Harmony Gold Mining Limited - Review for the quarter ended 30 September 2001
Release Date: 24/10/2001 12:34:57 Code(s): HAR Harmony
Review for the quarter ended 30 September 2001
This review includes certain information that is based on management's
reasonable expectations and assumptions. These "forward-looking statements"
include, but are not limited to, statements regarding estimates, intentions
and beliefs, as well as anticipated future production, mine life, market
conditions and costs. While management has prepared this information using
the best of their experience and judgment, and in all good faith, there are
risks and uncertainties involved which could cause results to differ from
projections.
Cautionary Note to US Investors - The United States Securities and Exchange
Commission (the "SEC") permits mining companies, in their filings with the
SEC, to disclose only those mineral deposits that a company can economically
and legally extract or produce. We use certain terms in this quarterly
review, such as "resources", that the SEC guidelines strictly prohibit us
from including in our filings with the SEC.
Key indicators
Quarterly production of 616 000 ounces
On track for annualised production of 2,5 million ounces
Record cash operating profit of R212,1 million
73% increase in e.p.s.from 37 cents to 64 cents
Excellent all round operational performance
Acquisition of stake in Bendigo Mining NL
18% increase in R/kg gold price results in 25% increase in reserves (8
million ounces)
Consolidation of Free State goldfields gaining momentum
Financial highlights
30 September 30 June
2001 2001
Cash operating
profit
- Rand 212 million 191 million
- US$ 25 million 24 million
Earnings
- Rand 93 million 40 million
- US$ 11 million 5 million
Earnings per share
- SA cents per share 64 37
- US cents per share 8 5
30 September 30 June
2001 2001
Gold produced
- kg 19 161 18 380
- oz 616 038 590 927
Cash costs
- R/kg 63 097 59 350
- $/oz 233 230
"Over the past five years Harmony has consistently pursued a strategy of
growth through acquisitions. Through this process we have played a leading
role in the logical consolidation of the South African gold industry to the
benefit of all stakeholders. On the back of a record quarter and prospects
of improved results due to the depreciating Rand, we believe that we made a
competitive offer for AngloGold's assets which will set the stage to
consolidate the Free State goldfields."
BERNARD's review
Safety report
It is with regret that I have to report the loss of life, as a result of
mine accidents, of ten employees and one illegal miner for the 1st quarter.
I wish to offer my sincere condolences to the family, friends and colleagues
of these employees.
I would like to extend my thanks and offer my congratulations to the
management and employees of Harmony 4 and Merriespruit 3 shafts. They have
respectively attained 500,000 and 750,000 fatality free shifts thereby
qualifying for certificates of excellence in terms of the Mine Health and
Safety Council's Awards Scheme.
Although our safety performance is less than satisfactory we take heart from
the desire and commitment displayed by our managers and employees to improve
on current performance.
Our efforts to establish in the company a culture of health and safety
continue unabated. Health and safety responsibility and accountability is
being entrenched at the operational level.
In order to secure lasting change in this regard we are equipping our
managers and their teams with the necessary knowledge and skill to manage
risk effectively in the workplace.
Strategic overview
From an operational perspective the company experienced a good quarter and
reported an 11% increase in cash operating profit to R212,1 million.
Earnings per share however increased by 73% from 37 cents to 64 cents
quarter on quarter.
The company continued with its strategy of growth through acquisitions
during the quarter. In an industry which is undergoing change with a wave of
mergers and acquisitions, Harmony continues to identify acquisition
opportunities both locally and abroad, which will impact significantly on
the future production profile of the company.
Bendigo Mining NL
On 25 September 2001 the company invested A$50 million (R215 million) to
subscribe for 294 million shares, or 31,1% of Bendigo Mining NL. In
addition, Harmony has been granted 360 million options to acquire in Bendigo
at any time before 31 December 2003 at a price of A$0,30 per share. On
exercise of these options Harmony would own approximately 50,1% of the
diluted capital of the company.
Our cash investment will be used to continue development of a high grade,
mechanised underground mine with a potential life of 25 years. The potential
resource of the orebodies is estimated at 12 million ounces of gold. The
proposed mine will be developed in stages and is planned to reach design
capacity over a six year period. At a recovery grade of 10-12 g/t, the mine
would be producing more than 400 000 ounces of gold per annum at a cash cost
of approximately US$100 per ounce. Total cash costs, including capital, for
the project are estimated at approximately US$135 per ounce.
Harmony earlier in the year acquired New Hampton operations in Western
Australia which produce an estimated 220 000 ounces per annum.
Offer to purchase Free State assets
During the quarter the company reopened negotiations with AngloGold to
purchase all its Free State assets i.e. Bambanani, Tshepong, Matjhabeng,
Joel and its remaining mineral rights.
We have previously stated that the need for consolidation in the region is
strong and has the potential to unlock value through the logical
exploitation and optimisation of assets. Surface and underground synergies,
once realised, will impact on the long term sustainability of the region as
a gold producer. The impact on the socio-economic environment of the Free
State goldfields will be to the benefit of all stakeholders. The gold
industry, labour, surrounding communities and supporting industries all have
a role to play in this process which will ensure the long term viability and
economic importance of this region. The national and provincial governments
have repeatedly expressed their support for this initiative which will
assure the economic regeneration of the Free State goldfields.
Harmony has submitted a joint offer to AngloGold with ARM
(African Rainbow Minerals). The 50/50 Joint Venture is an ideal vehicle to
realise the benefits of a consolidated mining region. ARM established itself
as operator in the region some four years ago, following the purchase of
mature AngloGold operations at that time. Both companies have a solid
presence in and knowledge of the region and are well positioned to
successfully consolidate and exploit these assets.
Further consolidation of the Free State assets in the short term could
include other assets which will offer further synergies to the proposed
Joint Venture. The fragmented nature of the current operations are evident
from the accompanying plan.
Both companies have sufficient financial reserves to conclude the
transaction. Harmony successfully completed its capital raising programme at
the end of June 2001 which resulted in the company having sufficient cash
resources available to finance its portion of the offer. If successful, such
a transaction will enhance Harmony's earnings in both the short and the long
term.
Gearing to changes in our gold price environment
Over the last few years the South African Rand has consistently depreciated
against mainly the United States Dollar. This depreciation has allowed the
company to receive a higher R/kg gold price despite the decreasing US$ price
of gold over the same period.
Subsequent to events on the 11 September 2001 in New York, the gold price
has found support at levels between US$280/oz and US$290/oz. This, with the
subsequent depreciation of our local currency to levels of above R9,25 to
the Dollar, will result in the company receiving significantly increased
revenues during the forthcoming quarter. The company's gearing to these
changes are substantial and will impact significantly on cash operating
profits realised.
Gearing to gold price
Quarterly cash operating profit estimates
Gold price R/million US$ Gearing Gearing
R/kg million in US$ in Rand
74 200(i) 212,1 25,2 - -
84 000(ii) 364,5 39,4 56% 72%
(i) Exchange rate at R74 200 per kg - US$1,00 = R8,41
(ii) Exchange rate at R84 000 per kg - US$1,00 = R9,25
At a gold price of R84 000/kg the company would increase cash operating
profits by 72% from an average R212,1 million per quarter to R364,5 million
per quarter. Due to the depreciation of the South African currency the
gearing decreases to 56% when expressed in US$ terms.
Substantial gearing exists when applying the changes in gold price to the
company's reserve base. At the current gold price levels of R84 000/kg, the
reserves available for mining increase by 25% from 33 million ounces to 41
million ounces. These reserves are available for mining at no additional
capital expense to the operations and would also positively affect the
amortisation charges per quarter.
Kalplats project
Evaluation work on the Kalplats project near Stella continued at a cost of
R2.3m for the quarter. Pre-feasibility studies on priority deposits included
additional drilling (16 boreholes representing 2 210m) to confirm reef
geometry and to obtain representative samples for metallurgical testwork.
Orebody models are being reviewed to determine the continuity and tonnage
potential of a higher grade reef zone (q4.5 g/t Pt + Pd + Au over 2 to 4m
width) within certain of the mineralised units.
Reef Zones Identified Thickness
Pt Pd Au TPM
Lower Grade Reef 0,61 g/t 0,59 g/t 0,01 g/t 1,21 g/t 8-14m
Middle Reef 0,48 g/t 0,93 g/t 0,02 g/t 1,43 g/t 5-10m
Main Reef 1,11 g/t 0,95 g/t 0,14 g/t 2,20 g/t 10-18m
High Grade Reef 2,40 g/t 1,81 g/t 0,32 g/t 4,60 g/t 2-5m
Pre-Reef 0,28 g/t 0,04 g/t 0,42 g/t 0,70 g/t 0-3m
Follow-up metallurgical testwork to optimise recoveries from different
grades and reef types is in progress and provisional results will be
available next quarter. Exploration drilling programmes were implemented in
the region to investigate new target areas which have the potential to add
to the existing 3,4 million ounce inferred mineral resource. It is worth
noting that this resource estimate is still only to a depth of 150m below
surface. A total of 130 overburden boreholes (1140m) was completed during
the quarter.
Inclusion in Philadelphia Gold and Silver Index (XAU)
As from 8 October 2001, the company had been included in the Philadelphia
Gold and Silver Index (XAU). This inclusion is significant as the company
received this recognition on the basis of its market capitalisation and
liquidity in the offshore trading of its shares. The main benefit from the
inclusion to the XAU is the increased visibility to institutions and fund
managers.
Quarterly operational review
The company reported improved operational results with R22,0 million or 11%
increase in cash operating profit, increasing from R190,5 million to a
record R212,1 million. This increase was mainly due to an increase in gold
production from the various operations and the higher gold price.
Net profit after other income/(expenses) at R93,4 million was R53,3 million
higher than the R40,1 million reported previously. This was mainly due to
decreased interest charges following the successful restructuring of the
company's balance sheet and lower depreciation charges.
Earnings per share increased sharply by 27 cents at 73% from 37 cents for
the June 2001 quarter to 64 cents for the September 2001 quarter. The
earnings per share for September 2001 is more significant as it was
calculated at 145 million shares outstanding compared to approximately 108
million shares outstanding for the previous reporting period.
cash operating profit vs US$ gold price
A summary of the quarterly results reflect the following;
September 2001 June 2001 Variance
Kilograms Produced 19 161 18 380 4,3%
Revenue R/kg 74 164 69 715 6,4%
Working Costs R/kg 63 097 59 350 (6,3%)
Working Costs R/tonne 239 223 (7,2%)
Revenue US$/oz 274 270 1,5%
Working Costs US$/oz 233 230 (1,3%)
Exchange Rate
R = US$ 1,00 8,41 8,03 4,7%
The impact of the annual salary increases is clear from the 7,2% increase in
cost per tonne. This increase in US$ terms was negated by the 4,7%
depreciation of the local currency. On an overall basis cash operating
profits increased by 11% quarter on quarter.
A quarter on quarter analyses of the various operations is as follows;
TOTAL WORKING PROFIT R'MILLION
Operation September 2001 June 2001 Variance
Free State 8,9 4,6 4,3
Evander 61,0 64,8 (3,8)
Randfontein 87,5 58,9 28,6
Elandskraal 43,3 59,2 (15,9)
Kalgold 10,7 1,0 9,7
Offshore operations 0,7 2,0 (1,3)
Total 212,1 190,5 21,6
Free State operations
The Free State Operations reported improved performances in all aspects
despite the adverse impact of a two day stayaway by employees during the
reporting period. Tonnage milled increased by 5,0% from 1,166 million tonnes
to 1,224 million tonnes. At a slightly higher recovery grade of 3,98 g/t
versus the 3,95 g/t of the previous quarter, these operations produced an
additional 263 kg gold. Total gold recovered was 4 867 kg.
Most cost indicators for these operations show the impact of the salary
increases and two-day stayaway by employees when compared with the previous
reporting period with R/kg and R/tonne costs increasing by 6,8% and 7,9%
respectively. The Brand operations were affected by a fire on a neighbouring
mine which curtailed production for more than two weeks.
The increased gold price resulted in the higher cash operating profit of
R8,9 million compared to the R4,6 million for the June 2001 quarter.
These operations will continue to improve and remain highly geared to
benefit from the anticipated increase in the Rand gold price in the
following quarter. Similar operational results will see the cash operating
profit soar to above R40 million for the quarter.
Evander operations
Evander again returned a spectacular performance with cash operating profits
of R61,0 million. Although this is 5,9% or R3,8 million less than the R64,8
million reported for the previous period, it is in line with expectations
for these operations.
Tonnage was 2,1% less at 521 000 tonnes and at a lower recovery grade of
6,21 g/t resulted in gold recovery from underground of 3 237 kg. The current
recovery grades are more in line with the average mining grade of the
Evander orebody and is expected to continue at these levels.
Surface clean-up contributed 70 kg which resulted in total gold recovered of
3 307 kg, 172 kg less than in the June 2001 quarter.
Despite lower tonnage, working costs were similar at R311/tonne, but in
US$/oz terms, the lower recovery grade resulted in these costs increasing by
6,0% to US$206/oz. Evander as a low cost producing region continues to be a
significant contributor to the performance of the company.
Randfontein operations
The benefits from the restructuring process at these operations which was
completed during the previous quarter, was evident as these operations
returned a R28,5 million improvement in cash operating profit. The R87,5
million is a 48,3% improvement over the R59,0 million for the June 2001
quarter.
Tonnage increased by 142 000 tonnes at 19,2% from 738 000 tonnes to 880 000
tonnes. At a higher recovery grade of 5,02 g/t compared to 4,93 g/t, gold
recovered from underground was 780 kg or 21,4% higher. The winding down of
surface operations contributed 324 kg which resulted in total gold recovery
from these operations of 4 745 kg.
Working costs increased marginally from R54 834/kg to R56 613/kg. When
measured on a cost/tonne basis, costs increased by 9,6% from R207/tonne to
R227/tonne. On a US$/oz basis, costs decreased from US$212/oz to US$209/oz
mainly due to the currency depreciation.
recoupment of randfontein investment
Randfontein, as in the case of Evander, is well on its way to recover the
investment made at the time of acquiring the operation. Our decision to
curtail the loss making sections on the operations are paying dividends and
Randfontein will remain an important contributor to our financial
performance.
Elandskraal operations
These operations continue to make good progress as the "Harmony Way" is
implemented.
At the previous quarterly announcements it was stated that the R59,2 million
cash operating profit for the period ending June 2001 was unsustainable in
the short term as further operational adjustments had to take place. These
operations returned an excellent R43,3 million cash operating profit for the
current quarter.
Tonnage was 4,5% or 26 000 tonnes less at 552 000 tonnes. At a higher
recovery grade of 6,65 g/t compared to the 6,4 g/t for the June 2001
quarter, kilograms produced were only 29 kg less at 3 669 kilograms. 221 kg
from surface operations resulted in total gold recovered of 3 890 kilograms.
Good progress with addressing working costs at these newly acquired
operations is being made. When measured on a cost/tonne basis, costs
decreased by 1,0% from R292/tonne to R289/tonne for the current reporting
period. In R/kg terms, costs increased by R8 701/kg or 16,1% to R62 656/kg
mainly due to the effect of the annual salary increases. At US$232/oz the
Elandskraal operations are well on track to deliver value to our
shareholders.
At the time of acquiring these operations the importance of generating cash
operating profits to cover the capital expenditure programme for the Shaft
Deepening Project was stressed. On the current performance of these
operations, the cash operating profits have been more than adequate to cover
the expenditure on the project which will extend the life of Elandskraal to
2017.
Kalgold operations
These operations performed in line with expectations, returning
significantly improved cash operating profits of R10,7 million compared to
the R1,0 million in the June 2001 quarter.
Improvements in both tonnage and grade resulted in a 39,9% or 160 kg
increase in gold recovered. Gold recovered was up from 401 kg to 561 kg in
the current quarter.
Working cost indicators at these operations all show the benefit of the
increased tonnages and grades with costs decreasing by R12 237/kg to R55
137/kg in the current quarter. In US$/oz terms, the operations reported
costs of US$204/oz compared to the US$261/oz of the June 2001 quarter.
Offshore operations
Offshore operations reported a profit of R0,6 million compared with a profit
of R2 million in the previous quarter. Tonnage reduced by 206 000 tonnes and
gold output by 341kg mainly because of the closure of the Bissett
operations.
Tonnage from underground at the New Hampton operations decreased by 43 000
tonnes from 302 000 tonnes to 259 000 tonnes, the recovery grade was higher
at 1,97 g/t compared to 1,65 g/t previously. This resulted in a net increase
of 13 kg to 510 kg being declared from underground operations.
Tonnage from surface sources decreased by 118 000 tonnes or 15% to 668 000
tonnes mainly due to material being sourced from marginal operations and
shortfalls made up from low grade stockpiles, whilst pre-stoping activities
at the large Trojan pit are being undertaken. Gold recovery decreased by
2,4% to 1 024 kg mainly due to recovery grades being lower at 1,53 g/t
compared to the 1,57 g/t achieved previously. Recovery grades are expected
to increase as mining from the Trojan pit commences.
Capital expenditure
September December
Quarter Quarter
Operations Actuals Forecast
Free State 17 14
Evander 17 22
Randfontein 2 3
Kalgold - 1
Elandskraal 34 36
New Hampton 1 2
Total 71 78
Operating and financial results (rand/metric)
Free Kalgold Evander Evander Rand-
State U/g Sur-face Open-cast fontein
Total U/g
Ore milled Sept-01 1 224 521 72 256 880
- t'000
June-01 1 166 532 35 236 738
Gold Sept-01 4 867 3 237 70 561 4 421
Produced
- kg
June-01 4 604 3 440 39 401 3 641
Yield - Sept-01 3.98 6.21 0.97 2.19 5.02
g/tonne
June-01 3.95 6.47 1.11 1.70 4.93
Cash Sept-01 73 666 56 348 25 700 55 137 56 920
Operating
Costs - June-01 68 995 50 168 51 795 67 374 53 122
R/kg
Cash Sept-01 293 350 25 121 286
Operating
Costs - June-01 272 324 58 114 262
R/tonne
Working Sept-01 367 451 240 076 5 100 41 620 332 066
Revenue June-01 322 205 236 763 2 663 28 025 254 465
(R'000)
Cash Sept-01 358 533 182 400 1 799 30 932 251 644
Operating
Costs June-01 317 652 172 578 2 020 27 017 193 419
(R'000)
Cash Sept-01 8 918 57 676 3 301 10 688 80 422
Operating
Profit June-01 4 553 64 185 643 1 008 61 046
(R'000)
Rand Elands Elands Offshore Total
fontein kraal U/g kraal opera-
Surface Surface tions
Ore milled Sept-01 306 552 290 963 5 064
- t'000
June-01 308 578 128 1 169 4 890
Gold Sept-01 324 3 669 221 1 791 19 161
Produced
- kg
June-01 301 3 698 124 2 132 18 380
Yield - Sept-01 1.06 6.65 0.76 1.86 3.78
g/tonne
June-01 0.98 6.40 0.97 1.82 3.76
Cash Sept-01 52 429 63 803 43 620 68 664 63 097
Operating
Costs - June-01 75 532 54 673 32 556 69 991 59 350
R/kg
Cash Sept-01 56 424 33 128 239
Operating
Costs - June-01 74 350 32 128 223
R/tonne
Working Sept-01 24 092 270 726 16 329 123 605 1 421 065
Revenue June-01 20 649 256 820 8 613 151 157 281 360
(R'000)
Cash Sept-01 16 987 234 092 9 640 122 977 1 209 004
Operating
Costs June-01 22 735 202 180 4 037 149 221 1 090 859
(R'000)
Cash Sept-01 7 105 36 634 6 689 628 212 061
Operating
Profit June-01 (2 086) 54 640 4 576 1 936 190 501
(R'000)
Financial results total operations (rand/metric) (unaudited)
Quarter Quarter
ended ended
30 Sept 30 June
2001 2001
Ore milled - t'000 5 064 4 890
Gold produced - kg 19 161 18 380
Gold price received - R / kg 74 164 69 715
Cash operating costs - R / kg 63 097 59 350
R'000 R'000
Gold sales 1 421 065 1 281 360
Cash operating costs 1 209 004 1 090 859
Cash operating profit 212 061 190 501
Amortisation (50 655) (70 940)
Mark to market of financial
instruments * (147 855) (1 915)
Employment termination costs (13 408) (3 885)
Other income - net 24 994 35 623
Interest paid (38 832) (53 209)
Corporate expenditure (14 159) (14 362)
Exploration and new business (10 155) (9 047)
Mark to market of listed
investments ** 159 346 -
Profit before taxation 121 337 72 766
South African normal taxation
- Current tax (19 514) (24 366)
- Deferred tax (8 466) (8 292)
Net earnings 93 357 40 108
Earnings per share - cents #
- Earnings 64 37
Dividends per share - (cents) - 70
* The mark to market of the financial instruments inherited when Randfontein
and New Hampton were purchased is based on a gold price of $291 per ounce,
and on an US$/Au$ exchange rate of US$1 = Au$ 2.13
** The mark to market of listed investments relates to the investment in
Goldfields of Australia of 43.3 million shares valued at Au$ 2.16.
# Calculated on weighted average number of shares in issue during the
quarter: 145,1 million (June 2001: 107,8 million)
Abridged balance sheet (rand) (unaudited)
At At
30 Sept 30 June
2001 2001
R'000 R'000
Employment of Capital
Mining assets after
amortisation 5 481 074 5 423 930
Investments 221 594 221 010
Loans to share trusts 29 114 30 729
Net current liabilities (165 442) (129 655)
(excluding cash)
Short-term investments
- Goldfields of Australia 401 708 319 861
Cash 1 228 680 1 158 427
7 196 728 7 024 302
Capital Employed
Shareholders' equity 4 620 746 4 593 699
Loans 1 235 183 1 212 200
Preference shares 5 479 5 479
Long-term provisions 438 703 437 671
Unrealised hedging loss 508 864 396 969
Deferred tax 387 753 378 284
7 196 728 7 024 302
Issued share capital: 145.1 million ordinary shares of 50 cents each.
(June 2001: 144.6 million)
Operating and financial results(US$/imperial)
Free Evander Evander Kalgold Rand-
State U/g Surface Opencast fontein
Total U/g
Ore milled Sept-01 1 350 575 79 282 970
- t'000
June-01 1 286 587 39 260 814
Gold Sept-01 156 477 104 071 2 251 18 036 142 138
Produced
- oz
June-01 148 021 110 598 1 254 12 892 117 060
Yield - Sept-01 0.116 0.181 0.028 0.064 0.147
oz/ton
June-01 0.115 0.188 0.032 0.050 0.144
Cash Sept-01 272 208 95 204 211
Operating
Costs - Costs - 267 194 201 261 206
$/oz $/oz
Costs - Sept-01 32 38 3 13 31
$/oz
Costs - June-01 31 37 6 13 30
$/ton
Working Sept-01 43 692 28 546 606 4 949 39 485
Revenue
($'000) June-01 40 125 29 485 332 3 490 31 689
Cash Sept-01 42,632 21,688 214 3,678 29,922
Operating
Costs June-01 39,558 21,492 252 3,365 24,087
($'000)
Cash Sept-01 1,060 6,858 392 1,271 9,563
Operating
Profit June-01 567 7,993 80 125 7,602
($'000)
Rand Elands Elands Offshore Total
fontein kraal U/g kraal opera-
Surface Surface tions
Ore milled Sept-01 337 609 320 1 062 5 584
- t'000
June-01 340 637 141 1 289 5 393
Gold Sept-01 10 417 117 961 7 105 57 582 616 038
Produced
- oz
June-01 9 677 118 893 3 987 68 545 590 927
Yield - Sept-01 0.031 0.194 0.022 0.054 0.110
oz/ton
June-01 0.028 0.187 0.028 0.053 0.110
Cash Sept-01 194 236 161 254 233
Operating
Costs - June-01 293 212 126 271 230
$/oz
Cash Sept-01 6 46 4 14 26
Operating
Costs - June-01 8 40 4 14 25
$/ton
Working Sept-01 2 865 32 191 1 942 14 697 168 973
Revenue
($'000) June-01 2 571 31 983 1 073 18 824 159 572
Cash Sept-01 2,020 27,835 1,146 14,623 143,758
Operating
Costs June-01 2,831 25,178 503 18,582 135,848
($'000)
Cash Sept-01 845 4,356 796 74 25,215
Operating
Profit June-01 (260) 6,805 570 242 23,724
($'000)
Financial results total operations (US$/imperial) (unaudited)
Quarter Quarter
ended ended
30 Sept 30 June
2001 2001
Ore milled - t'000 5 584 5 393
Gold produced - oz 616 038 590 927
Gold price received - $ / oz 274 270
Cash operating costs - $ / oz 233 230
$'000 $'000
Gold sales 168 973 159 572
Cash operating costs 143 758 135 848
Cash operating profit 25 215 23 724
Amortisation (6 023) (8 834)
Mark to market of
financial instruments * (17 581) (238)
Employment termination costs (1 594) (484)
Other income - net 2 972 4 436
Interest paid (4 617) (6 626)
Corporate expenditure (1 684) (1 789)
Exploration and new business (1 207) (1 127)
Mark to market of listed
investments ** 18 947 -
Profit before taxation 14 428 9 062
South African normal taxation
- Current tax (2 320) (3 034)
- Deferred tax (1 007) (1 033)
Net earnings 11 101 4 995
Earnings per share - cents #
- Earnings 8 5
Dividends per share - (cents) - 9
Prepared in accordance with International Accounting Standards
Currency Conversion Rates: US$1 = R8.41 (June 2001: R8.03)
* The mark to market of the financial instruments inherited when
Randfontein and New Hampton were purchased is based on a gold price of $291
per ounce, and on an US$/Au$ exchange rate of US$1 = Au$ 2.13
** The mark to market of listed investments relates to the investment in
Goldfields of Australia of 43.3 million shares valued at Au$ 2.16.
# Calculated on weighted average number of shares in issue during the
quarter: 145.1 million (June 2001: 107.8 million)
Abridged balance sheet(US$) (unaudited)
At At
30 Sept 30 June
2001 2001
US$'000 US$'000
Employment of Capital
Mining assets after
amortisation 651 733 675 458
Investments 26 349 27 523
Loans to share trusts 3 462 3 827
Net current liabilities (19 673) (16 145)
(excluding cash)
Short-term investments
- Goldfields of Australia 47 766 39 833
Cash 146 098 144 262
855 735 874 758
Capital Employed
Shareholders' equity 549 435 572 067
Loans 146 871 150 959
Preference shares 651 682
Long-term provisions 52 165 54 505
Unrealised hedging loss 60 507 49 436
Deferred tax 46 106 47 109
855 735 874 758
Issued share capital: 145.1 million ordinary shares of 50 cents each.
(June 2001: 144.6 million)
Currency conversion rates: US$1 = R8.41 (June 2001: R8.03)
Condensed statement of changes in shareholders' equity (Unaudited)
At At At At
30 Sept 30 Sept 30 Sept 30 Sept
2001 2000 2001 2000
R'000 R'000 US$'000 US$'000
Balance as at the
beginning of the
financial year 4 593 699 2 874 718 546 219 413 034
Currency
translation
adjustment
and other (79 594) 1 507 (9 465) 216
Issue of
share
capital 13 284 66 517 1 580 9 557
Net
earnings 93 357 63 389 11 101 9 108
Balance as at the
end of September 4 620 746 3 006 131 549 435 431 915
Development results - (Metric)
Channel Channel
Reef Sampled Width Value Gold
Meters Meters (Cm's) (g/t) (Cmg/t)
Randfontein
VCR Reef 521 429 101 13.20 1 331
UE 1A 2 775 2 616 99 12.53 1 243
E8 Reef 73 68 157 7.32 1 150
Kimberley Reef 407 405 316 3.33 1 052
All Reefs 3 776 3 518 125 9.80 1 230
Free State
Basal 1 473 1 008 136 6.17 839
Leader 1 179 1 034 165 6.16 1 016
A Reef 803 602 69 8.80 607
Middle 151 74 169 13.89 2 347
B Reef 19,5 - - - -
All Reefs 3 625 2 718 133 6.74 896
Evander
Kimberley Reef 2 880 2 676 67 14.80 992
Elandskraal
Vcr Reef 737 842 68 14.62 999
Development results - (imperial)
Channel Channel
Reef Sampled Width Value Gold
Feet Feet (inches) (oz/t) (in.ozt)
Randfontein
VCR Reef 1 709 1 407 40 0.382 15
UE1A 9 104 8,83 39 0.366 14
E8 Reef 240 223 62 0.213 13
Kimberley Reef 1 335 1 329 124 0.097 12
All Reefs 12 388 11 542 49 0.288 14
Free State
Basal 4 832 3 307 54 0.180 10
Leader 3 870 3 393 65 0.180 12
A Reef 2 636 1 975 27 0.257 7
Middle 495 242 67 0.405 27
B Reef 64 - - - -
All Reefs 11 896 8 918 52 0.196 10
Evander
Kimberley Reef 9 448 8 780 26,4 0.432 11
Elandskraal
VCR Reef 2 419 2 763 26.9 0.430 11.47
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
22 October 2001
Investor relations
Business address
Harmony Gold Mining Company Limited
Randfontein Office Park
C/o Main Reef Road and Ward Avenue
Randfontein, PO Box 2, Randfontein, 1760
Telephone: +27 (11) 412-1450
Telefax: +27 (11) 692-3879
E-mail: corporate@harmony.co.za
Investor relations contacts
Corn Bobbert
Telephone: +27 (11) 412-1450
Telefax: +27 (11) 411-2169
E-mail: cbobbert@harmony.co.za
Ferdi Dippenaar
Telephone: +27 (11) 412-1450
Telefax: +27 (11) 692-3879
E-mail: fdippenaar@harmony.co.za
Share transfer secretaries
Ultra Registrars (Pty) Ltd
Contact: Polly Pollard
Telephone: +27 (11) 370 5775
Telefax: +27 (11) 370 5780
E-mail: ultra@registrars.co.za
11 Diagonal Street
Johannesburg 2001
(PO Box 4844, Johannesburg, 2000)
United States Depositary
American Depositary Receipts,
The Bank of New York
Contact: Melissa Atheneos
Telephone: +1 (21) 815 5133
Telefax: +1 (212) 571 3050
E-mail: matheneos@bankofny.com
Shareholder Relations Department
101 Barcley Street, New York, NY10286
United States of America
United Kingdom Registrars
Capita IRG Plc
Contact(s): Melvyn Leigh/Therese Hodgin
Telephone: +44 (208) 639 1001
Telefax: +44 (208) 478 2876
E-mail: mleigh@capita-irg.com/
thodgin@capita-irg.com
Balfour House 390-398
High Road, Ilford
Essex IG1 1NQ, United Kingdom
Directors
A R Fleming*+(Chairman),
ZBSwanepoel (Chief executive), FAbbott,
F Dippenaar, Dr. A M Edwards*, TSA Grobicki,
MFPleming*, Lord Renwick of Clifton KCMG*+,
Dr. G S Sibiya*,
*Non executive directors +British
Trading Symbols
Ordinary Shares
JSE Securities Exchange : HAR
Nasdaq : HGMCY
London Stock Exchange : HRM
Euronext Paris : HG
Euronext Brussels : HMY
Warrants
JSE Securities Exchange : HARW
Nasdaq : HGMCW
Visit our new web site at www.harmony.co.za which includes an updated
company profile. For the 2001 annual report, go to www.har.co.za. For
general gold and investment information, go to www.harmonyedugold.co.za
For a hard copy,
please contact
Corn Bobbert on
tel +27 11 412-1450
or e-mail to
cbobbert@
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