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Harmony Gold Mining Company Limited - Announcement

Release Date: 27/01/2004 08:00:39      Code(s): HAR
Harmony Gold Mining Company Limited - Announcement                              
Harmony Gold Mining Company Limited                                             
Registration number: 1950/038232/06                                             
JSE code: HAR     ISIN: ZAE000015228                                            
Key indicators                                                                  
Highlights for the quarter                                                      
* solid operational performance with excellent cost control                     
* CONOPS implemented at Free Gold and Deelkraal. Negotiations underway for      
  remainder of operations                                                       
* good cash earnings allow for an interim dividend of 40 cents per share        
* ARMI converts its Harmony equity                                              
* acquisition of 42,2% of Avgold from Avmin. Offer to minorities to follow      
* growth projects on schedule and within budget                                 
* Abelle Limited  feasibility study on Morobe completed and further good        
  exploration results from Wafi                                                 
Quarterly financial highlights                                                  
                                               31 December     30 September     
                                                      2003             2003     
Cash operating profit                                                           
Rand                                           271 million      333 million     
US$                                             40 million       45 million     
Cash earnings                                                                   
- SA cents per share                                   105              130     
- US cents per share                                    15               18     
Basic earnings                                                                  
- SA cents per share                                    92             (24)     
- US cents per share                                    14              (3)     
Headline earnings                                                               
- SA cents per share                                   (66)            (28)     
- US cents per share                                   (10)             (4)     
Fully diluted earnings                                                          
SA cents per share                                      92             (24)     
US cents per share                                      14              (3)     
Gold produced                                                                   
Kg                                                  29 294           30 145     
Oz                                                 941 826          969 179     
Cash costs                                                                      
R/Kg                                                75 888           75 319     
$/Oz                                                   350              316     
Chief Executive"s review                                                        
SAFETY REPORT                                                                   
We regret to report that during the last quarter 12 of our employees lost their 
lives in our operations. The company extends sincere condolences to the         
families, friends and relatives of the deceased.                                
The quarter"s safety performance indicates an improvement with regards to key   
safety indicators except for the Fatality Frequency Rate. A number of shafts    
achieved good safety milestones.                                                
Date                         Shaft           Fatality free shifts               
6 October 2003               Matjhabeng                 1 000 000               
8 October 2003               Tshepong                     500 000               
22 November 2003             Harmony 2                  1 000 000               
A team of internal safety auditors were trained to perform a safety system      
audit on all Harmony shafts during the coming quarter. The audit will assist in 
focusing our shafts to ensure that there is complete legal compliance.          
Are the South African producers missing the Gold Bull Run?                      
With the US Dollar gold price firmly above the US$400/oz level, the             
strengthening of the South African Rand has resulted in South African producers 
not yet benefiting from the current bull run.                                   
This has also impacted on the stock price performance of South African gold     
producers, who have seen their stock prices underperform relative to their      
North American peer group. There could still be an ideal opportunity for all    
stakeholders to participate in the benefits of a higher US Dollar gold price    
environment if the South African Rand were to weaken to more realistic levels.  
This will impact on the local industries" ability to fund its future growth     
through the re-investment of net cash flows. The capital cost to develop deep   
level mines in South Africa remains high.                                       
Subsequent to quarter end the South African Rand has weakened to levels above   
R7,00 to the US Dollar following a correction in the US Dollar.                 
The South African Rand could stabilise at these levels. If we receive an        
average Gold price of R90 000/kg (+6%) for the coming quarter, our cash         
operating profits could increase by as much as 52%.                             
The past quarter in review  solid operational performance for second quarter in 
a row                                                                           
Although the South African Rand continued its strong trend against the US       
Dollar reaching a high of R6,09 to the US Dollar during December 2003, Harmony  
again proved its operational resilience by returning a solid performance for a  
second quarter in a row. The South African Rand has during the past quarter     
reached levels last seen pre-March 2000, nearly four years ago.                 
*Following the completion of the merger between Harmony and ARMgold on 22       
September 2003, the September quarter results are presented in a pro forma      
combined format to allow for a quarter on quarter comparison.                   
The company reported decreased cash operating profits down by 19% from          
R332,9 million to R271,0 million.                                               
The performance of the company is highlighted in the following table:           
                                                                          %     
                              December 2003     September 2003     Variance     
Production  kg                       29 294             30 145          (3)     
Production  oz                      941 820            969 179          (3)     
Revenue  R/kg                        85 139             86 364          (1)     
Cash cost  R/kg                      75 888             75 319          (1)     
Revenue  US$/oz                         393                362            9     
Cash cost  US$/oz                       350                316         (11)     
Exchange rate  R/US$                   6,75               7,42          (9)     
The impact of the strong Rand is evident and despite a 9% increase in the US    
Dollar gold price, we received a R/kg gold price which, measured quarter on     
quarter, was another 1% lower at R85 139/kg. Cash working costs were well       
controlled, decreasing by 2% or R47,4 million. In R/kg terms, cash working      
costs increased marginally from R75 319 to R75 888/kg. Underground cash costs   
in R/tonne terms increased by 3% from R403/tonne to R414/tonne partly as a      
result of the 5% reduction in tonnage treated. In US Dollar terms our cash      
operating profit margin decreased slightly from US$46/oz (13%) to US$43/oz      
(10%).                                                                          
Although we have reached an agreement with the labour unions on the             
introduction of CONOPS (continuous operations) at our Free Gold and Deelkraal   
operations, these benefits are only expected to start contributing to the       
operational performance of the company in three to six months" time. Activities 
related to the introduction of CONOPS are underway at the various Free Gold     
shafts and are progressing well. We are in the process of planning the          
introduction of CONOPS at the remaining Harmony operations. The business case   
for this approach is compelling and will bring us in line with international    
best practice in optimising capital efficiency. Costs have however already been 
incurred, increased labour charges and underground development to establish     
additional working places, and are reflected in the reported working costs. All 
stakeholders stand to benefit significantly from the successful introduction of 
CONOPS.                                                                         
A quarter on quarter cash operating profit variance analysis                    
Cash operating profit  September 2003                        R332,9 million     
volume decrease (tonnes)                          (5%)     (R124,5 million)     
working cost decrease (%)                           2%        R47,4 million     
recovery grade increase (g/t)                       2%        R50,9 million     
Rand gold price reduction (R/kg)                  (1%)      (R35,7 million)     
net variance                                                (R61,9 million)     
Cash operating profit  December 2003                         R271,0 million     
Quarter ended      Quarter ended     
Earnings per share                         December 2003     September 2003     
Cash earnings                                        105                130     
Basic earnings                                        92               (24)     
Headline earnings                                   (66)               (28)     
Fully Diluted earnings                                92               (24)     
The company continues to generate good cash earnings, returning 105 cents per   
share for the December 2003 quarter. This was 19% less than the 130 cents per   
share reported previously.                                                      
Reconciliation between basic and headline earnings                              
                                           Quarter ended      Quarter ended     
Earnings in cents per share                December 2003     September 2003     
Basic earnings                                        92               (24)     
Less profit on sale of mining assets                   1                  4     
Less profit on disposal of Russian                                              
investments net of tax                               173                        
Add amortisation on ARMgold goodwill                  16                        
                                                     (66)               (28)    
Using a weighted average share capital of 230 324 449 shares, fully diluted     
earnings per share for the first half of the financial year totals 76 cents per 
share. Due to the company"s consistent ability to generate good cash earnings,  
the Harmony Board feels that declaring a 40 cent dividend rewards our           
shareholders appropriately.                                                     
December quarter results at different gold prices                               
During the past month the industry has seen extreme volatility in the R/US$     
exchange rate.                                                                  
The R/kg price of gold has varied between R81 000/kg and R97 000/kg. Being      
unhedged, the impact of the change in the gold price flows through to the cash  
operating profit line immediately. Using the December 2003 quarterly production 
and cash cost profiles, the effect of a change in R/kg gold price received,     
indicates the significant leverage of Harmony to currency fluctuations.         
Gold price    Cash operating  % Gold price                           % Profit   
(R/kg)profit  (R"million)         variance                           variance   
85 139             271,0            Actual results for December 2003 quarter    
90 000             413,4                6%                                52%   
95 000             560,0               12%                               107%   
100 000             706,4              18%                               161%   
105 000             852,8              24%                               215%   
ARMI (AFRICAN RAINBOW MINERALS INVESTMENTS) CONVERTS ITS HARMONY                
EQUITY                                                                          
On 7 November 2003, the Boards of Avmin, Harmony and ARMI announced that they   
had reached agreement in principle regarding a range of indivisible             
transactions. On the implementation thereof, South Africa"s largest Black       
controlled mineral resources company under the leadership of the current        
Harmony Chairman, Patrice Motsepe, will have been created.                      
The transactions are best illustrated as follows:                               
Step 1 - Harmony acquires Avmin"s shareholding (42%) in Avgold (see next        
         section for detail)                                                    
Step 2 - Avmin acquires ARMI"s shareholding (14%) in Harmony and its            
         effective interest of 41,5% in the Modikwa Platinum Joint Venture      
Step 3 - Avmin acquires Kalplats from Harmony for R100 million (2 million       
         Avmin shares)                                                          
Step 4 - Conclusion of a voting pool agreement between Harmony and              
         ARMI with respect to their shareholding in Avmin. Harmony already      
         owns 34,5% or 38 789 761 shares in Avmin.                              
The structure post the transaction:                                             
The parties agreed that Avmin will change its name to African Rainbow Minerals  
(ARM) on completion of the transaction.                                         
The rationale for the transaction being:                                        
* to establish ARM as a fully empowered mineral resource company that could     
become a partner-of-choice for new South African mining ventures,               
* to build a strong financial base for ARM to support new mining investments,   
and                                                                             
* to increase ARM"s stake in Harmony from 14% to above 20%.                     
The relevance to Harmony is that ARM will, without placing Harmony"s Black      
Economic Empowerment credentials at risk, be well positioned to participate in  
further growth opportunities that the African mining sector offers. Harmony     
could stand to benefit.                                                         
The range of transactions are expected to be completed by mid-April 2004.       
OUR GROWTH STORY CONTINUES  UPGRADING THE QUALITY OF OUR PRODUCTION BASE        
Harmony to acquire Avgold                                                       
On 13 November 2003 the company announced that it had reached an in principle   
agreement regarding the acquisition of Avmin"s 42,2% interest (286 305 263      
shares) in Avgold Limited (Avgold) at R10,11 per share. The purchase price of   
R2 894 million will be settled by the issue of 28 630 526 new Harmony shares.   
This follows an announcement on 15 July 2003 that we had acquired 11,5% or 77   
540 830 shares in Avgold at a consideration of R7,91 per Avgold share, which    
was discharged by the issue of 6 960 964 new Harmony shares.                    
If the acquisition of the Avgold shares becomes unconditional, the company will 
own approximately 54% of Avgold, and a mandatory offer of 1 Harmony share per   
10 Avgold shares will be made to Avgold minorities. On an assumption of a 100%  
acceptance of the offer a total of 60 259 832 new Harmony shares will be        
issued. At a Harmony share price of R114,40 per share, (as at 19 January 2004)  
the company will have a market capitalisation of R36,5 billion, making it one   
of the ten largest companies listed on the JSE Securities Exchange, South       
Africa.                                                                         
Avgold owns the Target Mine in the Free State. The mine is expected to produce  
in excess of 300 000 ounces per annum at a cash cost of US$230,00 per ounce,    
even at the current strong South African Rand levels. The operation has a life  
of mine of 18 years. Avgold also owns the prospective Target North Project area 
which has a resource of 59,6 million ounces.                                    
QUARTERLY OPERATIONAL REVIEW                                                    
A quarter on quarter pro-forma combined operating profit analysis of the        
various operations is as follows:                                               
                           December 2003     September 2003        Variance     
Operations                   (R"million)        (R"million)     (R"million)     
Free Gold                            149                165            (16)     
Free State                            25                  7              18     
Evander                               22                 39            (17)     
Randfontein                           28                 40            (12)     
Elandskraal                         (29)                (6)            (23)     
Welkom/Orkney                         26                 33             (7)     
Kalgold                                9                 13             (4)     
Australian Operation   s              41                 42             (1)     
Total                                271                333            (62)     
CAPITAL EXPENDITURE                                                             
                                                      Actual       Forecast     
Operational capex                              December 2003     March 2004     
Free State                                                12             10     
Evander                                                   23             27     
Randfontein                                               15             12     
Elandskraal                                                4              5     
Kalgold                                                                         
Free Gold                                                 17             16     
Welkom/Orkney                                              2                    
Australian Operations                                     46             40     
Sub total                                                119            110     
                                                      Actual       Forecast     
Project capex                                  December 2003     March 2004     
Doornkop South Reef                                       21             24     
Elandsrand Shaft Deepening                                25             22     
Tshepong Decline                                          27             30     
Phakisa Shaft                                             24             26     
Nyala Shaft                                                7              4     
Sub total                                                104            106     
Total capex                                                                     
Free State                                                12             10     
Evander                                                   23             27     
Randfontein                                               36             36     
Elandskraal                                               29             27     
Kalgold                                                                         
Free Gold                                                 75             76     
Welkom/Orkney                                              2                    
Australian Operations                                     46             40     
Total                                                    223            216     
NOTICE OF INTERIM DIVIDEND                                                      
A dividend No. 78 of 40 cents per ordinary share being the interim dividend for 
the six month period ending 31 December 2003, has been declared payable on 8    
March 2004 to those shareholders registered as such in the books of the company 
at the close of business on 5 March 2004.                                       
The dividend is declared in the currency of the Republic of South Africa.       
Any change in address or dividend instruction to apply to this dividend must be 
received by the company"s transfer secretaries or registrar not later than 27   
February 2004.                                                                  
No dematerialisation or rematerialisation of share certificates may occur       
between 1 March 2004 and 5 March 2004, both days inclusive, nor may any         
transfers between registers take place during this period.                      
This announcement will be mailed to all registered holders on or about 2        
February 2004.                                                                  
Last day to trade ordinary shares cum dividend                27 February 2004  
Ordinary shares trade ex dividend from                            1 March 2004  
Record date                                                       5 March 2004  
Payment date                                                      8 March 2004  
By order of the Board.                                                          
MP van der Walt                                                                 
Company Secretary                                                               
Randfontein                                                                     
26 January 2004                                                                 
Operating and financial results (Rand/metric)                                   
                                  Underground production South Africa           
Free                 Rand-              
                                       State     Evander   fontein              
                      Dec-03           1 145         483       716              
Ore milled  t"000     Sep-03           1 156         538       694              
Dec-03           5 078       2 768     3 244              
Gold produced  kg     Sep-03           4 850       3 015     3 391              
                      Dec-03            4,43        5,73      4,53              
Yield  g/t            Sep-03            4,20        5,60      4,89              
Cash operating        Dec-03          81 566      78 154    77 007              
Costs  R/kg           Sep-03          85 499      73 337    75 018              
Cash operating        Dec-03             362         448       349              
Costs  R/ton          Sep-03             359         411       367              
Working revenue       Dec-03         435 492     237 494   276 427              
(R"000)               Sep-03         419 027     259 722   292 601              
Cash operating        Dec-03         414 190     216 330   249 812              
Costs (R"000)         Sep-03         414 668     221 110   254 388              
Cash operating        Dec-03          21 302      21 164    26 616              
Profit (R"000)        Sep-03           4 359      38 612    38 214              
                                  Underground production South Africa           
                                     Elands-        Free   Orkney/              
kraal        Gold    Welkom              
                      Dec-03             506       1 259       538              
Ore milled  t"000     Sep-03             491       1 254       560              
                      Dec-03           2 527       8 364     3 012              
Gold produced  kg     Sep-03           2 641       7 864     3 117              
                      Dec-03            4,99        6,64      5,60              
Yield  g/t            Sep-03            5,38        6,27      5,57              
Cash operating        Dec-03          95 485      68 416    76 076              
Costs  R/kg           Sep-03          88 284      67 492    76 320              
Cash operating        Dec-03             477         455       426              
Costs  R/ton          Sep-03             475         423       425              
Working revenue       Dec-03         215 283     708 578   255 506              
(R"000)               Sep-03         227 545     680 764   270 724              
Cash operating        Dec-03         241 290     572 230   229 141              
Costs (R"000)         Sep-03         233 158     530 758   237 890              
Cash operating        Dec-03        (26 007)     136 349    26 365              
Profit (R"000)        Sep-03         (5 613)     150 006    32 835              
                                                 Surface production             
                                                     South Africa               
                                         Sub        Free                        
total       State   Evander              
                      Dec-03           4 647         422        45              
Ore milled  t"000     Sep-03           4 693         227        47              
                      Dec-03          24 993         200        30              
Gold produced  kg     Sep-03          24 878         133        31              
                      Dec-03            5,38        0,47      0,67              
Yield  g/t            Sep-03            5,30        0,59      0,66              
Cash operating        Dec-03          76 941      67 064    52 067              
Costs  R/kg           Sep-03          76 050      70 238    58 903              
Cash operating        Dec-03             414          32        35              
Costs  R/ton          Sep-03             403          41        39              
Working revenue       Dec-03       2 128 780      16 907     2 498              
(R"000)               Sep-03       2 150 384      11 458     2 713              
Cash operating        Dec-03       1 922 992      13 413     1 562              
Costs (R"000)         Sep-03       1 891 971       9 342     1 826              
Cash operating        Dec-03         205 788       3 495       936              
Profit (R"000)        Sep-03         258 413       2 117       887              
                                  Surface production  South Africa              
                                       Rand-     Elands-      Free              
                                     fontein       kraal      Gold              
Dec-03             530         114       869              
Ore milled  t"000     Sep-03             546         296     1 102              
                      Dec-03             137          47       558              
Gold produced  kg     Sep-03             141         118       742              
Dec-03            0,26        0,41      0,64              
Yield  g/t            Sep-03            0,26        0,40      0,67              
Cash operating        Dec-03          74 241     149 489     63 614             
Costs  R/kg           Sep-03          72 184      93 102     65 736             
Cash operating        Dec-03              19          62         41             
Costs  R/ton          Sep-03              19          37         44             
Working revenue       Dec-03          11 804       3 964     47 403             
(R"000)               Sep-03          12 214      10 135     64 242             
Cash operating        Dec-03          10 171       7 026      35 471            
Costs (R"000)         Sep-03          10 178      10 986      48 776            
Cash operating        Dec-03           1 633     (3 062)      11 932            
Profit (R"000)        Sep-03           2 036       (851)      15 466            
Surface production                                    
                                South Africa                                    
                                                   Open-       South            
                                         Sub        cast      Africa            
total     Kalgold       Total            
                      Dec-03           1 980         327       6 954            
Ore milled  t"000     Sep-03           2 218         367       7 278            
                      Dec-03             972         643      26 608            
Gold produced  kg     Sep-03           1 165         779      26 822            
                      Dec-03            0,49        1,97        3,83            
Yield  g/t            Sep-03            0,53        2,12        3,69            
Cash operating        Dec-03          69 620      70 628      76 521            
Costs  R/kg           Sep-03          69 620      69 199      75 572            
Cash operating        Dec-03              34         139         293            
Costs  R/ton          Sep-03              37         147         279            
Working revenue       Dec-03          82 576      54 303   2 265 660            
(R"000)               Sep-03         100 763      67 227   2 318 374            
Cash operating        Dec-03          67 643      45 414   2 036 049            
Costs (R"000)         Sep-03          81 108      53 906   2 026 985            
Cash operating        Dec-03          14 934       8 890     229 611            
Profit (R"000)        Sep-03          19 655      13 321     291 389            
                                        Aus-                                    
                                      tralia     Harmony                        
                                       Total       Total                        
Dec-03           1 229       8 183                        
Ore milled  t"000     Sep-03           1 316       8 594                        
                      Dec-03           2 687      29 294                        
Gold produced  kg     Sep-03           3 323      30 145                        
Dec-03            2,19        3,58                        
Yield  g/t            Sep-03            2,53        3,51                        
Cash operating        Dec-03          69 618      75 888                        
Costs  R/kg           Sep-03          73 280      75 319                        
Cash operating        Dec-03             152         272                        
Costs  R/ton          Sep-03             185         264                        
 Working revenue      Dec-03         228 414   2 494 074                        
(R"000)               Sep-03         285 059   2 603 433                        
Cash operating        Dec-03         187 034   2 223 083                        
Costs (R"000)         Sep-03         243 511   2 270 496                        
Cash operating        Dec-03          41 379     270 991                        
 Profit (R"000)       Sep-03          41 548     332 937                        
Total Operations  quarterly financial results (Rand/metric) (unaudited)         
                                            Quarter ended     Quarter ended     
                                              31 December      30 September     
                                                     2003              2003     
(including        (excluding     
                                                 ARMgold)          ARMgold)     
Ore milled  t"000                                   8 183             6 854     
Gold produced  kg                                  29 294            22 725     
Gold price received  R/kg                          85 139            86 258     
Cash operating costs  R/kg                         75 888            76 693     
                                                R million         R million     
Gold sales                                          2 494             1 960     
Cash operating costs                                2 223             1 743     
Cash operating profit                                 271               217     
Income from associates                               (34)               (7)     
Amortisation                                        (246)             (142)     
Profit on sale of Highland & High River               522                       
Mark to market of financial instruments                11             (172)     
Rehabilitation cost provision                        (18)              (10)     
Employment termination costs                         (20)              (12)     
Other income  net                                      65                70     
Minority Interest                                     (6)                       
Interest paid                                       (107)              (55)     
Corporate, marketing and new business                                           
expenditure                                          (43)              (31)     
Exploration expenditure                              (35)              (14)     
Foreign exchange losses                              (50)              (31)     
Profit before taxation                                310             (187)     
South African normal taxation                                                   
Current tax                                          (84)              (18)     
Deferred tax                                           10                86     
Net earnings                                          236             (119)     
Earnings per share  cents*                                                      
Basic earnings                                         92              (62)     
Headline earnings                                    (66)              (67)     
Fully diluted earnings**                               92              (62)     
Dividends per share  cents                                                      
Proposed interim                                       40                       
Prepared in accordance with International Financial Reporting Standards         
* Calculated on weighted number of shares in issue at quarter end               
December 2003: 257,9 million (September 2003: 192,3 million)                  
** Calculated on weighted average number of diluted shares in                   
   issue at quarter end December 2003: 256,5 million                            
   (September 2003: 190,9 million)                                              
Reconciliation of headline earnings:                                            
Net earnings                                           236             (119)    
Adjustments:                                                                    
Profit on sale of assets                               (3)               (9)    
Profit on sale of Highland &                                                    
High River  net of tax                               (444)                      
Amortisation on goodwill                                41                      
Headline earnings                                    (170)             (128)    
Total Operations  pro forma quarterly financial results                         
(Rand/metric) (unaudited)                                                       
                                            Quarter ended     Quarter ended     
                                              31 December      30 September     
2003              2003     
                                               (including        (including     
                                                 ARMgold)          ARMgold)     
Ore milled  t"000                                   8 183             8 594     
Gold produced  kg                                  29 294            30 145     
Gold price received  R/kg                          85 139            86 364     
Cash operating costs  R/kg                         75 888            75 319     
                                                R million         R million     
Gold sales                                          2 494             2 603     
Cash operating costs                                2 223             2 270     
Cash operating profit                                 271               333     
Income from associates                               (34)              (11)     
Amortisation                                        (246)             (166)     
Profit on sale of Highland & High River               522                       
Mark to market of financial instruments                11             (172)     
Rehabilitation cost provision                        (18)              (17)     
Employment termination costs                         (20)              (20)     
Other income  net                                      65               121     
Minority Interest                                     (6)                       
Interest paid                                       (107)              (83)     
Corporate, marketing and new business                                           
expenditure                                          (43)              (42)     
Exploration expenditure                              (35)              (14)     
Foreign exchange losses                              (50)              (31)     
Profit before taxation                                310             (102)     
South African normal taxation                                                   
Current tax                                          (84)              (35)     
Deferred tax                                           10                76     
Net earnings                                          236              (61)     
Earnings per share  cents*                                                      
Basic earnings                                         92              (24)     
Headline earnings                                    (66)              (28)     
Fully diluted earnings**                               92              (24)     
Dividends per share  cents                                                      
Proposed interim                                       40                       
The pro forma quarterly financial results are for information purposes only.    
* Calculated on weighted number of shares in issue at quarter end               
  December 2003: 257,9 million (September 2003: 256,0 million)                  
** Calculated on weighted average number of diluted shares in                   
   issue at quarter end December 2003: 256,5 million                            
(September 2003: 254,6 million)                                              
Reconciliation     of headline earnings:                                        
Net earnings                                           236              (61)    
Adjustments:                                                                    
Profit on sale of assets                                (3)              (11)   
Profit on sale of Highland & High River  net of tax   (444)                     
Amortisation on goodwill                                 41                     
Headline earnings                                     (170)             (72)    
Abridged balance sheet (Rand) (unaudited)                                       
                                                        At               At     
                                               31 December     30 September     
                                                      2003             2003     
R million        R million     
Employment of capital                                                           
Mining assets after amortisation                    14 911        14    729     
Intangible assets                                    2 803          2   843     
Investments                                          1 098          1   260     
Investments in associates                            2 564          2   896     
Net current liabilities (excluding cash)             (924)        (1   300)     
Cash                                                 2 888          2   561     
Total assets                                        23 340           22 989     
Capital employed                                                                
Shareholders" equity                                16 251           15 937     
Loans                                                2 863            2 881     
Long-term provisions                                   860              840     
Minority Interest                                      155              139     
Unrealised hedging loss                                432              450     
Deferred tax                                         2 779            2 742     
Total equity and liabilities                        23 340           22 989     
Basis of accounting                                                             
The unaudited results for the quarter have been prepared on the International   
Financial Reporting Standards (IFRS) basis. These consolidated quarterly        
statements are prepared in accordance with IFRS 34, Interim Financial           
Reporting. The accounting policies are consistent with those applied in the     
previous financial year.                                                        
Issued share capital: 258,4 million ordinary shares of 50 cents each (September 
2003: 257,9 million shares)                                                     
28                                                                              
Operating and financial results  (US$/imperial)                                 
                          Underground production South Africa                   
Free                 Rand-                      
                               State   Evander     fontein                      
                  Dec-03       1,263        533        790                      
Ore milled  t"000 Sep-03       1,275        593        765                      
Gold produced     Dec-03     163,261     88,993    104,297                      
    oz            Sep-03     155,930     96,934    109,023                      
                  Dec-03        0.13       0.17       0.13                      
Yield  oz/t       Sep-03        0.12       0.16       0.14                      
Cash operating    Dec-03         376        360        355                      
Costs  $/oz       Sep-03         359        308        315                      
Cash operating    Dec-03          49         60         47                      
Costs  $/t        Sep-03          44         50         45                      
Working revenue   Dec-03      64,555     35,205     40,976                      
($"000)           Sep-03      56,500     35,020     39,453                      
Cash operating    Dec-03      61,397     32,067     37,031                      
Costs ($"000)     Sep-03      55,912     29,814     34,301                      
Cash operating    Dec-03       3,158      3,137      3,945                      
Profit ($"000)    Sep-03         588      5,206      5,153                      
                         Underground production  South Africa                   
                             Elands-       Free    Orkney/                      
kraal       Gold     Welkom                      
                  Dec-03         558      1,388        593                      
Ore milled  t"000 Sep-03         541      1,383        618                      
Gold produced     Dec-03      81,245    268,908     96,838                      
oz            Sep-03      84,910    252,832    100,213                      
                  Dec-03        0.15       0.19       0.16                      
Yield  oz/t       Sep-03        0.16       0.18       0.16                      
Cash operating    Dec-03         440        315        351                      
Costs  $/oz       Sep-03         370        283        320                      
Cash operating    Dec-03          64         61         57                      
Costs  $/t        Sep-03          58         52         52                      
Working revenue   Dec-03      31,912    105,035     37,875                      
($"000)           Sep-03      30,681     91,792     36,503                      
Cash operating    Dec-03      35,767     84,824     33,966                      
Costs ($"000)     Sep-03      31,438     71,565     32,076                      
Cash operating    Dec-03     (3,855)     20,211      3,908                      
Profit ($"000)    Sep-03       (757)     20,226      4,427                      
                                       Surface production  South Africa         
                                 Sub       Free                                 
                               total      State    Evander                      
Dec-03       5,124        465         50                      
Ore milled  t"000 Sep-03       5,175        250         52                      
Gold produced     Dec-03     803,540      6,430        965                      
    oz            Sep-03     799,843      4,276        997                      
Dec-03      156.81       0.01       0.02                      
Yield  oz/t       Sep-03      154.56       0.02       0.02                      
Cash operating    Dec-03         355        309        240                      
Costs  $/oz       Sep-03         319        295        247                      
Cash operating    Dec-03          56          4          5                      
Costs  $/t        Sep-03          49          5          5                      
Working revenue   Dec-03     315,557      2,506        370                      
($"000)           Sep-03     289,950      1,545        366                      
Cash operating    Dec-03     285,052      1,988        232                      
Costs ($"000)     Sep-03     255,106      1,260        246                      
Cash operating    Dec-03      30,505        518        139                      
Profit ($"000)    Sep-03      34,843        285        120                      
Surface production  South Africa                    
                               Rand-     Elands-      Free                      
                             fontein      kraal       Gold                      
                  Dec-03         584        126        958                      
Ore milled  t"000 Sep-03         602        326      1,215                      
Gold produced     Dec-03       4,405      1,511     17,927                      
    oz            Sep-03       4,533      3,794     23,856                      
                  Dec-03        0.01       0.01       0.02                      
Yield  oz/t       Sep-03        0.01       0.01       0.02                      
Cash operating    Dec-03         342        689        293                      
Costs  $/oz       Sep-03         303        390        276                      
Cash operating    Dec-03           3          8          5                      
Costs  $/t        Sep-03           2          5          5                      
Working revenue   Dec-03       1,750        588      7,027                      
($"000)           Sep-03       1,647      1,367      8,662                      
Cash operating    Dec-03       1,508      1,041      5,258                      
Costs ($"000)     Sep-03       1,372      1,481      6,577                      
Cash operating    Dec-03         242      (454)     1,769                       
Profit ($"000)    Sep-03         275      (115)     2,085                       
                  Surface production                                            
South Africa                                            
                                          Open-      South                      
                                 Sub       cast     Africa                      
                               total    Kalgold      Total                      
Dec-03       2,183        361      7,668                      
Ore milled  t"000 Sep-03       2,446        405      8,026                      
Gold produced     Dec-03      31,238     20,673    855,450                      
    oz            Sep-03      37,455     25,045    862,343                      
Dec-03       14.31       0.06     111.56                      
Yield  oz/t       Sep-03       15.31       0.06     107.45                      
Cash operating    Dec-03         321        326       353                       
Costs  $/oz       Sep-03         292        290       317                       
Cash operating    Dec-03           5         19         39                      
Costs  $/t        Sep-03           4         18         34                      
Working revenue   Dec-03      12,241      8,050    335,847                      
($"000)           Sep-03      13,586      9,065    312,601                      
Cash operating    Dec-03      10,027      6,732    301,811                      
Costs ($"000)     Sep-03      10,936      7,268    273,311                      
Cash operating    Dec-03       2,214      1,318     34,036                      
Profit ($"000)    Sep-03       2,650      1,796     39,290                      
Aus-                                            
                              tralia    Harmony                                 
                               Total      Total                                 
                  Dec-03       1,355      9,024                                 
Ore milled  t"000 Sep-03       1,451      9,477                                 
Gold produced     Dec-03      86,376    941,826                                 
    oz            Sep-03     106,836    969,180                                 
                  Dec-03        0.06     104.37                                 
Yield  oz/t       Sep-03        0.07     102.27                                 
Cash operating    Dec-03         321        350                                 
Costs  $/oz       Sep-03         307        316                                 
Cash operating    Dec-03          20         37                                 
Costs  $/t        Sep-03          23         32                                 
Working revenue   Dec-03      33,859    369,706                                 
($"000)           Sep-03      38,436    351,037                                 
Cash operating    Dec-03      27,725    329,536                                 
Costs ($"000)     Sep-03      32,834    306,145                                 
Cash operating    Dec-03       6,134     40,170                                 
Profit ($"000)    Sep-03       5,602     44,892                                 
Total Operations  quarterly financial results (US$/imperial) (unaudited)        
Quarter ended     Quarter ended     
                                              31 December      30 September     
                                                     2003              2003     
                                               (including        (excluding     
ARMgold)          ARMgold)     
Ore milled  t"000                                   9,023             7,559     
Gold produced  oz                                 941,814           730,622     
Gold price received  $/oz                             393               362     
Cash operating costs  $/oz                            350               322     
                                                 $million          $million     
Gold sales                                            370               264     
Cash operating costs                                  330               235     
Cash operating profit                                  40                29     
Income from associates                                (5)               (1)     
Amortisation                                         (37)              (19)     
Profit on sale of Highland & High River                77                       
Mark to market of financial instruments                 2              (23)     
Rehabilitation cost provision                         (3)               (1)     
Employment termination costs                          (3)               (2)     
Other income  net                                      10                 9     
Minority Interest                                     (1)                       
Interest paid                                        (16)               (7)     
Corporate, marketing and new business                                           
expenditure                                           (6)               (4)     
Exploration expenditure                               (5)               (2)     
Foreign exchange losses                               (7)               (4)     
Profit before taxation                                 46              (25)     
South African normal taxation                                                   
Current tax                                          (12)               (2)     
Deferred tax                                            1                11     
Net earnings                                           35              (16)     
Earnings per share  cents*                                                      
Basic earnings                                         14               (8)     
Headline earnings                                    (10)               (9)     
Fully diluted earnings**                               14               (8)     
Dividends per share  cents                                                      
Proposed interim                                        6                       
Prepared in accordance with International Financial Reporting Standards         
Currency conversion rates average for the quarter:                              
December 2003: US$1=R6,75 (September 2003: US$1=R7,42)                          
*Calculated on weighted number of shares in issue at quarter end                
 December 2003: 257,9 million (September 2003: 192,3 million)                   
**Calculated on weighted average number of diluted shares in                    
  issue at quarter end December 2003: 256,5 million                             
(September 2003: 190,9 million)                                               
Reconciliation of headline earnings:                                            
Net earnings                                            35                (16)  
Adjustments:                                                                    
Profit on sale   of assets                             (1)               (1)   
 Profit on sale   of Highland & High River  net of tax (66)                     
 Amortisation     on goodwill                             7                     
Headline earnings                                      (25)              (17)   
Total operations  pro forma quarterly financial results                         
(US$/imperial) (unaudited)                                                      
                                            Quarter ended     Quarter ended     
                                              31 December      30 September     
2003              2003     
                                               (including        (including     
                                                 ARMgold)          ARMgold)     
Ore milled  t"000                                   9,024             9,477     
Gold produced  oz                                 941,826           969,179     
Gold price received  $/oz                             393               362     
Cash operating costs  $/oz                            350               316     
                                                 $million          $million     
Gold sales                                            370               351     
Cash operating costs                                  330               306     
Cash operating profit                                  40                45     
Income from associates                                (5)               (1)     
Amortisation                                         (37)              (22)     
Profit on sale of Highland & High River                77                       
Mark to market of financial instruments                 2              (23)     
Rehabilitation cost provision                         (3)               (2)     
Employment termination costs                          (3)               (3)     
Other income  net                                      10                15     
Minority Interest                                     (1)                       
Interest paid                                        (16)              (11)     
Corporate, marketing and new business                                           
expenditure                                           (6)               (6)     
Exploration expenditure                               (5)               (2)     
Foreign exchange losses                               (7)               (4)     
Profit before taxation                                 46              (14)     
South African normal taxation                                                   
Current tax                                          (12)               (5)     
Deferred tax                                            1                11     
Net earnings                                           35               (8)     
Earnings per share  cents *                                                     
Basic earnings                                         14               (3)     
Headline earnings                                    (10)               (4)     
Fully diluted earnings **                              14               (3)     
Dividends per share  cents                                                      
Proposed interim                                        6                       
The pro forma quarterly financial results are for information purposes only.    
Currency conversion rates average for the quarter:                              
December 2003: US$1=R6,75 (September 2003: US$1=R7,42)                          
* Calculated on weighted number of shares in issue at quarter end               
        December 2003: 257,9 million (September 2003: 256,0 million)            
** Calculated on weighted average number of diluted shares in                   
   issue at quarter end December 2003: 256,5 million                            
   (September 2003: 254,6 million)                                              
Reconciliation of headline earnings:                                            
Net earnings                                            35               (8)    
Adjustments:                                                                    
Profit on sale of assets                                (1)              (1)    
Profit on sale of Highland & High River net of tax     (66)                     
Amortisation on goodwill                                 7                      
Headline earnings                                      (25)              (9)    
Abridged balance sheet (US$) (unaudited)                                        
                                                        At               At     
31 December     30 September     
                                                      2003             2003     
                                                 R million        R million     
Employment of capital                                                           
Mining assets after amortisation                     2 226            2 116     
Intangible assets                                      418              408     
Investments                                            164              181     
Investments in associates                              383              416     
Net current (liabilities) excluding cash             (138)            (186)     
Cash                                                   431              368     
Total assets                                         3 484            3 303     
Capital employed                                                                
Shareholders" equity                                 2 426            2 290     
Loans                                                  427              414     
Long-term provisions                                   129              120     
Minority Interest                                       23               20     
Unrealised hedging loss                                 64               65     
Deferred tax                                           415              394     
Total equity and liabilities                         3 484            3 303     
Basis of accounting                                                             
The unaudited results for the quarter have been prepared on the International   
Financial Reporting Standards (IFRS) basis. These consolidated quarterly        
statements are prepared in accordance with IFRS 34, Interim Financial           
Reporting. The accounting policies are consistent with those applied in the     
previous financial year.                                                        
Issued share capital: 258,4 million ordinary shares of 50 cents each.           
(September 2003: 257,9 million shares)                                          
Balance sheet converted at conversion rate of US$1 = R6,70 (September 2003:     
R6,96)                                                                          
Condensed statement of changes in shareholders" equity (unaudited)              
                         At              At              At              At     
                31 December     31 December     31 December     31 December     
2003            2002            2003            2002     
                  R million       R million     US$ million     US$ million     
Balance as at                                                                   
the beginning                                                                   
of the                                                                          
financial year        8 628           7 963           1 288             931     
Currency                                                                        
translation                                                                     
adjustment                                                                      
and other                             (455)               1            (52)     
Issue of share                                                                  
capital               7 798             213           1 164              25     
Net earnings            117             883              17             103     
Dividends paid        (292)           (741)            (44)            (87)     
Balance as at                                                                   
the end of                                                                      
December             16 251           7 863           2 426             920     
Prepared in accordance with International Financial Reporting Standards.        
Abridged cashflow statements (unaudited)                                        
6 months   6 months                                     6 months     6 months   
ended      ended                                           ended        ended   
31 Dec.    31 Dec.                                       31 Dec.      31 Dec.   
2002       2003                                             2003         2002   
US$"000    US$"000                                         R"000        R"000   
125         19  Cash flow from operating activities          133        1 251   
(62)       191  Cash utilised in investing activities      1 350        (618)   
(64)      (40)  Cash utilised in financing activities      (282)        (635)   
30         36   Translation adjustment                                          
29         206  Increase/(decrease) in cash and equivalents 1 201         (2)   
139        225  Opening cash and equivalents                1 687       1 441   
168        431  Closing cash and equivalents               2 888        1 439   
Prepared in accordance with International Financial Reporting Standards.        
Operating activities translated at average rates of:                            
December 2003: US$1 = R7,08                                                     
(December 2002: US$1 = R10,00)                                                  
Closing balance translated at closing rates of:                                 
December 2003: US$1 = R6,70                                                     
(December 2002: US$1 = R8,55)                                                   
Directors                                                                       
P T Motsepe (Chairman),                                                         
Z B Swanepoel (Chief Executive),                                                
F Abbott, Dr M M M M Bakane-Tuoane,                                             
F Dippenaar, V N Fakude, T S A Grobicki,                                        
W M Gule, M W King, D S Lushaba, M F Pleming,                                   
Lord Renwick of Clifton KCMG*, C M L Savage,                                    
Dr S P Sibisi, D V Simelane, Dr R V Simelane,                                   
M V Sisulu, P Taljaard, A J Wilkens                                             
*British                                                                        
Investor Relations                                                              
Ferdi Dippenaar                                                                 
Marketing Director                                                              
Telephone: +27 11 684 0140                                                      
Fax:       +27 11 684 0188                                                      
E-mail:     fdippenaar@harmony.co.za                                            
Corn Bobbert                                                                    
Investor Relations Officer                                                      
Telephone: +27 11 684 0146                                                      
Fax:         +27 11 684 0188                                                    
E-mail:      cbobbert@harmony.co.za                                             
Marian van der Walt                                                             
Company Secretary                                                               
Telephone: +27 11 411 2037                                                      
Fax:       +27 11 411 2398                                                      
E-mail:    mvanderwalt@harmony.co.za                                            
Date: 27/01/2004 08:01:10 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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