaries will be Anglogold's
largest shareholders with an equity interest of just over 50 per cent. 
Anglogold will be independently managed.  This will be characterised by:

a fully dedicated and entirely independent management, including its Chief
Executive Officer, Bobby Godsell.  The management will be remunerated by
Anglogold and incentivised by an Anglogold share incentive scheme;

a reconstituted board which will comprise not more than 17 members, three of
whom will be executive directors with the balance being non-executive
directors.  Of the non-executive directors, five will be Anglo American
nominees;

the managerial and financial capability and resources to carry out all aspects
of its ongoing business activities;

where appropriate, the purchase of selected specialised services from Anglo
American on normal commercial terms.  Any such contract will be subject to the
approval of a board committee consisting exclusively of directors independent
of Anglo American; and
 
no management or other contracts in terms of which any turnover or profit
related fees are payable to Anglo American.  Existing contracts of this nature
will be ceded and assigned to Anglogold.


CONDITIONS PRECEDENT

Implementation of the Overall Transaction is subject to, inter alia, the
following conditions precedent:

the passing by Anglogold shareholders, in accordance with the requirements of
the Companies Act and the Listings Requirements of the JSE, at a general
meeting of Anglogold shareholders, of all resolutions necessary to approve and
implement the Overall Transaction; and

the passing by Amgold shareholders, in accordance with the requirements of the
Companies Act and the Listings Requirements of the JSE, at a general meeting
of Amgold shareholders, of all resolutions necessary to approve and implement
the Overall Transaction.  This condition can be waived at the instance of the
Anglogold directors.

Each of the schemes of arrangement proposed by Anglogold between the relevant
Participating Companies and their shareholders shall be subject to, inter
alia, the following conditions precedent:

the fulfilment of each of the conditions precedent in respect of the Overall
Transaction set out above;

the relevant scheme having been agreed by a majority representing three
quarters (75 per cent) of the votes exercised by shareholders of the relevant
Participating Company present and voting, either in person or by proxy, at a
meeting of those shareholders convened in terms of Section 311 of the
Companies Act;

the Court sanctioning the relevant scheme; and

the Order of the Court sanctioning the relevant scheme being  registered by
the Registrar of Companies.

The Joel sub-transaction shall be subject to the following conditions
precedent:

the approval by the JCI shareholders in general meeting of the JCI
transaction; and

the approval by the Lonrho shareholders in general meeting of the eventual
acquisition of a 21 per cent interest in Lonrho for cash.

The acquisition of the share interests shall be subject to, inter alia, the
necessary approvals of shareholders not disposing of their interest in the
relevant company, and in the case of SEMOS, these shareholders and the senior
lenders.

FINANCIAL EFFECTS OF THE OVERALL TRANSACTION 

The financial effects set out below are based on historical financial
statements prepared on the appropriation method of accounting for wasting
assets in accordance with generally accepted accounting practice in the South
African gold mining industry.  It should be noted that the earnings per
ordinary share set out below are historical and do not purport to represent
future profits.  It should also be noted that because of, inter alia, the
wasting nature of mining assets, the net asset value figures set out below do
not necessarily represent realisable values for the assets.
The transaction includes not only current profit generating operations but
also the following assets that will generate distributable earnings in the
future:

Eastvaal - due to pay its first dividend in 2002;
service agreements  -  an ongoing cost reduction; and
mineral rights which are contiguous to existing mining areas and which could
form part of future mining plans.

The effect of the above is to dilute earnings in the short term and to
increase them in the longer term.  In addition, because the ratios have been
based on life-of-mine valuations, and earnings are not evenly distributed over
this period, the effect of the merger varies from company to company. 
Specifically, in the case of Ergo, the effect of the Overall Transaction is to
extend the period in which dividends are received by Ergo shareholders from
six years to in excess of 20 years. In the case of Joel no appropriation for
capital expenditure was made in 1997 and therefore the figures are not
directly comparable.

The financial effects have been calculated at 31 December 1997 (in the case of
Joel, the 30 June 1997 audited financial statements have been used) as if the
transaction had been implemented on 1 January 1997 and are purely an
aggregation of earnings and net assets without taking into account any
operational synergies.

The tables below set out the financial effects of the Overall Transaction on
the earnings and net asset value calculated on the appropriation basis
attributable to:

(Note: Where Anglogold shares are referred to these are ordinary shares in
Anglogold)


Anglogold shareholders

                          Before Overall       After Overall
                          Transaction          Transaction
                          per 100 shares       per 100 shares
                           (Rand)                 (Note 1)
                                                   (Rand) 

Earnings                     1 642,9               1 549,6 
Net asset value             29 237,0              23 044,8
 

Eastvaal shareholders
                          Before Overall       After Overall
                          Transaction Per      Transaction Per 2,30
                          100 Eastvaal shares  Anglogold shares
                              (Rand)            (Note 1)
                                                 (Rand) 
 
Earnings                        16,5                 35,6 
Net asset value                202,0                530,0 


Elandsrand shareholders

                            Before Overall      After Overall
                            Transaction         Transaction
                            Per 100               Per 8,50
                            Elandsrand shares   Anglogold shares
                                (Rand)            (Note 1)
                                                   (Rand) 

Earnings                        114,1               131,7
Net asset value               2 022,0             1 958,8 


Ergo shareholders                               After Overall
                           Before Overall        Transaction
                           Transaction Per 100     Per 2,80
                           Ergo shares           Anglogold shares
                            (Rand)                 (Note 1)
                                                    (Rand)
 
Earnings                        129,0                 43,4 
Net asset value               1 843,0                645,3 


Freegold shareholders                              After Overall
                       Before Overall              Transaction
                       Transaction Per 100          Per 11,59
                       Freegold shares            Anglogold shares
                          (Rand)                    (Note 1)
                                                     (Rand)
 
Earnings                        179,2                 179,6 
Net asset value               5 530,0               2 670,9 


Joel shareholders                                  After Overall
                                Before Overall     Transaction
                                                   Per 1,33 
                               Transaction Per     Anglogold shares 
                                100 Joel shares     (Note 1)              
                                 (Rand)              (Rand) 

Earnings                           47,0                 20,6 
Net asset value                   349,0                306,5 


Southvaal shareholders
                             Before Overall      After Overall
                              Transaction        Transaction
                             Per 100 Southvaal     Per 40,08
                                shares           Anglogold shares
                               (Rand)              (Note 1)
                                                    (Rand)
 
Earnings                          919,6                621,1 
Net asset value                  14,0 9                236,4 


Western Deeps shareholders
                                Before Overall     After Overall
                                 Transaction        Transaction
                            Per 100 Western Deeps     Per 53,00
                                   shares          Anglogold shares
                                  (Rand)             (Note 1)
                                                      (Rand)
 
Earnings                           776,5                821,3 
Net asset value                 13 590,0            12 213 ,8 

Note 1:       Based on the assumption that all the sub-transactions
constituting the Overall Transaction are successfully implemented.



OPINIONS AND RECOMMENDATIONS

SRK is of the opinion that the technical data, as outlined in its independent
technical adviser's report which it has prepared on Anglogold, each of the
Participating Companies and certain other companies, is valid and accurate and
has advised the boards of the Participating Companies and Anglogold
accordingly.  The aforesaid independent technical adviser's report has been
used as the basis for valuations performed by SCMB and the analyses performed
and opinions provided by SBC Warburg Dillon Read, FirstCorp and SCMB.

SCMB is of the opinion that the schemes are fair and reasonable to the
shareholders of Elandsrand, Ergo, Freegold and Western Deeps and has advised
the respective boards accordingly.

SCMB has determined the value of the gold mineral rights and the share
interests and the Erongo service agreement, and has advised the boards of
directors of the Participating Companies and Anglogold, Amgold, De Beers and
De Beers Centenary AG of the values, bases and methods of valuation of each of
these assets.  SCMB is of the opinion that the values of the gold mineral
rights and the share interests, including the exchange ratios as proposed in
respect of Driefontein  and the value of the Erongo service agreement, are
fair and reasonable in the context of the Overall Transaction and has advised
the boards of the Participating Companies, Anglogold, Amgold, De Beers and De
Beers Centenary AG accordingly.

FirstCorp is of the opinion that the schemes are fair and reasonable to the
shareholders of Eastvaal and Southvaal and has advised the respective boards
accordingly.

FirstCorp is of the opinion that the schemes so far as they relate to Amgold
are fair and reasonable to Amgold shareholders and has advised the board of
Amgold accordingly.

SBC Warburg Dillon Read has determined the value of the service agreements
held by Anglo American, excluding the Erongo service agreement, and is of the
opinion that the Overall Transaction is fair and reasonable to Anglogold
shareholders and has advised the board of Anglogold accordingly.

RELATED PARTIES

In terms of the Listings Requirements of the JSE, the disposal of gold
interests by Amgold to Anglogold is regarded as a related party transaction. 
Therefore, at the Amgold shareholders' meeting to approve the Overall
Transaction, the resolution is subject to a simple majority of shareholders
other than Anglogold (the related party) and its associates (which term is
deemed to include Anglo American and its subsidiaries) being in favour.

The Overall Transaction is regarded as a related party transaction in respect
of the acquisition by Anglogold of assets from Anglo American.  Therefore, at
the Anglogold shareholders' meeting, the resolution to approve or give effect
to the Overall Transaction will be subject to a simple majority of the votes
of shareholders other than Anglo American (the related party) and its
associates (as defined by the JSE Listings Requirements).

DELISTING OF THE PARTICIPATING COMPANIES

Pursuant to the implementation of the Overall Transaction (and assuming that
each scheme becomes effective), the Participating Companies will become wholly
owned subsidiaries of Anglogold.  Accordingly, applications will be made to
the JSE and other relevant stock exchanges for the termination of the listings
of the shares of the Participating Companies upon implementation of the
schemes.

LISTING OF ANGLOGOLD

Application will be made to the JSE for a listing of Anglogold shares to be
issued as a consequence of the Overall Transaction.  
Application will be made for the listing of the new Anglogold shares to be
issued on the London Stock Exchange and the Paris Stock Exchange.

DOCUMENTATION

Subject to the approval of the JSE, the Securities Regulation Panel, the High
Court of South Africa and other regulatory bodies, circulars containing full
details of the Overall Transaction and the notices convening the meetings of
shareholders of the Participating Companies, Amgold and Anglogold will be
posted to the respective shareholders concerned in due course.

Johannesburg
26 March 1998



Independent financial adviser to Anglogold
SBC Warburg Dillon Read

Independent financial adviser to Elandsrand, Ergo, Freegold and Western Deeps
and the independent merchant bank to the Overall Transaction
Standard Corporate and Merchant Bank

Independent financial adviser to Amgold, Eastvaal and Southvaal
FirstCorp

Legal advisers
Webber Wentzel Bowens
Maponya Inc.

Joint sponsoring brokers in South Africa
SBC Warburg Dillon Read
Smith Borkum Hare

Sponsoring broker in the United Kingdom
SBC Warburg Dillon Read

Independent technical adviser
Steffen Robertson and Kirsten Consulting Engineers (Proprietary) Limited




To be inserted in the announcement in the Financial Times in London only

This announcement has been approved solely for the purposes of section 57 of
the Financial Services Act 1986 by SBC Warburg Dillon Read.  SBC Warburg
Dillon Read is a division of Swiss Bank Corporation, is regulated in the
United Kingdom by the Securities and Futures Authority Limited and is acting
for Anglogold in relation to the Overall Transaction and no one else and will
not be responsible to anyone else for providing protections afforded to
customers of SBC Warburg Dillon Read or for providing advice in relation to
the Overall Transaction.


END

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