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HARMONY - COMPANY REPORT FOR THE QUARTER ENDED 30 JUNE 1998

Release Date: 15/07/1998 12:27:58      Code(s): HAR HARO
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
NASDAQ TRADING SYMBOL: HGMCY
("HARMONY" OR "THE COMPANY")
CONTINUED GOOD PERFORMANCE FROM OPERATIONS
EVANDER ACQUISITION ON TRACK
COMPANY REPORT FOR THE QUARTER ENDED 30 JUNE 1998
OPERATING RESULTS
........................................QUARTER............QUARTER
.......................................30/06/98 ...........31/03/98
FREE STATE OPERATIONS
UNDERGROUND OPERATIONS
ORE MILLED - T'000.....................976................869
GOLD PRODUCED - KG.....................4 542..............4 547
YIELD - G/T............................4.65...............5.23
GOLD PRICE - R/T MILLED................237.47.............251.00
CASH OPERATING COSTS - R/T MILLED     .197.76.............217.09
CASH OPERATING PROFIT - R/T MILLED.....39.71..............33.91
SURFACE OPERATIONS
TONNAGE TREATED - T'000................769................246
GOLD PRODUCED - KG.....................123................72
YIELD - G/T............................0.16...............0.29
GOLD PRICE - R/T TREATED...............8.16.. ............14.04
CASH OPERATING COSTS - R/T TREATED.....7.94...............5.30
CASH OPERATING PROFIT - R/T TREATED....0.22...............8.74
CLEAN-UP OPERATIONS....................-........  ........210
TOTAL FREE STATE OPERATIONS
GOLD PRICE - R/KG.................... .51 029..... .......47 966
CASH OPERATING COSTS - R/KG............42 684.............39 968
CASH OPERATING PROFIT - R/KG.......... 8 345..............7 998
EAST RAND OPERATIONS
UNDERGROUND OPERATIONS
ORE MILLED - T'000.....................249................262
GOLD PRODUCED - KG.....................990................987
YIELD - G/T.................. .........3.98...............3.77
GOLD PRICE - R/T MILLED................204.89.............179.84
CASH OPERATING COSTS - R/T MILLED .....203.18.............201.09
CASH OPERATING PROFIT (LOSS) -
R/T MILLED..                           1.71..   ..........(21.25)
CLEAN-UP OPERATIONS
ORE MILLED - T'000.....................-..................25
GOLD PRODUCED - KG.....................-..................107
YIELD - G/T............................-..   .............4.28
GOLD PRICE - R/T MILLED................-..................204.33
CASH OPERATING COSTS - R/T MILLED......-..................38.84
CASH OPERATING PROFIT - R/T MILLED.....-..................165.49
TOTAL EAST RAND OPERATIONS
GOLD PRICE - R/KG......................51 533.............47 738
CASH OPERATING COSTS - R/KG............51 103.............49 047
CASH OPERATING PROFIT (LOSS) - R/KG....430................(1 309)
FINANCIAL RESULTS
OPERATIONS................ QUARTER 30/06/98........QUARTER 31/03/98
................FREE......EAST...............FREE....EAST
R'000..........STATE..... RAND.....TOTAL....STATE....RAND....TOTAL
GOLD SALES.....238 052....51 018...289 070..231 629..52 225..283 854
MINING.........238 052....51 018...289 070..221 854..47 263..269 117
CLEAN-UP.......-..........-.........-.......9 775.. .4 962...14 737
CASH OPERATING
COSTS......... 199 119 ...50 592...249 711..193 007..53 657..246 664
MINING........ 199 119..  50 5922..49 711...189 952..52 686..242 638
CLEAN-UP.......-..........-.........-.......3 055....971.....4 026
CASH OPERATING
PROFIT/(LOSS)..38 933.....426 .....39 359. .38 622.. (1 432).37 190
SUNDRY REVENUE
- NET..............................4 627.....................3 386
INTEREST PAID
- BRAND SHAFTS....................(1 793)
EMPLOYMENT
TERMINATION.......................(1 098)....................(7 429)
...................................-------...................------
CASH PROFIT
BEFORE TAXATION....................41 095....................33 147
SA NORMAL
TAXATION REVERSAL..................4 039....................-
CASH PROFIT........................45 134...................33 147
CAPITAL EXPENDITURE
- NET.......... 8 053......236......8 289...4 381......611..4 992
ABRIDGED BALANCE SHEET .
R'000...............................AT 30/06/98........AT 31/03/98
CAPITAL EMPLOYED
SHAREHOLDERS' EQUITY..................1 301 311*.........1 150 019
EMPLOYMENT OF CAPITAL
NET MINING ASSETS AFTER
DEPRECIATION..........................1 440 913..........1 366 092
OTHER LONG TERM ASSETS................54 373.............81 387
LONG TERM PROVISIONS
DEFERRED TAX..........................(134 397).........(142 538)
REHABILITATION........................(134 637).........(134 836)
PROVISION FOR POST RETIREMENT
BENEFITS..............................(35 884)... ......(35 884)
LOAN - FREEGOLD.......................(76 793)..........-
NET CURRENT ASSETS (LIABILITIES)
(EXCLUDING CASH)......................44 334*...........(77 552)
CASH AND SHORT TERM INVESTMENTS.......143 402...........93 350
......................................1 301 311.........1 150 019
SHAREHOLDERS' EQUITY IS ADJUSTED FOR
NON-CASH ITEMS, BEING DEPRECIATION AND
PROVISIONS AMOUNTING TO:..............16 342............14 678
* SHAREHOLDERS' EQUITY WAS INCREASED WITH R122.5 MILLION AS A RESULT OF 4.9
MILLION SHARES ISSUED. THIS AMOUNT WAS INCLUDED IN CURRENT ASSETS AS THE FUNDS
WERE ONLY RECEIVED SUBSEQUENT TO THE QUARTER END.
DEVELOPMENT RESULTS
............................SAMPLED.........CHANNEL.......   CHANNEL
............................METRES .... .....WIDTH CM..   .G/T. .CM.G/T
FREE STATE OPERATIONS
BASAL REEF..................266.............97............5.3....903
LEADER REEF.................1 317...........163...........9.3....782
"A" REEF....................294.............162...........4.8....866
EAST RAND OPERATIONS
BLACK REEF................. 191..............115..........3.3...375
KIMBERLEY REEF..............973..............84...........7.4...620
COMMENTS
THE GOOD PERFORMANCE OF THE PREVIOUS QUARTER CONTINUED AS THE FULL BENEFITS OF
THE RESTRUCTURING WERE REALISED. THE CASH PROFIT FOR THE QUARTER INCREASED TO
R45.1 MILLION COMPARED WITH R33.1 MILLION DURING THE MARCH QUARTER. THE FREE
STATE OPERATIONS RETURNED ANOTHER STRONG PERFORMANCE, WHILST THE EAST RAND
OPERATIONS RETURNED TO PROFITABILITY DESPITE A DECREASE OF R2.5 MILLION IN THE
PUMPING SUBSIDY. EXCEPTIONAL ITEMS CONTAINED IN SUNDRY REVENUE INCLUDE A NET
LOSS ON THE DISPOSAL OF INVESTMENTS OF R18.7 MILLION, MAINLY DUE TO THE
DIVESTMENT OF GOLD FIELDS SHARES, WHICH WAS OFFSET BY PROCEEDS OF R21.6 MILLION
ON THE SETTLEMENT OF THE COMPANY'S DISPUTE WITH ST HELENA GOLD MINES LIMITED.
OPERATIONS
FREE STATE: TONS MILLED INCREASED BY 12 PER CENT FROM 869 000 IN THE MARCH
QUARTER TO 976 000 IN THE CURRENT QUARTER DUE TO ACHIEVING PLANNED PRODUCTION
LEVELS AFTER THE RESTRUCTURING IN THE PREVIOUS QUARTER. THE UNDERGROUND GRADE
ACCORDINGLY REDUCED TO FORECAST LEVELS AS LOWER-GRADE PANELS RESUMED
PRODUCTION. COSTS WERE REDUCED TO BELOW R200 PER TON BECAUSE OF INCREASED
VOLUMES AND ONGOING CONTROL OVER EXPENDITURE. THE TREATMENT OF SURFACE SOURCES
YIELDED 123 KG, BUT HAS SINCE BEEN CURTAILED IN ORDER TO TREAT UNDERGROUND ORE.
BRAND SHAFTS: BRAND NOS 2 AND 3 SHAFTS COMMENCED PRODUCTION DURING MAY 1998.
THE RESULTS OF THESE SHAFTS HAVE NOT BEEN INCLUDED IN THE PRODUCTION STATISTICS
DUE TO THEIR PRE-PRODUCTION COMMISSIONING PHASE. A TOTAL OF 37 000 TONS AT AN
AVERAGE RECOVERED GRADE OF 10.4 GRAMS WAS TREATED, RESULTING IN A PROFIT OF
R0.9 MILLION, WHICH WAS CAPITALISED. BRAND NO. 5 SHAFT WILL COMMENCE PRODUCTION
IN JULY 1998.
EAST RAND: TONS MILLED DECREASED BY 13 000 COMPARED WITH THE MARCH QUARTER DUE
TO THE COMPLETION OF THE PROCESSING OF THE STOCKPILE AND THE CLOSURE OF
GROOTVLEI 4 SHAFT AT THE END OF APRIL 1998. THE RECOVERED GRADE ACCORDINGLY
SHOWED AN IMPROVEMENT OF 6 PER CENT OVER THE SAME PERIOD. COST PER TON
INCREASED AS A RESULT OF THE LOWER VOLUMES MINED AND A REDUCTION IN THE PUMPING
SUBSIDY RECEIVED FROM THE STATE OF R2.5 MILLION. AN APPLICATION HAS BEEN MADE
FOR THE CONTINUATION OF THE PUMPING SUBSIDY, BUT ON THE DATE OF THIS REPORT, NO
REPLY HAD BEEN RECEIVED FROM THE GOVERNMENT. AROUND 500 EMPLOYEES AFFECTED BY
THE CLOSURE OF GROOTVLEI 4 SHAFT WERE TRANSFERRED TO THE FREE STATE OPERATIONS.
BISSETT: THE COMPANY FORMALLY TOOK POSSESSION OF THE BISSETT GOLD MINE IN
CANADA ON 16 JUNE 1998. THE MANAGEMENT TEAM IS ON SITE AND RECRUITMENT OF
LABOUR HAS COMMENCED. COMMISSIONING OF THE OPERATIONS WILL TAKE PLACE DURING
THE FORTHCOMING QUARTER.
CAPITAL EXPENDITURE
CAPITAL EXPENDITURE FOR THE QUARTER WAS R8.3 MILLION AND IS EXPECTED TO AMOUNT
TO R10.0 MILLION IN THE ENSUING QUARTER.
PROSPECTS
TONNAGES ARE EXPECTED TO INCREASE AT THE FREE STATE OPERATIONS AS THE BRAND
SHAFTS COME ON LINE, BUT DECREASE AT THE EAST RAND OPERATIONS DUE TO THE
CLOSURE OF GROOTVLEI 4 SHAFT. WORKING COSTS WILL CONTINUE TO BE CONTROLLED. THE
WEAKENING OF THE RAND AGAINST THE US DOLLAR WILL HAVE A MATERIAL POSITIVE
EFFECT ON THE RESULTS OF THE ENSUING QUARTER.
SHAREHOLDERS WERE ADVISED OF THE PROPOSED ACQUISITION OF EVANDER
GOLD MINES LIMITED, WHICH SHOULD BE FINALISED TOWARDS THE END OF AUGUST PENDING
APPROVAL BY THE RELEVANT SHAREHOLDERS AND REGULATORY BODIES.
A TOTAL OF 7.25 MILLION SHARES WERE ISSUED TO VARIOUS INSTITUTIONS RAISING
R181.25 MILLION IN CASH FOR THE PROPOSED ACQUISITION.
Z B SWANEPOEL            ......F ABBOTT
MANAGING DIRECTOR ..............FINANCIAL DIRECTOR
16 JULY 1998
REGISTERED OFFICE:
HARMONY GOLD MINING COMPANY LIMITED, GLEN HARMONY, VIRGINIA, FREE STATE
PO BOX 1, GLEN HARMONY, VIRGINIA, 9435, SOUTH AFRICA
TEL: +27 (57) 231-9111..........FAX: +27 (57) 217-4592
E-MAIL: HARMCORP@INTERNEXT.CO.ZA
SHARE TRANSFER SECRETARIES:
OPTIMUM REGISTRARS (PTY) LIMITED, EDURA HOUSE
41 FOX STREET, JOHANNESBURG, 2001
PO BOX 62391, MARSHALLTOWN, 2107 SOUTH AFRICA
TEL: +27 (11) 834-1050...........FAX: +27 (11) 834-2446
DEPOSITORY BANK:
AMERICAN DEPOSITORY RECEIPTS, THE BANK OF NEW YORK, SHAREHOLDER RELATIONS
DEPARTMENT 101 BARCLAY STREET, NEW YORK, NY 10286
TEL: 1 (800) 524-4458
UNITED KINGDOM TRANSFER AGENTS:
COMPUTERSHARE SERVICES PLC
PO BOX 82, CAXTON HOUSE, REDCLIFFE WAY, BRISTOL BS99 7NH
TEL: +44 (117) 930-6957.........FAX: +44 (117) 930-6509
INVESTOR RELATIONS:
FOR FURTHER INFORMATION CONTACT FERDI DIPPENAAR AT
TELEPHONE: +27 (11) 802-1822.......FAX: +27 (11) 802-2363
E-MAIL: HARMCORP@INTERNEXT.CO.ZA
DIRECTORS: L HEWITT (CHAIRMAN), ZB SWANEPOEL
HARMONY - NEWS RELEASE
CONTINUED GOOD PERFORMANCE FROM OPERATIONS
JOHANNESBURG, 15 JULY 1998 - HARMONY CONTINUES TO PERFORM WELL AND THE FULL
BENEFITS OF ITS RESTRUCTURING PROGRAMME, WHICH WAS COMPLETED DURING THE MARCH
QUARTER, WERE REALISED IN THE JUNE QUARTER.
THE CASH PROFIT FOR THE THREE MONTHS ENDED JUNE INCREASED BY R119 MILLION FROM
THE MARCH QUARTER'S R33.1 MILLION TO R45.1 MILLION.
MANAGING DIRECTOR BERNARD SWANEPOEL SAID THAT IT IS PARTICULARLY PLEASING THAT
THE EAST RAND OPERATIONS SHOWED A SMALL PROFIT OF RO.4 MILLION COMPARED WITH
LOSSES OF R1.4 MILLION AND R12.3 MILLION IN THE TWO PRECEDING QUARTERS, DESPITE
A REDUCTION OF R2.5 MILLION IN THE PUMPING SUBSIDY RECEIVED FROM THE STATE.
"WE ARE NOW SATISFIED THAT WE CAN EXPORT OUR TRADITIONAL LOW-COST, HIGH
PRODUCTIVITY SKILLS TO MARGINAL OPERATIONS AND TURN THEM AROUND. THIS BODES
WELL FOR OUR PROPOSED ACQUISITION OF EVANDER", SWANEPOEL SAID.
PRODUCTION INCREASED AT THE FREE STATE OPERATIONS, BUT DUE TO THE LOWER GRADE
OF 4.7 G/TON FORECAST THE PREVIOUS QUARTER BEING REALISED, GOLD OUTPUT REMAINED
STEADY AT 4 542 KG.
WORKING COSTS WERE REDUCED TO UNDER R200 PER TON. SWANEPOEL SAID THAT THE
TREATMENT OF SURFACE SOURCES, WHICH INCREASED SUBSTANTIALLY IN COMPARISON WITH
THE MARCH QUARTER, HAD SINCE BEEN CURTAILED IN ORDER TO CREATE CAPACITY FOR THE
TREATMENT OF ORE FROM UNDERGROUND OPERATIONS.
TWO OF THE BRAND SHAFTS (NOS 2 AND 3) ACQUIRED FROM FREEGOLD EFFECTIVE 1 MAY,
WERE COMMISSIONED DURING THE QUARTER; HOWEVER, AS A RESULT OF THE LIMITED
PRODUCTION PERIOD, THEIR RESULTS WERE NOT INCLUDED. THE TWO SHAFTS PRODUCED 37
000 TONS AT AN AVERAGE GRADE OF 10.4 G/TON AND REALISED A SMALL PROFIT OF RO.9
MILLION WHICH WAS CAPITALISED. BRAND 5 SHAFT WILL BE COMMISSIONED DURING THE
SEPTEMBER QUARTER.
TONS MILLED AT THE EAST RAND OPERATIONS WERE 13 000 LESS THAN THE MARCH
QUARTER. SWANEPOEL SAID THAT THIS WAS THE RESULT OF THE EXHAUSTION OF THE
STOCKPILE ACCUMULATED DURING PREVIOUS QUARTERS AND THE CLOSURE OF GROOTVLEI 4
SHAFT DURING THE QUARTER.
RECOVERED GRADE AT THE OPERATIONS SHOWED AN IMPROVEMENT OF 6 PER CENT TO 3.98
G/TON. AROUND 500 EMPLOYEES AFFECTED BY THE CLOSURE OF GROOTVLEI 4 SHAFT WERE
TRANSFERRED TO THE FREE STATE OPERATIONS.
THE ACQUISITION OF THE BISSETT GOLD MINE IN CANADA WAS FINALISED ON 16 JUNE. A
MANAGEMENT TEAM HAS MUSTERED AND RECRUITMENT OF LABOUR COMMENCED. THE OPERATION
WILL BE COMMISSIONED DURING THE COMING QUARTER.
SWANEPOEL SAID THAT VOLUMES AT THE FREE STATE OPERATIONS ARE EXPECTED TO
INCREASE DUE TO THE BRAND SHAFTS COMING ON LINE, WHILE WORKING COSTS WILL
CONTINUE TO BE CONTROLLED. TONNAGES FROM THE EAST RAND, HOWEVER, WILL DECREASE
AS A RESULT OF THE CLOSURE OF GROOTYLEI 4 SHAFT. THE WEAKENING OF THE RAND
AGAINST THE US DOLLAR SHOULD IMPACT POSITIVELY ON THE SEPTEMBER QUARTER'S
RESULTS.
SHAREHOLDERS WERE ADVISED THAT 7.25 MILLION SHARES WERE ISSUED, RAISING R181.25
MILLION IN CASH, OF WHICH 4.9 MILLION WERE ISSUED IN THE JUNE QUARTER AND
INCREASED SHAREHOLDERS' EQUITY BY R122.5 MILLION. THE PROCEEDS WILL BE USED IN
THE PROPOSED ACQUISITION OF EVANDER GOLD MINES LIMITED. THE EVANDER ACQUISITION
PROCESS IS ON TRACK AND SHOULD BE FINALISED TOWARDS THE END OF AUGUST.



                                        
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