Anglogold LTD - Acquisition from Minorco

RNS No 5252N
ANGLOGOLD LIMITED
29th December 1998


AngloGold Limited
(Incorporated in the Republic of South Africa) 
(Registration number 05/17354/06)
("AngloGold")

The acquisition by AngloGold of the gold interests of Minorco

Introduction

Further to the cautionary announcement of 7 December 1998, members of
AngloGold are advised that AngloGold will, subject to the conditions precedent
set out below, acquire the gold interests of Minorco with effect from 31
December 1998 ("the acquisition"). The purchase price is US$550 million, which
is subject to adjustment as set out below.

Rationale for the acquisition

AngloGold has a clearly defined strategy for global diversification.The
acquisition will diversify both the AngloGold asset base and its mining risk
profile. Instead of AngloGold's operations being confined to three countries
in Africa, they will now be located in six countries on three continents.
The mining assets to be acquired meet AngloGold's acquisition criteria:

* a low cash cost profile (below US$200 per ounce);

* the potential to expand, while adding around some 800 000 ounces of gold to
  the current gold production profile; and

* remaining life of more than five years.

On the technical front, the acquisition gives AngloGold increased exposure to
open pit and shallow underground mining. AngloGold's strength lies in
underground mining and exploration and geological modelling which, together
with its purely gold focus, will enable the company to add value to the assets
acquired.

This additional value should be generated partially by funding and managing a
focused exploration programme. This should result in a complete geological
model to identify new resources and to enable the optimal extraction of
existing orebodies. The addition of a managed hedging and market development
programme provides further opportunity to add value to the assets.
Nature of the gold interests of Minorco

Minorco's gold interests comprise mines in North and South America and gold
exploration and interests,including:

* The wholly-owned Independence Mining Company incorporating; 

* Pikes Peak Mining Company, which owns 66,7% of the Cripple Creek and Victor
  Mine, in the Cripple Creek mining district, south west of Colorado Springs,
  Colorado, USA.

* 70% Jerritt Canyon Joint Venture, north west of the town of Elko, Nevada,
  USA.

* 50% of Serra Grande, near the town of Crixas, Brazil.

* 100% of Morro Velho near the city of Belo Horizonte, Brazil.

* 46,25% of Cerro Vanguardia, in Patagonia in the south of Argentina.

Consideration

The purchase price for the acquisition is US$550 million, equivalent to R3 259
million (using the noon buying rate as quoted by the Federal Reserve Bank of
New York on 23 December 1998 of US$1=R5.9250). This price will be adjusted by
any third party debt attributable to Minorco's holding in these interests, by
the value of net current assets, both as at 31 December 1998, and to the
extent that any pre-emption rights held by the joint venture partners in Cerro
Vanguardia are exercised

It is expected that the purchase price reduction could be of the order of
US$50 million.

The consideration will be funded by a syndicated bank loan totalling US$350
million and cash from the company's resources.

Financial effects

The financial effects of the acquisition on the earnings per ordinary share of
AngloGold for the year ended 31 December 1997 and the net asset value per
ordinary share of AngloGold as at 31 December 1997, based on the assumptions
that the acquisition had been effective from 1 January 1997, are as set out in
the table below.

The figures in this table are based on the consolidated pro forma income
statement and balance sheet prepared in line with International Accounting
Standards for the circular to members of AngloGold dated 6 May 1998. These
figures are for the enlarged AngloGold and using the enlarged capital (97 587
266 ordinary shares in issue). This circular, a copy of which will be made
available for inspection, provides the best information available for these
purposes.
                    Before              After          Percentage
            the acquisition   the acquisition  increase/(decrease)
Earnings per 
share*                 US$2.00           US$1.90              (5%)
Net asset 
value per 
share                 US$30.28          US$33.22              10%

   *Cripple Creak only reached full production in 1997.
   *Excludes Cerro Vanguardia which came into production in 1998.

Related party

In terms of the Listings Requirements of the Johannesburg Stock Exchange
("JSE"), the acquisition is a "related party" transaction and Anglo American
Corporation of South Africa Limited ("AAC") is the related party concerned.
The consequence of this is that AAC may not be taken into account in
determining the quorum for the purposes of the ordinary resolution which will
be proposed at the general meeting to approve the acquisition. In addition, to
be effective, the ordinary resolution will have to be passed by a simple
majority of the members, other than AAC and its associates, present in person
or by proxy and voting at the general meeting.

Conditions precedent

The acquisition is conditional, inter alia, on the following conditions
precedent:

(a) the prior approval of the acquisition by ordinary resolution of AngloGold
members; and

(b) regulatory approvals, including that of the South African Reserve Bank.
Documentation

An independent technical advisor's report on the assets being acquired from
Minorco, is being prepared by Steffen Robertson and Kirsten (United States)
Inc. A circular, containing the above technical advisor's report and which is
subject to the approval of the JSE, giving details of the acquisition and
containing a notice of a general meeting of AngloGold members, is being
prepared and will be posted on or about 31 December 1998. 

Johannesburg
24 December 1998

Financial advisor
Goldman Sachs
Financial advisor and sponsoring broker
Merrill Lynch
Smith Borkum Hare
Merrill Lynch South Africa (Pty) Ltd
Registration Number 95/01805/07
Member of the Johannesburg Stock Exchange
Legal Advisors
Deneys Reitz Attorneys
Shearman & Sterling

END

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