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OFFER BY HARMONY FOR RANDFONTEIN

Release Date: 06/01/2000 08:37:16      Code(s): HAR HARO
HARMONY GOLD MINING COMPANY LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 05/38232/06)
("HARMONY")
OFFER BY HARMONY TO ACQUIRE THE ENTIRE ISSUED ORDINARY SHARE CAPITAL OF AND ALL
LISTED OPTIONS ISSUED BY RANDFONTEIN ESTATES LIMITED ("RANDFONTEIN")
1. INTRODUCTION
ROBERT FLEMING SOUTH AFRICA LIMITED ("FLEMINGS") IS AUTHORISED TO ANNOUNCE THAT
HARMONY INTENDS TO MAKE AN OFFER FOR THE ENTIRE ISSUED ORDINARY SHARE CAPITAL
OF RANDFONTEIN (A PUBLIC COMPANY INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA,
REGISTRATION NUMBER 01/00251/06) AND ALL LISTED OPTIONS IN RESPECT OF ORDINARY
SHARES ISSUED BY RANDFONTEIN (THE "OFFER").  THE OFFER WILL BE SUBJECT TO THE
FULFILMENT OF CERTAIN CONDITIONS PRECEDENT SET OUT BELOW AND WILL BE
IMPLEMENTED IN ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES REGULATION
PANEL (THE "SRP") AND IN TERMS OF SECTION 440K OF THE COMPANIES ACT, ACT NO. 61
OF 1973, AS AMENDED (THE "ACT").
THE CONSIDERATION PAYABLE UNDER THE TERMS OF THE OFFER WILL BE SATISFIED BY THE
ISSUE OF NEW HARMONY ORDINARY SHARES (THE "SHARE OFFER") OR ALTERNATIVELY, IN
RESPECT OF THE OFFER FOR RANDFONTEIN SHARES AND AT THE ELECTION OF AN ACCEPTING
RANDFONTEIN SHAREHOLDER, IN CASH (THE "CASH ALTERNATIVE").
BASED ON THE LAST TRADED PRICE OF 3 785 CENTS PER HARMONY ORDINARY SHARE AT THE
CLOSE OF BUSINESS ON 5 JANUARY 2000 (THE LAST DATE BEFORE PUBLICATION OF THIS
ANNOUNCEMENT), EXCLUDING THE PROPOSED HARMONY INTERIM DIVIDEND OF 50 CENTS PER
SHARE TO WHICH ACCEPTING RANDFONTEIN SHAREHOLDERS WILL NOT BE ENTITLED, AND
ASSUMING THE SHARE OFFER IS TAKEN UP IN FULL, THE OFFER VALUES:
* EACH RANDFONTEIN SHARE AT 1 157.85 CENTS PER SHARE AND THE ENTIRE ISSUED
ORDINARY SHARE CAPITAL OF RANDFONTEIN AT APPROXIMATELY R750.29 MILLION; AND
* EACH RANDFONTEIN LISTED OPTION AT 261.45 CENTS PER LISTED OPTION, AND ALL THE
LISTED OPTIONS AT APPROXIMATELY R31.37 MILLION.
THE CASH ALTERNATIVE IS 1 100 CENTS PER RANDFONTEIN SHARE.  THERE IS NO CASH
ALTERNATIVE FOR THE RANDFONTEIN LISTED OPTIONS.
IN TERMS OF THE OFFER FOR RANDFONTEIN SHARES:
* THE SHARE OFFER REPRESENTS A PREMIUM OF APPROXIMATELY 36% OVER THE CLOSING
MARKET PRICE PER RANDFONTEIN SHARE OF 850 CENTS ON 5 JANUARY 2000, THE DAY
BEFORE PUBLICATION OF THIS ANNOUNCEMENT, AND A PREMIUM OF APPROXIMATELY 45%
OVER THE CLOSING MARKET PRICE PER RANDFONTEIN SHARE OF 800 CENTS ON FRIDAY, 3
DECEMBER 1999, THE LAST PRACTICABLE DATE BEFORE PUBLICATION OF THE TERMS OF THE
WESTERN AREAS LIMITED RESTRUCTURING (THE "RESTRUCTURING") ON MONDAY, 6 DECEMBER
1999.
* THE CASH ALTERNATIVE REPRESENTS A PREMIUM OF APPROXIMATELY 29% AND 38%
RESPECTIVELY.
IN TERMS OF THE OFFER FOR RANDFONTEIN LISTED OPTIONS, THE SHARE OFFER
REPRESENTS A PREMIUM OF APPROXIMATELY 41% OVER THE CLOSING MARKET PRICE PER
RANDFONTEIN LISTED OPTION OF 185 CENTS ON 5 JANUARY 2000, THE DAY BEFORE
PUBLICATION OF THIS ANNOUNCEMENT, AND A PREMIUM OF APPROXIMATELY 87% OVER THE
CLOSING MARKET PRICE PER RANDFONTEIN LISTED OPTION OF 140 CENTS ON FRIDAY, 3
DECEMBER 1999, THE LAST PRACTICABLE DATE BEFORE PUBLICATION OF THE TERMS OF THE
RESTRUCTURING.
THE OFFER IS CONDITIONAL ON THE SCHEMES OF ARRANGEMENT PROPOSED BY WESTERN
AREAS LIMITED, IN TERMS OF SECTION 311 OF THE ACT, BETWEEN RANDFONTEIN AND ITS
SHAREHOLDERS AND THE HOLDERS OF THE LISTED OPTIONS IN RANDFONTEIN
(COLLECTIVELY, THE "WESTERN AREAS-RANDFONTEIN SCHEMES") NOT BEING IMPLEMENTED
AND ON THE OTHER MATTERS SET OUT BELOW.
2. TERMS OF THE OFFER
2.1. THE SHARE OFFER
HARMONY INTENDS TO OFFER TO ACQUIRE:
* ALL OF THE RANDFONTEIN SHARES IN ISSUE, OTHER THAN THOSE ALREADY HELD BY
HARMONY, IN EXCHANGE FOR THE ISSUE OF 31 NEW HARMONY SHARES FOR EVERY 100
RANDFONTEIN SHARES HELD; AND
* ALL OF THE RANDFONTEIN LISTED OPTIONS IN ISSUE IN EXCHANGE FOR THE ISSUE OF 7
NEW HARMONY SHARES FOR EVERY 100 RANDFONTEIN LISTED OPTIONS HELD.
THE NEW HARMONY SHARES TO BE ISSUED UNDER THE TERMS OF THE OFFER (THE "NEW
HARMONY SHARES") WILL BE ISSUED CREDITED AS FULLY PAID AND WILL RANK PARI PASSU
IN ALL RESPECTS WITH THE EXISTING HARMONY SHARES, INCLUDING THE RIGHT TO ALL
DIVIDENDS AND OTHER DISTRIBUTIONS HEREAFTER DECLARED, MADE OR PAID IN RESPECT
OF HARMONY SHARES, SAVE FOR THE INTERIM DIVIDEND TO BE PAID IN RESPECT OF THE
SIX MONTHS TO 31 DECEMBER 1999.  THE BOARD OF HARMONY HAS RESOLVED THAT,
SUBJECT TO ANY UNFORESEEN CIRCUMSTANCES, HARMONY WILL PAY AN INTERIM DIVIDEND
OF 50 CENTS PER SHARE FOR THE PERIOD ENDING 31 DECEMBER 1999.  AN ANNOUNCEMENT
IN THIS REGARD WILL BE MADE IN DUE COURSE.
APPLICATION WILL BE MADE TO THE JOHANNESBURG STOCK EXCHANGE (THE "JSE"), THE
LONDON STOCK EXCHANGE AND THE PARIS BOURSE FOR A LISTING OF THE NEW HARMONY
SHARES.
2.2. THE CASH ALTERNATIVE
IN TERMS OF THE OFFER FOR RANDFONTEIN SHARES, RANDFONTEIN SHAREHOLDERS MAY
ELECT TO RECEIVE THE CASH ALTERNATIVE, IN TERMS OF WHICH A RANDFONTEIN
SHAREHOLDER WILL BE ENTITLED TO ELECT TO RECEIVE 1 100 CENTS IN CASH PER
RANDFONTEIN SHARE HELD.  ACCEPTING RANDFONTEIN SHAREHOLDERS MAY ACCEPT THE CASH
ALTERNATIVE IN RESPECT OF ALL OR PART OF THEIR HOLDINGS OF RANDFONTEIN SHARES.
2.3. OTHER TERMS
THE OFFER WILL BE SUBJECT TO THE CONDITIONS AND FURTHER TERMS (INCLUDING TERMS
RELATING TO OVERSEAS SHAREHOLDERS) AS SET OUT BELOW AND TO BE SET OUT IN THE
OFFER DOCUMENT AND FORMS OF SURRENDER AND ACCEPTANCE.
THE RANDFONTEIN SHARES AND LISTED OPTIONS ARE TO BE ACQUIRED UNDER THE OFFER
FULLY PAID AND FREE FROM ALL LIENS AND ENCUMBRANCES, RIGHTS OF PRE-EMPTION AND
OTHER THIRD PARTY RIGHTS AND INTERESTS AND TOGETHER WITH ALL RIGHTS ATTACHING
THERETO, INCLUDING THE RIGHT TO RECEIVE AND RETAIN ALL DIVIDENDS AND OTHER
DISTRIBUTIONS DECLARED, MADE OR PAID AFTER THE DATE OF THIS ANNOUNCEMENT.
ACCEPTING RANDFONTEIN SHAREHOLDERS ARE ADVISED THAT IF THEY DO NOT ELECT TO
RECEIVE THE CASH ALTERNATIVE IN RESPECT OF ALL OR PART OF THEIR HOLDINGS OF
RANDFONTEIN SHARES, THEY WILL RECEIVE THE SHARE OFFER DUE TO THEM IN RESPECT OF
THE WHOLE OR THAT PORTION OF THEIR HOLDINGS OF RANDFONTEIN SHARES IN RESPECT OF
WHICH NO ELECTION IS MADE.
3. CONDITIONS PRECEDENT
THE OFFER WILL BE SUBJECT TO FULFILMENT (OR, WHERE APPLICABLE, WAIVER) OF
CERTAIN CONDITIONS PRECEDENT, WHICH ARE SUMMARISED AS FOLLOWS:
3.1. VALID ACCEPTANCES OF THE OFFER BEING RECEIVED FROM RANDFONTEIN
SHAREHOLDERS HOLDING NOT LESS THAN 75% OF THE ISSUED ORDINARY SHARE CAPITAL OF
RANDFONTEIN (OR SUCH LOWER PERCENTAGE AS HARMONY MAY DECIDE);
3.2. SUCH APPROVAL AS MAY BE REQUIRED BY THE COMPETITION COMMISSION, ON TERMS
ACCEPTABLE TO HARMONY;
3.3. THE JSE GRANTING A LISTING OF THE NEW HARMONY SHARES;
3.4. ALL OTHER NECESSARY REGULATORY CLEARANCES BEING OBTAINED;
3.5. THE WESTERN AREAS-RANDFONTEIN SCHEMES NOT BEING IMPLEMENTED;
3.6. THERE BEING:
(I) DISCLOSURE TO HARMONY OF ALL INFORMATION RELATING TO RANDFONTEIN MADE
AVAILABLE TO WESTERN AREAS LIMITED;
(II) NO MATERIAL ADVERSE CHANGE IN THE BUSINESS, PROSPECTS, FINANCIAL OR
TRADING POSITION, OR PROFITS, OF RANDFONTEIN SINCE THE MOST RECENT PUBLICLY
DISCLOSED INFORMATION CONCERNING RANDFONTEIN;
(III) NO MATERIAL MISREPRESENTATION OR OMISSION IN ANY PUBLICLY DISCLOSED
INFORMATION CONCERNING RANDFONTEIN;
(IV) NO MATERIAL UNDISCLOSED LIABILITY TO WHICH RANDFONTEIN IS SUBJECT,
INCLUDING LIABILITIES UNDER ANY HEDGING ARRANGEMENTS;
(V) NO ACTION OR STEPS, AS PUBLICLY DISCLOSED IN INFORMATION RELATING TO THE
RESTRUCTURING, BEING TAKEN IN RELATION TO RANDFONTEIN;
(VI) NO ACTS OR OMISSIONS, WHICH MAY OPERATE TO FRUSTRATE THE IMPLEMENTATION OF
THE OFFER OR MATERIALLY AFFECT THE BUSINESS, PROSPECTS, FINANCIAL OR TRADING
POSITION, OR PROFITS, OF RANDFONTEIN OR HARMONY;
(VII) NO AUTHORITY OF ANY NATURE HAVING TAKEN OR THREATENED TO TAKE ANY ACTION
OR STEP WHICH MAY OPERATE TO FRUSTRATE THE IMPLEMENTATION OF THE OFFER OR
MATERIALLY AFFECT THE BUSINESS, PROSPECTS, FINANCIAL OR TRADING POSITION, OR
PROFITS, OF RANDFONTEIN OR HARMONY;
3.7. SUCH FURTHER CONDITIONS PRECEDENT AS ARE SET OUT IN THE OFFER DOCUMENT.
THE CONDITIONS PRECEDENT REFLECTED IN PARAGRAPHS 3.6 AND 3.7 HAVE BEEN
STIPULATED FOR THE BENEFIT OF HARMONY, WHICH MAY WAIVE ALL OR ANY OF THEM IN
WHOLE OR IN PART.
4. BACKGROUND INFORMATION ON HARMONY
HARMONY IS ONE OF THE FASTEST GROWING GOLD PRODUCERS IN SOUTH AFRICA WITH A
CURRENT MARKET CAPITALISATION OF R3 040 MILLION.  HARMONY, AN INDEPENDENT GOLD
MINING COMPANY SINCE 1997, HAS, THROUGH ITS STRATEGY OF GROWTH THROUGH
ACQUISITION, TRANSFORMED ITSELF FROM A LEASE-BOUND OPERATION IN THE FREE STATE
INTO ONE OF THE LARGEST GOLD PRODUCERS IN THE WORLD.
BY FOCUSING ON ASSETS WITH TURNAROUND POTENTIAL AND APPLYING ITS MANAGEMENT
PRACTICES, WHICH INCLUDE A LOW COST STRUCTURE, OPTIMISING EXISTING RESERVES AND
EMPOWERING TEAMS THROUGH A FLAT REPORTING STRUCTURE, HARMONY HAS ESTABLISHED
ITSELF AS A WORLD-CLASS GOLD MINING CONCERN.
RESERVES HAVE INCREASED FROM 8 MILLION OUNCES IN 1996 TO MORE THAN 24 MILLION
OUNCES IN 1999 AND HARMONY HAS INCREASED ANNUAL PRODUCTION FROM 590 000 OUNCES
TO APPROXIMATELY 1.3 MILLION OUNCES OVER THE SAME PERIOD.  TOTAL COSTS OF SOME
US$243 PER OUNCE COMPARE FAVOURABLY WITH PEER GROUP PRODUCERS ELSEWHERE IN THE
WORLD.
HARMONY SHAREHOLDERS HAVE SEEN THE VALUE OF THEIR INVESTMENTS, EXCLUDING
DIVIDENDS RECEIVED, INCREASE BY SOME 218% OVER THE LAST TWO CALENDAR YEARS FROM
1 190 CENTS PER SHARE AT THE START OF 1998 TO 3 785 CENTS PER SHARE IMMEDIATELY
PRIOR TO THE OFFER.
5. BACKGROUND INFORMATION ON RANDFONTEIN
RANDFONTEIN IS A SOUTH AFRICAN GOLD PRODUCER WITH A CURRENT MARKET
CAPITALISATION OF SOME R550.8 MILLION.
RANDFONTEIN'S OPERATIONS ARE LOCATED TO THE SOUTH-WEST OF JOHANNESBURG AND HAVE
BEEN DESCRIBED AS HAVING A MINE LIFE OF SOME 11 YEARS.  THE PRINCIPAL MINING
OPERATIONS OF RANDFONTEIN ARE MATURE AND INCORPORATE SURPLUS MINING AND
METALLURGICAL CAPACITY.  ITS SHALLOW- TO MEDIUM-DEPTH OPERATIONS ARE HIGHLY
GEARED TO THE COST STRUCTURE.
IN THE 12 MONTHS TO JUNE 1999, RANDFONTEIN PRODUCED APPROXIMATELY 800 000
OUNCES OF GOLD AT A TOTAL COST OF US$260 PER OUNCE.
6. REASONS FOR THE OFFER
THE BOARD OF HARMONY BELIEVES THAT THE TREND OF RATIONALISATION IN THE LOCAL
AND INTERNATIONAL GOLD INDUSTRY WILL CONTINUE AND THAT THE FUTURE SHAPE OF THE
INDUSTRY WILL BE DETERMINED BY INTERNATIONAL PLAYERS WITH CRITICAL MASS.  THE
ACQUISITION BY HARMONY OF RANDFONTEIN WILL RESULT IN HARMONY STRENGTHENING ITS
MARKET POSITION IN SOUTH AFRICA AND BECOMING THE SIXTH-LARGEST GOLD PRODUCER IN
THE WORLD IN TERMS OF RESERVES AND PRODUCTION:
* HARMONY'S PRODUCTION WILL BE INCREASED BY MORE THAN 50% TO APPROXIMATELY 2.2
MILLION OUNCES PER YEAR;
* HARMONY'S RESERVE BASE WILL INCREASE TO 29.2 MILLION OUNCES;
* THROUGH COST CONTROL, REMOVAL OF MANAGEMENT CONTRACTS AT RANDFONTEIN AND THE
RATIONALISATION OF OVERHEADS, THERE WILL BE A FAVOURABLE IMPACT ON THE COST
PROFILE.
HARMONY BELIEVES THAT SIGNIFICANT SHAREHOLDER VALUE FOR CURRENT HARMONY
SHAREHOLDERS AND THOSE NEW HARMONY SHAREHOLDERS WHO ACCEPT THE SHARE OFFER WILL
BE UNLOCKED FROM RANDFONTEIN'S OPERATIONS FOLLOWING THE INTRODUCTION OF
HARMONY'S MINING PRACTICES AIMED AT COST CONTROL, IMPLEMENTING INNOVATIVE ORE
RESERVE MANAGEMENT SYSTEMS AND EMPOWERING THE PRODUCTION TEAMS TO ACHIEVE
STANDARDS OF PRODUCTIVITY SIMILAR TO THOSE AT THE CURRENT HARMONY OPERATIONS.
THE BOARD OF HARMONY BELIEVES THAT, FOLLOWING THE ACQUISITION OF RANDFONTEIN
AND THE ACHIEVEMENT OF THE BENEFITS FROM THE COMBINED OPERATIONS, HARMONY WILL
BE IN A STRONGER POSITION TO PURSUE FURTHER GROWTH OPPORTUNITIES AND TO LAUNCH
THE NEXT PHASE OF THE GEOGRAPHICAL DIVERSIFICATION OF ITS RESOURCE AND
PRODUCTION BASE.
7. BENEFITS OF THE OFFER
HARMONY BELIEVES THAT THE TERMS OF THE OFFER ARE SIGNIFICANTLY BETTER THAN
THOSE OFFERED TO RANDFONTEIN SHAREHOLDERS AND OPTION HOLDERS BY WESTERN AREAS
LIMITED UNDER THE WESTERN AREAS-RANDFONTEIN SCHEMES.
HARMONY BELIEVES THAT THE OPERATIONS OF RANDFONTEIN ARE IDEALLY SUITED TO
BENEFIT FROM HARMONY'S PROVEN ABILITY TO TRANSFER ITS LOW COST CULTURE AND HIGH
PRODUCTIVITY MINING METHODS TO MATURE MINING OPERATIONS WHICH ALSO CONTAIN
MARGINAL ORE RESOURCES.  THIS IS EXPECTED TO RESULT IN THE LIFE OF THE
RANDFONTEIN OPERATIONS BEING EXTENDED AND INCREASED PROFITABILITY BEING
ACHIEVED.
THE BOARD OF HARMONY ALSO EXPECTS THAT THE ACQUISITION OF RANDFONTEIN WILL
RESULT IN ENHANCED EARNINGS PER SHARE FOR HARMONY FROM THE FIRST FULL YEAR OF
COMBINED OPERATIONS, AND THAT HARMONY'S PROSPECTS FOR CONTINUED PROFITABLE
EXPANSION THEREAFTER WILL BE STRENGTHENED.
8. FINANCIAL EFFECTS OF THE OFFER
THE TABLE BELOW COMPARES THE FINANCIAL EFFECTS ON HOLDERS OF RANDFONTEIN SHARES
OF ACCEPTING THE SHARE OFFER OR THE CASH ALTERNATIVE.
RANDFONTEIN SHARE PRICE ON 5 JANUARY 2000 (CENTS PER SHARE)         850.00
* SHARE OFFER (CENTS PER SHARE)                                     1 157.85
  PREMIUM TO RANDFONTEIN SHARE PRICE (%)                            36%
* CASH ALTERNATIVE (CENTS PER SHARE)                                1 100.00
  PREMIUM TO RANDFONTEIN SHARE PRICE (%)                            29%
THE TABLE BELOW SETS OUT THE FINANCIAL EFFECTS ON HOLDERS OF RANDFONTEIN LISTED
OPTIONS OF ACCEPTING THE SHARE OFFER.
RANDFONTEIN LISTED OPTION PRICE ON 5 JANUARY 2000
 (CENTS PER LISTED OPTION)                                          185.00
* SHARE OFFER (CENTS PER LISTED OPTION)                             261.45
  PREMIUM TO RANDFONTEIN LISTED OPTION PRICE (%)                    41%
THE TABLE BELOW SETS OUT THE IMPACT ON THE HARMONY EARNINGS PER SHARE AND NET
ASSET VALUE PER SHARE BASED ON A 100% ACCEPTANCE OF THE SHARE OFFER BY THE
RANDFONTEIN SHAREHOLDERS AND OPTION HOLDERS.
                                             BEFORE        AFTER
                                 NOTES    THE OFFER    THE OFFER    % CHANGE
HARMONY                                     (CENTS)      (CENTS)
EARNINGS PER SHARE               1,3,4          247          374         51%
HEADLINE EARNINGS PER SHARE      1,3,4          247          374         51%
NET ASSET VALUE PER SHARE        2,3,4        2 623        2 733          4%
NOTES:
1. BASED ON THE AUDITED INCOME STATEMENTS OF HARMONY FOR THE YEAR ENDED 30 JUNE
1999.  IN ADDITION, THE PUBLISHED QUARTERLY INCOME STATEMENTS OF KALAHARI
GOLDRIDGE MINING COMPANY LIMITED ("KALGOLD") FOR THE FOUR QUARTERS ENDED 30
JUNE 1999 WERE INCLUDED IN HARMONY'S RESULTS, BASED ON THE ASSUMPTION THAT THE
ACQUISITION OF WEST RAND CONSOLIDATED MINES LIMITED ("WRCM") AND KALGOLD HAD
BEEN EFFECTIVE THROUGHOUT THAT PERIOD.
2. BASED ON THE AUDITED BALANCE SHEET OF HARMONY AT 30 JUNE 1999, INCLUDING THE
ACQUISITION PRICE OF WRCM AND KALGOLD.
3. BASED ON THE RANDFONTEIN FINANCIAL INFORMATION CONTAINED WITHIN THE CIRCULAR
TO SHAREHOLDERS OF WESTERN AREAS LIMITED DATED 20 DECEMBER 1999.
4. CALCULATIONS BASED ON THE ASSUMPTION THAT ALL RANDFONTEIN SHAREHOLDERS AND
OPTION HOLDERS ELECT TO RECEIVE THE SHARE OFFER AND NO RANDFONTEIN SHAREHOLDERS
ELECT TO RECEIVE THE CASH ALTERNATIVE.
9. EXPECTED CONSEQUENCES OF THE OFFER
THE IMPLEMENTATION OF THE OFFER IS CONDITIONAL ON THE WESTERN AREAS-RANDFONTEIN
SCHEMES NOT BEING IMPLEMENTED.
IF THE OFFER IS DECLARED UNCONDITIONAL, HARMONY INTENDS THAT:
* THE DISTRIBUTION OF RANDFONTEIN'S HOLDING OF 7 860 566 WESTERN AREAS SHARES
ENVISAGED UNDER THE TERMS OF THE RESTRUCTURING WILL NOT BE IMPLEMENTED.  THIS
IS NOT EXPECTED TO BE A STRATEGIC HOLDING FOR RANDFONTEIN FOLLOWING THE OFFER
AND THESE SHARES MAY, THEREFORE, BE DISPOSED OF OVER TIME IN THE MARKET;
* THE TERMS AND IMPLEMENTATION OF THE CANCELLATION OF THE CONSULTING SERVICES
CONTRACT BETWEEN JCI GOLD LIMITED AND RANDFONTEIN ENVISAGED UNDER THE TERMS OF
THE RESTRUCTURING FOR A CONSIDERATION OF R150 MILLION WILL BE REVIEWED AND THE
FUTURE OF THAT CONTRACT RE-EVALUATED;
* THE EXISTING LOAN ACCOUNT BALANCE OF SOME R101 MILLION REPAYABLE BY JCI GOLD
LIMITED TO RANDFONTEIN (WHICH IS AN INTEREST FREE LOAN, WITHOUT SECURITY AND
WITH NO FIXED DATE FOR REPAYMENT) WILL BE REVIEWED.
10. RECOMMENDATION
THE BOARD OF HARMONY URGES RANDFONTEIN SHAREHOLDERS AND OPTION HOLDERS
RESPECTIVELY TO VOTE AGAINST THE RESOLUTIONS GIVING EFFECT TO THE WESTERN
AREAS-RANDFONTEIN SCHEMES AT THE SCHEME MEETINGS CONVENED TO CONSIDER SUCH
RESOLUTIONS ON MONDAY, 17 JANUARY 2000, OR AT AN EXPECTED ADJOURNMENT OF SUCH
SCHEME MEETINGS.
THE BOARD OF HARMONY BELIEVES THAT THE OFFER IS IN THE INTERESTS OF RANDFONTEIN
SHAREHOLDERS AND OPTION HOLDERS RESPECTIVELY AND RECOMMENDS THAT THEY ACCEPT
THE OFFER.
11. GENERAL
AS AT THE DATE OF THIS ANNOUNCEMENT HARMONY HOLDS 337 500 RANDFONTEIN SHARES.
SAVE AS DISCLOSED ABOVE, NEITHER HARMONY NOR ANY OF THE DIRECTORS OF HARMONY
NOR, SO FAR AS HARMONY IS AWARE, ANY PARTY ACTING IN CONCERT WITH HARMONY, OWNS
OR CONTROLS ANY RANDFONTEIN SHARES OR HOLDS ANY OPTIONS TO PURCHASE RANDFONTEIN
SHARES OR HAS ENTERED INTO ANY DERIVATIVE REFERENCED TO RANDFONTEIN SHARES.
MESSRS FLEMING, HEWITT AND GROBICKI, WHO ARE DIRECTORS OF HARMONY, HAVE WITH
IMMEDIATE EFFECT RESIGNED AS DIRECTORS OF RANDGOLD & EXPLORATION COMPANY
LIMITED AND MR GROBICKI HAS RESIGNED WITH IMMEDIATE EFFECT AS A DIRECTOR OF
RANDGOLD RESOURCES LIMITED, BOTH OF WHICH COMPANIES FORM PART OF THE
RESTRUCTURING.
FLEMINGS HAS BEEN APPOINTED TO ADVISE THE BOARD OF HARMONY REGARDING THE OFFER
AND ITS TERMS.  CAZENOVE & CO. HAS BEEN APPOINTED AS CORPORATE BROKING ADVISER
TO THE BOARD OF HARMONY.
FLEMINGS HAS CONFIRMED TO THE SRP THAT HARMONY HAS SUFFICIENT RESOURCES TO
SATISFY THE CASH PAYMENTS TO THOSE RANDFONTEIN SHAREHOLDERS WHO ELECT TO
RECEIVE THE CASH ALTERNATIVE.
IF THE OFFER BECOMES UNCONDITIONAL AND IS ACCEPTED BY RANDFONTEIN SHAREHOLDERS
HOLDING NOT LESS THAN 90% OF THE RANDFONTEIN SHARES ON THE CLOSING DATE OF THE
OFFER AND HARMONY INVOKES SECTION 440K OF THE ACT, HARMONY WILL MAKE
APPLICATION TO THE RELEVANT EXCHANGES FOR A TERMINATION OF THE LISTINGS OF THE
RANDFONTEIN SHARES AND, WHERE APPLICABLE, THE LISTED OPTIONS.
12. SALIENT DATES OF THE OFFER
SUBJECT TO THE NECESSARY REGULATORY APPROVALS, THE OFFER IS EXPECTED TO OPEN ON
TUESDAY 11 JANUARY 2000 AND TO CLOSE ON 8 FEBRUARY 2000 (THE "FIRST CLOSING
DATE") AS FOLLOWS:
                                                        2000
OFFER OPENS AT 09:00 ON                                 TUESDAY, 11 JANUARY
WESTERN AREAS-RANDFONTEIN SCHEMES MEETINGS ON           MONDAY, 17 JANUARY
FIRST CLOSING DATE OF OFFER AT 16:00 ON                 TUESDAY, 8 FEBRUARY
PUBLICATION OF RESULTS OF OFFER                         FRIDAY, 11 FEBRUARY
13. POSTING OF SHARE CERTIFICATES, ELECTRONIC CREDITING OF SHARES AND POSTING
OF CHEQUES
AS HARMONY IS A PARTICIPANT IN SHARE TRANSACTIONS TOTALLY ELECTRONIC
("STRATE"), ACCEPTING RANDFONTEIN SHAREHOLDERS OR OPTION HOLDERS ARE ENTITLED
TO ELECT TO RECEIVE HARMONY SHARES TO BE ISSUED UNDER THE SHARE OFFER IN
MATERIAL OR ELECTRONIC FORM.  ANY SUCH SHAREHOLDERS AND OPTION HOLDERS WHO
ELECT TO RECEIVE SHARES IN MATERIAL FORM ARE ADVISED THAT THEY WILL HAVE TO
DEMATERIALISE SUCH SHARE CERTIFICATES IN ORDER TO TRADE IN THEIR HARMONY SHARES
IF A RANDFONTEIN SHAREHOLDER OR OPTION HOLDER HAS ELECTED TO RECEIVE SHARE
CERTIFICATES IN MATERIAL FORM, THE SHARE CERTIFICATES WILL BE POSTED BY
REGISTERED POST TO AND AT THE RISK OF THE RANDFONTEIN SHAREHOLDER OR OPTION
HOLDER CONCERNED, WITHIN SEVEN DAYS OF THE OFFER BEING DECLARED UNCONDITIONAL,
PROVIDED THAT SUCH SHAREHOLDER OR OPTION HOLDER, AS THE CASE MAY BE, HAS
SURRENDERED ITS DOCUMENTS OF TITLE TOGETHER WITH A DULY COMPLETED FORM OF
ACCEPTANCE AND SURRENDER.
IF A RANDFONTEIN SHAREHOLDER OR OPTION HOLDER HAS ELECTED TO RECEIVE THE
HARMONY SHARES IN ELECTRONIC FORM AND HAS PROVIDED THE NAME OF THE CENTRAL
SECURITIES DEPOSITORY PARTICIPANT ("CSDP") AND THE CSDP ACCOUNT NUMBER TO WHICH
THE HARMONY SHARES MUST BE CREDITED, THE HARMONY SHARES WILL BE CREDITED
ACCORDINGLY WITHIN SEVEN DAYS OF THE OFFER BEING DECLARED UNCONDITIONAL,
PROVIDED THAT SUCH SHAREHOLDER OR OPTION HOLDER, AS THE CASE MAY BE, HAS
SURRENDERED ITS DOCUMENTS OF TITLE TOGETHER WITH A DULY COMPLETED FORM OF
ACCEPTANCE AND SURRENDER
IF NO CSDP DETAILS ARE PROVIDED OR SHARE CERTIFICATES REQUESTED, THE HARMONY
SHARES WILL REMAIN REGISTERED IN ELECTRONIC FORM WITH THE TRANSFER SECRETARIES
APPOINTED TO THE OFFER.
CHEQUES IN RESPECT OF THE CASH ALTERNATIVE WILL BE POSTED BY REGISTERED POST
WITHIN SEVEN DAYS OF THE OFFER BEING DECLARED UNCONDITIONAL TO RANDFONTEIN
SHAREHOLDERS, AT THE RISK OF SUCH SHAREHOLDERS, WHO HAVE SURRENDERED THEIR
DOCUMENTS OF TITLE TOGETHER WITH DULY COMPLETED FORMS OF ACCEPTANCE AND
SURRENDER.
14. DOCUMENTATION
THE OFFER DOCUMENT CONTAINING DETAILS OF THE OFFER, ADDRESSED TO RANDFONTEIN
SHAREHOLDERS AND OPTION HOLDERS RESPECTIVELY, WILL BE POSTED AS SOON AS
POSSIBLE.  A FURTHER ANNOUNCEMENT RELATING TO THE POSTING OF THE OFFER DOCUMENT
WILL BE MADE IN DUE COURSE.
HARMONY GOLD MINING COMPANY LIMITED
VIRGINIA
6 JANUARY 2000
FINANCIAL ADVISER
  ROBERT FLEMING SOUTH AFRICA LIMITED
  (REGISTRATION NUMBER 95/11812/06)
LEGAL ADVISER
  CLIFFE DEKKER FULLER MOORE INC
  (REGISTRATION NUMBER 98/18173/21)
JOINT SPONSORING BROKER
  FLEMING MARTIN SECURITIES LIMITED
  (REGISTRATION NUMBER 95/11815/06)
  MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
JOINT SPONSORING BROKER
  DEUTSCHE BANK SECURITIES (SA) (PROPRIETARY) LIMITED
  (REGISTRATION NUMBER 95/11798/07)
  MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
CORPORATE BROKING ADVISER
  CAZENOVE & CO.
HARMONY OFFERS R780 MILLION FOR RANDFONTEIN
HARMONY TODAY ANNOUNCED ITS INTENTION TO MAKE OFFERS FOR THE EXISTING ISSUED
SHARE CAPITAL AND THE EXISTING LISTED OPTIONS OF RANDFONTEIN. THE OFFERS VALUE
RANDFONTEIN AT R780 MILLION.
THE SHARE OFFER VALUES EACH RANDFONTEIN SHARE AT R11.58 REPRESENTING A PREMIUM
OF 36% OVER THE CLOSING MARKET PRICE OF RANDFONTEIN.
THE OPTION OFFER VALUES EACH RANDFONTEIN OPTION AT R2.61 PER OPTION
REPRESENTING A PREMIUM OF 41%.
THE OFFER FOR THE ORDINARY SHARES INCLUDES A FULL CASH ALTERNATIVE OF R11 PER
SHARE WHICH SERVES AS A STRONG UNDERPIN TO THE SHARE OFFER.
COMMENTING ON THE OFFER, BERNARD SWANEPOEL, CHIEF EXECUTIVE OF HARMONY SAID:
"THERE IS A NATURAL FIT BETWEEN HARMONY'S AND RANDFONTEIN'S ASSETS, AND THIS
COMBINED WITH HARMONY'S PROVEN TRACK RECORD IN TRANSFORMING HIGH-COST, MATURE
OPERATIONS, SUCH AS RANDFONTEIN, INTO LOW COST HIGH PRODUCTIVITY PRODUCERS,
WILL RESULT IN UNLOCKING CONSIDERABLE OPERATIONAL AND SHAREHOLDER VALUE AS WE
HAVE RECENTLY DEMONSTRATED WITH EVANDER."
"THIS OFFER IS AT A SIGNIFICANT PREMIUM TO THE TERMS BEING OFFERED TO
RANDFONTEIN SHAREHOLDERS BY WESTERN AREAS," HE ADDED.  "HARMONY IS CONFIDENT
THAT THE ACQUISITION WILL CREATE VALUE FOR HARMONY SHAREHOLDERS, IN WHICH THE
RANDFONTEIN SHAREHOLDERS CAN PARTICIPATE THROUGH THE EXCHANGE OFFER.  OUR
CONFIDENCE IS REFLECTED IN THE BOARD'S DECISION TO FULLY BACK THE OFFER WITH
CASH".
HARMONY'S MANAGEMENT PREDICTS THAT THE ACQUISITION OF RANDFONTEIN WILL ENHANCE
HARMONY'S EARNINGS PER SHARE FROM THE FIRST FULL YEAR OF COMBINED OPERATIONS.
IN ADDITION, HARMONY WILL FURTHER STRENGTHEN ITS MARKET POSITION IN SOUTH
AFRICA AND BECOME THE SIXTH LARGEST GOLD PRODUCER IN THE WORLD IN TERMS OF ORE
RESERVES AND PRODUCTION. WITH THE ACQUISITION OF RANDFONTEIN, HARMONY'S
ANNUALISED PRODUCTION WILL INCREASE BY MORE THAN 50% TO APPROXIMATELY 2.2
MILLION OUNCES.
ENDS
ISSUED BY HARMONY GOLD MINING COMPANY LIMITED.  CONTACT: CHRISTINE LEONARDI;
TEL: +2711 802-1822; FAX: +2711 802-2363; E-MAIL: CLEONARDI@HARMONY.CO.ZA;
WEBSITE: HTTP://WWW.HARMONY.CO.ZA



                                        
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