Mineral Resource Management

Mponeng - 13 November 2003

Agenda

Geological risk management Mineral Resource Optimisation Mine design & scheduling Schedules and graphs Future capital projects Planning Wheel

Geological risk

A geological risk is any feature that endangers the realisation of a production plan.

Mponeng Mine - geological facies model

Mponeng VCR structure plan

Risk - factors governing uncertainty

Density of information
number and location of borehole intersections amount of underground orebody exposure

Facies understanding - how well is the model understood?

VCR footwall types affect reef preservation Reef terraces transgress footwall lithology Channelisation on shale footwall Erosion channels and areas of non-deposition in all facies

Structural understanding - how well is the structure understood?

Risk - factors governing impact

Severity of impact on :
One to three year plans (short term) LOM plan (longer term) The Business Plan (includes areas of opportunity)

Impact rating is dependent on:

The size of the risk block The blocks sensitivity to geological and evaluation changes, e.g. proximity of block to cut-off value

Choice of risk block at Mponeng

Footwall and facies type Structural discontinuities Mining levels

LOM 2002 risk blocks with new boreholes drilled to December 2002

500m

Block risk matrix - All blocks in LOM 2003

9 Very HI

L O R ISK

M E D RISK

21,23 22

H I R IS K

V e ry H I R ISK

19
V e ry L O R IS K

20
Exploration

UNCERTAINTY

7 HI

Development

13 17,18 4a 11 18a 7

4 1 2
H I R ISK

Current mining

V e ry H I R ISK

MED LO

8,9,12,14 3a 4b
L O R IS K

2 Very LO

6
V e ry L O R IS K
1 V e ry L O

1b
2 3 LO

2a,15
5 MED 6 HI

10
M E D R IS K
7

16
8 V e ry H I 9

IM P A C T

2003 drilling program superimposed on risk grid

500m

Mineral Resource
Global underground mineral inventory Published Resource Planning Resource Optimised Resource Scheduled Resource Reserve

Composite Krig grid plan - VCR

4Km

8Km

Confidence category plan - VCR

Published Resource - VCR

VCR

Planning Resource Level 1 - VCR

VCR

X X X
8

Planning Resource Level 2 - VCR

VCR

Optimisation

Big picture look at the Resource Value area curves (VACs) Cost/volume curves Basic mining equation (BME) and Basic financial equation (BFE)

Volume Area Curve - VAC

Planning Resource Level 1
6,500,000

RMG -Average value above cut-off (cmg/t)

6,000,000

100% 90%

3,400

Total above cut-off (m2)

5,500,000 5,000,000

3,000

80%
4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000

70% 60%

2,600

2,200

50%
1,800

% Margin
1,400

Breakeven
500,000 0 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 1,000 3,000

Cut-off Value (cmg/t)

Mponeng Cost Volume curve

6000 5800 5600 5400 5200 5000 4800 4600 4400 4200 4000 3800 3600 3400 3200 3000 2800 2600 2400 2200

105.000

R m illion

45.000

15.000 Variable Fixed R /m2

8,000 16.843 37.061 6738

12,000 25.264 37.650 5243

16,000 33.686 38.239 4495

20,000 42.107 38.829 4047

24,000 50.529 39.418 3748

28,000 58.950 40.007 3534 Fixed

32,000 67.371 40.596 3374 R /m 2

36,000 75.793 40.596 3233

40,000 84.214 40.596 3120

Variable

R / m2

75.000

10

Basic mining equation

MPONENG BUSINESS UNIT PLAN 2004, LEVEL 1 Optimisation scenario @ 80% 2004 2005 2006 2007

BME
FACE LENGTH x = x = x FACE ADVANCE TOTAL m2 ON REEF PERCENTAGE REEF m2 ON REEF cmg/t m m m2 % m2 cmg/t kg kg kg kg % % 39,954 8.01 320,005 96.78% 309,696 1,584 13,641 382 363 14,386 97.21% 98.28% 41,760 8.03 335,429 96.09% 322,299 1,698 15,214 391 206 15,811 97.20% 98.25% 41,405 8.11 335,612 95.67% 321,093 1,698 15,157 405 225 15,787 97.20% 98.29% 41,502 8.10 336,048 96.62% 324,674 1,698 15,326 429 209 15,965 97.20% 98.22%

x RD = kg GOLD EX STOPES + + = x x VAMPING kg REEF DEVELOPMENT kg TOTAL kg BROKEN MINE CALL FACTOR RECOVERY FACTOR

Mine design & scheduling

Planning Brief Rock engineering considerations Capacities & constraints Strategic objectives

11

Development schedule

VCR - Scheduled Resource - Level 1

12

Schedules & Graphs

BME/BFE format Comparisons with previous LOM plan

Basic Mining Equation

MPONENG BUSINESS UNIT PLAN 2004, LEVEL 1 SCHEDULE 4 A - LEVEL 1, ANNUAL TOTALS BUP 2004 2004 2005 2006 2007

BME
FACE LENGTH x = x = x FACE ADVANCE TOTAL m2 ON REEF PERCENTAGE REEF m2 ON REEF cmg/t m m m2 % m2 cmg/t kg kg kg kg % % 39,954 8.01 320,005 96.78% 309,696 1,584 13,641 382 363 14,386 97.21% 98.28% 41,760 8.03 335,429 96.09% 322,299 1,559 13,967 391 206 14,564 97.20% 98.25% 41,405 8.11 335,612 95.67% 321,093 1,622 14,479 405 225 15,109 97.20% 98.29% 41,502 8.10 336,048 96.62% 324,674 1,628 14,694 429 209 15,333 97.20% 98.22%

x RD = kg GOLD EX STOPES + + = x x VAMPING kg REEF DEVELOPMENT kg TOTAL kg BROKEN MINE CALL FACTOR RECOVERY FACTOR

13

Face length current and potential

5,000

4,500

4,000

Potential projects, including the VCR 120-125L

3,500

Current profile
3,000

2,500

2,000

1,500

1999

2000

2001

2002

2003 F/C

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Total M2
40,000

35,000

Potential projects, including the VCR 120-125L

30,000

Current profile
m2
25,000

20,000

15,000

10,000

1999

2000

2001

2002

2003 F/C

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

14

Mponeng Future capital project 120-125L

Exploiting the VCR resource 120 125L Will require some $115m capex Will add some 267 000 oz annually at a total cash cost of $267/oz Will commence production (pending board approval) in 2009

Mponeng Future capital project 120 -125L

SS2 SS1

VCR 120-125 lvl

Looking East

113 lvl 116 lvl Twin decline 120 lvl VCR 123 lvl 125 lvl 126 lvl

15

Mponeng Future capital project 120-125L

Capex spend will include: Backfill infrastructure Increased hoisting capacity SS2 equipped Increased plant capacity Slimes deposition

Mponeng Future capital project 120-125L

Where to from here? Project feasibility to be presented to the board ~Oct 2004 Additional sensitivities to be considered R7.00:USD in 2004 Gold price
$370/oz in 2004 $370/oz flat out to 2008 Thereafter $335/oz real (in 2004 money terms, post-2008)

16

The planning wheel

Totally integrated approach to planning optimised auditable SAMREC code

17

Planning Wheel detail for Jan/Feb, 2004

A B C D E F G H J K L CORPORATE EXECUTIVE CORPORATE MINING OFICE - AUDIT FINANCE & COSTING LABOUR & TECHNOLOGY MINERAL RESOURCE MANAGERS SURVEY AND PLANNING PROJECTS EVALUATION GEOLOGY ROCK ENG & VENTILATION SYSTEMS F1 H1 H2 J1,2,3 H3
B1 B2 B3 B4 B5 E1 F1 H1 H2 H3 J1 J2 K1 GEOLOGY AUDITS PREPARE & ISSUE FINAL WHEEL & BP 2004 COOK BOOK EVALUATION AUDITS GEOLOGY AUDITS EVALUATION AUDITS ANALYSIS OF THE IMPACT OF CHANGES TO STRUCTURE MODEL INCORPORATE NEW STRUCTURE INTO MINE DESIGN & REVIEW MACRO DESIGN PARAMETERS OPTIMISE LOCAL ESTIMATION & DOMAINS DATA VALIDATION ANALYSE DATA SETS & MODEL STATISTICAL DISTRIBUTION COMPILE AND VALIDATE BOREHOLE DATABASE VALIDATE AND FREESE STRUCTURE MODEL ROCK ENGINEERING OPTIMUM EXTRACTION PLAN

B1 B2

B3

B4 E1

J4

K1

18