| Tue 10 Feb 2004, 8:47 | | MINERAL RESOURCES AND ORE RESERVES AS AT 31 DECEMB |
|
ANGLOGOLD LIMITED - MINERAL RESOURCES AND ORE RESERVES AS AT 31 DECEMBER 2003
ANGLOGOLD LIMITED
(Registration number 1944/017354/06)
(Incorporated in the Republic of South Africa)
ISIN : ZAE000043485
JSE Share Code : ANG
NYSE Ticker: AU
("AngloGold")
MINERAL RESOURCES AND ORE RESERVES AS AT 31 DECEMBER 2003
Summary And Discussion
At the time of its formation, AngloGold"s reserve base was associated almost
entirely with deep-level mining operations in South Africa. Although the
company currently has a number of South African organic growth projects in
development, these deep-level orebodies are finite assets, whose limits, up to a
maximum depth within the bounds of current technology and practice, have largely
been defined. There are limited prospects therefore for growing the South
African reserve base. Consequently, AngloGold has, since its inception, set
about seeking to expand its asset and reserve base by acquiring companies and
exploring for orebodies that will host long-life, high-margin operations. The
soon-to-be-completed merger with Ashanti Goldfields, which will increase
AngloGold"s Ore Reserves by some 30%, primarily in the form of the long-life,
high-margin operations of Obuasi and Geita, is an example of the success of this
strategy.
The AngloGold Ore Reserve and Mineral Resource statement as at the end of 2003
illustrates the continuation of this pattern:
Brownfields exploration generated 3.4Moz of Mineral Resource at a discovery cost
of US$7.79/oz. A further 1.3Moz was added to the Mineral Resource with the
inclusion of Moab Extension, situated to the south of Kopanang.
The conversion of Mineral Resources to Ore Reserves added an additional 1.8Moz
of Ore Reserve at a cost of US$5.2/oz, with a further 0.8Moz added with the
inclusion of Moab Extension.
The total Mineral Resource decreased by 74.9Moz from 287.6Moz in 2002 to
212.7Moz in 2003. This was primarily due to a revision of the mining depth limit
at Western Ultra Deep Levels (WUDLS) from 5km to 4.5km below datum and an
increase in the Mineral Resource cut-off grade from 600cmg/t to 750cmg/t,
resulting in a net loss of 64.8Moz. In addition to this change at WUDLS,
depletion as a result of mining of Mineral Resources during 2003 reduced the
total Mineral Resource by 6.6Moz.
The total Ore Reserve decreased by 9.2Moz from 72.3Moz in 2002 to 63.1Moz in
2003. The key features of thus reduction were:
* depletion of 6.3Moz;
* a reduction of the planned life of mine at Savuka (leading to a reduction
of 2.2Moz in the Ore Reserve);
* a decision to remove the Carbon Leader Reef below the 120 level from the
current mine plan at Mponeng (leading to a reduction of 1.7Moz inclusive of
some Ventersdorp Contact Reef due to a reduction in life); and
* the assumption of a lower mine call factor and an update to the geological
model at Great Noligwa resulting in lower gold values (leading to a
reduction of 0.5Moz in the reserve).
These decreases were offset by certain increases in the Ore Reserve, principally
at Sunrise Dam, where new modelling techniques, additional drilling and new
underground design resulted in an increase of 1Moz in Ore Reserves
Details of the reconciliation between the 2002 and 2003 Ore Reserve Statements
are provided in the body of the report.
Detailed Report
Introduction
The table below sets out AngloGold"s Proved and Probable Ore Reserves as at
31 December 2003. All information on Proved and Probable Ore Reserves refers to
AngloGold"s attributable interest. Ore Reserves are reported in accordance with
the Australasian Code for Reporting of Mineral Resources and Ore Reserves (the
JORC Code), together with the South African Code for the Reporting of Mineral
Resources and Mineral Reserves (the SAMREC Code), for the South African
operations, as well as the requirements of the United States Securities and
Exchange Commission"s Industry Guide 7. Accordingly, as of the date of
reporting, all Ore Reserves are planned to be mined out under the life of mine
plans within the period of AngloGold"s existing rights to mine, or within the
time period of assured renewal periods of AngloGold"s rights to mine. In
addition, as of the date of reporting, with the exception of Geita Ridge 8 and
Moab Extension where the required permits and government approvals are
anticipated following the required submissions having been made, all Ore
Reserves are covered by the required permits and government approvals.
Assumptions
In respect of AngloGold"s South African assets, Ore Reserves were determined
assuming a gold price of US$350/oz and an exchange rate of ZAR7.00 = US$1. This
compares with a gold price of US$325/oz and an exchange rate of ZAR10.50 = US$1
as at 31 December 2002.
In respect of assets in East and West Africa, Ore Reserves were determined
assuming a gold price of US$350/oz.
In respect of assets in South America, Ore Reserves were determined assuming a
gold price of US$350/oz, with the exceptions of Cerro Vanguardia, as well as
certain parts of Morro Velho, namely Engenho D"Agua and Corrego Do Sitio. The
Ore Reserves for Cerro Vanguardia, Engenho D"Agua and Corrego Do Sitio were
determined at US$325/oz.
Ore Reserves for Cripple Creek & Victor in North America were determined
assuming a gold price of US$325/oz.
Ore Reserves at AngloGold"s Australian assets were determined assuming a gold
price of US$234/oz and at an exchange rate of A$1 = US$0.55 for Boddington
(based upon the gold price and exchange rate assumed for the 2000 feasibility
study) and at US$350/oz and an exchange rate of A$1 = US$0.63 for Sunrise Dam.
The Ore Reserve estimates in this document include Ore Reserves below current
infrastructure in the case of certain South African mines. However, these Ore
Reserves have been determined based upon completed feasibility studies.
Ore Reserve Statement
Mine Anticipated Category Tonnes Grade Contained
Life of mine of Ore (millions) g/t gold
(years)(1) Reserves (million oz)
South African operations
WEST WITS
Mponeng(3) 15 Proved 2.8 8.74 0.8
Probable 22.8 9.01 6.6
Total 25.6 8.98 7.4
Savuka 3 Proved 0.4 6.79 0.1
Probable 1.1 6.76 0.3
Total 1.5 6.77 0.3
TauTona(3) 12 Proved 1.6 13.11 0.7
Probable 16.3 11.21 5.9
Total 17.9 11.38 6.5
Western Ultra Proved - - -
Deep Levels(4) Probable - - -
Total - - -
VAAL RIVER
Great Noligwa 9 Proved 4.0 9.46 1.2
Probable 14.9 9.16 4.4
Total 18.8 9.22 5.6
Kopanang 13 Proved 3.4 6.94 0.8
Probable 19.8 7.19 4.6
Total 23.2 7.15 5.3
Moab Khotsong 20 Proved -
(3)(5) Probable 18.8 13.93 8.4
Total 18.9 13.93 8.4
Tau Lekoa 13 Proved 7.4 5.05 1.2
Probable 20.6 3.99 2.6
Total 28.0 4.27 3.8
SURFACE
Ergo 1 Proved 29.4 0.38 0.4
Probable - - -
Total 29.4 0.38 0.4
Vaal River 19 Proved 5.8 0.59 0.1
Surface Probable 153.6 0.56 2.8
Total 159.3 0.56 2.9
West Wits Proved - - -
Surface Probable - - -
Total - - -
EAST AND WEST AFRICAN OPERATIONS
Geita (50%)(6) 16 Proved 14.2 3.30 1.5
Probable 21.1 4.17 2.8
Total 35.3 3.82 4.3
Morila (40%)(6) 9 Proved 4.4 3.55 0.5
Probable 5.9 3.88 0.7
Total 10.3 3.74 1.2
Navachab 10 Proved 1.3 1.38 0.1
Probable 10.1 1.81 0.6
Total 11.4 1.76 0.6
Sadiola(38%)(6) 10 Proved 2.5 1.93 0.2
Probable 7.7 3.53 0.9
Total 10.2 3.14 1.0
Yatela (40%)(6) 5 Proved 0.9 1.12 0.0
Probable 3.4 3.84 0.4
Total 4.3 3.25 0.4
SOUTH AMERICAN OPERATIONS
Cerro Vanguardia 8 Proved 6.7 7.34 1.6
(92.5%)(6) Probable 0.5 10.16 0.2
Total 7.2 7.56 1.8
Morro Velho 15 Proved 2.3 7.84 0.6
Probable 5.2 7.01 1.2
Total 7.5 7.27 1.7
Serra Grande 11 Proved 1.6 6.17 0.3
(50%)(6) Probable 0.6 7.59 0.1
Total 2.3 6.55 0.5
NORTH AMERICAN OPERATIONS
Cripple Creek & 12 Proved 53.9 1.26 2.2
Victor Probable 64.7 0.87 1.8
Total 118.6 1.04 4.0
AUSTRALIAN OPERATIONS
Boddington 20 (from Proved 41.5 0.94 1.3
(33.33%)(6)(7) 2007) Probable 88.4 0.84 2.4
Total 129.9 0.87 3.6
Sunrise Dam 12 Proved 5.4 4.16 0.7
Probable 16.9 4.33 2.3
Total 22.2 4.29 3.1
Tanami (40%) Proved - - -
(6)(8) Probable - - -
Total - - -
TOTAL Proved 189.5 2.31 14.1
Probable 492.4 3.09 49.0
Total 681.9 2.88 63.1
(NB: Rounding of figures may result in computational discrepancies.)
Notes:
1) Anticipated Life of Mine is expressed in years from 2004 (or from the year
of the project"s start-up where this is relevant and indicated as such)
based on AngloGold"s current business plan for each operation. These
business plans include the mining of Ore Reserves and may include the
conversion of Mineral Resources to Ore Reserves. The life of mine is an
estimate used for business planning purposes and is subject to material
change due to future geologic information or economic conditions.
2) Ore Reserves include marginally economic and diluting materials delivered
for treatment and allow for losses that may occur during mining.
3) Probable Ore Reserves include Ore Reserves below current infrastructure,
which have been based upon completed feasibility studies.
4) The southerly down-dip extension of Mponeng, Elandsrand (Harmony Gold
Mining Company Limited) and Driefontein (Gold Fields Limited), with a
mining depth limit of 4.5km below surface.
5) Mine is still in the development stage with stoping only recently having
commenced.
6) Ore Reserves attributable to AngloGold"s percentage interest shown in each
case.
7) The Ore Reserves associated with the Boddington Expansion have been based
on the feasibility study completed in 2000 and assume a gold price of
US$234 per ounce and an exchange rate of A$1 = US$0.55.
8) No Ore Reserves shown as the mine has been permanently closed.
Reconciliation
The Ore Reserves as at 31 December 2003, show a year-on-year decrease of some
9.2Moz from 72.3Moz as at 31 December 2002 to 63.1Moz. The reduction in Ore
Reserves includes a depletion of 6.3Moz (being the ore delivered to
metallurgical plants and the corresponding reduction in the applicable Ore
Reserve)
The principal changes in AngloGold"s Ore Reserves for 31 December 2003 relative
to those as published as at 31 December 2002, for reasons other than depletion,
are as follows:
* an increase of 1.0Moz at Sunrise Dam due to new modelling techniques,
additional drilling and new underground design;
* a decrease of 1.7Moz at the Mponeng mine due to the exclusion of the Carbon
Leader below 120 level project. The curtailment of this project resulted
in a shorter life, which reduced some Ore Reserves in the Ventersdorp
Contact Reef below 120 Level project. The lower rand per kilogram gold
price at end 2003 resulted in the Carbon Leader Reef below 120 Level
project being no longer feasible and it has now been excluded from Ore
Reserves as at 31 December 2003. The project is currently the subject of a
revised feasibility study. A weakening of the rand relative to the US
dollar will also result in these Ore Reserves being included and as a
result of the revised feasibility study possibly being further amended;
* a decrease of 0.5Moz at the Great Noligwa mine due the assumption of a
lower mine call factor and due to updates to the geological model which
resulted in lower gold values;
* a decrease of 0.5Moz at the Moab Khotsong mine due to updates to the
geological model which resulted in lower gold values;
* an increase of 0.9Moz at the TauTona mine partially as a result of the
purchase of an area of Gold Fields Limited"s Driefontein Gold Mine;
* a decrease of 2.2Moz at the Savuka mine due to updates to the geological
model, which resulted in lower gold values, as well as changes in economic
factors which has resulted in a considerable proportion of the Mineral
Resource being considered as no longer feasible to be mined economically;
* an increase of 0.3Moz at Tau Lekoa due to the assumption of a higher mine
call factor, as well as extensions of the Ore Reserve due to exploration in
new mining areas;
* an increase of 0.6Moz of the Vaal River Surface Ore Reserves, due to the
inclusion of the Mizpah plant and the South Tailings facility;
* a decrease of 0.2Moz at Cerro Vanguardia due to changes in the pit designs
resulting from higher waste mining costs and reduced slope angles;
* a decrease of 0.3Moz due to the sale of AngloGold"s interest in the Jerritt
Canyon Joint Venture in North America during 2003; and
* a decrease of 0.7 Moz due to the sale of Amapari in Brazil during May 2003.
Methodology
AngloGold has adopted standard accepted procedures for the estimation of Ore
Reserves.
In the case of its underground mines, the procedure is as follows. Firstly, gold
content and tonnage are estimated for in situ mineralised material at a mining
operation. This mineralised material is not necessarily economically viable.
Exclusions on the grounds of safety (for example, stability pillars, shaft
pillars) are then defined. Grade and tonnage curves specific for each of the
deposits, in conjunction with the cost structure, yield, mine call factor and
Ore Reserves of the operation and gold price estimates are used to determine an
optimal mining mix. This process facilitates the determination of the average
grade to be mined by each operation. This grade is then applied to the grade-
tonnage curves, which in turn facilitates the determination of the cut-off grade
and reserve tonnage for the operation. A full mine design is carried out on the
blocks of mineralised material, excluding large mining areas that do not meet
the cut-off grade criterion. This mining plan is reviewed to ensure that it
satisfies the economic criterion and practical limitations of access and timing.
If the review process is positive then the mineralised material (with dilution)
included in the mining plan is declared and published as the ore reserve for
that operation.
In the case of surface, open-pit mines the procedure is as follows: Revenue and
costs are calculated for each mining block within a three-dimensional model of
the orebody using assumed values for gold price, operating costs, metallurgical
recoveries and slope angles. An optimisation process is then applied to
determine all the blocks combined within the model that make a positive
contribution under these assumptions. Within this process a cut-off grade is
applied which determines the ore blocks to be treated and included in Ore
Reserve. These blocks are scheduled with consideration being given to practical
mining considerations and limitations. Scheduled ore blocks that are classified
as Proved or Probable constitute the Ore Reserve.
Mineral Resources and Ore Reserves are reported in accordance with the
Australasian Code for Reporting of Mineral Resources and Ore Reserves (the JORC
Code) and the South African Code for the Reporting of Mineral Resources and
Mineral Reserves (the SAMREC Code).
Competent Persons
Competent Persons, designated in terms of the JORC and SAMREC Codes and taking
corporate responsibility for the reporting of AngloGold"s Mineral Resources,
are:
V A Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology), MAusIMM, 18
years" experience.
M F O"Brien, M Sc (Engineering), BSc (Hons) (Geology), Pr.Sci.Nat., MAusIMM, 24
years" experience.
Designated competent persons taking corporate responsibility for the reporting
of Ore Reserves are:
B W Guenther, BSc (Mining Engineering), MAusIMM, 23 years" experience.
D L Worrall, ACSM, MAusIMM, 23 years" experience.
J van Zyl Visser, BSc (Mineral Resource Management), PLATO, 17 years"
experience.
The Competent Persons are employed by AngloGold Limited and have consented to
the inclusion of the Mineral Resources and Ore Reserves information in this
document.
Johannesburg
10 February 2004
Queries:
www.anglogold.com
South Africa Tel: Mobile: E-mail:
Steve Lenahan +27 11 637 6248 +27 83 308 2200 slenahan@anglogold.com
Alan Fine +27 11 637 6383 +27 83 250 0757 afine@anglogold.com
Shelagh Blackman +27 11 637 6379 +27 83 308 2471 skblackman@anglogold.com
Europe & Asia
Tomasz Nadrowski +1 917 912 4641 tnadrowski@anglogold.com
USA
Charles Carter (Toll free) 800 417 9255
+1 212 750 7999 cecarter@anglogold.com
Australia
Andrea Maxey +61 8 9425 4604 +61 438 001 393 amaxey@anglogold.com.au
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this announcement are forward-looking within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including without limitation, those
statements concerning (i) timing, fulfillment of conditions, tax treatment and
completion of the Merger, (ii) the value of the transaction consideration, (iii)
expectations regarding production and cost savings at the combined group"s
operations and its operating and financial performance and (iv) synergies and
other benefits anticipated from the Merger. Although AngloGold and Ashanti
believe that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have
been correct.
For a discussion of important terms of the Merger and important factors and
risks involved in the companies" businesses, which could cause the combined
group"s actual operating and financial results to differ materially from such
forward-looking statements, refer to AngloGold"s and Ashanti"s filings with the
US Securities and Exchange Commission (the "SEC"), including AngloGold"s annual
report on Form 20-F for the year ended 31 December 2002, filed with the SEC on
7 April 2003 and Ashanti"s annual report on Form 20-F for the year ended
31 December 2002, filed with the SEC on 17 June 2003 and any other documents in
respect of the Merger that are furnished to the SEC by AngloGold or Ashanti
under cover of Form 6-K.
Neither AngloGold, Ashanti nor the combined group undertakes any obligation to
update publicly or release any revisions to publicly update any forward-looking
statements discussed in this announcement, whether as a result of new
information, future events or otherwise.
ADDITIONAL INFORMATION
In connection with the Merger, AngloGold will file with, or otherwise furnish
to, the SEC a scheme document/prospectus. Investors and security holders are
urged to carefully read the scheme document/prospectus regarding the Merger when
it becomes available, because it will contain important information. Investors
and security holders may obtain a free copy of the scheme document/prospectus
(when it is available) and other documents containing information about
AngloGold and Ashanti, without charge, at the SEC"s website at www.sec.gov.
Copies of the scheme document/prospectus together with any SEC filings that may
be incorporated by reference in the scheme document/prospectus may also be
obtained free of charge by directing a request to:
AngloGold Limited,
11 Diagonal Street, Johannesburg 2001,
PO Box 62117, Marshalltown 2107,
South Africa,
Attention: Chris R. Bull,
Company Secretary,
Telephone +27 11 637 6000,
fax: +27 11 637 6624.
UBS Investment Bank and First Africa Group Holdings (Pty) Limited ("First
Africa") are acting for AngloGold and no one else in connection with the Merger
and will not be responsible to anyone other than AngloGold for providing the
protections afforded to clients of UBS Investment Bank or First Africa or for
providing advice in relation to the Merger.
