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HARMONY - NO CHANGE TO THE FUNDAMENTAL VALUE LEAKAGE INHERENT WITHIN THE

Release Date: 01/12/2004 10:07:47      Code(s): HAR
HARMONY - NO CHANGE TO THE FUNDAMENTAL VALUE LEAKAGE INHERENT WITHIN THE        
          PROPOSED IAMGOLD TRANSACTION                                          
HARMONY GOLD MINING COMPANY LIMITED                                             
(Incorporated in the Republic of South Africa)                                  
(Registration number 1950/038232/06)                                            
Share code: HAR     ISIN: ZAE000015228                                          
("Harmony")                                                                     
30 November 2004                                                                
NO CHANGE TO THE FUNDAMENTAL VALUE LEAKAGE INHERENT WITHIN THE PROPOSED IAMGOLD 
TRANSACTION                                                                     
Substantial opposition remains                                                  
Gold Fields has announced that it has reached agreement with IAMGold to revise  
the terms of the proposed IAMGold transaction through an amendment to the cash  
portion contributed by Gold Fields by US$200 million (the "amendment"). Harmony 
believes that the amendment does not alter the fundamental value leakage        
inherent within the proposed IAMGold transaction and that it remains            
unconvincing and difficult to justify from both a value and structural          
perspective.  Furthermore, despite the amendment, the proposed IAMGold          
transaction has negative implications for Gold Fields, its shareholders, its    
South African assets and all of its stakeholders.                               
Harmony believes that the amendment confirms what Harmony and other Gold Fields 
shareholders have been saying to Gold Fields" management over recent time,      
namely that the proposed IAMGold transaction has no merit and is value          
destructive. In recognising that there is substantial opposition to the proposed
IAMGold transaction, Harmony believes that Gold Fields" management, under the   
smoke screen of the recent changes in South African exchange control            
restrictions, have made an inadequate and desperate attempt to re-price the     
proposed transaction a matter of days after vigorously defending it.            
Unfortunately the amendment will have a minimal effect on the overall terms of  
the proposed transaction, particularly given that IAMGold shareholders will     
continue to have a 30% share in the enlarged IAMGold.  The structural           
disadvantages implicit in the proposed IAMGold transaction will remain and the  
proposed transaction continues to be highly dilutive to Gold Fields             
shareholders. Whilst retaining US$200m of Gold Fields shareholders" own cash    
will be less disadvantageous to Gold Fields shareholders in the short term, it  
does not alter the fact that, in Harmony"s belief, the sale of these            
international assets at a significant undervaluation will have an enduring      
detrimental effect on Gold Fields and its shareholders.                         
Harmony believes that it remains in the best interests of Gold Fields           
shareholders to vote against the proposed IAMGold transaction at the Gold Fields
general meeting on 7 December 2004, for the following key reasons:              
     - from a value perspective the fundamental issues remain:                  
     * Gold Fields is disposing of its international asset portfolio at         
substantially less than fair value:                                        
     - the terms of the proposed IAMGold transaction are at a significant       
     discount to the consensus average P/NPV multiples of Gold Fields itself,   
     comparable South African and mid-cap international gold mining peers and   
the international gold mining majors;                                      
     - the terms of the proposed IAMGold transaction are at a significant       
     discount to other comparable transactions in the gold sector;              
     Gold Fields is contributing a disproportionate share of value in exchange  
for only approximately 70% of the fully diluted equity of the enlarged     
     IAMGold; and                                                               
     * a substantial re-rating of the enlarged IAMGold is required for Gold     
     Fields shareholders just to break even.  Any re-rating is uncertain given  
the structure of the proposed IAMGold transaction. Furthermore, given that 
     Gold Fields intends to dispose of its international asset portfolio at     
     significantly less than its fair value, Gold Fields will create an         
     unnecessarily low relative value base for its shareholders.  Accordingly,  
substantially all of the required re-rating of the enlarged IAMGold, should
     it eventuate, would be for the benefit of existing IAMGold shareholders.   
     - from a structural perspective, the fundamental issues remain.  The       
     proposed IAMGold transaction would:                                        
* result in a complex and inefficient corporate structure, with the        
     likelihood of a holding-company discount;                                  
     * with only 2 directors out of a possible 10 representing Gold Fields"     
     interests (5 would be non-executive directors, subject to strict rules of  
independence under the Canadian governance code), minimise Gold Fields"    
     ability to control the strategic direction of the enlarged IAMGold, which  
     will be run on a stand-alone basis and be fully independent of Gold Fields;
     * impair Gold Fields" ability to access the cash flows of its international
asset portfolio, which, as at 30 June 2004, generated 75% of Gold Fields"  
     operating cash flows, thereby leading to a loss of financial flexibility   
     and potentially prejudicing the optimal allocation of scarce cash          
     resources, with negative implications for Gold Fields and its South African
asset portfolio;                                                           
     * reduce the ability of Gold Fields to maintain its historic dividend      
     payout ratio in the absence of any substantial dividend receipts from the  
     enlarged IAMGold, which are unlikely, given the enlarged IAMGold"s own     
funding requirements and its management"s own forecasts;                   
     * lead to the creation of two mid-cap producers, lacking in scale; and     
     * as a result of the non-compete clause with the enlarged IAMGold outside  
     SADC, have negative implications for Gold Fields" future growth prospects. 
Notwithstanding the amendment, Harmony firmly believes that Gold Fields         
shareholders:                                                                   
     * would be selling their international assets at a material discount to    
     their fair value;                                                          
* will lose control of their future growth potential, the majority of their
     operating cash flows and control of all of the upside in their exploration 
     portfolio, which, by Gold Fields" own admission, has extremely promising   
     prospects; and                                                             
* should realise that the amendment is a transparent and cosmetic attempt  
     to hoodwink them into voting in favour of the ill-conceived proposed       
     IAMGold transaction. The proposed IAMGold transaction will cause value     
     leakage of an enduring nature.                                             
Substantial opposition remains                                                  
Despite the amendment, Harmony believes that there remains substantial          
opposition to the proposed IAMGold transaction:                                 
     - Harmony, which owns a total of 53,392,108 Gold Fields shares,            
representing approximately 10.8% of the entire issued share capital of Gold
     Fields, remains opposed to the proposed IAMGold transaction;               
     - the amendment will have no impact on the irrevocable undertaking from    
     Norilsk to vote against the proposed IAMGold transaction in respect of     
98,467,758 Gold Fields shares, representing approximately 20.03% of the    
     entire issued share capital of Gold Fields; and                            
     - in Harmony"s view, the amendment is entirely cosmetic and of no real     
     substance and will be of little consequence to the significant number of   
Gold Fields shareholders who have indicated to Harmony their opposition to 
     the proposed IAMGold transaction.                                          
Harmony believes that its views are confirmed by Gold Fields" management itself.
Gold Fields" management claims to have held "limited discussions" with certain  
institutional shareholders representing approximately 18% of the outstanding    
shares of Gold Fields, of which some 78% have indicated support. Harmony notes  
that this equates to only 14% of Gold Fields" outstanding shares, significantly 
below the level required to approve the proposed IAMGold transaction.  Harmony  
would assume that the majority of these shareholders represent funds that hold  
long positions in IAMGold and, therefore, are economically incentivised to      
support the proposed IAMGold transaction, regardless of whether it is in the    
best interests of Gold Fields and its shareholders.                             
Inconsistent strategy                                                           
Since the announcement of the Harmony offers, the Gold Fields board has created 
significant uncertainty through offering Gold Fields" shareholders a number of  
potential inducements to refrain from tendering their shares into the early     
settlement offer. As previously stated, Harmony believes that some of these are 
not capable of being implemented, especially in a manner that would be          
considered attractive to Gold Fields" shareholders. In addition, a number of    
these proposed options are clearly mutually exclusive and contradictory. The    
amendment confirms Harmony"s belief that these elusive strategies, never        
detailed in formal announcements, were merely designed to cause confusion       
amongst Gold Fields shareholders.                                               
Given that Harmony believes that the amendment has no impact on the fundamental 
value leakage inherent within the proposed IAMGold transaction, Harmony         
questions whether this is the best proposal that the Gold Fields board could    
produce. Harmony remains firm in its belief that Gold Fields" management"s      
strategy is in disarray and questions whether Gold Fields shareholders can still
believe in a management team that has changed the terms of a transaction only   
days after defending it so vigorously.                                          
Issued by (direct line, mobile, email):                                         
Harmony Gold                                                                    
Ferdi Dippenaar     +27 11 684 0140     +27 82 807 3684                         
Corne Bobbert       +27 11 684 0146     +27 83 380 6614                         
South Africa - Beachhead Media & Investor Relations                             
Jennifer Cohen      +27 11 214 2401     +27 82 468 6469     jennifer@bmsa.co.za 
Patrick Lawlor      +27 11 214 2410     +27 82 459 6709     patrick@bmsa.co.za  
United States - Financial Dynamics Business Communications                      
Hollis Rafkin-Sax   +1 212 850 5789     +1 917 509 0255     hrafkin-sax@fd-     
us.com                                                                          
Torie Pennington    +1 212 850 5629     +1 917 838 1369     tpennington@fd-     
us.com                                                                          
United Kingdom - Financial Dynamics Business Communications                     
Nic Bennett         +44 207 269 7115    +44 7979 536 619      nic.bennett@fd.com
Charles Watenphul   +44 207 269 7216    +44 7866 438 013                        
charles.watenphul@fd.com                                                        
US Information Agent - MacKenzie Partners, Inc                                  
Daniel Burch        +212 929 5500                proxy@mackenziepartners.com    
Steve Balet         +800 322 2885                                               
Unless the context otherwise requires, the definitions contained in the offer   
document or the registration statement sent to Gold Fields shareholders have the
same meaning in this announcement.                                              
In connection with the proposed merger, Harmony will file with the U.S.         
Securities and Exchange Commission ("SEC"), a registration statement on Form F- 
4, which will include a preliminary prospectus and related exchange offer       
materials, to register the Harmony ordinary shares (including Harmony ordinary  
shares represented by Harmony ADSs) to be issued in exchange for the remainder  
of Gold Fields ordinary shares held by Gold Fields shareholders located in the  
United States 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 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 and 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.        
Investors and holders of Gold Fields securities will receive information at an  
appropriate time on how to obtain transaction-related documents for free from   
Harmony or its duly designated agent. 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.
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 in the US,
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 US will only be made pursuant to a      
prospectus and related offer materials that Harmony will 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 US prior to the time the registration statement becomes        
effective.  No offering of securities shall be made in the US except by means of
a prospectus meeting the requirements of Section 10 of the United States        
Securities Act of 1933, as amended.                                             
Forward-looking Statements                                                      
Statements in this announcement include "forward-looking statements" that       
express or imply expectations of future events or results.  Forward-looking     
statements are statements that are not historical facts.  These statements      
include financial projections and estimates and their underlying assumptions,   
statements regarding plans, objectives and expectations with respect to future  
operations, products and services, and statements regarding future performance. 
Forward-looking statements are generally identified by the words "expect,"      
"anticipates," "believes," "intends," "estimates" and similar expressions.  All 
forward-looking statements involve a number of risks, uncertainties and other   
factors, and Harmony cannot give assurances that such statements will prove to  
be correct.  Risks, uncertainties and other factors that could cause actual     
events or results to differ from those expressed or implied by the forward-     
looking statements include, without limitation, the satisfaction of closing     
conditions, the acceptance or rejection of any agreement by regulators, delays  
in the regulatory processes, changes in the economic or political situation in  
South Africa, the European Union, the US and/or any other relevant jurisdiction,
changes in the gold industry within any such country or area or worldwide and   
the performance of (and cost savings realised by) Harmony.  Although Harmony"s  
management believes that the expectations reflected in such forward-looking     
statements are reasonable, investors and holders of Gold Fields securities are  
cautioned that forward-looking information and statements are subject to various
risks and uncertainties, many of which are difficult to predict and generally   
beyond the control of Harmony, that could cause actual results and developments 
to differ materially from those expressed in, or implied or projected by, the   
forward-looking information and statements.  These risks and uncertainties      
include those discussed or identified in the public filings with the SEC made by
Harmony and Gold Fields, including those listed under "Cautionary Statement     
Concerning Forward-Looking Statements" and "Risk Factors" in the preliminary    
prospectus included in the registration statement on Form F-4 that Harmony will 
file with the SEC.  Harmony does not undertake any obligation to update any     
forward-looking information or statements. You may obtain a free copy of the    
registration statement and preliminary and final prospectus (when available) and
other public documents filed with the SEC in the manner described above.        
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.     
Date: 01/12/2004 10:07:56 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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