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HARMONY - DISPOSAL OF GROOTVLEI AND CONSOLIDATED MODDERFONTEIN MINES

Release Date: 03/12/1998 16:09:21      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")
DISPOSAL OF THE GROOTVLEI PROPRIETARY MINES LIMITED ("GROOTVLEI") AND
CONSOLIDATED MODDERFONTEIN MINES LIMITED ("CONS MODDER")
1. INTRODUCTION
THE CORNER HOUSE (PROPRIETARY) LIMITED IS AUTHORISED TO ANNOUNCE THAT, SUBJECT
TO THE FULFILMENT OF THE CONDITIONS PRECEDENT SET OUT IN PARAGRAPH 4 BELOW,
HARMONY HAS DISPOSED OF ITS ENTIRE SHAREHOLDINGS IN AND CLAIMS AGAINST
GROOTVLEI AND CONS MODDER TO PETRA MINING LIMITED ("THE DISPOSAL").
2. CONSIDERATION
THE DISPOSAL CONSIDERATION IS R90 MILLION AND WILL BE SETTLED AS FOLLOWS:
* R60 MILLION TO BE SETTLED BY THE RECEIPT OF 12 MILLION MOLOPE GROUP LIMITED
"N" ORDINARY SHARES AT AN AGREED VALUE OF 500 CENTS EACH BY 31 JANUARY 1999;
* THE BALANCE OF R30 MILLION, BEARING INTEREST AT 10% PER ANNUM, IS TO BE
RECEIVED IN 21 EQUAL MONTHLY PAYMENTS COMMENCING ON 31 MARCH 1999.
3. RATIONALE FOR THE DISPOSAL
THIS TRANSACTION CONSOLIDATES THE EAST RAND BASIN INTO AN ECONOMIC MINING
ENTITY, WHICH WILL BE OPERATED BY A COMPETENT SMALL-SCALE MINING COMPANY WITH A
PROVEN TRACK RECORD AND AREA SPECIFIC KNOWLEDGE.
THE LIMITED CONTRIBUTIONS THESE OPERATIONS MADE TO HARMONY RESULTED IN THE
BOARD OF HARMONY DECIDING TO FOCUS ITS ASSETS AND MANAGEMENT TIME ON THE RECENT
EXPANDED FREE STATE OPERATIONS AS WELL AS ON EVANDER GOLD MINES LIMITED IN
MPUMALANGA.
4. CONDITIONS PRECEDENT
THE DISPOSAL IS CONDITIONAL UPON, INTER ALIA:
* RECEIPT OF THE RELEVANT REGULATORY AND STATUTORY APPROVALS INCLUDING THE
JOHANNESBURG STOCK EXCHANGE; AND
* APPROVAL BY PETRA MINING LIMITED SHAREHOLDERS IN GENERAL MEETING.
5. FINANCIAL EFFECTS OF THE DISPOSAL
HAD THE DISPOSAL BEEN EFFECTIVE FROM 1 JULY 1998, IT WOULD NOT HAVE HAD A
MATERIAL EFFECT ON HARMONY'S NET ASSET VALUE OR EARNINGS PER SHARE IN RESPECT
OF THE QUARTER ENDED 30 SEPTEMBER 1998.
VIRGINIA
3 DECEMBER 1998
CORPORATE ADVISER
THE CORNER HOUSE (PTY) LIMITED
(REGISTRATION NUMBER 97/01815/07)
HARMONY AGREES TO SELL EAST RAND OPERATIONS TO PETMIN
FOR IMMEDIATELY RELEASE ON 3 DECEMBER 1998
JOHANNESBURG, 3 DECEMBER 1998 - HARMONY HAS CONCLUDED NEGOTIATIONS TO SELL OFF
GROOTVLEI PROPRIETARY MINES LIMITED AND CONSOLIDATED MODDERFONTEIN MINES
LIMITED TO PETRA MINING LIMITED (PETMIN) FOR A CONSIDERATION OF R90 MILLION.
JSE-LISTED PETMIN CURRENTLY MINES ON A SMALL-SCALE ON THE EAST RAND.
HARMONY'S CHIEF EXECUTIVE BERNARD SWANEPOEL, SAYS THE DECISION IS BASED ON THE
EAST RAND OPERATIONS' LIMITED CONTRIBUTION TO HARMONY'S PRODUCTION RESULTS AND
ITS DEMAND ON MANAGEMENT'S TIME.
THIS TRANSACTION CONSOLIDATES THE EAST RAND BASIN INTO A ECONOMICAL ENTITY
OPERATED BY A COMPETENT SMALL-SCALE MINING COMPANY, WHILE FREEING HARMONY'S
ASSETS AND PERMITTING MANAGEMENT TO FOCUS ON ITS GROWTH STRATEGY.  PETMIN'S
COST STRUCTURE WILL ALLOW THEM TO SUCCESSFULLY MINE THIS BASIN FOR OVER TWELVE
YEARS.  THIS ACQUISITION WILL ALSO INCREASE PETMIN'S MONTHLY GOLD PRODUCTION TO
APPROXIMATELY 400KG.
DURING THE PAST TWELVE MONTHS HARMONY ACQUIRED ADDITIONAL SHAFTS IN THE FREE
STATE, AS WELL AS EVANDER GOLD MINES LIMITED IN MPUMALANGA. THESE ACQUISITIONS
WILL CONTRIBUTE SIGNIFICANTLY TO THE COMPANY'S FUTURE PROFITABILITY AND
CURRENTLY REQUIRE CONSIDERABLE INPUT FROM HARMONY'S MANAGEMENT TEAM TO
TRANSFORM THEM SUCCESSFULLY. "OUR SHAREHOLDERS WANTED US TO DISPOSE OF THESE
OPERATIONS AND FOCUS ON BEDDING DOWN OUR BIGGER ACQUISITIONS," SAYS SWANEPOEL.
ENDS
ISSUED BY HARMONY GOLD MINING COMPANY LIMITED.  CONTACT:  CHRISTINE LEONARDI.
TEL: (+27) 11 802-1822;
FAX: (+27) 11 802-2363.



                                        
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