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HARMONY - RESULTS

Release Date: 19/04/1999 12:41:21      Code(s): HAR HARO
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
JSE CODE:HAR
NASDAQ TRADING SYMBOL HGMCY
REPORT TO SHAREHOLDERS FOR THE QUARTER ENDED 31 MARCH 1999
HIGHLIGHTS
- CASH OPERATING PROFIT OF R104 MILLION
- EPS INCREASED BY 123% TO 125 CPS
- EVANDER CASH COSTS BELOW US$200/OZ
- ONE MILLION OUNCES PRODUCED BY 9 APRIL 1999
FINANCIAL
- CASH OPERATING PROFIT                          R104 MILLION   $17 MILLION
- EARNINGS                                       R87 MILLION    $14 MILLION
- EARNINGS PER SHARE                             125 CENTS      20 US CENTS
KEY INDICATORS
- GOLD PRODUCED                                  9 943 KG       319 675 OZ
- CASH COSTS                                     R46 432/KG     $237/OZ
SOUTH AFRICAN RAND VALUES ARE USED IN THIS REPORT OTHER THAN WHERE SPECIFIED.
FOR CONVENIENCE, THE CONVERSION RATE CAN BE TRANSLATED AT US$1.00 = R6.10
(DECEMBER 1998: US$1.00 = R5.80)
ENQUIRIES CONCERNING THIS REPORT CAN BE DIRECTED TO:
CHRISTINE LEONARDI, PUBLIC RELATIONS MANAGER
POSTNET SUITE 27, PRIVATE BAG X23, GALLO MANOR, 2052, SOUTH AFRICA
TELEPHONE: +27 (11) 802-1822. TELEFAX: +27 (11) 802-2363
E-MAIL: CLEONARDI@HARMONY.CO.ZA
THIS REPORT IS ALSO AVAILABLE AT WEBSITE: HTTP://WWW.HARMONY.CO.ZA
MESSAGE FROM THE CHIEF EXECUTIVE
OVERVIEW
THE COMPANY IMPROVED ON ITS STRONG PERFORMANCE IN THE MARCH QUARTER. NET
EARNINGS WERE R86,6 MILLION, COMPARED WITH R38,8 MILLION FOR THE DECEMBER
QUARTER. ACCORDINGLY, EARNINGS PER SHARE MORE THAN DOUBLED TO 125 CENTS FROM
THE 56 CENTS REALISED IN DECEMBER, WHILST CASH OPERATING PROFIT INCREASED TO
R104,3 MILLION, COMPARED WITH R100,4 MILLION IN THE PREVIOUS QUARTER (R100,4
MILLION INCLUDED R8,7 MILLION FROM THE EAST RAND OPERATIONS WHICH HAVE
SUBSEQUENTLY BEEN SOLD).
FOLLOWING THE ACQUISITION OF EVANDER IN JUNE 1998, OUR TARGET OF PRODUCING MORE
THAN 1 MILLION OUNCES FOR THE FINANCIAL YEAR WAS ACHIEVED BY 9 APRIL 1999.
WE BELIEVE THAT FURTHER GROWTH OPPORTUNITIES EXIST WITHIN THE MINING INDUSTRY.
THE MOST PLEASING ASPECT OF THE QUARTER WAS THE EXCELLENT OPERATIONAL RESULTS
ACHIEVED AT EVANDER, WHERE PROFITS INCREASED FROM R42,7 MILLION TO R66,2
MILLION AND THE CASH COST PER OUNCE WAS REDUCED TO BELOW US$200 PER OUNCE.
EVANDER'S TURNAROUND IS SPECTACULAR SEEN AGAINST THE FACT THAT WITHIN A MERE
NINE MONTHS SINCE THE ACQUISITION, HARMONY'S MANAGEMENT TEAM HAS CONVERTED A
LOSS MAKING OPERATION INTO ONE OF THE LOWEST COST PRODUCERS IN THE COUNTRY.
THIS WAS ONLY POSSIBLE WITH THE CO-OPERATION AND SUPPORT FROM ALL EVANDER'S
EMPLOYEES.
THE FREE STATE OPERATIONS EXPERIENCED A DECREASE IN PROFITS FROM R49,0 MILLION
TO R38,1 MILLION DUE TO PRODUCTION RELATED PROBLEMS AT THE BEGINNING OF THE
QUARTER.
GOLD PRODUCTION FROM BISSETT WAS LOWER THAN EXPECTED AND THE OPERATIONS DID NOT
BREAK EVEN BY THE END OF THE QUARTER. THIS IS ATTRIBUTED TO A LACK OF
FLEXIBILITY AND A DISRUPTION IN PRODUCTION DUE TO A SERIOUS ACCIDENT IN A KEY
WORKING AREA. ADDITIONAL DRILLING AND DEVELOPMENT RECONFIRMED THE VOLUMES AND
GRADE OF THE ORE BODY.
OUR STRATEGY OF CONVERTING NON-CORE ASSETS INTO CASH HAS REALISED A PROFIT OF
R28 MILLION DURING THE QUARTER. THIS WAS OFFSET BY A FINAL WRITE DOWN OF R14
MILLION ON THE DISPOSAL OF THE EAST RAND OPERATIONS. WE RECEIVED 12 MILLION
MOLOPE "N" SHARES AS PART PAYMENT FOR THE EAST RAND OPERATIONS, OF WHICH 6
MILLION SHARES WERE SOLD FOR A CONSIDERATION OF R28,2 MILLION.
AFTER THE DIVIDEND PAYMENT OF R35 MILLION, OUR CASH BALANCE STILL INCREASED BY
R71,8 MILLION QUARTER-ON-QUARTER TO R268 MILLION.
SINCE 1993 THE COMPANY HAS BEEN ENSURING THAT ALL COMPUTER SYSTEMS ARE YEAR
2000 COMPLIANT AND HAS ALREADY INCURRED OVER R11 MILLION EXPENDITURE WITH A
FURTHER R1 MILLION ANTICIPATED. PUBLIC AND PRIVATE SECTOR ASSOCIATES ARE
CURRENTLY BEING EVALUATED FOR COMPLIANCE.
PROSPECTS
I EXPECT THE JUNE QUARTER TO BE CHALLENGING, ESPECIALLY IN VIEW OF THE SIX
PUBLIC HOLIDAYS DURING THIS PERIOD.
EVANDER IS ON TRACK TO REDUCE ITS COST TO R260 PER TONNE BY THE END OF JUNE.
THIS WILL BE ACHIEVED BY AN INCREASE IN TONNAGES AND A FURTHER REDUCTION IN
COSTS. THE INCREASE IN VOLUME WILL RESULT IN THE GRADE DECREASING TO A MORE
SUSTAINABLE LEVEL OF APPROXIMATELY 7,0 GRAMS PER TONNE.
AN INVESTIGATION INTO RE-TREATING SLIMES DAMS AT EVANDER IS UNDERWAY WITH A
DRILLING PROGRAMME TO CONFIRM GRADES.
PRODUCTION IMPROVEMENTS AT HARMONY AND INCREASED FLEXIBILITY AT MASIMONG SHOULD
RESULT IN AN IMPROVED PERFORMANCE FROM THE FREE STATE OPERATIONS, WHILST
BISSETT SHOULD BREAK EVEN.
MANAGEMENT'S DISCUSSION AND OPERATIONAL ANALYSIS
BISSETT
PRE-PRODUCTION COSTS OF R8,3 MILLION (DECEMBER QUARTER: R12,3 MILLION) WERE
CAPITALISED FOR THE QUARTER. EXTENSIVE DRILLING AND DEVELOPMENT IN THE LAST
THREE QUARTERS CONTINUE TO IMPROVE STOPING FLEXIBILITY AND CONFIRM PREVIOUS
RESERVE ESTIMATES.
HOLE              TRUE WIDTH      GRADE (G/TONNE)      ZONE
                  METRES          CUT*      UNCUT
32 - 33           3.1             32.8      96.20      A-N EXTENSION
32 - 14           6.1             14.04     30.14      A-N EXTENSION
32 - 38           16.2            10.62     11.64      33A
32 - 42           13.4            7.50      15.00      33A
32 - 10           5.5             13.01     17.81      A-WEST EXTENSION
32 - 44           1.5             24.66     32.22      A-NORTH
* CUT TO 34G/T SAMPLE.
                                  SEPT. 98   DEC. 98    MARCH 99
DEVELOPMENT RATES                 1 761M     1 935M     1 525M
DIAMOND DRILLING                  1 957M     6 737M     4 251M
FREE STATE
THE FREE STATE MADE A CASH OPERATING PROFIT OF R38,1 MILLION AGAINST R49,0
MILLION FOR THE PREVIOUS QUARTER. A DECLINE IN PRODUCTION OCCURRED DURING THE
QUARTER DUE TO THE CHRISTMAS BREAK, PUBLIC HOLIDAYS AND LEAVE SCHEDULING
PROBLEMS ASSOCIATED WITH THE MASS HIRING OF NEW WORKERS IN JANUARY 1998. THIS
RESULTED IN A DECREASE OF 11 PER CENT IN TONNAGES AND A 12 PER CENT INCREASE IN
COST PER TONNE TO R248. THE RECOVERED GRADE INCREASED BY 6 PER CENT TO 4.87
GRAMS PER TONNE. A SIGNIFICANT IMPROVEMENT IN COST PER TONNE IS EXPECTED AS
PRODUCTION VOLUMES RETURN TO NORMAL.
THE MASIMONG SHAFTS RECORDED A LOSS OF R1 MILLION (R7 MILLION IN THE DECEMBER
QUARTER). INCREASED DEVELOPMENT HAS RESULTED IN IMPROVED STOPING FLEXIBILITY.
EVANDER
CASH OPERATING PROFIT INCREASED BY 55 PER CENT TO R66,2 MILLION COMPARED WITH
R42,7 MILLION DURING THE DECEMBER QUARTER. THE INCREASED PROFIT IS DUE TO A
FURTHER REDUCTION IN UNDERGROUND COST TO R296 PER TONNE AND AN INCREASE OF 5
PER CENT IN RECOVERED GRADE TO 7.73 GRAMS PER TONNE. THE COST PER KILOGRAM
REDUCED BY 10 PER CENT TO R38 352 PER KILOGRAM ($196 PER OUNCE).
THE TREATMENT OF WASTE ROCK AT THE LESLIE PLANT CONTINUED. 109 000 TONNES WERE
TREATED AT A RECOVERED GRADE OF 0.96 GRAMS PER TONNE, RESULTING IN A PROFIT OF
R2,8 MILLION FOR THE QUARTER.
CAPITAL EXPENDITURE
CAPITAL EXPENDITURE DURING THE QUARTER AMOUNTED TO R26 MILLION.
                                               MARCH 1999   JUNE 1999
OPERATION                                      R MILLION    R MILLION
                                                            (FORECAST)
FREE STATE                                     12           10
EVANDER                                        4            7
BISSETT                                        10           5
TOTAL                                          26           22
FINANCIAL RESULTS
                                                 QUARTER        QUARTER
                                                 ENDED          ENDED
                                                 31 MARCH       31 DECEMBER
TOTAL OPERATIONS (RANDS/METRIC)                  1999           1998
GOLD PRODUCED - KG                               9 943          10 896
GOLD PRICE RECEIVED - R/KG                       56 917         55 501
CASH OPERATING COSTS - R/KG                      46 432         46 286
CASH OPERATING COSTS - R/T                       247            236
                                                 R'000          R'000
GOLD SALES                                       565 924        604 741
CASH OPERATING COSTS                             461 674        504 328
CASH OPERATING PROFIT                            104 250        100 413
OTHER INCOME - NET                               23 799         5 803
EMPLOYMENT TERMINATION                           -              (30 209)
AMORTISATION                                     (25 304)       (26 628)
REHABILITATION PROVISION                         (2 477)        (3 060)
PROFIT BEFORE TAXATION                           100 268        46 319
SOUTH AFRICAN NORMAL TAXATION
- CURRENT TAX                                    (6 608)        (1 279)
- DEFERRED TAX                                   (7 106)        (6 257)
NET EARNINGS AFTER TAX                           86 554         38 783
CASH OPERATING EARNINGS PER SHARE - CENTS        150            145
EARNINGS PER SHARE- CENTS                        125            56
DIVIDENDS PER SHARE - CENTS                      0              50
PREPARED IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS.
OPERATING AND FINANCIAL RESULTS - SA OPERATIONS (RANDS/METRIC)
                         FREE STATE  EVANDER      EVANDER
                         TOTAL       UNDERGROUND  SURFACE  EAST RAND  TOTAL
ORE MILLED - T'000
          MARCH 1999     1 326       437          109      -          1 872
          DECEMBER 1998  1 483       427          53       174        2 137
GOLD PRODUCED - KG
          MARCH 1999     6 461       3 377        105      -          9 943
          DECEMBER 1998  6 808       3 134        56       898        10 896
YIELD - G/T
          MARCH 1999     4.87        7.73         0.96     -          5.31
          DECEMBER 1998  4.59        7.34         1.06     5.16       5.10
CASH
OPERATING
COSTS - R/KG
          MARCH 1999     50 882      38 352       32 457   -          46 432
          DECEMBER 1998  48 314      42 399       29 125   45 545     46 286
CASH
OPERATING
COSTS - R/T
          MARCH 1999      248        296          31       -          247
          DECEMBER 1998   222        311          31       235        236
WORKING
REVENUE (R'000)
          MARCH 1999      366 832    192 838      6 254    -         565 924
          DECEMBER 1998   377 913    174 119      3 119    49 590    604 741
CASH
OPERATING
COSTS (R'000)
          MARCH 1999      328 750    129 516      3 408    -         461 674
          DECEMBER 1998   328 919    132 879      1 631    40 899    504 328
CASH
OPERATING
PROFIT (R'000)
          MARCH 1999      38 082     63 322       2 846    -         104 250
          DECEMBER 1998   48 994     41 240       1 488    8 691     100 413
ABRIDGED BALANCE SHEET
                                               AT           AT
                                               31 MARCH     31 DECEMBER
R'000                                          1999         1998
CAPITAL EMPLOYED
SHAREHOLDERS' EQUITY                           1 784 356    1 731 660**
EMPLOYMENT OF CAPITAL
NET MINING ASSETS AFTER DEPRECIATION           2 134 307*   2 203 189**
INVESTMENTS                                    70 802       52 705
LONG-TERM PROVISIONS
- DEFERRED TAX                                 (190 688)    (183 582)**
- REHABILITATION                               (210 287)    (224 310)
- POST-RETIREMENT BENEFITS                     (34 981)     (40 660)
LOANS                                          (160 417)    (163 754)
NET CURRENT LIABILITIES (EXCLUDING CASH)       (92 653)     (108 417)**
CASH AND SHORT-TERM INVESTMENTS                268 273      196 489
                                               1 784 356    1 731 660
ISSUED SHARE CAPITAL: 69.3 MILLION ORDINARY SHARES OF 50 CENTS EACH (DECEMBER
1998: 69.3 MILLION SHARES).
** THE DISPOSAL OF THE EAST RAND OPERATIONS AT THE BEGINNING OF THE CURRENT
QUARTER WAS RESPONSIBLE FOR THE REDUCTION IN MINING ASSETS.
* CERTAIN ADJUSTMENTS RELATING TO THE EVANDER OPERATION HAVE BEEN MADE IN ORDER
TO CONFORM TO INTERNATIONAL ACCOUNTING STANDARDS. CONSEQUENTLY SOME DECEMBER
BALANCE SHEET ITEMS HAVE BEEN RESTATED.
DEVELOPMENT RESULTS (METRIC)
                                     CHANNEL      CHANNEL      AU
                        SAMPLED      WIDTH        VALUE        CONTENT
                        METRES       (CM)         (G/T)        (CM.G/T)
FREE STATE
BASAL REEF              1 390        84           8.70         731
LEADER REEF             1 170        140          4.44         621
"A" REEF                264          142          7.39         1 050
MIDDLE REEF             60           207          6.35         1 314
EVANDER
KIMBERLEY REEF          1 041        54           21.56        1 164
FINANCIAL RESULTS
                                                 QUARTER        QUARTER
                                                 ENDED          ENDED
                                                 31 MARCH       31 DECEMBER
TOTAL OPERATIONS (US$/IMPERIAL)                  1999           1998
GOLD PRODUCED - OZ                               319 675        350 314
GOLD PRICE RECEIVED - $/OZ                       290            297
CASH OPERATING COSTS - $/OZ                      237            248
CASH OPERATING COSTS - $/T                       36.67          36.91
                                                 $'000          $'000
GOLD SALES                                       92 774         104 266
CASH OPERATING COSTS                             75 684         86 953
CASH OPERATING PROFIT                            17 090         17 313
OTHER INCOME - NET                               3 901          1 000
EMPLOYMENT TERMINATION                           -              (5 208)
AMORTISATION                                     (4 148)        (4 591)
REHABILITATION PROVISION                         (406)          (528)
PROFIT BEFORE TAXATION                           16 437         7 986
SOUTH AFRICAN NORMAL TAXATION
- CURRENT TAX                                    (1 083)        (220)
- DEFERRED TAX                                   (1 165)        (1 079)
NET EARNINGS AFTER TAX                           14 189         6 687
CASH OPERATING EARNINGS PER SHARE - CENTS        25             25
EARNINGS PER SHARE- CENTS                        20             10
DIVIDENDS PER SHARE - CENTS                      0              9
PREPARED IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS.
CURRENCY CONVERSION RATE: US$1 = R6.10 (DECEMBER 1998: R5.80)
OPERATING AND FINANCIAL RESULTS - (US$/IMPERIAL)
                         FREE STATE  EVANDER      EVANDER
                         TOTAL       UNDERGROUND  SURFACE  EAST RAND  TOTAL
ORE MILLED - T'000
          MARCH 1999     1 462       482          120      -          2 064
          DECEMBER 1998  1 635       471          58       192        2 356
GOLD PRODUCED - OZ
          MARCH 1999     207 726     108 573      3 376    -         319 675
          DECEMBER 1998  218 882     100 760      1 801    28 871    350 314
YIELD - OZ/T
          MARCH 1999     0.142       0.225        0.028    -         0.155
          DECEMBER 1998  0.134       0.214        0.031    0.150     0.149
CASH
OPERATING
COSTS - $/OZ
          MARCH 1999     259         196          165      -         237
          DECEMBER 1998  259         227          156      244       248
CASH
OPERATING
COSTS - $/T
          MARCH 1999     36.87       44.05        4.66     -         36.67
          DECEMBER 1998  34.69       48.64        4.84     36.73     36.91
WORKING
REVENUE ($'000)
          MARCH 1999     60 136      31 613       1 025    -         92 774
          DECEMBER 1998  65 157      30 021       538      8 550     104 266
CASH
OPERATING
COSTS ($'000)
          MARCH 1999     53 893      21 232       559      -         75 684
          DECEMBER 1998  56 710      22 910       281      7 052     86 953
CASH
OPERATING
PROFIT ($'000)
          MARCH 1999     6 243       10 381      466       -         17 090
          DECEMBER 1998  8 447       7 111       257       1 498     17 313
ABRIDGED BALANCE SHEET (US$/IMPERIAL)
                                               AT           AT
                                               31 MARCH     31 DECEMBER
                                               1999         1998
                                               $'000        $'000
CAPITAL EMPLOYED
SHAREHOLDERS' EQUITY                           292 517      298 562**
EMPLOYMENT OF CAPITAL
NET MINING ASSETS AFTER DEPRECIATION           349 886*     379 860**
INVESTMENTS                                    11 607       9 087
LONG-TERM PROVISIONS
- DEFERRED TAX                                 (31 260)     (31 652)**
- REHABILITATION                               (34 473)     (38 674)
- POST-RETIREMENT BENEFITS                     (5 735)      (7 010)
LOANS                                          (26 298)     (28 233)
NET CURRENT LIABILITIES (EXCLUDING CASH)       (15 189)     (18 693)**
CASH AND SHORT-TERM INVESTMENTS                43 979       33 877
                                               292 517      298 562
ISSUED SHARE CAPITAL: 69.3 MILLION ORDINARY SHARES OF 50 CENTS EACH (DECEMBER
1998: 69.3 MILLION SHARES).
** THE DISPOSAL OF THE EAST RAND OPERATIONS AT THE BEGINNING OF THE CURRENT
QUARTER WAS RESPONSIBLE FOR THE REDUCTION IN MINING ASSETS.
* CERTAIN ADJUSTMENTS RELATING TO THE EVANDER OPERATION HAVE BEEN MADE IN ORDER
TO CONFORM TO INTERNATIONAL ACCOUNTING STANDARDS. CONSEQUENTLY SOME DECEMBER
BALANCE SHEET ITEMS HAVE BEEN RESTATED.
DEVELOPMENT RESULTS (IMPERIAL)
                                     CHANNEL      CHANNEL
                        SAMPLED      WIDTH        VALUE
                        FEET         (INCHES)     (OZ/T)
FREE STATE
BASAL REEF              4 560        33           0.254
LEADER REEF             3 839        55           0.130
"A" REEF                866          56           0.216
MIDDLE REEF             197          81           0.185
EVANDER
KIMBERLEY REEF          3 415        21           0.629
TOTAL NET PROFIT MARGIN (US$/OUNCE)
                                     $ OZ         $ OZ
                                     QUARTER      QUARTER
                                     MARCH 1999   DECEMBER 1998
CASH OPERATING COSTS                 237          248
NET OTHER COST/SUNDRY INCOME         8            31
NET OTHER INCOME                     (13)         (3)
EMPLOYEE TERMINATION COSTS           -            15
AMORTISATION                         13           13
REHABILITATION                       1            2
TAXATION                             7            4
ALL INCLUSIVE COSTS                  245          279
TOTAL REVENUE                        290          297
PROFIT MARGIN                        45           18
THIS REPORT WAS APPROVED BY THE BOARD OF DIRECTORS AND IS SIGNED ON ITS BEHALF
BY:
Z B SWANEPOEL                                  F ABBOTT
CHIEF EXECUTIVE                                FINANCIAL DIRECTOR
VIRGINIA
19 APRIL 1999
INVESTOR INFORMATION
BUSINESS ADDRESS
HARMONY GOLD MINING COMPANY LIMITED
SECOND FLOOR, BUILDING 26, THE WOODLANDS
WESTERN SERVICE ROAD, WOODMEAD
POSTNET SUITE 27, PRIVATE BAG X23, GALLO MANOR, 2052
E-MAIL: CORPORATE@HARMONY.CO.ZA
TELEPHONE: +27 (11) 802-1822. TELEFAX: +27 (11) 802-2363
INVESTOR RELATIONS
FOR FURTHER INFORMATION CONTACT
FERDI DIPPENAAR AT
TELEPHONE: +27 (11) 802-1822
TELEFAX: +27 (11) 802-2363
E-MAIL: FDIPPENAAR@HARMONY.CO.ZA
UNITED STATES DEPOSITORY
AMERICAN DEPOSITORY RECEIPTS
THE BANK OF NEW YORK
SHAREHOLDER RELATIONS DEPARTMENT
101 BARCLAY STREET
NEW YORK NY 10286, USA
TELEPHONE +1 (800) 524-4458
VISIT OUR WEBSITE: HTTP://WWW.HARMONY.CO.ZA
DIRECTORS
L HEWITT*(CHAIRMAN), ZB SWANEPOEL (CHIEF EXECUTIVE), F ABBOTT, RA ANDREW*
(BRITISH), RAL ATKINSON, GP BRIGGS (ALTERNATE), F DIPPENAAR, NJ FRONEMAN, TSA
GROBICKI*, PC PIENAAR (ALTERNATE), MF PLEMING*, FR SULLIVAN
* NON EXECUTIVE DIRECTORS
HARMONY IMPROVES STRONG PERFORMANCE DESPITE GOLD'S LOWS
JOHANNESBURG, 19 APRIL 1999 - IN A QUARTER WHERE THE GOLD PRICE HAS FALLEN
CLOSE TO ITS LOWEST LEVEL IN 21 YEARS, HARMONY INCREASED ITS EARNINGS BY R48
MILLION TO R87 MILLION. ACCORDINGLY, EARNINGS PER SHARE MORE THAN DOUBLED TO
125 CENTS FROM THE 56 CENTS REALISED IN DECEMBER.
CASH OPERATING PROFIT INCREASED TO R104 MILLION.  BERNARD SWANEPOEL, CHIEF
EXECUTIVE, SAYS THIS IS QUITE AN ACHIEVEMENT, SINCE THE PREVIOUS QUARTER'S R100
MILLION CASH PROFIT INCLUDED R9 MILLION FROM THE RECENTLY SOLD EAST RAND
OPERATIONS.
"THE MOST PLEASING ASPECT OF THE QUARTER IS THAT THE CASH COST PER OUNCE AT
EVANDER HAS BEEN REDUCED TO US$196 PER OUNCE.  THIS EFFECTIVELY MAKES THIS
OPERATION ONE OF THE LOWEST COST PRODUCERS IN THE COUNTRY.  PROFITS AT EVANDER
ALSO INCREASED FROM R43 MILLION TO R66 MILLION.  THE INCREASED PROFIT IS NOT
ONLY ATTRIBUTABLE TO THE REDUCTION IN TOTAL UNDERGROUND COST TO R296 PER TONNE,
BUT ALSO TO A 5 PER CENT INCREASE IN RECOVERED GRADE TO 7.73 GRAMS PER TONNE.
THIS WAS ONLY POSSIBLE WITH THE COOPERATION AND SUPPORT OF ALL EVANDER'S
EMPLOYEES," SAYS SWANEPOEL.
THEIR TARGET OF PRODUCING MORE THAN 1 MILLION OUNCES FOR THE FINANCIAL YEAR WAS
ACHIEVED BY 9 APRIL 1999.  "REACHING THIS TARGET WAS NEVER THE FINAL
DESTINATION, BUT ONE OF OUR MILESTONES IN CONVERTING HARMONY INTO A WORLD-CLASS
COMPANY.  THE COMPANY WILL CONTINUE TO EMPHASISE EARNINGS PER SHARE AS THE TRUE
MEASURE OF GROWTH, SAYS SWANEPOEL".
THE FREE STATE OPERATIONS EXPERIENCED A DECREASE IN PROFITS FROM R49 MILLION TO
R38 MILLION AS A RESULT OF PRODUCTION RELATED PROBLEMS AT THE BEGINNING OF THE
QUARTER INCLUDING NUMEROUS PUBLIC HOLIDAYS AND LEAVE SCHEDULING PROBLEMS
ASSOCIATED WITH THE MASS HIRING OF NEW WORKERS IN JANUARY 1998.  THIS RESULTED
IN AN 11 PER CENT DECREASE IN TONNAGES, WHICH WAS PARTIALLY OFFSET BY A 6 PER
CENT INCREASE IN RECOVERED GRADE TO 4.87 GRAMS PER TONNE.  SWANEPOEL SAYS A
SIGNIFICANT IMPROVEMENT IN UNIT COST IS EXPECTED WHEN PRODUCTION VOLUMES RETURN
TO NORMAL.  THROUGH THE WEAKER RAND, THE FREE STATE OPERATIONS' CASH COST WAS
MAINTAINED AT US$259.
THE RECENTLY ACQUIRED MASIMONG SHAFTS RECORDED A LOSS OF R1 MILLION - A
SIGNIFICANT IMPROVEMENT FROM THE R7 MILLION LOSS IN THE PREVIOUS QUARTER.
INCREASED DEVELOPMENT HAS RESULTED IN IMPROVED STOPING FLEXIBILITY.
GOLD PRODUCTION FROM BISSETT WAS LOWER THAN EXPECTED.  THIS CAN BE ATTRIBUTED
TO A LACK OF FLEXIBILITY AND A DISRUPTION IN PRODUCTION DUE TO AN ACCIDENT IN A
KEY WORKING AREA. PRE-PRODUCTION COSTS OF R8 MILLION COMPARED WITH R12 MILLION
FOR THE PREVIOUS QUARTER, WERE CAPITALISED.  EXTENSIVE DRILLING AND DEVELOPMENT
IN THE LAST THREE QUARTERS CONTINUE TO IMPROVE STOPING FLEXIBILITY AND HAVE
RECONFIRMED PREVIOUS RESERVE ESTIMATES.
"OUR STRATEGY OF CONVERTING NON-CORE ASSETS INTO CASH HAS ALLOWED US TO MAKE A
PROFIT OF R28 MILLION DURING THE QUARTER.  THIS WAS OFFSET BY THE FINAL WRITE
DOWN OF R14 MILLION ON THE DISPOSAL OF THE EAST RAND OPERATIONS," SAYS
SWANEPOEL.
AFTER THE DIVIDEND PAYMENT OF R35 MILLION TO THE COMPANY'S SHAREHOLDERS,
HARMONY'S CASH BALANCE NEVERTHELESS INCREASED BY R72 MILLION QUARTER-ON-QUARTER
TO R268 MILLION.
"I EXPECT THE JUNE QUARTER TO BE CHALLENGING, ESPECIALLY IN VIEW OF THE SIX
PUBLIC HOLIDAYS DURING THIS PERIOD.  EVANDER IS ON TRACK TO REDUCE ITS COST TO
R260 PER TONNE BY THE END OF THE NEXT QUARTER BY INCREASING TONNAGES AND A
FURTHER REDUCTION IN COSTS.  THE INCREASE IN VOLUME WILL ALSO RESULT IN THE
GRADE DECREASING TO A MORE SUSTAINABLE LEVEL OF APPROXIMATELY 7 GRAMS PER
TONNE. PRODUCTION IMPROVEMENTS AT HARMONY AND INCREASED FLEXIBILITY AT MASIMONG
SHOULD RESULT IN AN IMPROVED PERFORMANCE FROM THE FREE STATE OPERATIONS, WHILST
BISSETT SHOULD BREAK EVEN. WITH TOTAL COST AT US$245 PER OUNCE, WE ARE WELL
POSITIONED TO GENERATE STRONG EARNINGS DESPITE THE UNDER-PERFORMANCE OF THE
GOLD PRICE," SAYS SWANEPOEL.
ENDS
ISSUED BY HARMONY GOLD MINING COMPANY LIMITED.
CONTACT: CHRISTINE LEONARDI: PH: +27(11) 802-1822, FAX: +27(11) 802-2363
E-MAIL: CLEONARDI@HARMONY.CO.ZA.



                                        
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