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HARMONY GOLD MINING/GOLD FIELDS LTD - CAUTIONARY ANNOUNCEMENT

Release Date: 24/06/1998 16:42:42      Code(s): HAR HAROGFL
CAUTIONARY ANNOUNCEMENT
GOLD FIELDS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 97/19961/06)
("GOLD FIELDS")
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
(NASDAQ TRADING SYMBOL: HGMCY)
("HARMONY")
CAUTIONARY ANNOUNCEMENT REGARDING THE PROPOSED DIVESTMENT BY GOLD FIELDS AND
THE EFFECTIVE ACQUISITION BY HARMONY OF GOLD FIELDS' INTEREST IN EVANDER GOLD
MINES LIMITED ("EVANDER"), AND A PROPOSED SCHEME OF ARRANGEMENT
1. INTRODUCTION
GOLD FIELDS AND HARMONY HAVE ENTERED INTO AN AGREEMENT, WHICH IF CARRIED OUT IN
THE MANNER SET OUT IN THE FOLLOWING PARAGRAPH, WILL RESULT IN THE DIVESTMENT BY
GOLD FIELDS AND THE EFFECTIVE ACQUISITION BY HARMONY OF GOLD FIELDS' 86%
INTEREST IN EVANDER ("THE TRANSACTION"). THE CONSIDERATION PAYABLE TO GOLD
FIELDS IN TERMS OF THE TRANSACTION IS TO BE 8 913 320 NEW ORDINARY SHARES IN
HARMONY AND R250 MILLION IN CASH, EQUIVALENT TO 26,4 NEW HARMONY SHARES AND
R740,46 IN CASH FOR EACH 100 EVANDER SHARES HELD BY GOLD FIELDS.
IT IS INTENDED TO EFFECT THE TRANSACTION IN TERMS OF SECTION 311 OF THE
COMPANIES ACT, 1973 (ACT 61 OF 1973), AS AMENDED ("THE ACT"), BETWEEN EVANDER
AND ITS SHAREHOLDERS, OTHER THAN HARMONY ("THE PROPOSED SCHEME"), WHEREBY
EVANDER SHAREHOLDERS ("THE SCHEME MEMBERS") WILL BE OFFERED:
1.1 58,3 ORDINARY SHARES IN HARMONY FOR EVERY 100 ORDINARY SHARES HELD IN
EVANDER ("THE SHARE CONSIDERATION"); OR
1.2 26,4 ORDINARY SHARES IN HARMONY AND R740,46 IN CASH FOR EVERY 100 ORDINARY
SHARES HELD IN EVANDER ("THE SHARE AND CASH ALTERNATIVE").
SHOULD SCHEME MEMBERS NOT ELECT TO RECEIVE THE SHARE AND CASH ALTERNATIVE THEY
WILL BE DEEMED TO HAVE ELECTED TO RECEIVE THE SHARE CONSIDERATION.
UPON THE PROPOSED SCHEME BECOMING OPERATIVE, EVANDER WILL BECOME A WHOLLY-OWNED
SUBSIDIARY OF HARMONY AND THE LISTINGS OF EVANDER ON THE JOHANNESBURG STOCK
EXCHANGE ("THE JSE") AND THE LONDON AND BRUSSELS STOCK EXCHANGES WILL BE
TERMINATED.
GOLD FIELDS, AS HOLDER OF 86% OF THE ISSUED ORDINARY SHARES IN EVANDER, HAS
PROVIDED AN IRREVOCABLE UNDERTAKING TO VOTE IN FAVOUR OF THE PROPOSED SCHEME.
IN THE EVENT THAT THE PROPOSED SCHEME DOES NOT BECOME OPERATIVE, THEN, SUBJECT
TO THE APPROVAL OF THE SECURITIES REGULATION PANEL, HARMONY HAS UNDERTAKEN TO
MAKE AN OFFER TO ACQUIRE ALL OF THE SHARES OF EVANDER FOR THE SAME
CONSIDERATION AS DESCRIBED ABOVE. GOLD FIELDS HAS PROVIDED AN IRREVOCABLE
UNDERTAKING TO ACCEPT SUCH AN OFFER IN RESPECT OF ITS ENTIRE 86% INTEREST IN
EVANDER. IN THE EVENT THAT  SHAREHOLDERS REPRESENTING 90% OF THE SHARES OF
EVANDER ACCEPT THE OFFER, HARMONY INTENDS TO INVOKE THE PROVISIONS OF SECTION
440K OF THE ACT TO ACQUIRE THE OUTSTANDING EVANDER SHARES.
2. RATIONALE FOR THE TRANSACTION
GOLD FIELDS' VISION IS TO BECOME A WORLD CLASS GOLD COMPANY, AS MEASURED BY
OUTPUT, COST OF PRODUCTION IN US DOLLARS PER OUNCE AND MARKET VALUE. EVANDER IS
NOT A CORE ASSET FOR GOLD FIELDS AND THE TRANSACTION ADVANCES THE COMPANY
TOWARDS ITS VISION. GOLD FIELDS INTENDS TO REDEPLOY THE CASH RESOURCES REALISED
FROM THE DISPOSAL OF ITS INTEREST IN EVANDER IN ITS OTHER OPERATIONS.
THE ACQUISITION OF EVANDER BY HARMONY CREATES CRITICAL MASS, IMPROVED GEARING
TO THE GOLD PRICE AND OPERATIONAL SYNERGIES AS WELL AS UPGRADING HARMONY'S ORE
RESERVE BASE. THE TRANSACTION IS IN LINE WITH HARMONY'S STATED OBJECTIVE OF
UTILISING ITS LOW COST MINING SKILLS AND STRUCTURE TO REINFORCE ITS
INTERNATIONAL STANDING AS A QUALITY GOLD MINING BUSINESS THROUGH THE
ACQUISITION OF ESTABLISHED MINING OPERATIONS. IT WILL INCREASE HARMONY`S ANNUAL
GOLD PRODUCTION BY APPROXIMATELY 375 000 OUNCES AND EXTEND ITS PROVEN AND
PROBABLE ORE RESERVES BY APPROXIMATELY 10 MILLION OUNCES OF GOLD. EVANDER
SHAREHOLDERS WILL ACCORDINGLY PARTICIPATE IN HARMONY`S FURTHER DEVELOPMENT.
3. SPECIFIC ISSUE OF SHARES FOR CASH
HARMONY WILL APPROACH SELECTED LOCAL AND INTERNATIONAL FINANCIAL INSTITUTIONS
AND OTHER INVESTORS IN ORDER TO RAISE THE REQUIRED CASH PORTION OF THE SHARE
AND CASH ALTERNATIVE. IN TERMS OF THE LISTINGS REQUIREMENTS OF THE JSE THE
SPECIFIC APPROVAL OF HARMONY SECURITY HOLDERS IS REQUIRED IN RESPECT OF THE
ISSUE OF SHARES FOR CASH ("THE CASH ISSUE") AS SUCH ISSUE MAY EXCEED 10% OF
HARMONY'S ISSUED SHARE CAPITAL.
4. CONDITIONS PRECEDENT FOR THE TRANSACTION
THE TRANSACTION WILL BE SUBJECT TO THE FOLLOWING CONDITIONS PRECEDENT:
- THE NECESSARY REGULATORY AND STATUTORY APPROVALS BEING GRANTED;
- THE RAISING BY HARMONY OF SUFFICIENT CASH IN ORDER FOR THE CASH PORTION OF
THE SHARE AND CASH ALTERNATIVE TO BE MADE;
- THE PASSING BY HARMONY SECURITY HOLDERS OF SUCH RESOLUTIONS AS MAY BE
NECESSARY TO IMPLEMENT THE TRANSACTION AND THE CASH ISSUE; AND
- THE RELEVANT STOCK EXCHANGES ON WHICH HARMONY IS LISTED GRANTING LISTINGS FOR
THE HARMONY ORDINARY SHARES TO BE ISSUED IN TERMS OF THE PROPOSED SCHEME.
5. FINANCIAL EFFECTS OF THE PROPOSED SCHEME
THE TABLE BELOW SETS OUT THE FINANCIAL EFFECTS OF THE PROPOSED SCHEME IN TERMS
OF THE MARKET VALUE ON A SCHEME MEMBER HOLDING
100 EVANDER ORDINARY SHARES.
        RETAIN 100 EVANDER      RECEIVE THE SHARE      RECEIVE THE SHARE AND
        ORDINARY SHARES         CONSIDERATION          CASH ALTERNATIVE
MARKET
VALUE
(NOTE)   R1 180                  R1 355,48             R1 354,26
NOTE:
BASED ON THE CLOSING MARKET PRICES OF HARMONY ORDINARY SHARES AND EVANDER
ORDINARY SHARES ON THE JSE ON 23 JUNE 1998, BEING THE LAST PRACTICABLE DATE
PRIOR TO FINALISATION OF THIS ANNOUNCEMENT.
6. FURTHER ANNOUNCEMENT AND DOCUMENTATION
A FURTHER ANNOUNCEMENT RELATING, INTER ALIA, TO THE SALIENT DATES OF THE
PROPOSED SCHEME WILL BE PUBLISHED IN THE PRESS IN DUE COURSE. A CIRCULAR TO
HARMONY SECURITY HOLDERS CONTAINING FULL DETAILS OF THE PROPOSED SCHEME AND
CASH ISSUE, AND A DOCUMENT TO EVANDER SHAREHOLDERS CONTAINING FULL DETAILS OF
THE PROPOSED SCHEME WILL BE POSTED WITHIN 30 DAYS HEREOF OR WITHIN SUCH
EXTENDED TIME PERIOD AS ALLOWED BY THE SECURITIES REGULATION PANEL.
ACCORDINGLY, SECURITY HOLDERS IN HARMONY AND EVANDER ARE ADVISED TO EXERCISE
CAUTION WHEN DEALING IN THEIR SECURITIES UNTIL A FURTHER ANNOUNCEMENT WHICH
WILL INCLUDE THE EFFECTS OF THE TRANSACTION ON GOLD FIELDS AND HARMONY`S
EARNINGS IS MADE.
JOHANNESBURG
24 JUNE 1998
CORPORATE ADVISER TO HARMONY
THE CORNER HOUSE (PTY) LTD
(REGISTRATION NUMBER 97/08185/07)
LEGAL ADVISER TO HARMONY
BOWMAN GILFILLAN HAYMAN GODFREY ATTORNEYS
SPONSORING BROKER TO HARMONY
RICE RINALDI TURNER & CO
(A MEMBER OF THE JOHANNESBURG STOCK EXCHANGE)
FINANCIAL ADVISER TO GOLD FIELDS
DEUTSCHE MORGAN GRENFELL (SA) (PROPRIETARY) LIMITED
(REGISTRATION NUMBER 95/11798/07)
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
LEGAL ADVISER TO GOLD FIELDS
EDWARD NATHAN & FRIEDLAND INC.
(REGISTRATION NUMBER 77/00525/21)
JOINT SPONSORING BROKERS TO GOLD FIELDS
DEUTSCHE MORGAN GRENFELL (PROPRIETARY) LIMITED
(REGISTRATION NUMBER 73/06709/07)
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
BOE SECURITIES LIMITED
REGISTRATION NUMBER 95/12240/06
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE



                                        
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