Harmony Gold Mining Company Limited - Harmony way is good in South Africa Release Date: 04/11/2004 08:27:02 Code(s): HAR Harmony Gold Mining Company Limited - Harmony way is good in South Africa
Harmony Gold Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1950/038232/06)
Share code: HAR ISIN: ZAE000015228
("Harmony")
"THE HARMONY WAY IS GOOD IN SOUTH AFRICA."
Ian Cockerill, Gold Fields CEO, 3rd November 2004
Gold Fields Limited ("Gold Fields") seems to be confused over the issue of
efficiency gains at its South African Operations.
When Harmony announced its offers, Ian Cockerill stated that Harmony"s target of
ZAR 1 billion of cost savings per annum was "beyond bold" and that he and his
management team "have been scratching our heads" to see where these could come
from.
Now, Gold Fields has found that it is possible to reduce costs and has announced
new initiatives of a further ZAR 200 to 300 million in South Africa. So Harmony
is right after all then?
However, there is one major difference between Harmony and Gold Fields - ability
versus desire.
When asked why it has taken so long to notify Gold Fields" shareholders of the
possibility of such cost savings, Ian Cockerill responded:
"A desire to cut costs has always been part of the Gold Fields strategy but a
desire to deliver and the ability can often be two entirely different things"
While Gold Fields has wasted valuable time thinking about how to improve the
performance of its South African operations, Harmony has a track record of
delivering such performance, time and time again. As can be seen from the
following, based on previous experiences, Harmony"s targets for Gold Fields are
not `beyond bold".
Planned Achieved
Total Harmony Cost Evander St Randfontein Elandsrand
Cost Cost Savings Helena
2004 Reduction as a % of
(ZAR m) Target total
(ZAR m)
Head 140 98 1.45%
Office
Total 6589
Operation
s Cost
Labour 330 5% 20% 18% 8% 8%
cost
Synergies
Stores 264 4% 4% 8% 13% 2%
Electrici 132 2% 2% 5% 3% 2%
ty &
Water
Other 297 4.5% 7% (2%) (3%) 7%
cost,
incl G&A,
Services
Contracto 66 1% 1% 2% 4% (1%)
rs
Total 6729 1185 17.95% 33% 32% 35% 17%
Savings
from
operation
s
By applying the techniques of the Harmony Way to the Gold Fields" mines, as
Harmony has in the past, it will extract value for all shareholders, for all
employees and for the country. Harmony will deliver at least ZAR1 billion in
cost savings at Gold Fields. Together, with Harmony"s proven methodology and
the skills and experience of the Gold Fields" employees, Harmony can transform
the South African mining industry and build a true national champion for South
Africa.
HARMONY: THE ABILITY TO CUT COSTS
4 November 2004
Virginia
Harmony will be hosting a conference call for investment analysts and the press
at 16h30 (South Africa) today. Call numbers are available on www.harmony.co.za
In connection with the proposed acquisition of Gold Fields, Harmony has filed a
registration statement on Form F-4, which includes a preliminary prospectus and
related exchange offer materials, to register the Harmony ordinary shares
(including Harmony ordinary shares represented by Harmony American Depositary
Shares (ADSs)) to be issued in exchange for Gold Fields ordinary shares held by
Gold Fields shareholders located in the US and for Gold Fields ADSs held by Gold
Fields shareholders wherever located, as well as a Statement on Schedule TO.
Investors and holders of Gold Fields securities are strongly advised to read the
registration statement and the preliminary prospectus, the related exchange
offer materials and the final prospectus (when available), the Statement on
Schedule TO and any other relevant documents filed with the Securities and
Exchange Commission (SEC), as well as any amendments and supplements to those
documents, because they will contain important information. Investors and
holders of Gold Fields securities may obtain free copies of the registration
statement, the preliminary and final prospectus (when available), related
exchange offer materials and the Statement on Schedule TO, as well as other
relevant documents filed or to be filed with the SEC, at the SEC"s web site at
www.sec.gov. The preliminary prospectus and other transaction-related documents
may be obtained for free from MacKenzie Partners, Inc., the information agent
for the U.S. offer, at the following address: 105 Madison Avenue, New York, New
York 10016; telephone 1 (212) 929 5500 (call collect) or 1 (800) 322 2885 (toll-
free call); e-mail proxy@mackenziepartners.com. Investors and security holders
may obtain a free copy of the Form 20-F filed with the SEC on October 5, 2004,
as amended, and any other documents filed with or furnished to the SEC by
Harmony at www.sec.gov.
This communication is for information purposes only. It shall not constitute an
offer to purchase or exchange or the solicitation of an offer to sell or
exchange any securities of Gold Fields or an offer to sell or exchange or the
solicitation of an offer to buy or exchange any securities of Harmony, nor shall
there be any sale or exchange of securities in any jurisdiction in which such
offer, solicitation or sale or exchange would be unlawful prior to the
registration or qualification under the laws of such jurisdiction. The
distribution of this communication may, in some countries, be restricted by law
or regulation. Accordingly, persons who come into possession of this document
should inform themselves of and observe these restrictions. The solicitation of
offers to buy Gold Fields ordinary shares (including Gold Fields ordinary shares
represented by Gold Fields ADSs) in the United States will only be made pursuant
to a prospectus and related offer materials that Harmony expects to send to
holders of Gold Fields securities. The Harmony ordinary shares (including
Harmony ordinary shares represented by Harmony ADSs) may not be sold, nor may
offers to buy be accepted, in the United States prior to the time the
registration statement becomes effective. No offering of securities shall be
made in the United States except by means of a prospectus meeting the
requirements of Section 10 of the United States Securities Act of 1933, as
amended.
The directors of Harmony accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Harmony (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement is in accordance with the facts
and does not omit anything likely to affect the import of such information.
Joint financial advisers and
investment banks Co-financial advisers
HSBC Investec Merrill Lynch Morgan
Stanley
Joint transaction sponsors Attorneys
Investec Merrill Lynch Cliffe Dekker Hogan and
Hartson
Date: 04/11/2004 08:27:08 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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