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PROPOSED SCHEME TO CONSTITUTE WRCM/KALGOLD AS SUBSIDIARIES OF HARMONY

Release Date: 10/06/1999 16:34:57      Code(s): HAR HAROWRC KGL
PROPOSED SCHEMES OF ARRANGEMENT TO CONSTITUTE WEST RAND CONSOLIDATED MINES
LIMITED ("WRCM") AND KALAHARI GOLDRIDGE MINING COMPANY LIMITED ("KALGOLD") AS
WHOLLY-OWNED SUBSIDIARIES OF HARMONY GOLD MINING COMPANY LIMITED ("HARMONY")
(THE "SCHEMES")
TRANSACTION SUMMARY
ROBERT FLEMING SOUTH AFRICA LIMITED ("FLEMINGS") IS AUTHORISED TO ANNOUNCE ON
BEHALF OF THE BOARDS OF HARMONY, WRCM AND OF KALGOLD THAT HARMONY INTENDS TO
PROPOSE THE SCHEMES IN TERMS OF SECTION 311 OF THE COMPANIES ACT, 1973 (ACT 61
OF 1973) AS AMENDED (THE "ACT"), BETWEEN:
WRCM AND ITS SHAREHOLDERS IN RESPECT OF THE ORDINARY SHARES IN WRCM ("WRCM
SHARES") (THE "WRCM SCHEME"); AND
- KALGOLD AND ITS SHAREHOLDERS IN RESPECT OF THE ORDINARY SHARES IN KALGOLD
("KALGOLD SHARES") (THE "KALGOLD" SCHEME").
SUCCESSFUL IMPLEMENTATION OF THE SCHEMES WILL RESULT IN THE TERMINATION OF THE
LISTINGS OF THE WRCM SHARES ON THE JOHANNESBURG STOCK EXCHANGE (THE "JSE"), THE
LONDON STOCK EXCHANGE AND THE PARIS BOURSE, THE TERMINATION OF THE LISTING OF
THE AMERICAN DEPOSITORY RECEIPTS IN RESPECT OF WRCM SHARES ON THE NEW YORK
STOCK EXCHANGE AND THE TERMINATION OF THE LISTING OF THE KALGOLD SHARES ON THE
JSE.
FLEMINGS HAS BEEN APPOINTED AS INDEPENDENT FINANCIAL ADVISER TO THE BOARDS OF
WRCM AND KALGOLD REGARDING THE TERMS AND IMPLEMENTATION OF THE SCHEMES.  THE
BOARDS OF WRCM AND KALGOLD WILL RENDER THEIR RECOMMENDATIONS TO THE
SHAREHOLDERS OF THE RESPECTIVE COMPANIES IN DUE COURSE.
BACKGROUND AND RATIONALE FOR THE TRANSACTION
OVER THE PAST 4 YEARS, HARMONY HAS BEEN TRANSFORMED FROM A MARGINAL, SINGLE
MINING LEASE OPERATION INTO ONE OF THE MOST PROFITABLE GOLD MINING COMPANIES IN
THE WORLD AND OPERATES A TOTAL OF 15 SHAFT SYSTEMS IN THE SOUTHERN FREE STATE
AND EVANDER GOLDFIELDS OF SOUTH AFRICA.
HARMONY'S MANAGEMENT HAS ACHIEVED THIS THROUGH A COMBINATION OF SOUND MINING
PRACTICES AND CAREFULLY SELECTED ACQUISITIONS.  GOLD OUTPUT HAS INCREASED TO
SOME 1.4 MILLION OUNCES PER YEAR AND COSTS OF PRODUCTION HAVE BEEN REDUCED BOTH
IN RAND/TONNE AND DOLLAR/OUNCE TERMS.  THE RESULT OF THE SUCCESSFUL
IMPLEMENTATION OF ITS MINING PHILOSOPHIES IS THAT THE HARMONY OPERATIONS HAVE
BEEN GENERATING STEADILY INCREASING PROFITS WHICH BY MARCH 1999 HAD REACHED
APPROXIMATELY R100 MILLION PER QUARTER.
HARMONY'S BUSINESS TO DATE HAS BEEN LARGELY FOCUSED ON THE UNDERGROUND MINING
AND PROCESSING OF NARROW REEF WITWATERSRAND GOLD ORES, AND THE COMPANY HAS A
PUBLICLY STATED DUAL STRATEGY OF EXPANDING ITS OPERATIONAL BASES AND
PROFITABILITY WHILST REPLACING ITS ORE RESERVES WHICH, PARTICULARLY IN THE FREE
STATE OPERATIONS, ARE BEING DEPLETED.  WITWATERSRAND GOLD MINING WILL ALWAYS
CONSTITUTE A VERY SIGNIFICANT PART OF HARMONY'S TOTAL PRODUCTION, PROFIT BASES
AND SKILLS.  HOWEVER, THE BOARD HAS RESOLVED THAT, IN ACCORDANCE WITH HARMONY'S
STATUS AS ONE OF THE TOP GOLD MINING COMPANIES IN THE WORLD, ITS GROWTH
STRATEGY SHOULD INCLUDE DIVERSIFICATION BOTH GEOGRAPHICALLY AND INTO OTHER
STYLES OF GOLD DEPOSITS, INCLUDING THOSE WHICH ARE EXPLOITED THROUGH THE USE OF
OTHER MINING TECHNIQUES, PARTICULARLY OPEN PIT METHODS.  HARMONY HAS ALREADY
EMBARKED ON FULFILLING THIS STRATEGY WITH THE ACQUISITION OF A VEIN-TYPE
UNDERGROUND GOLD MINE AT BISSETT IN CANADA.
THE MAIN BUSINESSES OF THE COMPANIES COMPRISING THE WRCM GROUP CONSIST OF THE
OPERATION OF SOUTH AFRICA'S LEADING OPEN PIT GOLD MINING OPERATION AT KALGOLD
AND THE MANAGEMENT OF A RANGE OF GOLD EXPLORATION PROGRAMMES IN A VARIETY OF
GEOLOGICAL ENVIRONMENTS.  IN ADDITION, WRCM HAS AN ACTIVE PROGRAMME AIMED AT
IDENTIFYING AND, WHERE APPROPRIATE, ACQUIRING OTHER GOLD MINING OPPORTUNITIES
IN SOUTH AFRICA AND INTERNATIONALLY.
IT IS THE OPINION OF THE RESPECTIVE BOARDS OF HARMONY, WRCM AND KALGOLD THAT,
IN ADDITION TO THE LARGE BASE OF GOLD RESOURCES AND RESERVES, THE COMPANIES
HAVE PARTICULARLY COMPLEMENTARY SKILLS AND ASSETS, COMPATIBLE CULTURES AND A
RANGE OF OBJECTIVES WHICH WILL BE BEST ACHIEVED AND GREATLY ENHANCED BY THE
FORMAL MERGER OF THE THREE COMPANIES.  THE STRONG CASH FLOWS AND COMBINATION OF
MANAGEMENT SKILLS AND EXPERTISE IN A VARIETY OF MINING TECHNOLOGIES WILL ENSURE
THAT THE ENLARGED HARMONY WILL BE WELL POSITIONED TO PURSUE AGGRESSIVELY A
BROADER SPECTRUM OF GOLD RELATED OPPORTUNITIES.  THE TRANSACTION WILL ALSO
INCREASE THE EXPOSURE OF THE ENLARGED HARMONY TO THE INTERNATIONAL MINING
COMMUNITY.
THE TRANSACTION IS EXPECTED TO RELEASE AND ENHANCE ALL OF THE SYNERGIES
ANTICIPATED BY THE DIRECTORS OF HARMONY, WRCM AND KALGOLD.
APPOINTMENT OF A NEW CHAIRMAN
MR LIONEL HEWITT, AFTER HIS RETIREMENT AS THE SENIOR EXECUTIVE OF ANGLO
AMERICAN'S GOLD MINING OPERATIONS, AGREED IN 1995 TO TAKE THE CHAIRMANSHIP OF
HARMONY.  AT THE TIME OF HIS APPOINTMENT HARMONY WAS A LEASE BOUND MARGINAL
OPERATION WITH A DRAMATICALLY SHRINKING RESERVE BASE AND PRODUCTION PROFILE.
IN THE 41/2 YEARS SINCE HIS APPOINTMENT AND DESPITE THE DECLINE IN THE DOLLAR
PRICE OF GOLD, HARMONY HAS BEEN TRANSFORMED THROUGH A COMBINATION OF
ACQUISITIONS AND THE APPLICATION OF SUPERIOR MINING PRACTICES INTO A ROBUST,
GROWING SET OF SHAFT SYSTEMS OPERATING IN VARIOUS PARTS OF THE WITWATERSRAND
BASIN.  IN THAT TIME HARMONY HAS ALSO EXPANDED ITS ACTIVITIES INTO OTHER FACETS
OF THE GOLD INDUSTRY SUCH AS REFINING AND MARKETING AND HAS ALSO STARTED TO
ACQUIRE MINES AND PROSPECTS OUTSIDE SOUTH AFRICA.
MR HEWITT BELIEVES THAT THE INCUMBENT HARMONY OPERATIONAL TEAMS, UNDER THE
GUIDANCE OF BERNARD SWANEPOEL, ARE ACHIEVING AMONGST THE BEST STANDARDS IN THE
INDUSTRY.  MR HEWITT CONSIDERS THAT FOLLOWING HIS RELOCATION OUT OF
JOHANNESBURG THE COMPANY WILL BE BETTER SERVED BY A NEW CHAIRMAN LOCATED IN ONE
OF THE WORLD'S FINANCIAL CAPITALS WHO WILL BE BETTER PLACED TO GUIDE HARMONY IN
THE NEXT ACQUISITIVE AND INTERNATIONALISATION PHASE OF ITS DEVELOPMENT.
IT IS WITH SINCERE APPRECIATION THAT THE HARMONY BOARD WISHES TO PAY TRIBUTE TO
MR HEWITT'S GUIDANCE THROUGH THIS EVOLUTIONARY PHASE OF ITS HISTORY AND TO
WELCOME MR ADAM FLEMING, FORMERLY DEPUTY CHAIRMAN OF ROBERT FLEMING HOLDINGS
LIMITED IN LONDON, AND THE CURRENT CHAIRMAN OF WRCM AND KALGOLD, AS THE NEW
HARMONY CHAIRMAN.  HARMONY IS VERY PLEASED TO ANNOUNCE THAT MR HEWITT HAS
AGREED TO CONTINUE TO SERVE THE COMPANY AS A NON-EXECUTIVE DIRECTOR OF THE
COMPANY.
CONSIDERATION PAYABLE IN TERMS OF THE SCHEMES
SUBJECT TO THE FULFILLMENT OF THE CONDITIONS PRECEDENT REFERRED TO BELOW, THE
FOLLOWING CONSIDERATION WILL BE RECEIVED BY PARTICIPANTS IN THE RESPECTIVE
SCHEMES:
- WRCM SCHEME
PARTICIPANTS IN THE WRCM SCHEME WILL RECEIVE 35.71 ORDINARY SHARES IN HARMONY
("HARMONY SHARES") FOR EVERY 100 WRCM SHARES HELD.
- KALGOLD SCHEME
PARTICIPANTS IN THE KALGOLD SCHEME WILL RECEIVE 7.66 HARMONY SHARES FOR EVERY
100 KALGOLD SHARES HELD.
THE RATIO OF HARMONY SHARES TO KALGOLD SHARES WAS CALCULATED WITH REFERENCE TO
THE WEIGHTED AVERAGE ORDINARY SHARE PRICES OF HARMONY AND KALGOLD SHARES OVER A
PERIOD OF 30 DAYS UP TO AND INCLUDING 4 JUNE 1999, THE LAST DATE PRIOR TO THE
FINAL NEGOTIATION OF THE TERMS OF THE SCHEMES.  THE CONSIDERATION PAID PER
KALGOLD SHARE HAS BEEN INCLUDED IN THE CALCULATION USED TO DETERMINE THE
CONSIDERATION PAYABLE UNDER THE WRCM SCHEME.
BASED ON THE CLOSING PRICE PER HARMONY SHARE AS AT 9 JUNE 1999, THE
CONSIDERATION PAYABLE UNDER THE WRCM SCHEME VALUES EACH WRCM SHARE AT 1043
CENTS PER SHARE.
BASED ON THE CLOSING PRICE PER HARMONY SHARE AS AT 9 JUNE 1999, THE
CONSIDERATION PAYABLE UNDER THE KALGOLD SCHEME VALUES EACH KALGOLD SHARE AT 224
CENTS PER SHARE.
THE AGGREGATE NUMBER OF HARMONY SHARES TO BE ISSUED IN RESPECT OF THE
TRANSACTION IS EXPECTED TO REPRESENT APPROXIMATELY 13% OF THE ENLARGED ISSUED
SHARE CAPITAL OF HARMONY.  THE HARMONY SHARES TO BE ISSUED WILL RANK PARI PASSU
IN ALL RESPECTS WITH THE EXISTING ISSUED ORDINARY SHARES IN HARMONY, SAVE THAT
THEY WILL NOT PARTICIPATE IN ANY DIVIDEND WHICH MAY BE DECLARED IN RESPECT OF
THE FINANCIAL YEAR ENDING 30 JUNE 1999.
FINANCIAL EFFECTS OF THE TRANSACTION
THE FINANCIAL EFFECTS ON HARMONY SHAREHOLDERS, WRCM SHAREHOLDERS AND KALGOLD
SHAREHOLDERS OF THE WRCM SCHEME AND THE KALGOLD SCHEME ARE AS FOLLOWS:
KALGOLD
                                  NOTES     BEFORE    AFTER      INC
EARNINGS PER 100 KALGOLD SHARES   1         R7.70     R19.07     148%
HEADLINE EARNINGS PER 100 KALGOLD
SHARES                            1         R7.70     R19.07     148%
NAV PER 100 KALGOLD SHARES        2         R94.00    R178.06    89%
WRCM
                                  NOTES     BEFORE    AFTER      INC
EARNINGS PER 100 WRCM SHARES      1,3       R9.30     R87.35     839%
HEADLINE EARNINGS PER 100 WRCM
SHARES                            1,3       R9.30     R87.35     839%
NAV PER 100 WRCM SHARES           2         R982.00   R878.00    -11%
HARMONY
                                  NOTES     BEFORE    AFTER       INC
EARNINGS PER 100 HARMONY SHARES   1         R277.97   R247.48     -11%
HEADLINE EARNINGS PER 100 HARMONY
SHARES                            1         R277.97   R247.48     -11%
NAV PER 100 HARMONY SHARES        2         R2510.82  R2459.90    -2%
NOTES
1. BASED ON THE PUBLISHED QUARTERLY INCOME STATEMENT OF HARMONY FOR THE
CALENDAR YEAR ENDED 31 DECEMBER 1998 AND THE AUDITED INCOME STATEMENTS OF WRCM
AND KALGOLD FOR THE YEAR ENDED 31 DECEMBER 1998 BASED ON THE ASSUMPTION THAT
THE ACQUISITION OF WRCM AND KALGOLD HAD BEEN EFFECTIVE THROUGHOUT THAT PERIOD.
2. BASED ON THE PUBLISHED QUARTERLY CONSOLIDATED BALANCE SHEET OF HARMONY AT 31
DECEMBER 1998 AND THE AUDITED BALANCE SHEETS OF WRCM AND KALGOLD FOR THE YEAR
ENDED 31 DECEMBER 1998, BASED ON THE ASSUMPTION THAT THE ACQUISITION OF WRCM
AND KALGOLD HAD BEEN EFFECTIVE AT THAT DATE.
3. THE FOCUS OF WRCM'S ACTIVITIES IS ON EXPLORATION AND WRCM'S EPS ARE REPORTED
AFTER WRITING OFF EXPLORATION EXPENDITURE INCURRED DURING THE PERIOD.
SHAREHOLDINGS IN WRCM AND KALGOLD
AS AT THE DATE OF THIS ANNOUNCEMENT, HARMONY HAS DIRECT SHAREHOLDINGS OF 100
ORDINARY SHARES IN EACH OF WRCM AND KALGOLD.
AS AT THE DATE OF THIS ANNOUNCEMENT, SHAREHOLDERS, INCLUDING THE DIRECTORS OF
WRCM AND KALGOLD, REPRESENTING 74.53% OF THE ISSUED ORDINARY SHARES IN WRCM AND
71.11% OF THE ISSUED ORDINARY SHARES IN KALGOLD RESPECTIVELY HAVE GIVEN
IRREVOCABLE UNDERTAKINGS TO VOTE IN FAVOUR OF THE SCHEMES IN RESPECT OF SHARES
HELD BY THEM IN THE RELEVANT COMPANY.
INCLUDED IN THE ABOVE IS THE IRREVOCABLE UNDERTAKING GIVEN BY WRCM TO VOTE IN
FAVOUR OF THE KALGOLD SCHEME IN RESPECT OF ITS DIRECT AND INDIRECT HOLDINGS OF
SOME 56.6% OF THE SHARE CAPITAL OF KALGOLD.  THIS UNDERTAKING IS SUBJECT TO
CONFIRMATION BY FLEMINGS THAT THE TERMS OF THE KALGOLD SCHEME ARE FAIR AND
REASONABLE TO KALGOLD SHAREHOLDERS, AND IS SUBJECT TO WRCM SHAREHOLDERS'
APPROVAL.
CONDITIONS PRECEDENT AND FURTHER TERMS OF THE SCHEMES
IMPLEMENTATION OF EACH OF THE SCHEMES IS CONDITIONAL, INTER ALIA, UPON:
- THE REQUIRED MAJORITY OF VOTES BEING CAST IN FAVOUR OF EACH SCHEME AT THE
RELEVANT SCHEME MEETING CONVENED FOR SUCH PURPOSE;
- THE PASSING OF ANY REQUISITE ORDINARY OR SPECIAL RESOLUTIONS BY THE
SHAREHOLDERS OF WRCM AND KALGOLD;
- THE HIGH COURT OF SOUTH AFRICA (WITWATERSRAND LOCAL DIVISION) SANCTIONING
EACH OF THE SCHEMES AND THE ORDERS OF COURT SANCTIONING THE RESPECTIVE SCHEMES
BEING REGISTERED BY THE REGISTRAR OF COMPANIES; AND
- RECEIPT OF ANY NECESSARY REGULATORY CONSENTS.
ADDITIONALLY, IMPLEMENTATION OF THE KALGOLD SCHEME IS CONDITIONAL ON THE WRCM
SCHEME BECOMING UNCONDITIONAL.
IT IS ANTICIPATED THAT THE EFFECTIVE DATE OF THE TRANSACTION WILL BE 1 JULY
1999.
ALTERNATIVE OFFER STRUCTURE
IF THE WRCM SCHEME OR THE KALGOLD SCHEME DOES NOT PROCEED FOR ANY REASON,
HARMONY WILL MAKE A GENERAL OFFER TO SHAREHOLDERS OF WRCM OR KALGOLD IN TERMS
OF THE RULES OF THE SECURITIES REGULATION PANEL ("SRP") (THE "OFFERS").  THE
CONSIDERATION PAYABLE UNDER THE OFFERS WILL REMAIN THE SAME AS THAT PAYABLE
UNDER THE RESPECTIVE SCHEMES AND THE OFFERS WILL BE SUBJECT TO THE SAME
CONDITIONS PRECEDENT REFLECTED HEREIN, INCLUDING, IN RESPECT OF KALGOLD, THE
BECOMING UNCONDITIONAL OF THE WRCM SCHEME, BUT EXCLUDING THE REMAINING
CONDITIONS PRECEDENT THAT SPECIFICALLY RELATE TO THE SCHEMES. IN ADDITION, THE
WRCM SCHEME WILL BE SUBJECT TO ACCEPTANCES BEING RECEIVED FROM NOT LESS THAN
90% OF ALL SHAREHOLDERS IN WRCM, WHICH CONDITION MAY BE WAIVED BY HARMONY.
DOCUMENTATION AND ANNOUNCEMENTS
DOCUMENTATION, WHICH IS SUBJECT TO THE APPROVAL OF THE SRP AND THE JSE, IS IN
THE COURSE OF PREPARATION AND WILL BE DISPATCHED TO SHAREHOLDERS OF WRCM AND
KALGOLD AS SOON AS POSSIBLE.
A FURTHER ANNOUNCEMENT GIVING THE SALIENT DATES OF THE SCHEMES WILL BE
PUBLISHED AS SOON AS POSSIBLE.
JOHANNESBURG
10 JUNE 1999
PRESS RELEASE
FOR FURTHER DETAILS CONTACT BERNARD SWANEPOEL ON +27(0)83-303-9922 OR
TED GROBICKI ON +27(0)33-375-4345
HARMONY, WEST RAND CONS AND KALGOLD TO MERGE IN R300 MILLION DEAL
JOHANNESBURG, 10 JUNE 99 - HARMONY IS SET TO MERGE WITH WEST RAND CONSOLIDATED
MINES LIMITED (WRCM) AND KALAHARI GOLDRIDGE MINING COMPANY LIMITED (KALGOLD) IN
A R300 MILLION DEAL.
HARMONY REACHED ITS 1 MILLION OUNCE PRODUCTION LEVEL IN APRIL THIS YEAR AND
THIS ACQUISITION WILL CONTRIBUTE UP TO 100 000 OUNCES TO THE ENLARGED COMPANY'S
ANNUAL PRODUCTION LEVELS OF APPROXIMATELY 1.3 MILLION OUNCES.
HARMONY'S BUSINESS IN SOUTH AFRICA UP TO NOW HAS BEEN FOCUSSED ON THE
UNDERGROUND MINING AND PROCESSING OF NARROW REEF WITWATERSRAND GOLD ORES VIA A
TOTAL OF 15 SHAFTS IN THE SOUTHERN FREE STATE AND EVANDER GOLD FIELDS
RESPECTIVELY. CHIEF EXECUTIVE BERNARD SWANEPOEL, SAYS IN ACCORDANCE WITH
HARMONY'S STATUS AS ONE OF THE TOP GOLD MINING COMPANIES, ITS GROWTH STRATEGY
SHOULD INCLUDE DIVERSIFICATION INTO THE EXPLOITATION OF OTHER STYLES OF GOLD
DEPOSITS AND THE USE OF OTHER MINING TECHNIQUES, INCLUDING OPEN PIT METHODS.
"THE STRONG CASH FLOWS AND COMBINED MANAGEMENT AND EXPLORATION SKILLS AND
MINING TECHNOLOGIES WHICH WILL EXIST IN THE NEW GROUP WILL ENSURE THAT THE
ENLARGED HARMONY WILL BE WELL POSITIONED TO TAKE ADVANTAGE OF GOLD RELATED
OPPORTUNITIES PRESENTED BOTH IN SOUTH AFRICA AND INTERNATIONALLY".
THE WEST RAND CONSOLIDATED MINES GROUP OWNS SOUTH AFRICA'S PRE-EMINENT OPEN PIT
MINING OPERATION AT KALGOLD, AND MANAGES A RANGE OF GOLD EXPLORATION PROGRAMMES
IN A VARIETY OF GEOLOGICAL ENVIRONMENTS. IN ADDITION, THE COMPANY HAS AN ACTIVE
PROGRAMME AIMED AT IDENTIFYING AND, WHERE APPROPRIATE, ACQUIRING OTHER GOLD
MINING OPPORTUNITIES IN SOUTH AFRICA AND ABROAD.
TED GROBICKI, CEO OF WRCM AND KALGOLD, SAYS THAT IN ADDITION TO THE LARGE BASE
OF GOLD RESOURCES AND RESERVES, THE COMPANIES HAVE PARTICULARLY COMPLEMENTARY
SKILLS AND ASSETS, COMPATIBLE CULTURES AND A RANGE OF OBJECTIVES WHICH WOULD BE
BEST ACHIEVED AND GREATLY ENHANCED BY THE FORMAL MERGER OF THE THREE COMPANIES.
ADAM FLEMING, FORMERLY DEPUTY CHAIRMAN OF ROBERT FLEMING HOLDING LIMITED,
LONDON AND CURRENTLY THE CHAIRMAN OF WRCM AND KALGOLD WILL JOIN HARMONY'S BOARD
AND TAKE OVER THE CHAIRMANSHIP FROM LIONEL HEWITT. "LIONEL MADE A CRITICAL
CONTRIBUTION TO HARMONY'S STRATEGY OF TRANSFORMING ITSELF FROM A LEASE BOUND
MARGINAL OPERATION TO ONE OF THE WORLD'S PREMIER GOLD MINING COMPANIES. I AM
PLEASED THAT WE CAN CONTINUE TO CALL ON LIONEL'S KNOWLEDGE AND EXPERIENCE, AS
HE WILL REMAIN AS A NON-EXECUTIVE DIRECTOR", SAYS SWANEPOEL.
BASED ON THE CLOSING PRICE FOR EACH OF THE HARMONY, WRCM AND KALGOLD SHARES ON
THE JSE ON 9 JUNE, THE ENTIRE ISSUED SHARE CAPITAL OF WRCM AND KALGOLD, IS
VALUED AT R187 MILLION AND R270 MILLION RESPECTIVELY. SUBJECT TO THE
FULFILLMENT OF CERTAIN CONDITIONS PRECEDENT, PARTICIPANTS IN THE WRCM SCHEME
WILL RECEIVE 35.71 ORDINARY SHARES IN HARMONY FOR EVERY 100 WRCM SHARES HELD.
PARTICIPANTS IN THE KALGOLD SCHEME WILL RECEIVE 7.66 HARMONY SHARES FOR EVERY
100 KALGOLD SHARES HELD.
"WE ARE EXTREMELY PLEASED WITH THIS DEAL, WHICH IS EFFECTIVE AS OF 1 JULY 1999.
HARMONY'S MANAGEMENT HAS, OVER THE PAST FOUR YEARS, ACHIEVED GREAT SUCCESS IN
INTRODUCING A COMBINATION OF SOUND MINING PHILOSOPHIES, WHICH HAVE
SIGNIFICANTLY INCREASED THE COMPANY'S GOLD OUTPUT AND REDUCED PRODUCTION COSTS.
THE RESULT IS THAT HARMONY'S OPERATIONS HAVE STEADILY BEEN GENERATING
INCREASING PROFITS, WHICH BY MARCH THIS YEAR HAD REACHED APPROXIMATELY R100
MILLION PER QUARTER. WE BELIEVE THAT THE ENLARGED HARMONY WILL SUSTAIN
PROFITABILITY DESPITE THE CONTINUED DEPRESSION IN 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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