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Avmin/ARMI/HARMONY - DETAILED JOINT CAUTIONARY ANNOUNCEMENT

Release Date: 13/11/2003 08:27:43      Code(s): AIN HAR
Avmin/ARMI/HARMONY - DETAILED JOINT CAUTIONARY ANNOUNCEMENT                     
Anglovaal Mining        African Rainbow         Harmony Gold Mining             
Limited                 Minerals & Exploration  Company Limited                 
(Incorporated in the    Investments             (Incorporated in the            
Republic of South       (Proprietary) Limited   Republic of South               
Africa)                 (Incorporated in the    Africa)                         
(Registration number    Republic of South       (Registration number            
1993/004580/06)         Africa)                 1950/038232/06)                 
(Share code: AIN)       (Registration number    (Share code: HAR)               
(ISIN code:             1997/020158/07)         (ISIN code:                     
ZAE000017141)            ("ARMI")               ZAE000015228)                   
("Avmin")                                       ("Harmony")                     
DETAILED JOINT CAUTIONARY ANNOUNCEMENT                                          
INTRODUCTION                                                                    
The Boards of Avmin, Harmony and ARMI have reached agreement in principle       
regarding a range of indivisible transactions which, if implemented, will result
in the creation of the largest black controlled mineral resources company in    
South Africa under the leadership of mining entrepreneur, Patrice Motsepe.      
The transactions, which are subject to the fulfilment of the conditions         
precedent detailed in paragraph 8, are as follows:                              
Avmin will dispose of its entire 42.2% interest in Avgold Limited ("Avgold") to 
Harmony, the consideration for which will be discharged by the issue of new     
Harmony shares ("the Avgold Share Disposal");                                   
-    Avmin will acquire from the ARM group of companies ("ARM"):                
ARM"s entire indirect 13.6% interest in Harmony;                                
ARM"s 41.5% effective interest in the Modikwa Joint Venture,                    
the consideration for which will be discharged by the issue of new Avmin shares 
to ARM or its nominee (collectively referred to as the "Avmin Acquisitions");   
Avmin will acquire the Kalplats platinum discovery and associated mineral rights
from Harmony, the consideration for which will be discharged by the issue of new
Avmin shares (the "Kalplats Acquisition"); and                                  
Harmony will merge its remaining shares in Avmin with the Avmin shares          
controlled by ARM, post the above transactions, either through a sale           
transaction or a voting pool arrangement ("the ARM Control Structure").         
The above transactions are collectively referred to as "the Transaction".       
RATIONALE AND PROPOSED NEW STRUCTURE                                            
The Avmin board of directors has completed its review of the strategic direction
and future structure of the Avmin Group referred to at the time of announcing   
Avmin"s provisional results on 11 September 2003. The two key objectives of the 
review were to:                                                                 
establish Avmin as a fully empowered mineral resources company, utilising the   
Avmin Group"s resources to become a preferred partner-of-choice for new South   
African mining ventures; and                                                    
build a strong financial base for Avmin to support new mining investments, in   
particular its large in-house projects, including the Nkomati nickel mine       
expansion.                                                                      
The Transaction will result in ARM becoming the effective controlling           
shareholder of a larger, diversified and empowered Avmin, with significant      
holdings in gold, platinum, nickel and ferrous metal assets.  As a consequence  
Avmin, without placing Harmony"s black economic empowerment credentials at risk,
will be well positioned to secure significant funding (as debt and capital      
markets allow) for its existing projects and to participate in further growth   
opportunities that the South African mining sector offers, taking advantage of  
its unique empowerment status.  All parties have agreed that Avmin will change  
its name to African Rainbow Minerals Limited.                                   
For a diagrammatic explanation of the resultant Avmin Group structure please    
refer to the paid announcement to be published on 14 November 2003.             
Gold asset portfolio                                                            
Avmin"s gold assets will comprise a holding of 22.2% in Harmony which in turn   
will hold a 53.7% interest in Avgold (42.2% from Avmin plus current holding of  
11.4% prior to any mandatory offer being made by Harmony to the minority        
shareholders of Avgold), forming the fifth largest gold producer globally with  
4.3 million ounces of production per annum and with an estimated 470 million    
resource ounces.                                                                
Harmony has over the past three years upgraded its production base with a range 
of quality enhancing acquisitions.  The company is currently developing five    
mines, which is intended to increase the company"s underground recovery grade by
some 13% over the next four years.  The acquisition of 42.2% of Avgold will     
further enhance the overall quality of the company"s production base.           
Platinum Group Metals ("PGM") portfolio                                         
The Avmin PGM asset portfolio will comprise assets that have the potential of   
achieving significant attributable production levels in future years. This      
includes the 41.5% indirect interest in the Modikwa Joint Venture and a 55%     
interest in the Two Rivers project. Furthermore, the 75% held Nkomati  mine is  
contemplating a major expansion project which will form part of Avmin"s PGM     
asset portfolio.                                                                
Ferrous metals asset portfolio                                                  
Avmin"s ferrous metals asset portfolio will comprise the iron ore, manganese and
chrome businesses held through its existing 50.3% interest in Assmang Limited.  
Assmang"s total product sales for 2003 were:                                    
     Metric tons                                           000"s                
     Iron ore                                              5 263                
     Manganese ore (excluding deliveries to the Cato       1 171                
Ridge alloy operation)                                                     
     Manganese alloys                                      206                  
     Charge chrome                                         244                  
     Chrome ore (excluding deliveries to Machadodorp       20                   
alloy operation)                                                           
BOARD OF AVMIN                                                                  
Following the conclusion of the proposed Transaction, Patrice Motsepe will      
become the Chairman of Avmin and Rick Menell will be deputy Chairman.           
The Board composition will be reviewed and changes considered to reflect the new
controlling shareholding in Avmin.                                              
THE PROPOSED TRANSACTION                                                        
The Avgold Share Disposal                                                       
Avmin will dispose of its entire holding of 286  305  263 ordinary shares in    
Avgold (42.2%) to Harmony for a consideration to be settled by the issue to     
Avmin of 28  630  526 new Harmony shares.  This represents a ratio of 1 Harmony 
share for every 10.0 Avgold shares based on the 30  day volume weighted average 
traded prices.                                                                  
The Avmin Acquisitions                                                          
Avmin will acquire:                                                             
ARM"s entire indirect holding of 35 002 396 Harmony shares; and                 
ARM"s 83% indirect shareholding in the ARM Mining Consortium Limited which in   
turn holds 50% in the Modikwa Joint Venture, a joint venture in respect of the  
Modikwa Platinum Mine,                                                          
for a consideration to be settled by the issue to ARM of 87  750  417 new Avmin 
shares at an issue price of R50 per Avmin share.                                
The Kalplats Acquisition                                                        
Avmin will acquire the Kalplats platinum discovery and associated mineral rights
from Harmony to be settled by the issue to Harmony of 2  000  000 new Avmin     
shares.                                                                         
The ARM Control Structure                                                       
Harmony will merge its entire holding of 38 789 761 Avmin shares (20.1% post    
dilution) remaining after the implementation of the Avmin Acquisitions with the 
Avmin shares held by ARM  (either through a sale transaction or voting pool     
arrangement).                                                                   
As a result, 63.2% of Avmin will be black controlled.                           
MANDATORY OFFER TO AVGOLD MINORITIES                                            
Pursuant to the successful implementation of the Avgold Share Disposal, Harmony 
will hold in excess of 35% of the issued share capital of Avgold. In terms of   
the Securities Regulation Code on Takeovers and Mergers and Rules of the        
Securities Regulation Panel ("the Code"), Harmony will be required to extend a  
mandatory offer to the other shareholders of Avgold ("the Avgold minority       
shareholders") for the remaining 46.3% of Avgold in accordance with the         
requirements of the Code.  Accordingly Harmony will extend an offer to the      
Avgold minority shareholders to acquire all or part of their Avgold shares for  
the same consideration as the Avgold Share Disposal.                            
CHANGE OF CONTROL IN AVMIN AND WAIVER OF MANDATORY OFFER                        
Pursuant to the successful implementation of the Avmin Acquisitions, ARM, will  
hold in excess of 35% of the issued share capital of Avmin. The Securities      
Regulation Panel has indicated to ARM and Avmin that it will allow ARM to       
dispense with the requirement to extend a mandatory offer to Avmin minority     
shareholders, provided a simple majority of the Avmin shareholders excluding    
Harmony and ARM in general meeting waive the requirement for a mandatory offer. 
Accordingly, as a condition precedent to the Avmin Acquisitions, shareholders of
Avmin will be requested to waive the requirement for a mandatory offer by ARM.  
RELATED PARTY TRANSACTIONS AND VOTING RESTRICTIONS                              
Harmony is a material shareholder of Avmin.  As a result, the Avgold Share      
Disposal and the Kalplats Acquisition are related party transactions in respect 
of Avmin in terms of the Listings Requirements of the JSE Securities Exchange,  
South Africa ("the Listings Requirements"). Accordingly, Harmony may not vote   
its shares in Avmin on the Avmin shareholder resolutions required to approve the
Avgold Share Disposal and the Kalplats Acquisition.                             
CONDITIONS PRECEDENT                                                            
Implementation of the Transaction will be subject, inter alia, to:              
the signature of the requisite legal agreements and such agreements becoming    
unconditional;                                                                  
the obtaining of the necessary regulatory approvals; and                        
the obtaining of third party and shareholder approvals, to the extent required, 
including the waiver, in general meeting,  by Avmin minority shareholders of the
requirement for a mandatory offer by ARM.                                       
OPINIONS AND RECOMMENDATIONS                                                    
As the Avgold Share Disposal and the Kalplats Acquisition are related party     
transactions, the board of directors of Avmin will appoint an independent       
adviser to advise Avmin minority shareholders in respect of the Avgold Share    
Disposal and the Kalplats Acquisition as required by the Listings Requirements. 
Deutsche Securities (SA) (Proprietary) Limited has been the adviser to the Avmin
board on the restructuring review and the Transaction.                          
CAUTIONARY ANNOUNCEMENT                                                         
A further announcement will be made on SENS and in the press as soon as the     
requisite legal agreements have been signed and the financial effects finalised.
Accordingly, both Avmin and Harmony shareholders are advised to exercise caution
when trading in their securities until such time as a further announcement is   
made which is expected to be at the end of November.                            
Johannesburg                                                                    
13 November 2003                                                                
Financial adviser and sponsor to Avmin               Financial adviser to       
                                                     Harmony & ARMI and sponsor 
                                                     to Harmony                 
Deutsche Securities                                JPMorgan                     
Member of the Deutsche Bank Group                                               
Deutsche Securities (SA) (Proprietary) Limited                                  
(Registration number 1995/011798/07)                                            
Member of the JSE Securities Exchange South Africa                              
Attorneys to Avmin                                   Attorneys to Harmony       
Deneys Reitz Attorneys                            Cliffe Dekker                 
Attorneys to ARMI                                                               
Bowman Gilfillan                                                                
Date: 13/11/2003 08:27:51 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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