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HARMONY QUARTERLY RESULTS

Release Date: 19/07/1999 16:06:44      Code(s): HAR HARO
HARMONY GOLD MINING COMPANY LIMITED
WEBSITE: HTTP://WWW.HARMONY.CO.ZA
REPORT TO SHAREHOLDERS FOR THE QUARTER AND YEAR ENDED 30 JUNE 1999
HIGHLIGHTS - FINANCIAL YEAR ENDED
FINAL DIVIDEND - 60 CENTS
TOTAL DIVIDEND - 110 CENTS
                                               JUNE 1999       JUNE 1998
- GOLD PRODUCED
  (EXCLUDING BISSETT)
  - KG                                         39 682          23 853
  - OZ                                         1 275 803       766 890
- CASH OPERATING PROFIT
  - SA RAND                                    R384 MILLION    R40 MILLION
  - US$                                        $63 MILLION     $8 MILLION
- CASH OPERATING COSTS
  - R/KG                                       R46 561/KG      R47 991/KG
  - $/OZ                                       $239/OZ         $305/OZ
- EARNINGS
  - SA RAND                                    R171 MILLION    (R19 MILLION)
  - US$                                        $28 MILLION     ($4 MILLION)
- DIVIDENDS
  - SA RAND                                    R76 MILLION     -
  - US$                                        $13 MILLION     -
KEY INDICATORS - QUARTER ENDED JUNE 1999
- GOLD PRODUCED                                9 652 KG        310 318 OZ
- CASH COSTS                                   R47 166/KG      $240/OZ
FINANCIAL - QUARTER ENDED JUNE 1999
- CASH OPERATING PROFIT                        R75 MILLION     $12 MILLION
- EARNINGS                                     R57 MILLION     $9 MILLION
- EARNINGS PER SHARE                           82 CENTS        13 US CENTS
FINANCIAL RESULTS
(UNAUDITED)                       QUARTER    QUARTER    YEAR       YEAR
                                  ENDED      ENDED      ENDED      ENDED
                                  30 JUNE    31 MARCH   30 JUNE    30 JUNE
TOTAL OPERATIONS                  1999       1999       1999       1998
ORE MILLED - T/000                1 981      1 872      7 735      5 367
GOLD PRODUCED - KG                9 652      9 943      39 682     23 853
GOLD PRICE RECEIVED - R/KG        54 913     56 917     56 234     49 684
CASH OPERATING COSTS - R/KG       47 166     46 432     46 561     47 991
CASH OPERATING COSTS - R/T        230        247        239        213
                                  R'000      R'000      R'000      R'000
GOLD SALES                        530 025    565 924    2 231 474  1 185 112
CASH OPERATING COSTS              455 242    461 674    1 847 644  1 144 729
CASH OPERATING PROFIT             74 783     104 250    383 830    40 383
OTHER INCOME - NET                13 362     23 799     50 253     34 796
EMPLOYMENT TERMINATION            -          -          (30 499)   (21 287)
AMORTISATION                      (24 586)   (25 304)   (100 740)  (69 729)
REHABILITATION PROVISION          2 574      (2 477)    (6 039)    (4 248)
PROFIT BEFORE TAXATION            66 133     100 268    296 805    (20 085)
SOUTH AFRICAN NORMAL TAXATION
- CURRENT TAX                     (4 609)    (6 608)    (13 841)   (1 236)
- DEFERRED TAX                    (4 670)    (7 106)    (22 594)   1 944
EARNINGS AFTER TAX                56 854     86 554     260 370    (19 377)
IMPAIRMENT OF FIXED ASSETS        -          -          (89 643)*  -
NET EARNINGS                      56 854     86 554     170 727    (19 377)
DIVIDENDS                         (41 676)   -          (76 340)   -
EARNINGS PER SHARE - CENTS
- CASH OPERATING EARNINGS         108        150        555        82
- EARNINGS                        82         125        375        (40)
- NET EARNINGS AFTER IMPAIRMENT   82         125        247        (40)
DIVIDENDS PER SHARE - CENTS       60         -          110        -
OPERATING AND FINANCIAL RESULTS - SA OPERATIONS
                                  FREE STATE EVANDER     EVANDER
                                  TOTAL      UNDERGROUND SURFACE   TOTAL
ORE MILLED - T'000
JUNE 1999                         1 379      495         107       1 981
MARCH 1999                        1 326      437         109       1 872
GOLD PRODUCED - KG
JUNE 1999                         6 370      3 195       87        9 652
MARCH 1999                        6 461      3 377       105       9 943
YIELD - G/T
JUNE 1999                         4.62       6.45        0.81      4.87
MARCH 1999                        4.87       7.73        0.96      5.31
CASH OPERATING COSTS R/KG
JUNE 1999                         49 987     41 738      39 920    47 166
MARCH 1999                        50 882     38 352      32 457    46 432
CASH OPERATING COSTS - R/T
JUNE 1999                         231        269         32        230
MARCH 1999                        248        296         31        247
WORKING REVENUE (R'000)
JUNE 1999                         349 818    175 507     4 700     530 025
MARCH 1999                        366 832    192 838     6 254     565 924
CASH OPERATING COSTS (R'000)
JUNE 1999                         318 416    133 353     3 473     455 242
MARCH 1999                        328 750    129 516     3 408     461 674
CASH OPERATING PROFIT (R'000)
JUNE 1999                         31 402     42 154      1 227     74 783
MARCH 1999                        38 082     63 322      2 846     104 250
ABRIDGED BALANCE SHEET
(UNAUDITED)                                          AT           AT
                                                     30 JUNE      31 MARCH
R'000                                                1999         1999
CAPITAL EMPLOYED
SHAREHOLDERS' EQUITY                                 1 750 645    1 784 356
EMPLOYMENT OF CAPITAL
NET MINING ASSETS AFTER DEPRECIATION                 2 032 961*   2 134 307
INVESTMENTS                                          71 940       70 802
LONG-TERM PROVISIONS
DEFERRED TAX                                         (173 358)*   (190 688)
REHABILITATION                                       (207 713)    (210 287)
POST-RETIREMENT BENEFITS                             (34 981)     (34 981)
LOANS                                                (147 686)    (160 417)
NET CURRENT LIABILITIES (EXCLUDING CASH)             (100 580)    (92 653)
CASH AND SHORT-TERM INVESTMENTS                      310 062      268 273
                                                     1 750 645    1 784 356
ISSUED SHARE CAPITAL: 69.5 MILLION ORDINARY SHARES OF 50 CENTS EACH (MARCH
1999: 69.3 MILLION SHARES).
* AT THE CURRENT GOLD PRICE, THE RECOVERABLE AMOUNTS OF CERTAIN MINING ASSETS
AT THE FREE STATE OPERATIONS ARE LOWER THAN THEIR BOOK VALUE. IN LINE WITH THE
COMPANY'S ACCOUNTING POLICY, MINING ASSETS OF R112 MILLION HAVE BEEN IMPAIRED
(WRITTEN OFF). THERE HAS BEEN AN ASSOCIATED WRITE BACK FROM DEFERRED TAX OF
R22.4 MILLION (IMPAIRMENT R89.6 MILLION NET OF TAX).
DEVELOPMENT RESULTS
                                             CHANNEL    CHANNEL     AU
                                  SAMPLED    WIDTH      VALUE       CONTENT
                                  METRES     (CM)       (G/T)       (CM.G/T)
FREE STATE
BASAL REEF                        1 162      101        6.50        657
LEADER REEF                       1 300      151        4.65        702
MIDDLE REEF                       16         259        14.77       3 825
"A" REEF                          406        115        5.33        613
EVANDER
KIMBERLEY REEF                    1 818      58         26.26       1 523
PREPARED IN ACCORDANCE WITH INTERNATIONAL ACCOUNTING STANDARDS CURRENCY
CONVERSION RATES: US$1
- QUARTER ENDED JUNE 1999: R6.12 (MARCH 1999: R6.10)
- YEAR ENDED JUNE 1999: R6.07 (JUNE 1998: R4.89)
MESSAGE PROM THE CHIEF EXECUTIVE
OVERVIEW
THE PAST YEAR, AND ESPECIALLY THE JUNE 1999 QUARTER, HAS BEEN A SOBERING
EXPERIENCE FOR THOSE IN THE BUSINESS OF PRODUCING GOLD. GOLD PRICES LAST SEEN
20 YEARS AGO AFFECTED, AND CONTINUE TO AFFECT, THE EARNINGS AND EXPENDITURE
PLANS OF GOLD PRODUCERS ACROSS THE BOARD, WHILE SOME PRODUCERS MAY BE FORCED TO
THROW IN THE TOWEL.
THE DAMAGE INFLICTED BY THE BANK OF ENGLAND IS NOT LIMITED TO THOSE DIRECTLY
INVOLVED IN THE GOLD MINING INDUSTRY. GOLD-PRODUCING COUNTRIES AND THEIR
REGIONAL ECONOMIES WILL SUFFER. AND, IF THE GOLD PRICE DOES NOT RECOVER IN THE
SHORT TERM, AS MANY AS 80 000 SOUTH AFRICAN MINE WORKERS WILL BE CHALLENGED
WITH FINDING ALTERNATIVE EMPLOYMENT BY THE END OF THE YEAR.
WHEN COMPARED WITH THE SPOT GOLD PRICE, AS MUCH AS 45% OF WORLD GOLD PRODUCTION
IS ESTIMATED TO BE LOSS MAKING. SHOULD THE GOLD PRICE SUSTAIN CURRENT LEVELS
FOR ANY EXTENDED PERIOD, IT COULD SPEED UP THE CONTINUED CONSOLIDATION OF THE
SOUTH AFRICAN INDUSTRY.
QUARTERLY REVIEW (JUNE 1999)
AT R74.8 MILLION, THE CASH OPERATING PROFIT FOR THE JUNE QUARTER IS R29.4
MILLION BELOW THAT OF THE PREVIOUS QUARTER. REVENUE DECLINED BY R36 MILLION DUE
TO THE IMPACT OF THE FALLING GOLD PRICE AND LOWER GRADES, PARTIALLY OFFSET BY
SAVINGS IN OPERATING COSTS. ACCORDINGLY, EARNINGS REDUCED TO R56.9 MILLION OR
82 CENTS PER SHARE. DURING TIMES LIKE THESE, WE HAVE TO RETAIN OUR FOCUS ON
REDUCING OPERATING COSTS AND CONTINUE TO OPTIMISE OUR OPERATIONS.
ONE OF THE HARMONY TEAM'S GREATEST STRENGTHS IS ITS ABILITY TO DRIVE DOWN
OPERATING COSTS AND THIS WAS PROVEN AGAIN WITH THE EVANDER OPERATION, WHICH
CONTINUES TO SHINE IN THE HARMONY STABLE. AS EXPECTED, THE OPERATION ACHIEVED
ITS OBJECTIVE OF DECREASING WORKING COSTS TO R257 PER TON BY JUNE 1999 FROM
R360 PRIOR TO THE ACQUISITION. THE POSITIVE EFFECT ON THE RESERVE BASE BY
ACHIEVING THESE COST LEVELS IS REFLECTED IN THE LATEST ORE RESERVE CALCULATIONS
AS IT HAS INCREASED FROM 10.4 MILLION OUNCES TO 15.1 MILLION OUNCES, USING THE
SAME METHODOLOGY. THIS BODES WELL FOR THE ABILITY OF THE OPERATION TO INCREASE
FLEXIBILITY AND PRODUCTION.
IN LINE WITH EXPECTATIONS AND DESPITE THE PRODUCTION STOPPAGES ASSOCIATED WITH
THE SIX PUBLIC HOLIDAYS DURING THE QUARTER, THE FREE STATE OPERATIONS INCREASED
PRODUCTION BY 53 000 TONS TO 1 379 000 TONS. A 7% COST BENEFIT RESULTING FROM
THE TRANSFORMATION OF THE RECENTLY ACQUIRED BRAND AND MASIMONG SHAFTS ASSISTED
IN OFFSETTING THE LOWER GRADES REALISED DUE TO PRODUCTION PROBLEMS IN SOME OF
THE HIGHER GRADE AREAS.
WE EXPECT THAT THESE LEVELS IN TERMS OF TONNAGES AND A SLIGHTLY HIGHER RECOVERY
GRADE ARE ACHIEVABLE FOR THE NEXT QUARTER.
DIVIDEND
IN VIEW OF THE SATISFACTORY PROFITS AND CASH POSITION OF THE COMPANY, A FINAL
DIVIDEND OF 60 CENTS A SHARE WILL BE DECLARED FOR THE SIX MONTHS TO JUNE 1999,
BRINGING TO 110 CENTS THE TOTAL DIVIDEND FOR THE YEAR.
ANNUAL REVIEW
THE COMPANY HAS BEEN SUCCESSFUL IN ITS STRATEGY OF GROWTH THROUGH ACQUISITION
AS CONFIRMED BY THE FOLLOWING YEAR ON YEAR COMPARISON. THE COMPANY HAS EMERGED
AS ONE OF THE TOP GOLD PRODUCERS IN THE WORLD, AND THE THIRD LARGEST PRODUCER
IN SOUTH AFRICA, NOW PRODUCING 1.3 MILLION OUNCES A YEAR, COMPARED TO 0.8
MILLION OUNCES FOR THE PREVIOUS FINANCIAL YEAR.
YEAR ON YEAR COMPARISON
                                                           PERCENTAGE
(UNAUDITED)                       1999         1998        IMPROVEMENT
GOLD PRODUCED (KG)                39 682       23 853      66
GOLD PRODUCED (OZ)                1 275 803    766 890     66
WORKING COST (R/KG)               46 561       47 991      3
WORKING COST ($/OZ)               239          305         22
CASH OPERATING PROFIT (RM)        384          40
CASH AT HAND (RM)                 310          143
EARNINGS BEFORE IMPAIRMENT (RM)   260          (19)
NET EARNINGS (RM)                 171          (19)
EARNINGS (CENTS/SHARE
BEFORE IMPAIRMENT)                375          (40)
NET EARNINGS (CENTS/SHARE
AFTER IMPAIRMENT)                 247          (40)
THE QUALITY OF THE PRODUCTION HAS IMPROVED AS THE COMPANY INCREASED GOLD
PRODUCTION BY 66% FROM 23 853 KGS AT 4.23 G/T TO 39 682 KGS AT 5.27 G/T.
THE GOLD PRICE RECEIVED PER OUNCE WAS US$288 FOR THE YEAR, US$28 AN OUNCE LOWER
THAN FOR THE PREVIOUS YEAR. REVENUE PER KILOGRAM, HOWEVER, IMPROVED TO R56 234
COMPARED WITH R49 684 IN THE PRECEDING YEAR AS A RESULT OF THE SOUTH AFRICAN
RAND'S SIGNIFICANT DEPRECIATION AGAINST THE US DOLLAR.
HARMONY'S CASH OPERATING PROFIT INCREASED FROM R40.4 MILLION IN 1997/98 TO
R383.8 MILLION FOR THE CURRENT FINANCIAL YEAR. CASH OPERATING COSTS REDUCED
FROM US$305 AN OUNCE TO US$239 AN OUNCE DUE TO THE EFFECT OF THE DEPRECIATION
IN THE LOCAL CURRENCY, A REAL REDUCTION IN COSTS IN R/KG TERMS AND AN INCREASE
IN GRADE.
EARNINGS IMPROVED TO 375 CENTS PER SHARE BEFORE IMPAIRMENT CHARGES, COMPARED
WITH A LOSS OF 40 CENTS PER SHARE IN THE PREVIOUS FINANCIAL YEAR.
DUE TO THE PERSISTENTLY LOW GOLD PRICE AND IN LINE WITH INTERNATIONAL
ACCOUNTING STANDARDS (I.A.S.), MANAGEMENT CONSIDERED IT PRUDENT TO WRITE DOWN A
NET AMOUNT OF R89.6 MILLION AS AN IMPAIRMENT OF THE MINING ASSETS IN THE FREE
STATE.
IN JUNE THIS YEAR HARMONY ANNOUNCED ITS MERGER WITH WEST RAND CONSOLIDATED
MINES (WRCM) AND KALAHARI GOLDRIGE MINING COMPANY (KALGOLD)IN A R300 MILLION
DEAL, EFFECTIVE 1 JULY 1999. THIS ACQUISITION WILL ADD APPROXIMATELY 100 000
OUNCES TO HARMONY'S PRODUCTION, EFFECTIVELY INCREASING THE PROJECTED ANNUALISED
FIGURE TO ABOVE 1.3 MILLION OUNCES.
WE BELIEVE THE COMPANIES ARE PERFECTLY MATCHED. IN ADDITION TO A LARGE BASE OF
GOLD RESOURCES AND RESERVES, THE COMPANIES HAVE PARTICULARLY COMPLEMENTARY
SKILLS AND ASSETS, COMPATIBLE CULTURES AND SIMILAR OBJECTIVES THAT WOULD BE
BEST ACHIEVED AS ONE. WITH THIS MERGER, HARMONY IS ALSO ENTERING A NEW ARENA BY
DIVERSIFYING ITS MINING ASSETS. IN ACCORDANCE WITH HARMONY'S NEW PROFILE AS A
LEADING GOLD PRODUCER, THE COMPANY'S GROWTH STRATEGY SHOULD INCLUDE THE
DIVERSIFICATION INTO EXPLORATION, THE EXPLOITATION OF OTHER TYPES OF GOLD
DEPOSITS AND THE UTILISATION OF OTHER TECHNIQUES, SUCH AS OPEN-PIT MINING.
KALGOLD, A LOW COST OPEN CAST MINING COMPANY AND OPERATING ENTITY OF WRCM, IS
CURRENTLY MINING THE KRAAIPAN GREENSTONE BELT. KALGOLD HAS ESTABLISHED THAT THE
BELT, AN AREA WITH GREAT EXPLORATION POTENTIAL, CONTAINS SUBSTANTIAL GOLD
DEPOSITS THAT CAN BE EXTRACTED THROUGH LOW COST OPENCAST MINING METHODS.
AS OF THE BEGINNING OF THE 1999/2000 FINANCIAL YEAR, SOME BOARD CHANGES WILL BE
MADE AT THE NEW ENLARGED HARMONY. LIONEL HEWITT WILL RETIRE AS NON-EXECUTIVE
CHAIRMAN OF THE HARMONY BOARD AND THE REINS HANDED TO ADAM FLEMING, CURRENTLY
CHAIRMAN OF WRCM AND KALGOLD, AND A MAN WITH A VAST KNOWLEDGE OF THE GOLD
MINING INDUSTRY. LIONEL'S EXCEPTIONAL SKILLS AND EXPERIENCE ARE NOT LOST TO
HARMONY, AS HE HAS AGREED TO REMAIN ON THE BOARD AS A NON-EXECUTIVE DIRECTOR.
FOLLOWING THE MERGER OF WRCM AND KALGOLD WITH HARMONY, THE ENLARGED COMPANY
WILL BE ARMED WITH A STRONGER CASH FLOW, ADDITIONAL MANAGEMENT AND EXPLORATION
SKILLS AND COMPLEMENTARY MINING TECHNOLOGIES, WHICH WILL BETTER POSITION THE
COMPANY TO TAKE FULL ADVANTAGE OF GROWTH OPPORTUNITIES PRESENTED BOTH LOCALLY
AND ABROAD.
HARMONY'S MANAGEMENT AND WORKERS HAVE ACHIEVED GREAT SUCCESS IN INTRODUCING
SOUND MINING PRACTICES AT ALL OF THE COMPANY'S OPERATIONS. IT HAS RESULTED IN
THE COMPANY SIGNIFICANTLY INCREASING OUTPUT AND REDUCING COSTS. WE BELIEVE THAT
THE ENLARGED HARMONY IS BETTER POSITIONED TO SUSTAIN ITS PROFITABILITY DESPITE
THE DEPRESSED GOLD PRICE.
MANAGEMENT'S DISCUSSION AND OPERATIONAL ANALYSIS
FREE STATE
A DIFFICULT QUARTER DURING WHICH THE OPERATIONS MANAGED TO INCREASE TONNAGE BY
4% DESPITE PRODUCTION INTERRUPTIONS FOR 6 PUBLIC HOLIDAYS. THE CONTINUED
TRANSFORMATION OF THE RECENTLY ACQUIRED BRAND AND MASIMONG SHAFTS RESULTED IN A
SAVING OF R10.3 MILLION COMPARED WITH THE MARCH QUARTER. THE NET RESULT WAS AN
IMPRESSIVE REDUCTION IN COST PER TON OF 7% TO R231 FROM PREVIOUS LEVELS OF
R248. UNFORTUNATELY PRODUCTION PROBLEMS IN CERTAIN HIGH-GRADE AREAS RESULTED IN
AN OVERALL DECREASE IN GRADE AND GOLD PRODUCTION OF 91 KGS COMPARED WITH THE
MARCH QUARTER. THIS WAS EXACERBATED BY THE LOWER GOLD PRICE, WHICH CAUSED
REVENUE TO DECLINE BY R17 MILLION (5%) AND CASH OPERATING PROFIT BY R6.7
MILLION (18%) TO R31.4 MILLION. THE OPERATIONS ARE EXPECTED TO REPEAT THE ABOVE
PERFORMANCE IN RESPECT OF VOLUME AND GRADE.
EVANDER
THE EVANDER OPERATIONS CONTINUED TO IMPROVE IN LINE WITH EXPECTATIONS. A 13%
INCREASE IN UNDERGROUND TONNAGE WAS ACHIEVED WITH ONLY A 4% INCREASE IN TOTAL
CASH OPERATING COSTS. THE COST PER TON REDUCED FROM A QUARTER AVERAGE OF R296
IN MARCH TO R269 AND WAS BELOW R257 FOR THE MONTH OF JUNE. THE CHALLENGE NOW IS
TO CONTINUE FOCUSING ON DECREASING UNIT COST EVEN FURTHER TO BRING IT IN LINE
WITH THAT ACHIEVED AT THE FREE STATE OPERATIONS.
AS REPORTED PREVIOUSLY, THE EXTREMELY HIGH GOLD RECOVERIES OF RECENT QUARTERS
COULD NOT BE MAINTAINED AND THE GRADE WAS REDUCED TO MORE SUSTAINABLE LEVELS OF
6.5G/T. THIS RESULTED IN A REDUCTION IN GOLD OUTPUT OF 182 KGS AND, TOGETHER
WITH THE REDUCTION IN THE GOLD PRICE, REDUCED TOTAL REVENUE BY R17.3 MILLION.
SURFACE OPERATIONS ACHIEVED A PROFIT OF R1.2 MILLION FOR THE QUARTER.
BISSETT
THE PRODUCTION BUILD-UP AT BISSETT CONTINUES, ALBEIT AT A SLOWER THAN PLANNED
PACE. THE NET COST OF THE OPERATION FOR THE JUNE QUARTER OF R5.3 MILLION (MARCH
1999 - R8.4 MILLION) HAS BEEN CAPITALISED AS PRE-PRODUCTION EXPENDITURE.
FOLLOWING AN IN DEPTH OPTIMISATION PLAN, IT HAS BEEN DECIDED TO INCREASE THE
MINE'S PRODUCTION CAPACITY FROM 21 000 TONS TO 30 000 TONS PER MONTH AND
ADDITIONAL CAPITAL EXPENDITURE OF R25 MILLION WILL BE INCURRED OVER THE NEXT
SIX MONTHS. OPERATIONAL CHANGES RESULTING FROM THIS DECISION RAISED PRODUCTION
TO 60% OF THE INCREASED CAPACITY BY QUARTER END AND WE FORECAST THAT A 75%
LEVEL WILL BE ACHIEVED BY SEPTEMBER QUARTER END.
CAPITAL EXPENDITURE
CAPITAL EXPENDITURE DURING THE QUARTER AMOUNTED TO R33 MILLION.
                                            JUNE 1999       SEPTEMBER 1999
OPERATION                                   R MILLION       R MILLION
                                                            (FORECAST)
FREE STATE                                  12              8
EVANDER                                     12              10
BISSETT                                     9               16
TOTAL                                       33              34
THIS REPORT WAS APPROVED BY THE BOARD OF DIRECTORS AND IS SIGNED ON ITS BEHALF
BY:
Z B SWANEPOEL                        F ABBOTT                VIRGINIA
CHIEF EXECUTIVE                      FINANCIAL DIRECTOR      19 JULY 1999
NOTICE OF FINAL DIVIDEND
A DIVIDEND NO. 69 OF 60 CENTS PER ORDINARY SHARE, BEING THE FINAL DIVIDEND FOR
THE FINANCIAL YEAR ENDED 30 JUNE 1999, HAS BEEN DECLARED PAYABLE ON 3 SEPTEMBER
1999 TO THOSE SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY AT THE CLOSE
OF BUSINESS ON 6 AUGUST 1999. IN THIS REGARD, MEMBERS ARE ADVISED THAT ANY
SHARES TO BE ISSUED IN TERMS OF THE SCHEMES OF ARRANGEMENT PROPOSED IN TERMS OF
SECTION 311 OF THE COMPANIES ACT, 1973, BETWEEN WEST RAND CONSOLIDATED MINES
LIMITED AND KALAHARI GOLDRIDGE MINING COMPANY LIMITED AND THEIR RESPECTIVE
SHAREHOLDERS OTHER THAN THE COMPANY, WILL NOT RANK FOR THIS DIVIDEND NO. 69.
THE DIVIDEND IS DECLARED IN THE CURRENCY OF THE REPUBLIC OF SOUTH AFRICA.
DIVIDEND CHEQUES WILL BE POSTED FROM THE OFFICE OF THE TRANSFER SECRETARIES IN
SOUTH AFRICA OR THE REGISTRARS IN THE UNITED KINGDOM ON OR ABOUT 2 SEPTEMBER
1999.
ANY CHANGE IN ADDRESS OR DIVIDEND INSTRUCTION TO APPLY TO THIS DIVIDEND MUST BE
RECEIVED BY THE COMPANY'S TRANSFER SECRETARIES OR REGISTRAR NOT LATER THAN 6
AUGUST 1999.
THIS ANNOUNCEMENT WILL BE MAILED TO ALL REGISTERED SHAREHOLDERS ON OR ABOUT 20
JULY 1999.
BY ORDER OF THE BOARD
FW BAKER                      VIRGINIA
COMPANY SECRETARY             20 JULY 1999
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 GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
JSE CODE:HAR
NASDAQ TRADING SYMBOL HGMCY
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
TOUGH QUARTER CONCLUDES EXCELLENT YEAR FOR HARMONY
JOHANNESBURG, 19 JULY 1999 - HARMONY'S CASH OPERATING PROFIT INCREASED FROM
R40.4 MILLION IN THE PREVIOUS YEAR TO R383.8 MILLION.  CASH OPERATING COSTS
REDUCED FROM US$305 AN OUNCE TO US$239 AN OUNCE, DUE TO THE EFFECT OF THE LOCAL
CURRENCY'S DEPRECIATION, REAL REDUCTION IN COSTS IN R/KG TERMS AND AN INCREASE
IN GRADE. GOLD PRODUCTION INCREASED BY 66% FROM 23 853 KGS AT 4.23 G/T TO 39
682 KGS AT 5.27 G/T.
CHIEF EXECUTIVE BERNARD SWANEPOEL SAYS THE PAST YEAR, AND ESPECIALLY THE
QUARTER UNDER REVIEW, HAS BEEN A SOBERING EXPERIENCE FOR THOSE IN THE BUSINESS
OF PRODUCING GOLD.  GOLD PRICES LAST SEEN 20 YEARS AGO AFFECTED, AND CONTINUE
TO AFFECT, THE EARNINGS AND CAPITAL EXPENDITURE PLANS OF PRODUCERS ACROSS THE
BOARD, WHILE SOME MAY BE FORCED TO THROW IN THE TOWEL.  WHEN COMPARED WITH THE
SPOT GOLD PRICE, AS MUCH AS 45% OF WORLD GOLD PRODUCTION IS ESTIMATED AS LOSS
MAKING. SHOULD THE CURRENT GOLD PRICE SUSTAIN CURRENT LEVELS FOR ANY EXTENDED
PERIOD, AS MANY AS 80 000 MINE WORKERS COULD BE CHALLENGED WITH FINDING
ALTERNATIVE EMPLOYMENT BY THE END OF THE YEAR AS THE CONTINUED CONSOLIDATION OF
THE SOUTH AFRICAN GOLD INDUSTRY SPEEDS UP.
FINANCIAL DIRECTOR FRANK ABBOTT EXPLAINED THAT AT THE CURRENT GOLD PRICE, THE
RECOVERABLE AMOUNT OF CERTAIN MINING ASSETS AT THE FREE STATE OPERATIONS ARE
LOWER THAN THEIR BOOK VALUE.  IN LINE WITH THE COMPANY'S ACCOUNTING POLICY,
MINING ASSETS OF R112 MILLION HAVE BEEN IMPAIRED (WRITTEN OFF).  THERE HAS BEEN
AN ASSOCIATED WRITE BACK FROM DEFERRED TAX OF R22.4 MILLION (IMPAIRMENT R89.6
MILLION NET OF TAX).
IN VIEW OF THE SATISFACTORY PROFITS AND CASH POSITION OF THE COMPANY, A FINAL
DIVIDEND OF 60 CENTS A SHARE HAS BEEN DECLARED, MAKING THE TOTAL DIVIDEND FOR
THE YEAR 110 CENTS.
HARMONY RETURNED A CASH OPERATING PROFIT OF R75 MILLION FOR THE QUARTER, R29
MILLION BELOW THAT OF THE PREVIOUS QUARTER.  REVENUE DECLINED BY R36 MILLION.
THIS CAN BE ATTRIBUTED TO THE FALLING GOLD PRICE AND LOWER GRADES, BUT WAS
PARTIALLY OFFSET BY SAVINGS IN OPERATING COSTS.  EARNINGS PER SHARE,
ACCORDINGLY, REDUCED TO 82 CENTS PER SHARE.
DURING TIMES LIKE THESE HARMONY HAS TO RETAIN ITS FOCUS ON REDUCING OPERATING
COSTS AND SHALL CONTINUE TO OPTIMISE OPERATIONS. "ONE OF THE HARMONY TEAM'S
GREATEST STRENGTHS IS OUR ABILITY TO DRIVE DOWN OPERATING COSTS AND WE HAVE
PROVED THAT AGAIN WITH THE EVANDER OPERATION, WHICH CONTINUES TO SHINE IN OUR
STABLE," SAYS SWANEPOEL.
THE EVANDER OPERATION ACHIEVED ITS OBJECTIVE OF DECREASING WORKING COSTS FROM
R360 PER TON PRIOR TO THE ACQUISITION TO R257 PER TON BY JUNE 1999.  BY
REACHING THESE COST LEVELS, EVANDER'S RESERVE BASE HAS BEEN INCREASED FROM 10.4
MILLION OUNCES TO 15.1 MILLION OUNCES, WHICH PLACES THE OPERATION IN A STRONGER
POSITION TO INCREASE FLEXIBILITY AND PRODUCTION. "THE CHALLENGE IS NOW TO
REDUCE UNIT COST AND TO BRING IT IN LINE WITH THAT ACHIEVED AT THE FREE STATE
OPERATIONS," SAYS SWANEPOEL.
IN LINE WITH EXPECTATIONS AND DESPITE THE PRODUCTION STOPPAGES ASSOCIATED WITH
THE SIX PUBLIC HOLIDAYS DURING THE QUARTER, THE FREE STATE OPERATIONS INCREASED
PRODUCTION BY 53 000 TONS TO APPROXIMATELY 1.4 MILLION TONS.  THE CONTINUED
TRANSFORMATION OF THE RECENTLY ACQUIRED BRAND AND MASIMONG SHAFTS RESULTED IN A
SAVING OF R10.3 MILLION FROM THE PREVIOUS QUARTER.  THE NET RESULT WAS AN
IMPRESSIVE 7% REDUCTION IN COST PER TON TO R231 FROM ITS PREVIOUS LEVELS OF
R248.  PRODUCTION PROBLEMS IN CERTAIN HIGH-GRADE AREAS RESULTED IN AN OVERALL
DECREASE IN GRADE AND GOLD PRODUCTION FROM THE PREVIOUS QUARTER.  THIS CAUSED
REVENUE TO DECLINE BY 5% OR R17 MILLION AND CASH OPERATING PROFIT TO DECLINE BY
18% TO R31.4 MILLION. IN TERMS OF VOLUME AND GRADE, IT IS EXPECTED THAT THE
FREE STATE OPERATIONS WILL REPEAT THEIR CURRENT PERFORMANCE.
THE PRODUCTION BUILD-UP AT BISSETT CONTINUES, ALTHOUGH AT A SLOWER PACE THAN
ANTICIPATED.  THE R5.3 MILLION NET COST OF THE OPERATION FOR THE JUNE QUARTER
HAS BEEN CAPITALISED AS PRE-PRODUCTION EXPENDITURE.  SWANEPOEL SAYS THAT
FOLLOWING AN IN-DEPTH OPTIMISATION PLAN, IT HAS BEEN DECIDED TO INCREASE THE
MINE'S PRODUCTION CAPACITY BY 9 000 TONNES TO 30 000 TONNES PER MONTH.
ADDITIONAL CAPITAL EXPENDITURE OF R25 MILLION WILL BE INCURRED OVER THE NEXT
SIX MONTHS.  "OPERATIONAL CHANGES RESULTING FROM THIS DECISION RAISED
PRODUCTION TO 60% OF CAPACITY BY QUARTER END. WE FORECAST THAT THIS LEVEL WILL
BE INCREASED TO 75% BY END SEPTEMBER," SAYS SWANEPOEL.
THE ACQUISITION OF WEST RAND CONSOLIDATED MINES (WRCM) AND KALAHARI GOLDRIDGE
MINING COMPANY (KALGOLD) WILL ADD APPROXIMATELY 100 000 OUNCES TO HARMONY'S
PRODUCTION, EFFECTIVELY INCREASING THE PROJECTED ANNUALISED FIGURE TO ABOVE 1.3
MILLION OUNCES.  WITH THIS ACQUISITION, HARMONY IS ALSO ENTERING A NEW ARENA BY
DIVERSIFYING ITS MINING ASSETS.  KALGOLD, A LOW-COST OPENCAST MINING COMPANY
AND THE OPERATING ENTITY OF WRCM, CURRENTLY MINES THE KRAAIPAN GREENSTONE BELT.
 KALGOLD HAS ESTABLISHED THAT THE BELT, AN AREA WITH GREAT EXPLORATION
POTENTIAL, CONTAINS SUBSTANTIAL GOLD DEPOSITS THAT CAN BE EXTRACTED THROUGH
LOW-COST OPENCAST MINING METHODS.
"HARMONY HAS BEEN SUCCESSFUL IN ITS STRATEGY OF GROWTH THROUGH ACQUISITIONS AND
HAS EMERGED AS ONE OF THE TOP GOLD PRODUCERS IN THE WORLD, AS WELL AS THE THIRD
LARGEST GOLD PRODUCER IN SOUTH AFRICA.  A YEAR AGO, THE COMPANY WAS PRODUCING
760 000 OUNCES OF GOLD AND NOW PRODUCES APPROXIMATELY 1.3 MILLION OUNCES A
YEAR. WHEN THE COMPANY'S PRODUCTION AND FINANCIAL RESULTS FOR THE 1998/99
FINANCIAL YEAR AND THE PREVIOUS YEAR ARE COMPARED, IT IS OBVIOUS THAT HARMONY
HAS BEEN TRANSFORMED SUCCESSFULLY, FROM A ONCE MARGINAL PRODUCER, INTO A
LEADING GOLD MINING COMPANY. WE BELIEVE THAT THE ENLARGED COMPANY IS NOW BETTER
POSITIONED TO SUSTAIN PROFITABILITY NOTWITHSTANDING THE DEPRESSED 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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