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Harmony Gold Mining Company Limited - Press Announcement

Release Date: 27/01/2003 12:02:35      Code(s): HAR
Harmony Gold Mining Company Limited - Press Announcement                        
HARMONY GOLD MINING COMPANY LIMITED                                             
JSE Share code:     HAR                                                         
ISIN No.:           ZAE000015228                                                
JSE Options code:   HARW                                                        
ISIN No:            ZAE000031209                                                
NYSE:               HMY                                                         
BY 6% GROWTH IN E.P.S.                                                          
Johannesburg - 27 January 2003 - Harmony Gold Mining Company Limited (NYSE: HMY:
JSE: HAR) today reported a 6% increase in earnings per share, up from 247 cents 
to 262 cents quarter on quarter, despite receiving 6% or R6 292/kg less in gold 
price.  The Harmony Board has approved an interim dividend of 125 cents up 67%  
on last year`s interim dividend of 75 cents.  Earnings per share for the first  
six months of the 2003 financial year totals 509 cents, an increase of 89% over 
the 270 cents reported for the corresponding period in the previous financial   
In terms of growth in production and earnings per share the company is well on  
track to improve on the previous year`s performance and is confident that       
planned year on year production growth of 16%, which will see the company       
produce in excess of 3,1 million ounces per annum, is achievable.               
Cash operating profits quarter on quarter decreased by 20% from R950 million to 
R763 million with the stronger Rand alone contributing R150 million to the      
R187 million decrease. The company however still achieved a US$102/oz or 31%    
cash operating profit margin at cash costs of US$222/oz.                        
In cost terms, the operations performed well, despite South African inflation   
reaching a recent high of 12%.  Cash operating costs decreased by 2% or R38     
million to R1 649 million. Rand/tonne costs decreased by 4%. Despite the 3%     
decrease in overall production of 24 078 kg, R/kg costs remained flat at R68    
500.The effects of the appreciation of the South African Rand is clear with     
Dollar cash costs increasing from US$204/oz using a R10,39 exchange rate to     
US$222/oz at R9,61 to the Dollar.                                               
On 19 September 2002, Harmony, the National Union of Mineworkers (NUM) and the  
United Association of South Africa (UASA) entered into a historical agreement   
whereby the stakeholders will develop and maintain programmes to reverse the    
impact of HIV/AIDS.                                                             
The company views the current rising Dollar gold price trend as great news as it
reflects interest from investors and speculators in gold as an alternative      
investment, hedging themselves against the current uncertainty in world markets.
"It is pleasing to see gold trading above US$350/oz as this shows there is solid
support for gold at these levels and in the continued absence of significant    
hedging activities. Concerns that a gold price of above US$350/oz would see     
producers returning to their bad habits of hedging has been shown to be         
unfounded.  The low interest rate environment resulted in a low gold contango   
and not even the most prolific hedgers are prepared to continue to ignore the   
clearly expressed wishes of investors when the potential benefits of hedging is 
negligible.  Exotic financial instruments are out of favour with investors and  
simple ("vanilla") hedging is not worth the risk of further alienating investors
who want exposure to a rising gold price.  The record long positions held by    
speculators show that they expect the two year rising trend to continue,"       
commented Bernard Swanepoel, chief executive.                                   
With the 23 acquisitions Harmony has completed to date came a portfolio of      
probably the most prospective shallow to medium depth mining project areas      
remaining in South Africa, at no cost.  The returns from these acquisitions have
been spectacular. The rising gold price may mean that now is not the smartest   
time to be buying growth opportunities.  At these prices excellent returns are  
available from internal or organic growth projects which Harmony today owns. The
Doornkop South Reef Project which was launched on 22 January 2003 is an         
excellent example. The Project, with an NPV of R876 million and IRR of 48%, will
add an additional 330 000 ounces to the company`s production profile. In        
addition, 2 798 employment opportunities will be created. More projects are     
being evaluated and further announcements are expected in the next quarter.     
The company recently announced its acquisition of stakes in companies who have  
operations and prospective exploration areas in Russia, and other mining regions
in the world. Harmony`s stake in Highland Gold which was acquired at a total    
cost of US$26,4 million is currently valued at US$134 million.                  
On 21 November 2002 Harmony acquired a 21% stake in High River Gold at a cost of
US$14,5 million. The stake in this Toronto based company with gold interests in 
Russia, Canada and West Africa has subsequently increased to US$24 million.     
"In line with our growth strategy it has in the past, and definitely will in the
future, become necessary for the company to make strategic investments in       
corporate entities.  To date these activities have seen Harmony establish a     
sizeable international production base," concluded Bernard.                     
Issued by Harmony Gold Mining Company Limited                                   
27 January 2003                                                                 
For more details contact:                                                       
Bernard Swanepoel                                                               
on +27(0)83 303 9922                                                            
Ferdi Dippenaar                                                                 
on +27(0)82 807 3684                                                            
Investor Relations                                                              
Corn Bobbert                                                                   
Tel +27 11 684 0146                                                             
Fax +27 11 684 0188 Mobile +27(0)83 380 6614                                    
ISIN No.:   ZAE000015228                                                        
JSE:     HAR                                                                    
NYSE:    HMY                                                                    
Date: 27/01/2003 12:02:06 PM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             

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