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HARMONY - PRESS RELEASE

Release Date: 25/01/1999 12:04:03      Code(s): HAR HARO
HARMONY ON ITS WAY TO ACHIEVING PLUS ONE MILLION OUNCE PRODUCTION TARGET
JOHANNESBURG, 25 JANUARY 1999 - THE FIRST TIME INCLUSION OF HARMONY'S NEWLY
ACQUIRED MASIMONG AND BRAND 5 SHAFTS' RESULTS, HAS INCREASED THE COMPANY'S GOLD
PRODUCTION BY A FURTHER 18 PER CENT. ANNUALISED GOLD PRODUCTION NOW STANDS AT
1.3 MILLION OUNCES, WHICH IS FAR REMOVED FROM THE 580 000 OUNCES PRODUCED IN
1996.
CHIEF EXECUTIVE BERNARD SWANEPOEL SAYS THE COMPANY HAS DOUBLED IN SIZE IN TERMS
OF AVAILABLE ORE RESERVES AND PRODUCTION LEVELS SINCE EMBARKING ON ITS STRATEGY
OF GROWTH.
A CASH OPERATING PROFIT OF R100.4 MILLION WAS ACHIEVED, WHICH COMPARES
FAVOURABLY WITH THAT OF THE PREVIOUS QUARTER (R104.3 MILLION). R30 MILLION
RETRENCHMENT COSTS WERE ALSO INCURRED AT THE EVANDER AND EAST RAND OPERATIONS
AND AS A RESULT, NET AFTER TAX EARNINGS DECLINED FROM R78.2 MILLION (EPS: 114
CENTS) IN THE SEPTEMBER QUARTER TO R38.8 MILLION (EPS: 56 CENTS). THE COMBINED
EARNINGS FOR THE SIX MONTHS ENDING DECEMBER WAS 170 CENTS PER SHARE AND ENABLED
THE COMPANY TO DECLARE AN INTERIM DIVIDEND OF 50 CENTS PER SHARE.
THE HARMONY OPERATION'S CASH OPERATING PROFIT WAS REDUCED BY R19 MILLION TO R47
MILLION, MAINLY AS A RESULT OF THE LOWER GOLD PRICE RECEIVED AND A SLIGHT
REDUCTION IN THE RECOVERED GRADE.  THE BRAND SHAFTS, WHICH INCLUDED THE BRAND
NO. 5 SHAFT'S RESULTS FOR THE FIRST TIME, INCREASED ITS CASH OPERATING PROFIT
WITH R3.6 MILLION THIS QUARTER TO R8.6 MILLION. THIS INCREASED PRODUCTION LEAD
TO A REDUCTION OF 10 PER CENT IN COSTS TO R281 PER TON.
SWANEPOEL SAYS THEY ANTICIPATED THE R7 MILLION LOSS INCURRED BY MASIMONG FOR
THE QUARTER, ALTHOUGH A CASH OPERATING PROFIT FOR THE MONTH OF DECEMBER WAS
RECORDED. THIS TREND IS EXPECTED TO CONTINUE.
A DECREASE IN WORKING COSTS WAS ACHIEVED AT THE EVANDER OPERATIONS, WHICH LEAD
TO AN IMPROVEMENT IN CASH OPERATING PROFIT OF R13.3 MILLION TO R42.7 MILLION
FOR THE CURRENT QUARTER.  TOTAL WORKING COSTS FOR THE QUARTER WERE REDUCED BY
R15 MILLION OR R5 197 PER KILOGRAM OF GOLD PRODUCED.  AS PART OF THE
OPERATION'S RESTRUCTURING 1 141 EMPLOYEES APPLIED FOR VOLUNTARY RETRENCHMENT
PACKAGES DURING THE QUARTER AT A COST OF R19 MILLION.  SWANEPOEL SAYS THE FULL
BENEFITS OF THE RESTRUCTURING WILL BE EVIDENT IN THE JUNE QUARTER, AS THE
OPERATIONS ARE STILL ADJUSTING TO THE CHANGES.  THE TREATMENT OF WASTE ROCK
COMMENCED DURING THE QUARTER AND IS EXPECTED TO CONTINUE AT 35 000 TONS PER
MONTH.  THIS WILL ADD AN ADDITIONAL R1 MILLION TO THE BOTTOM LINE PER MONTH AND
IS EXPECTED TO CONTINUE TO DO SO FOR THE NEXT THREE YEARS.
CAPITAL EXPENDITURE AND PRE-PRODUCTION COSTS OF R16.5 MILLION AT THE BISSETT
OPERATION IN CANADA WERE CAPITALISED FOR THE QUARTER.  "GOLD PRODUCTION WAS
DOWN DUE TO GOLD LOCK UP IN THE PLANT AND THE MILLING OF A HIGHER THAN EXPECTED
PROPORTION OF LOWER GRADE ORE FROM DEVELOPMENT OPERATIONS WHICH AFFECTED THE
GRADE.  COSTS AND TONNAGES WERE IN LINE WITH EXPECTATIONS AND WE EXPECT THE
OPERATION TO REACH DESIGNED PRODUCTION LEVELS BY MARCH THIS YEAR" SAYS
SWANEPOEL.
IN DECEMBER HARMONY DISPOSED OF ITS ENTIRE SHAREHOLDING IN ITS EAST RAND
OPERATIONS, WHICH INCLUDE CONSOLIDATED MODDERFONTEIN AND GROOTVLEI, FOR A
CONSIDERATION OF R90 MILLION TO PETRA MINING LIMITED. THIS WILL BE SETTLED  BY
WAY OF 12 MILLION MOLOPE "N" SHARES AT A VALUE OF R5 EACH, WHILST THE BALANCE
WILL BE PAID IN 21 MONTHLY INSTALMENTS AT AN INTEREST RATE OF 10 PER CENT.  THE
FIRST INSTALMENT IS PAYABLE ON 31 MARCH 1999. THE OPERATIONS CONTRIBUTED R8.6
MILLION TO CASH PROFIT, COMPARED WITH R3.4 MILLION THE PREVIOUS QUARTER.  THE
INCREASE IN CASH PROFIT AND GOLD PRODUCTION WAS DUE TO UNDERGROUND AND SURFACE
CLEANUP OPERATIONS, PRIOR TO THE CLOSURE AND DISPOSAL OF THE OPERATIONS.  THE
ENTIRE WORKFORCE RECEIVED RETRENCHMENT PACKAGES AT A COST OF R11 MILLION AS A
RESULT OF THE CLOSURE.
"IT IS EXPECTED THAT THE CURRENT PRODUCTION LEVELS WILL BE MAINTAINED DURING
THE MARCH QUARTER.  WE ALSO ANTICIPATE UNIT COSTS PER TON AND PER KILOGRAM TO
REDUCE AT EVANDER, BRAND AND MASIMONG.  HARMONY IS ON TRACK TO DELIVER IN
EXCESS OF ONE MILLION OUNCES FOR THE FINANCIAL YEAR.  I BELIEVE THAT THIS
TARGET WILL BE REACHED BY APRIL THIS YEAR," SAYS SWANEPOEL.
ENDS
ISSUED BY HARMONY GOLD MINING COMPANY LIMITED.  CONTACT: CHRISTINE LEONARDI;
TEL. +27(11) 802-1822; FAX: +27(11) 802-2363; E-MAIL CLEONARDI@HARMONY.CO.ZA.



                                        
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