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HARMONY - ACQUISITION AND PRESS RELEASES

Release Date: 08/04/1998 16:02:23      Code(s): HAR HARO
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
("HARMONY")
NASDAQ TRADING SYMBOL: HGMCY
ACQUISITION OF STEYN SHAFTS 5, 6, 7 AND 8 FROM FREE STATE CONSOLIDATED GOLD
MINES (OPERATIONS) LIMITED
("FREEGOLD")
1. INTRODUCTION
AN AGREEMENT HAS BEEN CONCLUDED IN TERMS OF WHICH HARMONY WILL PURCHASE THE
MINERAL RIGHTS, ACCOMPANYING INFRASTRUCTURE AND EQUIPMENT OF STEYN SHAFTS 5, 6,
7 AND 8 FROM FREEGOLD.  THE EFFECTIVE DATE OF THE ACQUISITION IS 1 MAY 1998.
2. CONSIDERATION
THE PURCHASE CONSIDERATION IS R85 MILLION AND WILL BE SETTLED AS FOLLOWS:
* R10 MILLION ON THE EFFECTIVE DATE;
* THE BALANCE OF R75 MILLION PAYABLE IN EQUAL INSTALMENTS OVER A 15 MONTH
PERIOD COMMENCING ON 31 AUGUST 1998.
3. RATIONALE FOR THE ACQUISITION
THE ACQUISITION IS IN LINE WITH HARMONY'S OBJECTIVE OF UTILISING ITS LOW COST
MINING SKILLS AND STRUCTURE TO REINFORCE ITS INTERNATIONAL STANDING AS A
QUALITY GOLD MINING BUSINESS.  THE ACQUISITION WILL EXPAND HARMONY'S PROVEN AND
PROBABLE RESERVES BY MORE THAN 1.5 MILLION OUNCES (46 000 KILOGRAMS) AND BOOST
ITS ANNUAL GOLD PRODUCTION BY AROUND 237 000 OUNCES (7 400 KILOGRAMS).
THE STEYN SHAFTS, PARTICULARLY SHAFTS 6 AND 7, RECORDED AVERAGE RECOVERED
GRADES OF BETWEEN 6 G/T TO 8 G/T, WHICH IS HIGHER THAN THE CURRENT AVERAGE
RECOVERED GRADE FROM HARMONY'S SHAFTS OF ABOUT 4,7 G/T.  THE HIGH GRADE SHAFTS
PROVIDE IMMEDIATE OPERATIONAL FLEXIBILITY IN THE CURRENT GOLD MARKET. HARMONY
BELIEVES THAT IT WILL TAKE APPROXIMATELY SIX MONTHS TO BUILD UP THE PRODUCTION
LEVELS OF THE VARIOUS SHAFTS TO THE PLANNED ECONOMICALLY VIABLE LEVELS
MENTIONED BEFORE.  FREEGOLD SHUT DOWN THE FOUR SHAFTS.  HARMONY EXPECTS TO
CREATE ABOUT 3 000 NEW EMPLOYMENT OPPORTUNITIES IN THE FREE STATE GOLDFIELDS.
4. FINANCIAL EFFECTS OF THE ACQUISITION
AT THE CURRENT GOLD PRICE THE ACQUISITION IS NOT EXPECTED TO HAVE A MATERIAL
EFFECT ON HARMONY'S NET ASSET VALUE OR EARNINGS PER SHARE IN RESPECT OF THE
YEAR ENDING 30 JUNE 1998.
VIRGINIA
8 APRIL 1998
THE CORNER HOUSE
THE CORNER HOUSE (PTY) LTD
(REGISTRATION NUMBER 97/08185/07)
DEUTSCHE MORGAN GRENFELL
DEUTSCHE MORGAN GRENFELL (SA) (PROPRIETARY) LIMITED
(REGISTRATION NUMBER 95/11798/07
(MEMBER OF THE JOHANNESBURG STOCK EXCHANGE)
PRESS RELEASE
FOR FURTHER DETAILS CALL BERNARD SWANEPOEL ON +27(11)802-1822(W) OR MOBILE
(0)83-303-9922
HARMONY TO ACQUIRE FREEGOLD'S STEYN SHAFTS
JOHANNESBURG, 8 APRIL  - HARMONY HAS ACQUIRED STEYN SHAFTS 5, 6, 7 AND 8  FROM
FREEGOLD IN A DEAL WHICH WILL BOOST ITS ANNUAL GOLD PRODUCTION BY AROUND 237
000 OZ (7 400 KG) AND EXPAND ITS PROVEN AND PROBABLE ORE RESERVES BY MORE THAN
1.5 MILLION OZ.
IT WILL PAY FREEGOLD R85 MILLION IN CASH FOR THE MINERAL RIGHTS, INFRASTRUCTURE
AND EQUIPMENT OF THE FOUR  SHAFTS, OF WHICH R10 MILLION IS DUE ON 1 MAY - THE
EFFECTIVE DATE OF THE TRANSACTION - WITH THE BALANCE PAYABLE IN EQUAL MONTHLY
INSTALMENTS OVER AN 15-MONTH PERIOD STARTING ON 31 AUGUST 1998.
THE FOUR SHAFTS, WHICH WERE SHUT DOWN BY FREEGOLD AT THE END OF LAST MONTH,
WILL BE BROUGHT BACK INTO OPERATION IN A CONTROLLED BUILD-UP PROGRAMME DESIGNED
TO ACHIEVE OPTIMAL PRODUCTION LEVELS OVER A SIX-MONTH PERIOD. SHAFTS 6 AND 7
WILL START THIS PROCESS ON 1 MAY WITH 5 SHAFT FOLLOWING BY THE END OF JUNE.  IN
THE PROCESS, HARMONY EXPECTS TO CREATE ABOUT 3 000 NEW EMPLOYMENT OPPORTUNITIES
IN THE FREE STATE GOLDFIELDS.
MANAGING DIRECTOR BERNARD SWANEPOEL SAID TODAY THE STEYN DEAL WAS IN LINE WITH
HARMONY'S GROWTH STRATEGY, WHICH IS DESIGNED TO BUILD AN INTERNATIONAL-STANDARD
GOLD MINING COMPANY BY LEVERAGING ITS LOW-COST SKILLS TO HIGHER-QUALITY ASSETS.
 IT IS THE LATEST IN A SERIES OF RECENT ACQUISITIONS, WHICH INCLUDED UNISEL,
SAAIPLAAS AND VERMEULENSKRAAL NOORD IN THE FREE STATE, GROOTVLEI AND CONS
MODDER ON THE EAST RAND, AS WELL AS THE EXPLORATION COMPANY LYDEX.  TOGETHER,
THESE HAVE SIGNIFICANTLY EXTENDED AND ENHANCED HARMONY'S ASSET BASE.
SWANEPOEL NOTED THAT A PARTICULAR ATTRACTION OF THE STEYN SHAFTS WAS THAT THEIR
RECORDED AVERAGE RECOVERED GRADES OF BETWEEN 6G/T AND 8G/T WERE HIGHER THAN THE
CURRENT 4.7G/T AVERAGE OF HARMONY'S EXISTING OPERATIONS, PROVIDING IMMEDIATE
OPERATIONAL FLEXIBILITY.  THEIR ACQUISITION WOULD THEREFORE STRENGTHEN THE
COMPANY'S ABILITY TO SUSTAIN ITS PROFITABILITY IN A WEAK GOLD MARKET.
RELEASED BY DU PLESSIS ASSOCIATES ON BEHALF OF HARMONY GOLD MINING COMPANY
LIMITED.
DPA CONTACT KATHY DU PLESSIS TEL:+27(11)728-4701 FAX:+27(11)728-2547
MOBILE:(0)83-266-5847  E-MAIL: GOLD@DPA.CO.ZA



                                        
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