
ARMgold AND HARMONY MERGE TO CREATE SOUTH AFRICA"S LARGEST GOLD PRODUCER Release Date: 02/05/2003 17:38:01 Code(s): HAR HARW ARMgold AND HARMONY MERGE TO CREATE SOUTH AFRICA"S LARGEST GOLD PRODUCER
Harmony Gold Mining Co
ISIN: ZAE000015228
Jse Share code: HAR
JOINT NEWS RELEASE
by Harmony Gold Mining Co. Ltd. and
African Rainbow Minerals Gold Ltd.
ARMgold AND HARMONY MERGE TO CREATE
SOUTH AFRICA"S LARGEST GOLD PRODUCER
Johannesburg, 2 May 2003 - Harmony Gold Mining Company
Limited (NYSE: HMY JSE: HAR) and ARMgold (JSE: AOD)
today announced details on a proposed merger of the two
companies and the joint acquisition of a 34,5% stake in Anglovaal
Mining Limited ("Avmin") (JSE: AIN).
The merger between the two companies, will create the fifth
largest gold producer in the world, producing approximately 4,1
million ounces per annum. It is intended that the merger
will be effected by the issue of two Harmony shares for every three
ARMgold shares held. In addition,ARMgold will pay a special
dividend of 500 cents per ordinary share prior to implementation of
the merger. The merged company will be known as Harmony with
conspicuous and distinctive emphasis on the letters "ARM" to
reflect ARMgold"s identity in the merged company
"This merger will create the largest local producer of gold ounces in
South Africa. Harmony will be recognised as a role model in the
industry and the country and will be truly representative of the new
South Africa. Merging the two companies seemed like the logical
next step in both the companies" growth strategies. We share one
of the industry"s best gold assets in Free Gold and from a cultural,
operational and strategic perspective, the fit seems natural, "
commented Patrice Motsepe. Mr Motsepe will become the new
Non-Executive Chairman of Harmony and will play an active and
extensive role in advancing the long-term interests of the company.
Mr Adam Fleming, retiring Non-Executive Chairman of Harmony
commented: "After four exciting years of being part of the Harmony
Team, it is an honour to hand over the reigns to Patrice, who I"m
sure will chair the company during its next phase of development. I
am and intend to remain a significant shareholder of Harmony."
"As an investment alternative, Harmony will now offer a unique opportunity,
being the largest, unhedged South African gold producer, exposed to both the US
Dollar gold price and the volatility of the SA Rand. The new company will have
the benefit of more than 45% shareholding in North America with enhanced
liquidity on the NYSE. The company is now, more than ever, well positioned to
continue with its strategy of growth and delivery of
shareholder value," commented Bernard Swanepoel, Harmony Chief Executive.
The new company will have operating mines in all the major gold producing
regions in South Africa. It is anticipated that most of the synergies, will in
the short term, be realised in the Free State, as the region will now be
consolidated as one operating unit. Optimal use of infrastructure and
exploitation of the orebodies will deliver enhanced returns for the
shareholders.
The only other operations of note in the Free State are Beatrix mine, operated
by Gold Fields Limited and Target mine, operated by Avgold, which has a resource
base of 78,1 million ounces of gold of which 2,6 million ounces are in the
reserve category. The two companies have now acquired a stake in Avgold through
the Avmin transaction referred to below. The new Harmony will be well
positioned to continue with its strategy of growth, both locally and
internationally.
The two companies today also announced that they had jointly acquired Anglo
American Plc"s 34,5% stake in Avmin for a cash consideration of R43,50 per
share. Harmony and ARMgold will participate on a 50/50 joint venture basis in a
transaction which is valued at R1,766 billion (a premium of 9% on the 90 day
moving average price). Avgold recently placed 90 million shares to retire
offshore debt, decreasing its stake in Avgold to 42%.
Avmin, which has a market capitalisation of R3,4 billion, holds shares in the
following companies;
- Avgold Limited 42,0%
- Chambisi 90,0%
- Assmang 50,3%
- Nkomati Mine 75,0%
- Two Rivers Project 41,3%
The acquisition of the stake in Avmin creates an opportunity for Harmony and
ARMgold to participate in unlocking value within that company.
A press conference has been scheduled for the morning of Monday May 5th, 2003.
ENDS
Disclaimer
This presentation 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 ad
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. U.S. Investors are urged to consider closely the
disclosure in our public filings with the SEC available from us at Harmony Gold
Mining Company Limited, P.O. Box 2, Randfontein, 1760, South Africa, Attention:
Mr. Ferdi Dippenaar. You can also obtain these filings from the SEC by calling
1-800-SEC-0330.
2 May 2003
For more details contact:
Bernard Swanepoel
on +27(0)83 303 9922
or
Patrice Motsepe
on +27(0)82 560 0930
or
Ferdi Dippenaar
on +27(0)82 807 3684
or
Pieter Taljaard
on +27(0)82 441 8834
Harmony
Investor Relations Officer
Corn Bobbert
Tel +27 11 684 0146
Fax +27 11 684 0188
Mobile +27(0)83 380 6614
cbobbert@harmony.co.za
www.harmony.co.za
JSE: HAR HAR
NYSE: HMY
ISIN No.: ZAE000015228
JSE: HARW
NYSE: HMYWS
ISIN No.: ZAE000031209
ARMgold
Investor Relations Officer
Mangisi Gule
Tel +27 11 883 5606
Fax +27 11 883 5609
Mobile +27(0)82 805 3863
mangisi.gule@armgold.com
www.armgold.com
JSE: AOD HAR
ISIN No.: AE000039244
|