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Harmony Gold Mining Company Limited - Press Announcement

Release Date: 26/02/2003 07:40:35      Code(s): HAR HARW
Harmony Gold Mining Company Limited - Press Announcement                        
Harmony Gold Mining Company Limited                                             
JSE:          HAR                                                               
NYSE:         HMY                                                               
ISIN No.:     ZAE000015228                                                      
JSE:          HARW                                                              
NYSE:         HMYWS                                                             
ISIN No.:     ZAE000031209                                                      
Johannesburg - 26 February 2003 - Harmony Gold Mining Company Limited           
(NYSE: HMY: JSE: HAR) today announced an agreement to subscribe for shares in,  
and an intention to make a public takeover offer for, Abelle Limited (ASX: ABX) 
an Australian publicly listed gold company with assets in Australia and Papua   
New Guinea ("PNG").                                                             
At the offer price of A$0.75 cents per share, Harmony`s offer values the company
at A$155 million or approximately US$90 million on a fully diluted basis.       
Harmony has entered into an irrevocable pre-bid acceptance agreement with       
Abelle`s major shareholder, Guiness Peat Group Plc, to acquire a 19.9%          
shareholding in Abelle.                                                         
The Board of Directors of Abelle has indicated that it welcomes Harmony`s       
decision to invest in Abelle, and Harmony`s decision to make a takeover offer,  
as it provides Abelle with the financial and technical capacity to bring the    
Morobe and Wafi projects into production.                                       
Abelle`s major interests incorporate a 50% interest in the Morobe Project in    
Papua New Guinea (together with an option to acquire a further 50% interest),   
and a 100% interest in both the Wafi Project in Papua New Guinea and the Gidgee 
Project in Western Australia. The projects in PNG were discovered by Rio Tinto  
in the 1980`s with high quality exploration and feasibility studies demarcating 
a resource of in excess of 10.5 million ounces.                                 
Harmony has also committed to injecting approximately A$26 million (US$16       
million) in Abelle in exchange for shares, which is intended to provide the     
company with surety of finance in order to complete the acquisition of a further
50% interest in the Morobe Project and to complete optimisation studies at      
Morobe and Wafi.                                                                
Commenting on the offer, Harmony Chief Executive Bernard Swanepoel said:        
"Abelle will provide Harmony with a set of highly prospective gold projects in  
Papua New Guinea and Australia which strongly complement our existing portfolio 
in the region.                                                                  
"Abelle has gold resources in excess of 10.5 million ounces, and - in Morobe and
Wafi - two of the largest undeveloped gold projects in the world.               
"The feasibility study recently completed on Morobe envisaged that the project  
will produce an average of approximately 300,000 ounces of gold and 5.0 million 
ounces of silver (some 380,000 gold equivalent ounces) per annum over a mine    
life in excess of 8 years.                                                      
"Harmony`s offer for Abelle represents the next step in our strategy of creating
a significant gold business in Australasia, combining producing assets with high
quality and prospective growth projects in the region.  In Australia, Harmony   
currently produces over 500,000 ounces per annum from our Hill 50, Mt Magnet and
South Kalgoorlie operations, owns 50% of a joint venture that is developing     
several gold projects in the Pine Creek area in the Northern Territories, and   
has a 31.8% interest in the high grade Bendigo project which is expected to be  
capable of producing in excess of 400,000 ounces per annum at full operation.   
"Harmony is financing this acquisition with part of the significant profit      
realised on the recent divestment of our shareholding in Placer, which resulted 
from our original investment in Goldfields Limited in 2000.                     
"In our view, Papua New Guinea has tremendous geological prospectivity, and a   
regional mineral endowment rivalling any second challenger to the Witswatersrand
of South Africa.  Having previously achieved exposure to PNG through our        
Goldfields and Placer investments - Placer being the operator of the Porgera    
mine - we now have the opportunity to participate directly in two of the most   
exciting undeveloped growth projects in the country," concluded Bernard.        
The Harmony offer is subject to the normal conditions and approvals, including  
securing 50.1% acceptances from shareholders.                                   
STRATEGIC RATIONALE FOR TRANSACTION                                             
Abelle will provide Harmony with two of the largest prospective gold development
projects in the world, Morobe and Wafi, which strongly complement Harmony`s     
existing Australasian portfolio of producing assets and growth projects.        
Papua New Guinea is widely regarded as one of the most resource rich countries  
in the world.  It sits on the highly prospective "Rim of Fire" which is host to 
some of the world`s largest epithermal gold and copper-gold deposits, including 
Grasberg, Porgera, Lihir and Misima.  As a major gold producing region, PNG     
complements Harmony`s existing operations and development projects in Africa,   
Australia and Russia.                                                           
MORE ABOUT ABELLE                                                               
Abelle Limited ("Abelle") is an ASX listed Australian gold mining and           
exploration company based in Perth, Western Australia.  In January 2003, Abelle 
merged with Aurora Gold ("Aurora"), creating a portfolio of gold assets at      
varying stages of exploration, development and production.                      
Abelle`s major interests include:                                               
a 50% interest in the Morobe Project in Papua New Guinea (together with an      
option to acquire a further 50% interest);                                      
a 100% interest in the Wafi Project in Papua New Guinea; and                    
a 100% interest in the Gidgee Project in Western Australia                      
The current number of fully paid ordinary shares in Abelle is 160,546,100.  The 
company has 75,970,012 listed options and 2,207,50 unlisted options.            
Morobe Project                                                                  
The Morobe Project comprises four exploration licences covering an area of 966  
km2 and is located in the Wau district of Morobe Province, Papua New Guinea, 210
km north north-west of Port Moresby and 90 km south south-west of Lae.          
The Morobe Project is 100% owned by Morobe Consolidated Goldfields Limited      
("MCG"), which is a Papua New Guinea incorporated company.  MCG was acquired in 
September 1998 by Aurora Gold (50%) and CDC Capital Partners (50%).             
On February 26th 2003, Abelle announced that it had entered into an agreement   
with CDC under which it has the option to acquire the outstanding 50% of MCG    
from CDC, giving it 100% ownership in the Morobe project.                       
In November 2001, Lycopodium, in conjunction with a number of specialist sub    
consultants, was retained to prepare a feasibility study to define project      
The Lycopodium Feasibility Study was completed in October 2002 and envisaged    
that the project will produce an average of 301,000 ounces of gold and 5.0      
million ounces of silver (379,000 gold equivalent ounces) per annum over a 8.2  
year mine life, assuming a 5 million tonne per annum ore treatment rate.        
Assessment of project issues, project financing and obtaining government mining 
permits and approvals have commenced and the company intends to fast track the  
development of this project.                                                    
Wafi Project                                                                    
The Wafi copper-gold deposits are situated 55 km from the Morobe Project near Mt
Watut in Morobe Province, around 60 km southwest of Lae and 60 km northwest of  
Wau, and are held under four exploration licences which cover a total area of   
approximately 990 km2.                                                          
The Wafi project is a major mineralised gold and copper-gold system with two    
main mineralised phases, a porphyry copper-gold pipe and an extensive later     
overprinting high sulphidation gold phase which is geographically and           
geologically distinct from the porphyry.                                        
The metallurgy of the oxide gold material is good with 90% recovery.  The       
primary sulphide mineralisation is refractory.  Abelle has commissioned a series
of scoping metallurgical tests to characterise the refractory species, as a     
first step towards the development of an economic process solution.             
Gidgee Project                                                                  
Abelle`s Australian gold mining business is located in Gidgee, Western          
Australia, which is about 650 km north-northeast of Perth, and covers the       
historic mining centres of Jonesville and Gun Creek.  After 15 years of gold    
production history, the Gidgee project has substantial site and operational     
infrastructure, with mining, processing, administration and exploration         
functions of a remote site.                                                     
Gidgee produced 23,769 ounces of gold in the half year to December 2002, with   
gold production sourced from the Swan Bitter underground mine.  Production is   
currently dominated by lower grade and higher cost development ore.  Development
into the first high grade lode has been completed and production will be sourced
from this lode in the first quarter of 2003.                                    
About Harmony Gold Mining Company Limited                                       
Harmony is South Africa`s third largest gold producer and the sixth largest gold
producer in the world.  Harmony is listed in South Africa, New York, London,    
Paris, Berlin and Brussels, and has a market capitalisation of approximately    
US$2.7 billion.                                                                 
Since becoming an independent mining company in 1995, Harmony has implemented a 
successful strategy of delivering shareholder value by ensuring strong leverage 
to the gold price through remaining unhedged, and pursuing a focused strategy of
growth through acquisition and cost reduction.  Through organic growth and the  
completion of some 23 corporate acquisitions, Harmony has increased its         
production base to an annualised 3.1 million ounces for the 2003 financial year.
As at 30 June 2002, Harmony`s mining operations in South Africa and Australia   
reported in aggregate total proven and probable reserves of approximately 49    
million ounces, and a gold resource in excess of 290 million ounces.            
Harmony has appointed Salomon Smith Barney as its financial and strategic       
For further information please contact:                                         
Bernard Swanepoel                                                               
Chief Executive                                                                 
Harmony Gold Mining Company Limited                                             
Office: +27 11 684 0140                                                         
Mobile: +27 83 303 9922                                                         
Ted Grobicki                                                                    
Executive Director                                                              
Harmony Gold Mining Company Limited                                             
Office: (61) (8) 9211 3100                                                      
Mobile: (61) (0) 427 990 039                                                    
Ferdi Dippenaar                                                                 
Marketing Director                                                              
Harmony Gold Mining Company Limited                                             
Office: +27 11 684 0140                                                         
Mobile: +27 82 807 3684                                                         
Summary of Conditions to Harmony`s offer                                        
Harmony either receives notice from the Australian Treasurer to the effect that 
there is no objection to the offer under the Foreign Acquisitions and Takeovers 
Act 1975 (the "FATA"), or the period provided under the FATA lapses without an  
order being made that prohibits the acquisition of Abelle by Harmony.           
Harmony and its associates have a relevant interest in the number of Abelle     
shares equal to at least 50.1% of the number of Abelle shares which are on issue
at the end of the offer period.                                                 
None of the usual prescribed occurrences (as defined in the Corporations Act    
2001 (Commonwealth) sections 652C(1) and (2)) occurs (other than issues of      
shares on exercise of options or to Harmony or a related company).              
No material adverse change or event occurs, is announced or otherwise becomes   
public in relation to the structure, business, financial or trading position or 
condition, assets or liabilities, profitability or prospects of Abelle or its   
subsidiaries, taken as a whole.                                                 
The Option Agreement between CDC Financial Services (Mauritius) Limited and Kula
Fund Limited (collectively "Grantor"), Aurora Gold PNG Pty Limited ("Grantee")  
and Abelle dated 25 February 2003 under which the Grantor grants to the Grantee 
an option to purchase fifty fully paid ordinary shares in the capital of Morobe 
Consolidated Goldfields Limited ("Morobe") and certain loans made to Morobe by  
the Grantor ("Morobe Option"), is and remains (subject to fulfilment or waiver  
of conditions precedent) a legal, valid and binding obligation of each party and
the Morobe Option is either validly exercised by the Grantee or remains capable 
of being validly exercised by the Grantee.                                      
Neither Abelle nor any of its subsidiaries enters into or agrees to enter into  
any gold price or foreign exchange hedge contract, or contract of a similar     
nature, which has or is likely to have a material effect on the financial or    
trading position or condition, assets or liabilities, profitability or prospects
of Abelle or any of its subsidiaries.                                           
All approvals, consents and waiting periods required by any governmental agency 
in Papua New Guinea in relation to the offer are either given, granted or have  
Date: 26/02/2003 07:40:09 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             

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