GUIDELINES FOR THE REPORTING OF EXPLORATION

RESULTS, MINERAL RESOURCES AND ORE RESERVES

FOR 2006

MINERAL RESOURCE & ORE RESERVE STEERING COMMITTEE

Vaughan Chamberlain
Peter Rowe
14 August 2006
 TABLE OF CONTENTS

1. INTRODUCTION ........................................................................................................................ 4
1.1 MAIN PRINCIPLES ............................................................................................................ 4
1.2 COMPETENCE AND RESPONSIBILITY ........................................................................... 4
1.3 AUDIT AND REVIEW ......................................................................................................... 5
1.4 RISK ANALYSIS ................................................................................................................ 5
1.5 REGULATORY BODIES .................................................................................................... 6
2 MINERAL RESOURCE REPORTING ........................................................................................ 7
2.1 REPORTING PROCEDURES ............................................................................................ 7
2.2 EXPLORATION RESULTS ................................................................................................ 7
2.3 MINERAL RESOURCE REPORTING PRACTICE............................................................. 7
2.4 MINERAL RESOURCE CLASSIFICATION ....................................................................... 9
2.5 MINERAL RESOURCE RECONCILIATION ...................................................................... 9
2.6 THE MINERAL RESOURCE (STATEMENT) REPORT ..................................................... 9
2.7 PRELIMINARY MINERAL RESOURCE REPORTING .................................................... 12
3. ORE RESERVE REPORTING.................................................................................................. 12
3.1 ORE RESERVE REPORTING PROCEDURES ............................................................... 12
3.2 ORE RESERVE REPORTING PRACTICE ...................................................................... 13
3.3 THE ORE RESERVE (STATEMENT) REPORT............................................................... 13
APPENDIX 1: DATES AND RESOURCE & RESERVE PARAMETERS FOR YEAR ENDED 31
DECEMBER 2006 ............................................................................................................................ 16
APPENDIX 2: COMPETENT PERSON DEFINITIONS .................................................................... 17
APPENDIX 3: RECOGNISED OVERSEAS PROFESSIONAL ORGANISATIONS (ROPOs)........ 18
APPENDIX 4: INDEPENDENT INTERNAL REVIEW OF THE METHODOLOGY AND PROCESS
FOR ESTIMATING THE ORE RESERVES FOR SURFACE MINES .............................................. 20
APPENDIX 5: MINERAL RESOURCE STATEMENT OF COMPETENCE AND COMPLIANCE ... 21
APPENDIX 6: NOTES ON MINERAL RESOURCE CLASSIFICATION CALCULATION.............. 22
APPENDIX 7: MINERAL RESOURCE RECONCILIATION PROCESS .......................................... 26
APPENDIX 8: PROCEDURE TO QUANTIFY OUNCES GENERATED BY EXPLORATION ......... 27
APPENDIX 9: APPLICATION OF RESOURCE CUT-OFF GRADES.............................................. 28
APPENDIX 10: COMPETENT PERSONS LETTER OF APPOINTMENT....................................... 30
APPENDIX 11: ORE RESERVE STATEMENTS OF COMPETENCE AND COMPLIANCE .......... 31

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DISTRIBUTION

Mancom
Competent Persons
Mineral Resource and Ore Reserve Steering Committee Members
Manager Mining Geology and Evaluation – CTG, Chairman
Geology Manager – CTG, Secretary
Executive Officer – Corporate Technical Group
Executive Officer – Business Planning (Africa)
Executive Officer – International Technical
Head of Exploration (Greenfields)
Manager Business Planning
Manager Underground Mining – International
Manager New Business
Mineral Resource Manager – South America
Senior Divisional Evaluator
Manager Mineral Resources – Africa Open Pit Region
Manager Mining Geology and Evaluation – CTG
Manager Evaluation - Africa Underground Region
Manager Geology - Africa Underground Region
Manager Planning and Survey - Africa Underground Region
Manager Surface Mining – CTG
Manager Mining – Africa Open Pit Region

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1. INTRODUCTION
This document provides guidelines for the reporting of Exploration Results, Mineral
Resources and Ore Reserves in compliance with internationally accepted codes of practice
adopted by AngloGold Ashanti. The Australian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves, 2004 (the JORC code) has been adopted as
the minimum standard for AngloGold Ashanti; the South African Code for Reporting Mineral
Resources and Ore Reserves March 2000 (the SAMREC code) is essentially the same and
applies to South African reporting. This guideline should be read in conjunction with the
appropriate code of practice. The JORC Code can be viewed and downloaded at
http://www.jorc.org/main.php. The SAMREC Code can be viewed and downloaded at
http://www.saimm.co.za/ .

In accordance with the terms of reference of the Mineral Resource and Ore Reserve
Steering Committee, this document is annually reviewed and updated by the Committee for
distribution to the Competent Persons in the mining and exploration operations.

Significant changes to the guidelines resulting from the annual review and update are shown
in red.

1.1 MAIN PRINCIPLES

The main principles governing the operation and application of the codes are transparency,
materiality and competence permitting a reasonable judgement of the mineralisation to be
made. This requires that sufficient relevant information be clearly and accurately presented
to support the Mineral Resource and Ore Reserve statements.

Transparency requires that the reader of a Public Report is provided with sufficient
information, the presentation of which is clear and unambiguous, to understand the Report
and not be misled.

Materiality requires that a Public Report contains all the relevant information that investors
would reasonably require for the purposes of making a reasonable and balanced judgement
regarding the mineralisation being reported.

Competence requires that the Public Report is based on work which is the responsibility of a
suitably qualified and experienced person who is subject to an enforceable professional
code of ethics (JORC 2004).

1.2 COMPETENCE AND RESPONSIBILITY

It is a requirement of the codes that the Resource/Reserve Statements and supporting
documentation should be prepared by or under the direction of, and signed off by, a
Competent Person or Persons. The definition of Competent Person is given in Appendix 2
for the respective codes and approved professional bodies in Appendix 3.

It is the responsibility of the Regional Offices and their business units to ensure that the
technical teams responsible for the preparation of the Resource/Reserve Statements are
managed by suitably qualified persons in compliance with JORC definitions.

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 As a general guide, persons being called upon to act as Competent Persons should be
clearly satisfied in their own minds that they could face their peers and demonstrate
competence in their respective field of responsibility.

Mineral Resource and Ore Reserve estimation is usually a multi-disciplinary team effort.
The team consists of several persons, each one often eligible to be classified as a
Competent Person in terms of the JORC and/or SAMREC Codes. These persons are
referred to as technical specialists. and as such, where a clear division of responsibilities is
possible, it is recommended that each Competent Person accept responsibility for their
contribution (generally, Exploration Results and then Mineral Resource processes lead in to
but are distinct from Ore Reserve processes). However, there should be one Competent
Person (lead Competent Person) who takes overall responsibility for the Mineral Resource
and one for the Ore Reserve. If exploration results are being reported, then a competent
person with relevant experience in exploration should be responsible for these results. A
compiler (preferably a Competent Person) should be nominated to take responsibility for the
compilation of the Mineral Resource and one for the Ore Reserve Statement. The lead
Competent Person should be the first point of contact for queries relating to the statement.
(A Letter of Appointment is appended as Appendix 10 and is to be used to formalise the
appointment of each Competent Person.)

The Mineral Resource/Ore Reserve Statements are to be signed off at both the business
unit and regional levels.

The process for the transformation from Mineral Resources to Ore Reserves is to be
appropriate and auditable.

1.3 AUDIT AND REVIEW

Each AngloGold Ashanti operation will be subject to an external audit once every three years
(or at an interval determined by the AngloGold Ashanti Mineral Resource and Ore Reserve
Steering Committee). These audits will concentrate on the processes employed for the
estimation of both Mineral Resources and Ore Reserves. The aim of the audits will be to
verify that there are no fatal flaws in the processes employed or the Mineral Resource and
Ore Reserve numbers to be published. The audit will also verify the compliance of the
operation with the JORC and SAMREC codes as well as the compliance with this guideline.

Each AngloGold Ashanti operation will be subject to internal review from both regional and
corporate Competent Persons. These audits will be process audits and will allow the
Competent Persons to sign off on the Mineral Resources or Ore Reserves. It is
recommended that the Mineral Resource reviews are based on the check lists included in
the JORC code. A recommended review process for Ore Reserves is attached
(Appendix 4).

1.4 RISK ANALYSIS

The Mineral Resource and Ore Reserve teams need to address the potential risk to the
operation/project in terms of the risk to the Ore Reserve and thereby to the operation itself. It
is recommended that the analysis occurs as a multidisciplinary workshop. Factors that must
be considered and rated include the following :

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 • Potential water threats
• Geotechnical considerations
• Sampling issues
• Quality control issues
• Assay issues
• Geological modelling issues
• Statistical modelling issues
• Structural complications
• Metallurgical/mineralogical issues
• Estimation technique issues (e.g. kriged or global estimate issues)
• Production risks
• Economic risks
• Legal risks
• Environmental risks
• Country risks

Each identified risk must have an associated risk management (amelioration) program. This
program must describe the process, deadlines and indicative costs.

1.5 REGULATORY BODIES

Differences in requirements between the JORC/SAMREC Codes and the US Security and
Exchange Commission (SEC) require an iterative process for the statement of Ore
Reserves, and may require two different reserve statements for any particular mine. The
SEC does not recognize Mineral Resource, so the following process only applies to the Ore
Reserve component. The following process is to be employed:

• Determine the Reserve to meet JORC/SAMREC requirements, employing the

JORC/SAMREC gold price and exchange rates as defined in the appendices for the
appropriate reporting year.
• Test the JORC/SAMREC reserve for economic viability at the SEC gold price and
exchange rate parameters specified in the appendices.
ƒ if the production plan is still year-by-year cashflow positive, report the
JORC/SAMREC Ore Reserve;
ƒ otherwise, truncate the Ore Reserve for production years which are cashflow
negative, or modify the production profile to defer negative cashflow as long as
possible, then report the modified SEC Ore Reserve.
• Both a lower and upper SEC gold price are provided. This test should be applied at both
prices and these are both to be reported at year end.

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2 MINERAL RESOURCE REPORTING

2.1 REPORTING PROCEDURES

Key dates for reporting Mineral Resources are provided in Appendix 1.

The regional Competent Person must call for a review to be conducted by the Corporate
Mineral Resource personnel. The audit team will consist of persons competent in the
evaluation and geology disciplines.

The individual Mineral Resource Statements from each of the operations will be summarised
in a company Mineral Resource Statement. The Regional Competent Persons will be
required to sign off the final Mineral Resource tables to be published in the Annual Report.

2.2 EXPLORATION RESULTS

All exploration results that could ‘materially’ influence the valuation of the particular operation
(rule of thumb ‘materially’ >10%) should be reported in the individual Mine Mineral Resource
Statements so that they are available for reporting at a corporate level. The materiality
requirement suggests that exceptionally positive (as well as negative) exploration results that
might affect the financial position of the company should be reported. There is also an onus
to report in a balanced fashion, Selective high grade intercepts must be placed in the context
of the overall results (either by complete reporting or a balanced summary of total results).

2.3 MINERAL RESOURCE REPORTING PRACTICE

AngloGold Ashanti interprets the ‘reasonable and realistic prospects for eventual economic
extraction’ definition of Mineral Resource (see JORC and SAMREC) in terms of a specific
Resource Gold Price, with a premium to the price established for the Reserve calculation.
When this elevated Resource Gold Price is applied to the Resource, a scoping study should
demonstrate that at the time of reporting, extraction could be justified on the grounds of a
positive cash flow (IRR>0). Where a Mineral Resource would require new infrastructure to
allow exploitation, then the estimated capital cost of such infrastructure should be included in
the estimation.

It is essential that the content of the Mineral Resource Statement is not regarded as the
responsibility of a single person. It is the culmination of work conducted by the multi-
disciplinary Mineral Resource team and should enjoy the ownership of this team. The Lead
Competent Person, based on the Business Unit, as well as Regional and Corporate
Competent Persons or Recognised Mining Professionals (as defined in Appendix 1) must
sign off the Mineral Resource Statement. These persons must be registered with an
approved or recognised body as detailed in Appendix 2 and a disclosure statement must be
included (Appendix 5).

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Details of the legal entity under which the Mineral Resource is held is required for all project
areas. These details must include the title and identification number of the deed/agreement,
the term of the permission and any restrictions and limitations of the agreement that may
affect the legal tenure or the ability to ultimately mine such areas.

The Mineral Resource Statement must include details of the stockpiles, ‘waste’ rock dumps
and/or tailings material, if appropriate. Rock dumps and other surface sources are to be
quoted as a Mineral Resource only where they are in such form, quality and quantity that
there are reasonable and realistic prospects for eventual economic extraction.

Where dilution factors or discounts, assumed or estimated, have been applied to the Mineral
Resource, then these must be disclosed. This disclosure includes fault discounts and the
bulking up of Mineral Resources to an estimated stope width (mining width) as in the Africa
Underground Region.

Mineral Resources must specify one or more of the categories of ‘Inferred’, ‘Indicated’ or
‘Measured’. Reports must not contain Mineral Resource figures combining two or more of
the categories unless figures for the individual categories are also provided.

A Mineral Resource must not be reported in terms of contained mineral content (e.g.
Ounces) unless the corresponding tonnage and grade figures are also presented.

Pillar material, mineralised remnants and shaft pillars that are potentially mineable, in part or
whole, must be included in the Mineral Resource statement. The potential mineability needs
to be based on the documented opinion of a mining engineer (a “Competent Person” in
respect of this aspect.

Where safety pillars have been planned or are required in areas ahead of current workings
this must be commented on in the Mineral Resource statement. As the exact position and
grade of such planned pillars can not be determined, an estimated percentage of the Mineral
Resource to be contained in pillars must be disclosed but retained in the Mineral Resource
until it has been officially abandoned.

Mineral Resources must be reported separately for areas characterised by unique

circumstances i.e. separate geographic areas/volumes, project areas with distinct identities,
areas below current or approved infrastructure, areas above current or approved
infrastructure, areas contained in pillars and shaft pillar, areas affected by specific
metallurgical problems or permitting problems. The unique characteristics for each area
must be detailed in the report.

Relevant Mineral Resource Plans and/or sections must be prepared and documented for
each operation. These must show the Categorised Mineral Resource with the year-end
faces (or estimates thereof). These plans must show areas of mineralisation and the
resource categorisation of these areas. In the case of a 3D Mineral Resource, a series of
representative sections along with a locality plan will suffice.

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 If any Mineral Resources have not been modified to produce Ore Reserves for economic or
other reasons, these unmodified Mineral Resources must be included in the report and also
separately reported in the Preliminary and Final Mineral Resource and Reserve Statements
and entered into the Mineral Resource and Ore Reserve reporting (Rcubed) system. This is
to assist the reader of the report in making a judgement of the likelihood of the unmodified
Measured and Indicated Mineral Resources eventually being converted to Mineral Reserves
(to comply with Clause 5.5.7, SAMREC Code).

2.4 MINERAL RESOURCE CLASSIFICATION

It is corporate policy that resource classification is to be based on a definitive and auditable
process and is to adhere to the 15% Rule outlined below.

Mineral Resource Classification is to be based on the 15% Rule. A Measured Mineral

Resource should be expected to be within 15% of the metal estimated at least 90% of the
time (three month periods), while for an Indicated Mineral Resource estimate the annual
estimate should be within 15% of the metal estimated at least 90% of the time (yearly
periods). For Inferred Mineral Resource the error may be greater then 15%, 90% of the time
(yearly periods).

The process and methodology are at the discretion of the Competent Person. A suggested
methodology is attached as Appendix 6, but techniques such as conditional simulation or
even an empirical reconciliation-based approach may be employed. However, all operations
are responsible for demonstrating, through reconciliation, that their classification system
conforms to the 15% Rule set out above.

2.5 MINERAL RESOURCE RECONCILIATION

In terms of Mineral Resource Reconciliation it is desirable that a common philosophy and
procedures are applied throughout the company. This should facilitate being able to make
comparisons on an equal and comparative footing. To this end a standardised approach is
attached as Appendix 7. The final application of the approach is the choice of the competent
person, but the effect of exploration is to be quantified by following the procedure in
Appendix 8.

2.6 THE MINERAL RESOURCE (STATEMENT) REPORT

The Mineral Resource Statement for an operation must comply with the following minimum
standard :

• Index (with page numbers)

• Competency statement - signed off by all accountable “Competent Persons”,
stating affiliation and experience for each person. This section will form the release
statement for the competent team and acknowledge their conformance with this
document (Pro forma Competency statement – Appendix 5 )
• Legal Tenure of mine and project areas (Detailed summary of the legal entity under which
exploration and mining can take place. This must include exposure of any potential risks
to the ability to ultimately convert and mine the Mineral Resource)

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• Resource Report (tabulations, summary of key issues, changes, trends, development and
drilling strategy, etc.).
• Summary of process followed (Discuss data integrity, methodology and techniques used,
assumptions.).

Sampling and assay procedures must be reported on as follows :

• Sampling methods - both channel sampling and drill hole sampling, including locations,
spacing, checks, sizes and coverage must be provided in a database. The database is to
be provided on CD or DVD.
• Sample preparation techniques (Full description required).
• Assay Techniques. (Description required e.g. aliquot size, AA finish, etc).
• Quality Control and Quality Assurance measures (Summarise the sampling and assay
audits and show graphs of standards, duplicates and blank sample results, discuss lab
QA/QC procedures and interlab results).

Sampling results must be reported as follows :

• New drill hole, trench and underground development intersections for the year, including
new resource definition drilling, should be combined with the full data base (on CD or
DVD).
• Summarised development sampling results for year must be provided in the database
(tabulation per deposit/shaft).
• Other relevant exploration information should be included in the database (this section
should expand on the mine exploration strategy and summarise any relevant exploration).

The estimation section must cover the following topics :

• Reconciliation (Show regression graphs and tabulations and discuss findings / actions).
• Geological Model Report (Discussion of assumptions, confidence, and description of
geological units, etc.).
• Evaluation Model (if different to Geological model + reasons, e.g., record statistical
analysis to support the determination of the Estimation Domains).
• Base statistics, distribution analysis and area comparisons. Density and other relevant
variables should also be discussed in this section (comparison between previous versus
current should be included).
• Semi-variograms (all directions and fit - and tabulated comparison with previous).
• Estimation techniques and parameters (optimisation - discretisation / neighbourhood /
confidence and restriction of kriging).
• Method of resource classification (see Appendix 9 for discussion of resource cut-off) and
of resource constraint (e.g. US$650 Whittle pit shell). This section must include details of
all the economic parameters used in defining the resource cut-off, i.e. Gold price,
exchange rate, level of costs applied and the margin included in the calculation if any.
• Results (and detailed discussion thereof).

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Estimation of “Other Resources” may include the following :

• Dumps
• Tailings
• Mining Pillars
• Shaft Pillars
• Stockpiles
• Minor Reefs
• Other Resources (e.g. spent heaps, scat stockpiles, etc)

These “Other Resources” sections should include discussion on estimation techniques and
show locality plans, etc. All information including data sets should be included on the CD or
DVD.

Demonstration of positive cash flow to demonstrate the potential economic viability of the
Mineral Resource as defined in Section 2.3 :

• Scoping level production schedule or Basic Mining Equation (BME).

• Scoping level financial schedule or Basic Financial Equation (BFE) with revenue at the
stated Mineral Resource price assumptions, operating costs and capital costs.

Mineral Resource Risk reporting is to include :

• Qualitative risk analysis. This should include an assessment of the impact and probability
of the occurrence of specific risks.
• Plan to manage risk (e.g. proposed adoption of improved sampling system to overcome
bias).

A “General” section is to address the following topics :

• Resource tonnage/grade reconciliation (per reef and/or per shaft and/or per pit, discuss
all significant differences).
• Grade Tonnage Curves (required for all operations), which must clearly state
assumptions such as selectivity (SMU).
• Measured, Indicated and Inferred Summary reports. (Comparative - previous versus
current). For the annual report the Mineral Resources are quoted as inclusive and
exclusive of the Ore Reserve component, the Ore Reserves being diluted to the tonnage
and grade 'delivered to the mill', in accordance with the JORC code necessitated by our
ASX listing.
• Work ‘in progress’ report (or detailed follow-up required).
• Relevant local issues.
• Non Resource Inventory (descriptive listing of all material that has been estimated BUT
NOT included in the Mineral Resource because there are not ‘reasonable prospects for
eventual economic extraction’ – JORC 2004). These should be referenced to the
investigational reports which detail the rationale for such exclusion.
• Blank pages for record of audit comments and Corporate team sign-off.

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 The report is to be presented in three sections:

• Part 1 is to address all of the required topics. It should be descriptive in nature and
should include tabulated results, important graphs, assumptions and conclusions.
• Part 2 is to contain all the supporting documentation, plans and graphs for Part 1, as
appendices.
• Part 3 is to be a CD or DVD including all data used in the Evaluation, a copy of Part 1 and
Part 2 and all other relevant detail. This CD/DVD must have a listing of file names and
description of their use. The focus is on quality and not volume.

One hard copy and one CD/DVD copy of the document are required by the Corporate Office.
The above sequence and layout should be adhered to and all the content items should be
addressed; even if only to state that they are not relevant for the particular operation.

2.7 PRELIMINARY MINERAL RESOURCE REPORTING

The Preliminary Mineral Resource Statement is due as per Appendix 1.

The Preliminary Mineral Resource statement is to be reported using Rcubed.

The data required for the Preliminary Mineral Resource Statement will consist of :

• An estimate of the Mineral Resource (including an estimated depletion of the planned

mining for the remainder of the year).
• An estimate of the Mineral Resource not currently included in the Ore Reserve (i.e. the
exclusive portion).
• Reconciliation between the previous Final Mineral Resource and the current Preliminary
Resource.
• Explanation of significant changes. Significant changes are defined as a greater than 5%
change in gold and/or tonnage.

No further Mineral Resource Reporting is required until the Final Mineral Resource as per
Appendix 1. If remodelling takes place and indicates a greater than 5% change in the
Mineral Resource, then the Rcubed database must be updated and the Mineral Resource
and Ore Reserve Committee informed in writing as to the reasons for such changes.

3. ORE RESERVE REPORTING

3.1 ORE RESERVE REPORTING PROCEDURES

Key dates for reporting Ore Reserves are provided in Appendix 1.

• The Preliminary Ore Reserve Tables are as reported in the Business Unit Plan and
should report the projected reserves as at 31st December each year.
• In addition to the Preliminary Ore Reserve Tables, the reserve data should be entered
into the Rcubed Reporting Database; this will enable the Rcubed Database entries to be
checked ahead of the final reporting process in November. For final reporting, it is

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 anticipated that the Tables will not be required and the Rcubed database entries will
provide the required information.
• The Ore Reserve Statement should include a detailed reconciliation against the
previously reported reserves specifying changes attributable to depletions, change in the
mineral resource and change of scope (economics, design, etc.).
• The individual Ore Reserve Statements will be combined as a company Ore Reserve
Statement. All Competent Persons will be required to sign off the final Ore Reserve
numbers in the form and context in which they are to be published.
• Professional details of all Competent Persons responsible for preparation of the Ore
Reserve Statement should be included in the report as shown in Appendix 11.
• When compiling the Ore Reserve Statements cognisance should be taken of the
comments and recommendations made in previous Audits.

3.2 ORE RESERVE REPORTING PRACTICE

• Ore Reserves must be reported separately as Proved Reserves and Probable Reserves,
in line with the appropriate code definitions. Total and not attributable Ore Reserves
should be shown.
• Ore Reserves should be reported according to tonnage, mean grade(s), and contained
metal inclusive of mining dilution, mining ore losses and other modifying factors, including
mine call factors. These modifying factors should be based on measurements, rather than
estimates, and must be clearly defined in the supporting documentation.
• Tonnage and grade estimates for surface stockpile materials that meet ore reserve
criteria should be itemised separately but should be aggregated with the total ore reserve
figures.
• Only those reserves included for treatment in the Business Unit Plan production schedule
should be considered in the Ore Reserve Statement. This could include marginal or sub-
grade ores.
• Economic cut-off grades used to define the ore reserve should be specified. Where
different cut-off grades apply (e.g. oxide, sulphide ore types), the reserves should be
itemised separately for each ore type. The cut-off grades applied will be dependent on a
predefined depletion strategy, such as an elevated cut-off grade, the basis for which
should be included in the Statement.
• Inferred resources must not be included in the Ore Reserve Statement. Inferred
resources scheduled for treatment in the Business Unit Plan should be reported
separately in the supporting documentation as this represents upside potential.
• For new projects, an auditable pre-feasibility or feasibility study should have been
completed that demonstrates the viability of the project and meets the Company’s
investment requirements. There should also be intent on the part of the company to
proceed to feasibility and ultimately a mining phase. For existing mines this should include
the production schedule or BME and a financial schedule or BFE as defined in the
business plan.

3.3 THE ORE RESERVE (STATEMENT) REPORT

The Regional Offices may determine the level of detail for the report but as a minimum
standard the following guideline is provided.

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Ore Reserve Statement
• Statement of Competency and Compliance – signed off by Competent Persons stating
affiliation and experience for each person (Refer to Appendix 11 for relevant
documentation). This section will form the release statement for the competent team.
• Summary of process followed – planning strategy, planning parameters, methodology,
assumptions.
• Ore Reserve Report – tabulations, summary of key inputs, reconciliation with previous
reserve.

Mineral Resources (for conversion to Ore Reserve)

• Description of the Mineral Resource estimate used as a basis for the conversion to the
Ore Reserve.
• Clear statement as to whether the Mineral Resources are reported additional to, or
inclusive of, the Ore Reserves.
• Differences between current and previous Mineral Resources that may affect the Ore
Reserve should be explained.
• Significant differences between the Mineral Resource and Ore Reserve should be
explained.

Mine Planning Strategy

• A summary of the corporate objectives and constraints influencing ore reserve
development (e.g. optimising NPV, minimum cash cost requirements).
• A summary of cut-off grade and stockpiling policy (e.g. breakeven, marginal and elevated
cut-off grades).
• A brief description of the mining method and its influence on reserves (e.g. bench height,
mining dilution, mining recovery and minimum mining widths).

Geotechnical Design
• A brief description of the geotechnical work undertaken with reference to consultant’s
reports, if utilised.
• A summary of the rockmass characteristics and major structural features affecting mine
design (slope angles, stope size, etc)and therefore reserves.
• A summary of the mine design recommendations and stability risk assessments.
• Note historical data on major failure events.

Metallurgical Factors
• Comment on the metallurgical process and the appropriateness to the style of
mineralisation.
• State the metallurgical recovery factor(s) applied and their source (e.g. actual plant
performance, bulk sample testwork).

Economic Factors
• State commodity prices and exchange rates used and any hedging assumptions.
• Tabulation of operating cost assumptions including selling expenses, royalties,
rehabilitation, replacement capital, etc. and other cost /revenue factors influencing
reserves. Verification of the source of cost information (e.g. actual, budgeted, estimated).

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 Cut-off Grades
• Define and demonstrate cut-off grades (full or partial costing),
• Define stockpile criteria.

Methodology
• Summarise methodology used for the mine optimisation including cost allocation in the
model, dilution, mining recovery and mine call factor assumptions.
• Where appropriate provide supporting reconciliation information to support choice of
adjustment factors, assumed dilution, mine call factors;
• Comment on the optimisation results and the selection of final pit limits.
• Summarise mine design parameters.
• Include plan of final mine design and plan of start face positions.

Ore Reserve Results

• A detailed statement of reserves classified as Proved Reserves and Probable Reserves
and separated according to ore type, commodity type (uranium, silver etc) process
method, location, mining method as appropriate to reserve classification.
• Surface stockpile reserves to be separately itemised.
• Ore Reserves below infrastructure to be separately itemised.
• An SEC compliance statement is required.
• Total waste tonnages to be reported and strip ratios calculated.
• Comment on differences between Reserves reported and those reported in the Business
Unit Plan.
• Comment on any material differences between Reserves within the design pit and
optimised pit shell.
• Summarise marginal ore stockpiled inventory.
• Report the Business Unit Plan schedule broken down by proved and probable reserves,
and inferred resources.

Reconciliation
A comparison of the Ore Reserve against that reported for the previous year should
be included. Changes should be reported according to :
• Depletion – the ore delivered to the plant as reported by the plant. Vamping tons to be
included.
• Model Change – a comparison obtained from the resource model used for the previous
year’s reserve estimate and the current resource model ; in both cases the models are
depleted to the end of the current year and the current final mine design applied.
• Scope or other changes that result from any other factors. These would mainly result
from change in mine design assumptions such as gold price, operating costs, recoveries,
geotechnical parameters, etc.

In each case where material differences occur an explanation should be provided to

reconcile these differences.

Support Documentation
A list of support documentation should be provided to facilitate external auditing.

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APPENDIX 1: DATES AND RESOURCE & RESERVE PARAMETERS FOR YEAR ENDED 31
DECEMBER 2006

KEY DATES

DELIVERABLE DATE
Preliminary Mineral Resources & Ore Reserves Tables* (tables completed
30 August 2006
in Resource and Reserve Reporting (Rcubed) system
Corporate Mineral Resource & Ore Reserves Review BEFORE 30 November 2006
Final Mineral Resource & Ore Reserves Tables* completed in Rcubed 30 November 2006
Complete Mineral Resource and Ore Reserve Statement 31 January 2007

(NOTE: * Preliminary and Final Mineral Resource Tables will state the Mineral Resources and
Ore Reserves ‘as at 31 December 2006’, that is, less the anticipated depletion projected from
June to December inclusive.)

METAL PRICES AND EXCHANGE RATES FOR YEAR ENDED 31 DECEMBER 2006

REGULATORY BODY PARAMETER VALUE UNITS

SAMREC/JORC Resource Gold Price 650 US$/oz

Reserve Gold Price 550 US$/oz

SAMREC/JORC Exchange rate –South Africa 6.50 ZAR/US$

Exchange rate – Australia 0.73 AUD/US$
Exchange rate – Brazil 2.20 R$/$US
Exchange rate – Argentina 3.15 Ar$/US$

SEC Reserve Gold Price (Lower) 475 US$/oz

Reserve Gold Price (Upper) 500 US$/oz

Reserve Copper Price ? US$/lbs

SEC Exchange rate –South Africa 6.34 ZAR/US$

Exchange rate – Australia 0.74 AUD/US$
Exchange rate – Brazil 2.52 R$/$US
Exchange rate – Argentina 2.98 Ar$/US$

Silver Price 10 US$/oz

Uranium Price 43 US$/lbs
US$/lbs – to be agreed
Copper Price 1.90
with Newmont
Brent Crude 55 US$/bbl
Sulphur Price 80US$/tonne
These numbers are to be applied during the Resource and Reserve Evaluation. These are NOT the
numbers to be used in the Business Plan cash flow.

Page 16 of 30
APPENDIX 2: COMPETENT PERSON DEFINITIONS

(1) In terms of SAMREC a competent person is defined as:

A ‘Competent Person’ is a person who is a member of the South African Council for Natural
Scientific Professions (SACNASP), and/or the Engineering Council of South Africa (ECSA), and/or
the South African Council for Professional Land Surveyors and Technical Surveyors (PLATO) or
any other statutory South African or international body that is recognised by SAMREC. A
Competent Person should have a minimum of five years experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which that person is
undertaking. If the Competent Person is estimating, or supervising the estimation of Mineral
Resources, the relevant experience must be in the estimation, assessment and evaluation of
Mineral Resources. If the Competent Person is estimating, or supervising the estimation of Mineral
Reserves, the relevant experience must be in the estimation, assessment, evaluation and economic
extraction of Mineral Reserves.

(2) In terms of JORC (2004) a competent person is defined as:

A ‘Competent Person’ is a person who is a Member or Fellow of The Australasian Institute of Mining
and Metallurgy, or of the Australian Institute of Geoscientists, or of a ‘Recognised Overseas
Professional Organisation’ (‘ROPOs’) included in a list promulgated from time to time*.
A ‘Competent Person’ must have a minimum of five years experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the
activity which that person is undertaking. If the Competent Person is preparing a report on
Exploration Results, the relevant experience must be in exploration. If the Competent Person is
estimating, or supervising the estimation of Mineral Resources, the relevant experience must be in
the estimation, assessment and evaluation of Mineral Resources. If the Competent Person is
estimating, or supervising the estimation of Ore Reserves, the relevant experience must be in the
estimation, assessment, evaluation and economic extraction of Ore Reserves.

(*see Appendix 3)

See Appendix 10 for formal appointment of Competent Person.

Page 17 of 30
APPENDIX 3: RECOGNISED OVERSEAS PROFESSIONAL ORGANISATIONS (ROPOs).

Persons wishing to take responsibility as Competent Persons should make application to the
professional bodies and organizations for membership. The JORC Code is our de facto primary
Reporting Code. Practitioners working on operations outside Australia or South Africa and who are
not members of the organisations listed as Primary Bodies or ROPOs under JORC/ASX are urged
to seek AusIMM Membership to qualify themselves as CP’s, as the latter is widely recognised in the
mineral industry.

The most flexible options are:

If in South Africa – join one of the appropriate (for Geologists/Surveyors/Engineers) organisations:
South African Council for Natural Scientific Professions or
South African Council for Professional Land Surveyors and Technical Surveyors (PLATO) or
Engineering Council of South Africa (ECSA) or
Geological Society of South Africa or
South African Institute of Mining and Metallurgy
If in Australia – join one of these organisations:
Australasian institute of Mining and Metallurgy
Australian Institute of Geoscientists
If anywhere else – join:
Australasian institute of Mining and Metallurgy

ROPOs
JORC Code:
Primary Bodies:
Australasian institute of Mining and Metallurgy
Australian Institute of Geoscientists
ROPOs recognized by the ASX/JORC
Institute of Materials, Minerals and Mining
Engineering Council of South Africa
Geological Society of London
Institute of Geologists of Ireland
European Federation of Geologists
American Institute of Professional Geologists
South African Council for Natural Scientific Professions
Geological Society of South Africa
South African Institute of Mining and Metallurgy
South African Council for Professional and Technical Surveyors
Professional Engineers Ontario
Association of Professional Engineers and Geoscientists of British Columbia
Association of Professional Engineers and Geoscientists of Manitoba
Association of Professional Geoscientists of Ontario
Association of Professional Engineers and Geoscientists of Newfoundland
Association of Professional Engineers, Geologists and Geophysicists of the Northwest Territories
Ordre des Geologues du Quebec
SME Registered Member of the Society of Mining, Metallurgy and Exploration, Inc.1
Association of Professional Engineers, Geologists and Geophysicists of Alberta
Association of Professional Geoscientists of Nova Scotia
Association of Professional Engineers and Geoscientists of New Brunswick
Ordre des Ingénieurs du Quebec
1
Note that it is only the SME Registered Member class of members that are recognised as fulfilling the
requirements for recognition as a ROPO, not members of the SME generally

SAMREC Code:
Primary Bodies:

Page 18 of 30
South African Council for Natural Scientific Professions
South African Council for Professional Land Surveyors and Technical Surveyors (PLATO)
Engineering Council of South Africa (ECSA)
Secondary South African Bodies recognized by SAMREC (with the same status as the primary
bodies):
Geological Society of South Africa
South African Institute of Mining and Metallurgy
ROPOs recognized by the JSE on the advice of SAMREC
The Institute of Materials, Minerals and Mining (IMMM)
The Australasian Institute of Mining and Metallurgy (AusIMM)
The Institute of Geologists of Ireland (IGI)
The European Federation of Geologists (EFG)
The Australian Institute of Geoscientists (AIG)
The Canadian Council of Professional Geoscientists (CCPG)

Examples:

These examples illustrate the pitfalls of regulatory jurisdictions and ROPOs.

Jim Beam is a member in good standing of the Association of Professional Geoscientists of Ontario with six
years experience. He wishes to sign-off the Mineral Resources of an AGA operation in Venezuela. This
would satisfy the requirements of ASX/JORC but not of JSE/SAMREC. If Jim Beam becomes a member of the
AusIMM, then the requirements of both codes will be satisfied.

Jack Daniels is a member of the AusIMM and wishes to sign-off the Ore Reserves of the Too Lekker Mine in
South Africa. This satisfies the requirements of ASX/JORC but not of JSE/SAMREC, despite the AusIMM
being a ROPO for JSE/SAMREC as Jack is required to register with one of the primary or secondary bodies
recognised by SAMREC (ECSA or SACNASP or PLATO etc.) as he is within South Africa. Alternatively, if
Jack moves to the Telebung Mine in Afghanistan, he will fulfil the requirements of both JSE/SAMREC and
ASX/JORC, as he is outside the primary and secondary jurisdictions of SAMREC, where the ROPO option is
recognised.

Slim Pickings is a member in good standing of the South African Council for Natural Scientific Professions and
wishes to sign-off the Mineral Resources of the Surprise Plan Mine the Great Gritty Desert of Western
Australia. This satisfies the requirements of JSE/SAMREC but not of ASX/JORC, despite the SACNASP
being a ROPO for ASX/JORC as Slim is required to register with one of the primary or secondary bodies
recognised by ASX/JORC (AusIMM or AIG) as he is within Australia/New Zealand.

Page 19 of 30
APPENDIX 4: INDEPENDENT INTERNAL REVIEW OF THE METHODOLOGY AND PROCESS
FOR ESTIMATING THE ORE RESERVES FOR SURFACE MINES

The following areas are to be addressed and reported,

• review of the planning strategy adopted including consideration of treatment capacity

constraints, mining capacity constraints, cash flow requirements, cut-off grade and stockpiling
strategy, consideration of inferred resources, consideration of marginal ore, and application of
mine call type factors.

• review and comment on the minimum mining block size with respect to the scale of mining,
ability to selectively mine, and allowance for mining dilution and ore loss.

• review and comment on the methodology applied to select the final and interim pit limits.
Confirm that the planning parameters (both revenue and cost generating) assumed for the
optimization are consistent with actual/budgeted values and are being correctly applied in the
optimization process. Check cut-off grade calculations.

• confirm that the pit slope geometry is in agreement with that recommended by the geotechnical
consultant. Review and comment on the pit design and development phases including mining
access, operating width and flexibility to manage potential risk from groundwater and slope
failure. Reconcile design and optimization values.

• review and comment on the planned production sequence. Consideration should be given to
operating capabilities and the ability to manage production risks; and

• review capital replacement policies to determine the impacts on fleet availability, efficiencies and
maintenance costs.

• confirm that the Ore Reserves reported are consistent with the Planning Strategy and compliant
with JORC reporting standards.

• Identify and report main declaration issues. Comment on the risks inherent in the reserve
calculation and any possible opportunities

• Review and comment on consideration given to recommendations made in previous audits.

Page 20 of 30
APPENDIX 5: MINERAL RESOURCE STATEMENT OF COMPETENCE AND COMPLIANCE

The estimates of the Mineral Resource presented in this Report have been carried out in
accordance with the principles and guidelines of the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves, published in 2004 ( JORC Code).

Lead Competent Person

Name Job Title Registration Signed

John Smith Chief geologist AusIMM No 123456

John Smith has sufficient experience relevant to the type and style of mineral deposit under
consideration and to the activity which is being undertaken to qualify as a Competent Person (or
Recognised Mining Professional) as defined in the 2004 Edition of the JORC Code. John Smith
consents to the inclusion in the Report of the matters based on this information in the form and
context in which it appears.

The following Technical Specialists were involved in the preparation of the Mineral Resource and
have appropriate experience in their field of expertise to the activity that they are undertaking and
consent to the inclusion in the Report of the matters based on their technical information in the form
and context in which it appears.

NAME JOB TITLE REGISTRATION RESPONSIBILITY

Exploration drilling
Geological modelling
Resource modelling
Resource compilation
Quality control
Management

The Mineral Resources presented in this Report have been estimated by subordinates and their
work has been reviewed and has been accepted as being a true reflection of the Mineral Resource
of ABC Gold Mine as at 31st December 2006. This report is in accordance with the AngloGold
Ashanti Guidelines for the Reporting of Exploration Results, Mineral Resources and Ore Reserves
for 2006.

Page 21 of 30
APPENDIX 6: NOTES ON MINERAL RESOURCE CLASSIFICATION CALCULATION

These notes are based on a scheme put forward by Anglo American Minred.

Summary of the Theory

Based on the "15% error with 90% confidence" rule. Idea is to be able to estimate the average
grade above cut-off with less than 15% relative error and 90% confidence. In mining terms this
would mean that one out of a possible ten blocks (or production panels/time period) would have a
relative kriging error in excess of 15%.

Indicated Resource: One year's production should meet the criteria (i.e. for ten year's production
one year would be expected to have an error in excess of 15%).

Measured Resource: One month's production should meet the criteria.

Basic Method:

1. Select appropriate mining cut-off

2. Create Metal and Tonnage Indicators on borehole data:

Tonnage Indicator Ind [Tonnes]: =0 if grade < cut-off

=1 if grade ≥ cut-off

Metal Indicator Ind [Metal]: =0 if grade < cut-off

= Grade if grade ≥ cut-off

• If grade is below cut-off, the material will go to the waste dump and no tonnes or metal
are sent to the plant (the probability of tonnage or metal to the plant is equal to 0).
• If grade is equal to or greater than the cut-off, all tonnes are sent to the plant (the
probability of tonnage to the plant is equal to 1).
• If grade is equal to or greater than the cut-off, the metal sent to the plant is equal to the
contained metal (tonnes * grade).

The error for the tonnes above cut-off for the panel is a function of the kriging variance (σ2Tonnes)
of Ind [Tonnes].
The error for the contained metal above cut-off for the panel is a function of the kriging variance
(σ2Tonnes) of Ind [Metal].

3. Calculate & model experimental semi-variograms for each indicator.

4. Decide on a panel size which would represent expected production for one month and one year.
5. Select a theoretical sample spacing
6. Krig the panel (month or year) for both indicator variables with the selected sample spacing.
7. Calculate the kriging error for each indicator at the theoretical sample spacing as follows:

Errortonnes = √σ2Tonnes*1.645 / mean value for Ind [Tonnes]

Errormetal = √σ2Metal *1.645 / mean value for Ind [Metal]

As the average grade above cut-off is defined as Metal/Tonnes (above cut-off), combining
the errors will produce the error for the average grade:

eAve.Grade2 = eTonnes2 + eMetal2 - 2 etonnes emetal * rmetal,tonnes

Page 22 of 30
 where r is the correlation coefficient for the metal and tonnage indicators.

8. Adjust the theoretical sample spacing until the relative error for average grade is equal to or less
than 15% for a given panel size.
9. Krig the resource block size with this spacing and the original grade semi-variogram. The
resulting block variance can be used a threshold value for the classification of kriged estimates
(according to the kriging variance in each block). Kriged blocks with a kriging variance less than
the threshold will be Indicated or Measured as the case may be.

Independent Zone Correction

A correction is made for independent zones within a year's or month's production panel. Example
given is in an underground environment where one year's production may come from a few different
stopes, the spacing between which is beyond the range of the semi-variograms. In this instance the
fact that these zones are independent needs to be taken into account. Formulas adjusted as
follows:

Errortonnes = √σ2Tonnes*1.645 / mean value for Ind [Tonnes] *√Nind

Errormetal = √σ2Metal *1.645 / mean value for Ind [Metal] *√Nind

where Nind equals the number of independent zones in the annual or monthly production panel.

Note that if Independent Zones are used then it is this support size that is used in the
calculation of the kriging variances (not the total panel size).

Practical Example

Setting Indicators

Simple process - set a field called INDT where values are zero for grade below cut-off and 1 above
cut-off. Metal field INDM is set similarly except the value above cut-off is the actual grade value.

Monthly and Annual Production Panel Sizes

Deciding on appropriate panel sizes is best done in a spreadsheet, with panel tonnes calculated
from the X,Y,Z dimensions and the density. Placing these in as formulas allows the values to be
tweaked to arrive at the final dimensions. Example shown below:

Classification based on production level of 5.3 million tonnes ore per annum.

Calculated
Estimated Panel Panel
Production X Y Z Density Tonnes
Annual 5 300 000 250 415 30 1.7 5 291 250
Monthly 441 667 100 260 10 1.7 442 000

Using Independent Zones

Calculated

Page 23 of 30
 Estimated Panel Panel
Production No X Y Z Density Tonnes
Zones
Annual 5 300 000 2 250 210 30 1.7 5 355 000
Monthly 441 667 2 100 130 10 1.7 442 000

Suggestions for the number of independent zones:

Things that can influence your choice of the number to use here can be the number of times the
production panel size could fit into the total deposit, whether the size of the panel is very much
larger than the semi-variogram range, what the anticipated production fleet will be (say two
excavators working different parts of the deposit simultaneously). The morphology of the deposit
could also have a bearing on the choice here, for example Yatela which is roughly synformal and
mining could take place simultaneously on both sides of the "basin". If the equipment is going to be
working together, advancing across the deposit, then to my mind independent zones would not be
required.

Try to keep things simple and general - using parameters that are very detailed and too dependant
on a specific mining scenario would not be appropriate for the classification of a resource.

Determining the correlation coefficient r

This is determined by regularising the tonnage and metal indicators into the required panel size and
calculating the correlation coefficient from these regularised values. There are various ways this can
be done in Datamine but a simple procedure is to use IJKGEN to attach block identifiers to the
borehole data, calculate the mean for each block and then output these results to Excel.

Determining the correlation coefficient in Excel:

Two methods are suggested. They are fairly subjective, therefore use both to confirm the choice of
this parameter.

Method 1

The following method was suggested by Anglo American Minred. Sort the data on the number of
samples and then the correlation coefficient is calculated using the Excel function CORREL. This
requires two input ranges - select the Tonnage Indicator as the first range and the Metal Indicator as
the second. In the simple example shown below, in each row the formula uses only the rows below
i.e. for the first row (samples = 28) the entire range is used, but in the second (samples = 62) the
preceding values for the first row are not used and so on. The final correlation coefficient is not
shown because this would be only for the values in the row where samples = 6528 and this returns
an error.

No. IndTonnes IndMetal Correlation EZ3/FW Zone Annual Production Panel

Samples Coefficient 4 Independent Zones of 240x40x25m
0.99
28 0.000 0.000 0.980
62 0.000 0.000 0.979 0.98
Correlation Coefficient

86 0.023 0.097 0.977

0.97
134 0.050 0.094 0.980
174 0.052 0.048 0.980 0.96

442 0.117 0.230 0.980 0.95

698 0.031 0.072 0.980
0.94
883 0.348 0.738 0.979
1031 0.117 0.246 0.967 0.93
1166 0.126 0.192 0.967 0 500 1000 1500 2000
No. Samples
1253 0.006 0.015 0.974
1415 0.011 0.015 0.971

Page 24 of 30
 1545 0.001 0.001 0.965
1660 0.220 0.455 0.963
3214 0.096 0.152 0.971
4624 0.109 0.163 0.961
6418 0.226 0.603 1.000
6528 0.213 0.437

The correlation coefficients can be graphed in the fashion shown above. Generally at the start of the
curve, there are too few samples in the block for the calculated coefficients to be reliable. Similarly
at the other end of the curve where the sample numbers are high, too few blocks are available for
the results to be reliable. Somewhere in the middle, the curve should stabilise and this will give an
indication of what the correct coefficient should be.

Method 2

An alternative method is to produce a scatterplot in MS Excel of the INDM values versus the INDT
values. Fit a linear regression and display the R2 value on the chart. The correlation coefficient is the
square root of this value. Again the influence of blocks with too few samples should be removed.

Determining the error of the production panel and classifying the model

The error on the estimate of the production panel is determined by using various drill spacings,
which in principle should resemble reality. Within the software package that is used for kriging,
generate artificial drill hole spacings and then ‘krig test’ the production block using the Metal and
Tonnage Variogram models determined above. From this determine the Estimation Variance for the
Metal and Tonnage variogram models. Note that when doing the ‘krig testing’ only samples that fall
within the production panel should be used. This can be limited by setting the kriging search
parameters to half the production panel dimensions.

Using the equations given in Section 7. above, determine the error associated with your production
panel. Ideally a spacing that is represented in your orebody in reality will give a 15% error. If this
does not occur then continue to ‘krig test’ the production panel with various drill hole spacing, and
repeat the calculations until a 15% error is achieved. Using the sample spacing that yields a 15%
error for the production panel, ‘krig test’ the parent block size that is used in the Resource model,
using the relevant grade variogram for that zone. This will yield an Estimation Variance threshold
that can be applied to that zone in the Resource model, below which the block will be either
Measured or Indicated (based on whether a yearly or Quarterly production panel was used). In this
entire process it is imperative that variogram sill relationships are honoured i.e. the Metal and
Tonnage variogram model sills are set to the population variance for those data sets and that the
grade variogram used for kriging is the same as the variogram used to ‘krig test’ the Resource
model block. Without doing this, the Estimation parameters determined as well as the resultant
calculated errors and Estimation Variance Thresholds will be meaningless.

Once this is determined the Resource model can be colour coded on the Estimation Thresholds for
Measured and Indicated and then strings (per section line) or wireframes generated that outline the
broad classification trends i.e. removing the influence of single or small groupings of blocks. The
final classification for the Resource model is set from the strings or wireframes.

Page 25 of 30
APPENDIX 7: MINERAL RESOURCE RECONCILIATION PROCESS

Depletion Difference between start pit (A) (Dec2004) and end pit (B) (Dec2005) on the old
model (Dec 2004)
Gold Price Difference in depleted pit shells ($425/oz (C) - $425/oz (D)) on the 2004 model with
2004 costs
Costs Difference in depleted pits shells between $425/oz on 2004 model with 2004 cost (D)
and the pit shell at $425/oz but 2005 cost parameters on the 2004 model (E)
Stockpiles New stockpile inventory statement minus old statement
Exploration All material with an Exploration indicator > 0 between last year’s depleted pit shell
(2004) and the shell based on $425/oz, 2005 costs and the 2005 Model (F).
Methodology All material with an Exploration indicator = 0 in pit shell F,

A = End of last year’s (2004) production pit

B = End of this year’s (2005) production pit
C = Pit based on this year’s (2005) gold price ($425), 2004 model with 2004 costs
D = Pit based on last year’s (2004) gold price ($425), 2004 model with 2004 costs
E = Pit based on this year’s (2005) costs, last year’s (2004) gold price and last year’s
model (2004)
F = Pit based on this year’s (2005) gold price, this year’s (2005) costs and this year’s
(2005) model. This is this year’s limiting shell

Page 26 of 30
APPENDIX 8: PROCEDURE TO QUANTIFY OUNCES GENERATED BY EXPLORATION

Introduction

As part of the annual reconciliation process, resource geologists are required to report changes due
to new exploration data.

In order to standardise the methodology for identifying the contribution of new data to changes in
the resource estimate, an indicator technique should be used. This technique provides a simple,
easy to use, repeatable, auditable way of determining this portion of the reconciliation equation.

Methodology

1) Set an indicator (EXPIND) for all new boreholes = 1 and all old boreholes = 0. New is
defined as drilled between the data cut off for the last and current models.
2) Estimate the indicator variable into the block model using exactly the same parameters as
for the primary variable (Au).

This is very easy to do in Datamine if the estimation is run using Estima. Simply copy the last
line in the estimation parameter file by clicking on the ‘new record’ button in AED. Change the
estimation variable from Au to EXPIND, save and exit. Leave all other parameters the same.
When the estimation is run, the indicator will be estimated using the same search and sample
parameters, same variograms as the primary variable.

For those not using Datamine, an equivalent process should be followed.

The resulting value estimated as EXPIND will indicate the relative influence of the new data on
each block with EXPIND = 1 indicating that only new data was used, EXPIND=0 indicating that
only old data was used and EXPIND between 0 an 1 indicating the relative influence of new
data. Selecting blocks within the new models that have been affected by new data and
comparing them with the equivalent blocks from the old model will quantify change due to
exploration.

The relative change due to exploration will not necessarily be directly proportional to the
influence of the new data. Large or small changes can be caused by either large or small
influences. Changes may be either positive or negative.

Page 27 of 30
APPENDIX 9: APPLICATION OF RESOURCE CUT-OFF GRADES

A ‘Mineral Resource’ is a concentration or occurrence of material of intrinsic economic interest in or

on the Earth’s crust in such form and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade, geological characteristics and continuity of a
Mineral Resource are known, estimated or interpreted from specific geological evidence and
knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories.

The above definition from the JORC Code, 2004 (the SAMREC Code definition is similar) implies
that material without ‘reasonable and realistic prospects for eventual economic extraction’ should
not be included in the Mineral Resource, unless mining, metallurgical, economic, marketing, legal,
environmental, social or governmental factors necessitate its inclusion. An example of this would be
a very low grade underground mining de-stressing cut that has to be extracted for geotechnical
reasons and that will be metallurgically treated to offset a portion of the financial loss.

Selection of Resource Cut-off grade.

This is the grade above which there are reasonable and realistic prospects for eventual economic
extraction. The interpretation of “reasonable prospects for eventual economic extraction” depends
on the view taken of the metal price and costs as well as the estimated grades.

Current policy is as follows:

Open Pit Operations

1. A Whittle/LG pit shell is generated for Mineral Resource gold price.

2. Apply cut-off grade equivalent to the anticipated lowest grade stockpile to material within the
Resource Whittle pitshell.

Current operation
planned pit

d a
a d
a d b
c
b b
c
Resource Whittle
pit shell

In the sketch above, blocks marked ‘a’ are automatically excluded from the Mineral Resource
as they fall outside of the Resource Whittle pit shell. Blocks marked ‘d’, ‘b’ and ‘c’ fall within
the shell, but blocks marked c are excluded as they have grades less than the lowest stockpile
grades.

Page 28 of 30
Underground Operations

1. Select material based on Resource gold price. The cut should be based on a positive
undiscounted cash flow i.e. 0 discount rate. Access Capital should be included in the
calculation.

Page 29 of 30
APPENDIX 10: COMPETENT PERSONS LETTER OF APPOINTMENT

Official Appointment of Competent Persons

Each Region is responsible for the official recognition ("Appointment") of their Competent Persons.
It is recommended that the decision regarding the Appointments should be undertaken by the
AngloGold Ashanti Resource and Reserve Committee and operational and/or regional
management. The designation of Competent Person will be made in writing at General Manager
Level with the endorsement by the respective Regional COO and the AngloGold Ashanti Resource
and Reserve Committee.

It is recommended that a standard letter of appointment is used.

Recommended Standard Letter of Appointment

Competent Person - Letter of Appointment

In accordance with the AngloGold Ashanti Policy on the Public Reporting of Exploration Results,
Mineral Resources and Ore Reserves and in compliance with the Australasian Code for Reporting
Mineral Resources and Ore Reserves (the JORC Code) and the South African Code For Reporting
Of Mineral Resources And Mineral Reserves (the SAMREC CODE),

[Name of Operation] appoints [Name and Title of Competent Person]

to prepare reports and sign off as a Competent Person on its Mineral Resources / Ore Reserves
(delete whichever not applicable).

The Competent Person declares:

That he/she meets the requirements of a Competent Person (CP) in terms of the JORC/SAMREC
(strike out whichever is not applicable) Code and;
Has read and understands the AngloGold Ashanti Policy on the Public Reporting of Exploration
Results, Mineral Resources and Ore Reserves and;
Has read and understands the JORC/SAMREC Code (strike out whichever is not applicable) and;
Is clearly satisfied that he/she can face his/her peers and demonstrate competence for the deposit.

[Signature] - General Manager

[Signature] - Resource & Reserve Committee Member

Signed by nominee [Signature of Competent Person]

Being a Member of [Insert Technical Organisation of which the nominee is a member], Member Number[..…]
Dated [Date]

The letter of Appointment will be issued by the General Manager following recommendations and
endorsement by the AngloGold Ashanti Resource and Reserve Committee and the Chief Operating
Officer of the Region concerned.
In the case of projects and feasibility studies the Competent Person Appointment letter will be
issued by the Region and/or the Business Development Unit, following recommendation and
endorsement by the AngloGold Ashanti Resource and Reserve Committee.

Page 30 of 30
APPENDIX 11: ORE RESERVE STATEMENTS OF COMPETENCE AND COMPLIANCE

The estimates of Ore Reserves presented in this Report have been carried out in accordance with
the principles and guidelines of the Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves , published in December 2004 (JORC Code).

Competent Person

Name Job Title Registration Signed

John Smith Chief Engineer AusIMM No 123456

John Smith has sufficient experience relevant to the type and style of mineral deposit under
consideration and to the activity which is being undertaken to qualify as a Competent Person ( or
Recognised Mining Professional) as defined in the 2004 Edition of the JORC Code. John Smith
consents to the inclusion in the Report of the matters based on this information in the form and
context in which it appears.

The following Technical Specialists were involved in the preparation of the Ore Reserves and have
appropriate experience in their field of expertise to the activity that they are undertaking and consent
to the inclusion in the Report of the matters based on their technical information in the form and
context in which it appears.

Technical Specialists

Activity Name Job Title Responsibility Signed

Mining Engineering Mining cost estimate
Mine Planning Reserve Estimation
Geotechnical Slope Designs
Metallurgy Recovery and Process Costs
Environmental Permitting
Legal Mineral Rights
Marketing Realisation Costs
Administration Administration Costs
Financial Cashflow Analyses
Corporate Metals Pricing Forecast

The Ore Reserves presented in this Report have been estimated by subordinates and their work
has been reviewed and has been accepted as being a true reflection of the Ore Reserves of ABC
Gold Mine as at 31st December 2005. This report is in accordance with the AngloGold Ashanti
Guidelines for the Reporting of Exploration Results, Mineral Resources and Ore Reserves for 2006.

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