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Harmony and ARM Joint Venture acquires Free State assets from AngloGold

Release Date: 21/11/2001 13:00:13      Code(s): HAR
by Harmony Gold Mining Co. Ltd. and African Rainbow Minerals (Pty) Ltd.
Harmony and ARM Joint Venture acquires Free State assets from AngloGold
Johannesburg, 21 November 2001 - The 50/50 joint venture initiative between
Harmony Gold Mining Company Limited ("Harmony") and African Rainbow Minerals
(Pty) Ltd. ("ARM") today announced that it has reached agreement with
AngloGold to acquire its Free State assets ("Freegold") for a total
consideration of R2.2 billion. An amount of R1.8 billion is payable on all
conditions precedent being met and the balance of R400 million will be
payable on 1 January 2005.
The Freegold assets consist of the mines and associated infrastructure of
Joel, Tshepong, Matjhabeng and Bambanani, and other mineral rights. The
operations will be directed and managed by a joint management team, sourced
from existing Freegold, Harmony and ARM personnel.
Commenting on the transaction, Bernard Swanepoel and Patrice Motsepe said
that it was not only a very positive outcome for Harmony and ARM, but also
represented a major step in the consolidation of the Free State mining
environment. Further consolidation of the Free State assets could include
other operations i.e. Oryx and St. Helena, which will offer further
synergies to the proposed Joint Venture (JV). The latter are currently owned
by Gold Fields Limited; the JV has received an exclusive right to negotiate
the acquisition of these assets.
"The Freegold assets could fit well with the JV's overall strategy and
respective existing asset bases - they are high quality assets that are
contiguous to both companies' existing Free State operations and they have
significant turnaround potential.
This acquisition also represents much needed consolidation for the region,"
commented Bernard Swanepoel, chief executive of Harmony. "We are also very
fortunate to have ARM as our partner in this transaction, as they have a
successful operational track record and complimentary management
methodologies to ourselves.  We believe they will contribute significantly
to ensuring the long term profitability of these operations, and therefore
to the sustainability of the Free State goldfields."
Patrice Motsepe, executive chairman of ARM said, "The acquisition is in line
with ARM's growth strategy of increasing its production of 525 000 ounces
per annum to 1 million ounces per annum - making ARM the 10th largest gold
company in the world.  We will now have the critical mass to proceed with
listing during the course of 2002."
"Our proven track record of turning loss making marginal shafts into
profitable shafts and unique operating principles, coupled with the
experience and operational excellence of Harmony will enhance the JV's
ability to profitably extract the remaining ore reserves in the Free State.
In addition, ARM's extensive experience in working with trade unions, local
communities and other empowerment groups will enhance employment and create
opportunities for local business in the region."
From the JV perspective, the acquisition paves the way for consolidating the
Free State mining operations into a significant gold producer and employer,
something that the province and region desperately needs.
The main benefit to Harmony from participating in this JV will be the
increase in annual production to approximately 3,0 million ounces, making
the group the 5th largest gold producer in the world.
It further strengthens Harmony's position in the Free State and will rapidly
result in the unlocking of further operational and production synergies with
its existing operations.
The acquisition is subject to the conclusion of a formal sale and purchase
agreement between the JV and AngloGold.  The formal agreement is subject to
various approvals including that of the competition authorities.
21 November 2001
For further details contact:
Bernard Swanepoel on +27(0)83-303-9922
Patrice Motsepe
on +27(0)82-560-0930
Issued by Harmony Gold Mining Company Limited.
Corne Bobbert
Tel +27 11 412 1450
Fax +27 11 692 3879, Mobile +27 83 380 6614
e-mail: cbobbert@harmony.co.za
Web Site:

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