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Harmony Gold Mining Company Limited - Review For The Quarter Ended 30 September

Release Date: 31/10/2005 08:00:04      Code(s): HAR
Harmony Gold Mining Company Limited - Review For The Quarter Ended 30 September 
2005                                                                            
HARMONY GOLD MINING COMPANY LIMITED                                             
Registration number 1950/038232/06                                              
Incorporated in the Republic of South Africa                                    
ISIN: ZAE000015228                                                              
Trading Symbols                                                                 
JSE Limited                          HAR                                        
New York Stock Exchange, Inc .       HMY                                        
London Stock Exchange plc            HRM                                        
Euronext Paris                       HG                                         
Euronext Brussels                    HMY                                        
Berlin Stock Exchange                HAM1                                       
REVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2005                                  
CHIEF EXECUTIVE"S REVIEW - SEPTEMBER 2005                                       
Dear shareholder                                                                
We continue to make good progress in all areas of our business, although it     
might not reflect in the operational performance of the company at this time.   
The past 18 months has been a difficult period, during which we undertook a     
number of initiatives:                                                          
* initiating the restructuring of our operations to deal with a low R/kg gold   
price environment. This process, which started in April 2004, has had its       
hiccups and the time required for the conclusion thereof went way beyond what   
was anticipated at the commencement of the process. During August 2005, we      
managed to conclude the process, and for the first time in more than a year, we 
are looking forward to a normalised operating environment.                      
We have always valued our relationship with the various unions and have         
initiated processes to re-establish a co-operative relationship.                
* the placing of a number of shafts on care and maintenance as part of our      
restructuring initiatives, has also been completed. We have significantly       
reduced the number of our employees and stopped the mining of unprofitable      
reserves to enhance our cashflows. To date we have not seen the planned higher  
volumes and recovery grades. The benefit of being able to increase the volumes  
from our profitable shafts, through CONOPS and the higher gold price, will      
begin to show during the December 2005 quarter.                                 
* our focus on delivering our growth projects remains. Some shareholders and    
analysts have expressed their concern regarding our ability to fund our growth  
plans, and we have noted them. We do however recognise the value and            
contribution that these projects will make to our future cost structure and     
production profile. Harmony is in a transformation phase, from a previously     
marginal producer to one with high margin, quality assets. These assets will    
provide a solid phase from which we will continue to create value for our       
shareholders.                                                                   
* the company was ideally structured to facilitate the restructuring phase,     
which is now completed. The management structure has now been streamlined for   
the recovery phase. All of our South African operations are consolidated under  
the focus of one integrated management team.                                    
The future of Harmony is dependent upon our ability to deliver on projects and  
a comprehensive and professional structure has been put in place company wide   
under the guidance of our most experienced engineers and managers.              
As your management team we have never blamed external factors for               
underperformance. We have now addressed the impact of the external factors and  
remain committed to deliver on our promise to make Harmony a high margin,       
quality operation!                                                              
Bernard                                                                         
Analysis of earnings per share                                                  
                                            Quarter ended     Quarter ended     
Earnings per share (SA cents)           30 September 2005      30 June 2005     
                                                                 (restated)     
Cash earnings                                          30                47     
Basic loss                                           (82)             (283)     
Headline loss                                        (86)              (94)     
Fully diluted loss                                   (82)             (283)     
Adjusted headline loss*                              (63)              (94)     
* Excludes all unrealised gains/(losses) in financial instruments as well as    
the tax implications                                                            
Reconciliation between basic and headline loss                                  
Quarter ended     
Headline earnings in cents per share (SA cents)              September 2005     
Basic loss                                                             (82)     
Profit on sale of mining assets                                         (4)     
Headline loss                                                          (86)     
Cash earnings for the year to date total 30 cents per share. Fully diluted loss 
per share for the financial year to date totals 82 cents per share.             
CAPITALISING OUR MINE DEVELOPMENT COST                                          
Harmony has changed its accounting policy on the capitalisation of mine         
development costs.                                                              
This change has the following benefits:                                         
-    Harmony better aligns its policy with those of its global industry peers.  
-    It allows for a more direct link between revenue and associated            
expenditure.                                                                    
-    Harmony would be able to institute systems that would allow the shaft teams
     to make better business decisions.                                         
-    All development that provides access to proven and probable reserves is    
     capitalised.                                                               
-    Development, which is purely for exploration purposes, is considered to be 
     a working cost.                                                            
-    Development that previously qualified as capital is still regarded as      
capital.                                                                        
Effect of the change                                                            
  There is a direct impact on the operating cost profile of the company. The    
operating cost of Harmony was reduced by R136 million for the September 2005    
quarter. This equates to 8% of total cost or R7 075 per kilogram. Capital       
expenditure has increased with a similar amount, as indicated in the capital    
expenditure table on page 6 (June 2005: R140 million/ R7 017 per kg).           
The capitalised cost will be amortised over the estimated life of the         
proven and probable reserve to which it gives access.                           
  Information on the restatement of our financial results for the quarter       
ending June 2005 as well as the corresponding period, i.e. September 2004       
has been included in the financial section.                                     
OPERATING AND FINANCIAL RESULTS (Rand/metric) (unaudited)                       
                               Underground production - South Africa            
                                                        Leve-                   
Quality       Growth        raged                   
                             Ounces     Projects       Ounces     Sub total     
Ore milled                                                                      
- t"000          Sep-05       1 464          315        1 218         2 997     
Jun-05       1 508          331        1 095         2 934     
Gold produced                                                                   
- kg             Sep-05       8 719        1 995        5 380        16 094     
                 Jun-05       9 073        1 933        5 181        16 187     
Yield - g/tonne  Sep-05        5.96         6.33         4.42          5.37     
                 Jun-05        6.02         5.84         4.73          5.52     
Cash operating                                                                  
costs - R/kg     Sep-05      76 896       91 253      100 158        86 453     
Jun-05      69 419       88 210      104 320        82 833     
Cash operating                                                                  
costs - R/tonne  Sep-05         458          578          442           464     
                 Jun-05         418          515          494           457     
Working revenue                                                                 
(R"000)          Sep-05     798 188      183 850      492 960     1 474 998     
                 Jun-05     816 768      172 999      468 577     1 458 344     
Cash operating                                                                  
costs (R"000)    Sep-05     670 457      182 050      538 852     1 391 359     
                 Jun-05     629 835      170 510      540 480     1 340 825     
Cash operating                                                                  
profit (R"000)   Sep-05     127 731        1 800     (45 892)        83 639     
Jun-05     186 933        2 489     (71 903)       117 519     
Capital                                                                         
expenditure                                                                     
(R"000)          Sep-05     108 833      140 184       45 597       294 614     
Jun-05     119 288      117 099       40 157       276 544     
Quality Ounces - Evander Shafts, Randfontein Cooke Shafts, Target, Tshepong,    
Masimong                                                                        
Growth Projects - Doornkop shaft & South Reef Project, Elandsrand shaft and     
New Mine Project, Phakisa shaft, Tshepong Decline Project                       
Leveraged Ounces - Deelkraal, Bambanani, Joel, Eland, Kudu/Sable, West, Nyala,  
St Helena, Harmony 2, Merriespruit 1                                            
and 3, Unisel, Brand 3 and 5, Saaiplaas 3, Evander 9, Orkney 2 and 4, Welkom 1  
OPERATING AND FINANCIAL RESULTS   (Rand/metric) (unaudited)                     
                           South Africa South Africa   Australia      Harmony   
                                Surface        Total       Total        Total   
Ore milled - t"000    Sep-05        838        3 835         765        4 600   
Jun-05      1 415        4 349         849        5 198   
Gold produced - kg    Sep-05      1 228       17 322       1 897       19 219   
                      Jun-05      1 536       17 723       2 163       19 886   
Yield - g/tonne       Sep-05       1.47         4.52        2.48         4.18   
Jun-05       1.09         4.08        2.55         3.83   
Cash operating        Sep-05     87 029       86 493      78 643       85 718   
costs - R/kg          Jun-05     70 815       81 792      69 398       80 444   
Cash operating        Sep-05        128          391         195          358   
costs - R/tonne       Jun-05         77          333         177          308   
Working revenue       Sep-05    112 361    1 587 359     178 821    1 766 180   
(R"000)               Jun-05    135 789    1 594 133     190 463    1 784 596   
Cash operating        Sep-05    106 872    1 498 231     149 186    1 647 417   
costs (R"000)         Jun-05    108 773    1 449 598     150 108    1 599 706   
Cash operating        Sep-05      5 489       89 128      29 635      118 763   
profit (R"000)        Jun-05     27 016      144 535      40 355      184 890   
Capital expenditure   Sep-05          0      294 614      71 389      366 003   
(R"000)               Jun-05          0      276 544      65 514      342 058   
TOTAL OPERATIONS - QUARTERLY FINANCIAL RESULT (Rand/metric) (unaudited)         
                           Quarter ended    Quarter ended     Quarter ended     
                            30 September          30 June      30 September     
2005             2005              2004     
                                               (restated)        (restated)     
Ore milled      t"000             4 600             5 198             6 564     
Gold produced   kg               19 219            19 886            25 822     
Gold price                                                                      
received        R/kg             91 888            89 711            83 023     
Cash operating                                                                  
costs           R/kg             85 718            80 444            71 722     
R million         R million         R million     
Revenue                           1 766             1 784             2 144     
Cash operating costs      (1)     1 647             1 599             1 852     
Cash operating profit               119               185               292     
Amortisation and                                                                
depreciation of mining                                                          
properties,                                                                     
mine development costs                                                          
and mine plant facilities (1)     (244)             (233)            (2860)     
Corporate, administration                                                       
and other expenditure              (56)              (81)              (38)     
Provision for                                                                   
rehabilitation costs                (3)               (6)              (14)     
Operating loss                    (184)             (135)              (46)     
Amortisation and                                                                
depreciation other than                                                         
mining properties,                                                              
mine development costs                                                          
and mine plant facilities          (11)              (10)               (9)     
Employment termination                                                          
and restructuring costs              13             (217)             (154)     
Share-based compensation           (33)              (30)              (11)     
Exploration expenditure            (18)              (16)              (24)     
Loss on sale of                                                                 
investment in Goldfields              -             (372)                 -     
Mark-to-market of listed                                                        
investments                          21                13                 -     
Interest paid                      (96)             (134)             (100)     
Interest received                    52                45                36     
Other (expenses)/income -                                                       
net                                (20)                 9                 1     
(Loss)/gain on financial                                                        
instruments                       (115)               (7)                 1     
Gain/(loss) on foreign                                                          
exchange                             20              (18)               (1)     
Loss on sale of listed                                                          
investments and                                                                 
subsidiaries                          -              (73)                 -     
Profit on                                                                       
Australian-listed                                                               
investments                           -                 -                 4     
Permanent diminution in                                                         
carrying value of ARM                                                           
investment                            -             (337)                 -     
Provision for                                                                   
post-retirement benefits              -              (57)                 -     
Loss before tax                   (371)           (1 339)             (303)     
Current tax - expense                 -             (110)              (17)     
Deferred tax - benefit    (1)        48               338                53     
Net loss                          (323)           (1 111)             (267)     
(1) The change accounting                                                       
policy on capitalisation                                                        
of mine                                                                         
development costs had the                                                       
following effect:                                                               
- Cash operating costs -                                                        
decrease                            137               140               159     
- Amortisation and                                                              
depreciation of mining                                                          
properties,                                                                     
mine development costs                                                          
and mine plant facilities          (71)              (66)              (56)     
- Deferred tax - expenses          (13)              (14)              (19)     
- Net effect of change in                                                       
accounting policy                    53                60                84     
The effects of the change in policy are in the process of being audited.        
The company does not expect any material change to arise from the audit.        
TOTAL OPERATIONS - QUARTERLY FINANCIAL RESULTS (Rand/metric) (unaudited)        
Quarter ended         Quarter ended     Quarter ended    
                       30 September               30 June      30 September     
                               2005                  2005              2004     
                                        (restated)     (r          estated)     
Loss per share -                                                                
cents *                                                                         
- Basic loss                   (82)                 (283)              (83)     
- Headline loss                (86)                  (94)              (88)     
- Fully diluted loss                                                            
** ***                         (82)                 (283)              (83)     
Dividends per share -                                                           
(cents)                                                                         
- Interim                         -                     -                 -     
- Proposed final                  -                     -                 -     
* Calculated on weighted average number of shares in issue at quarter end       
September 2005: 392.3 million (June 2005: 392.2 million) (September 2004: 320.8 
million).                                                                       
** Calculated on weighted average number of diluted shares in issue at quarter  
end September 2005:                                                             
392.3 million (June 2005: 392.2 million) (September 2004: 320.9 million).       
*** The effect of the share options is anti-dilutive.                           
Reconciliation of headline loss:                                                
Net loss                      (323)               (1 111)             (267)     
Adjustments:                                                                    
- Profit on sale of assets     (15)                  (26)              (10)     
- Mark-to-market of listed                                                      
investments                       -                     4                 -     
- Profit on Australian-listed                                                   
investments                       -                      -              (4)     
- Loss on sale and dilution of                                                  
investment in ARM Limited         -                    103                 -    
- Profit on disposal of                                                         
investment Bendigo NL             -                   (30)                 -    
- Loss on disposal of                                                           
investment in Goldfields          -                    372                 -    
- Loss on disposal of                                                           
subsidiaries                      -                      1                 -    
- Impairment of fixed                                                           
assets - net of tax               -                   (19)                 -    
- Diminution in carrying                                                        
value of listed investments       -                    337                 -    
Headline loss                 (338)                  (369)             (281)    
ABRIDGED BALANCE SHEET AT 30 SEPTEMBER 2005 (Rand) (unaudited)                  
                        At 30 September      At 30 June     At 30 September     
2005            2005                2004     
                              R million       R million           R million     
                                             (restated)          (restated)     
ASSETS                                                                          
Non-current assets                                                              
Property, plant and                                                             
equipment                        22 633          22 626              23 519     
Intangible assets                 2 268           2 268               2 268     
Investments                       4 709           4 154               2 795     
                                 29 610          29 048              28 582     
Current assets                                                                  
Inventories                         552             578                 518     
Receivables                         597             632                 401     
Income and mining taxes              27              27                   -     
Cash and cash                                                                   
equivalents                         971           1 830               1 013     
2 147           3 067               1 932     
Total assets                     31 757          32 115              30 514     
EQUITY AND LIABILITIES                                                          
Share capital and                                                               
reserves                                                                        
Issued capital                   25 645          25 645              21 076     
Fair value and other                                                            
reserves                          (257)           (670)               (963)     
Deferred share-based                                                            
compensation                      (215)           (248)               (147)     
(Accumulated                                                                    
loss)/retained earnings         (1 729)         (1 406)               1 438     
23 444          23 321              21 404     
Non-current liabilities                                                         
Long-term borrowings              2 464           2 422               2 801     
Net deferred taxation                                                           
liabilities                       2 128           2 192               2 842     
Net deferred financial                                                          
liabilities                         436             386                 573     
Long-term provisions                938             939                 817     
5 966           5 939               7 033     
Current liabilities                                                             
Payables and accrued                                                            
liabilities                       1 293           1 514               1 448     
Short-term portion of                                                           
long-term borrowings              1 046           1 333                 595     
Income and mining taxes               -               -                  26     
Shareholders for                                                                
dividends                             8               8                   8     
                                  2 347           2 855               2 077     
Total equity and                                                                
liabilities                      31 757          32 115              30 514     
Number of ordinary                                                              
shares in issue             393 341 194     393 341 194         320 819 739     
Net asset value per                                                             
share (cents)                     5 960           5 929               6 672     
The balance sheet at 30 June 2005 is in accordance with the audited balance     
sheet except for the effects of the adoption of IFRS 2, share-based payments,   
and the change in the accounting policy relating to the capitalisation of mine  
development cost.                                                               
CONDENSED STATEMENT OF CHANGES IN EQUITY                                        
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005  (unaudited)                       
                                     Issued     Fair value         Deferred     
                                      share      and other      share-based     
capital       reserves     compensation     
                                  R million      R million        R million     
Balance at 1 July 2005               25 645          (670)            (248)     
Currency translation                                                            
adjustment and other                      -            413                -     
Adoption of IFRS 2,                                                             
share-based payments                      -              -               33     
Net earnings                              -              -                -     
Balance at 30 September 2005         25 645          (257)            (215)     
Balance at 1 July 2004               20 945        (1 186)             (27)     
Currency translation                                                            
adjustment and other                      -            223                -     
Adoption of IFRS 2,                                                             
share-based payments                    131              -            (120)     
Net earnings                              -              -                -     
Dividends paid                            -              -                -     
Balance at                                                                      
30 September 2004 (restated)         21 076          (963)              147     
                                                     Retained                   
                                                     earnings         Total     
R million     R million     
Balance at 1 July 2005                                (1 406)        23 321     
Currency translation                                                            
adjustment and other                                        -           413     
Adoption of IFRS 2,                                                             
share-based payments                                        -            33     
Net earnings                                            (323)         (323)     
Balance at 30 September 2005                          (1 729)        23 444     
Balance at 1 July 2004                                  1 801        21 533     
Currency translation                                                            
adjustment and other                                        -           223     
Adoption of IFRS 2,                                                             
share-based payments                                        -            11     
Net earnings                                             (32)          (32)     
Dividends paid                                          (395)         (395)     
Balance at                                                                      
30 September 2004 (restated)                            1 438        21 404     
                                    Issued      Fair value         Deferred     
                                     share       and other      share-based     
                                   capital        reserves     compensation     
US$ million     US$ million      US$ million     
Balance at 1 July 2005               4 039           (106)             (39)     
Currency translation                                                            
adjustment and other                     -              65                -     
Adoption of IFRS 2,                                                             
share-based payments                     -               -                5     
Net earnings                             -               -                -     
Balance at 30 September 2005         4,039            (41)             (34)     
Balance as 1 July 2004               3 233           (183)              (4)     
Currency translation                                                            
adjustment and other                     -              34                -     
Adoption of IFRS2,                                                              
share-based payments                    21               -             (19)     
Net earnings                             -               -                -     
Dividends paid                           -               -                -     
Balance at                                                                      
30 September 2004 (restated)         3 254           (149)             (23)     
                                                   Retained                     
                                                   earnings           Total     
                                                US$ million     US$ million     
Balance at 1 July 2005                                (221)           3 673     
Currency translation                                                            
adjustment and other                                      -              65     
Adoption of IFRS 2,                                                             
share-based payments                                      -               5     
Net earnings                                           (51)            (51)     
Balance at 30 September 2005                          (272)           3 692     
Balance as 1 July 2004                                  278           3 324     
Currency translation                                                            
adjustment and other                                      -              34     
Adoption of IFRS2,                                                              
share-based payments                                      -               2     
Net earnings                                              5               5     
Dividends paid                                         (61)            (61)     
Balance at                                                                      
30 September 2004 (restated)                            222           3 304     
Balances translated at closing rates of: September 2005: US$1 = R6.35           
(September 2004: US$1 = R6.48).                                                 
SUMMARISED CASH FLOW STATEMENT                                                  
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005 (unaudited)                        
Three            Three     
                                                    months           months     
                                                     ended            ended     
                                              30 September     30 September     
2004             2005     
                                               US$ million      US$ million     
Cash flow from operating activities                                             
Cash utilised by operations                             18             (28)     
Interest and dividends received                          6                8     
Interest paid                                          (9)              (7)     
Income and mining taxes paid                             -                -     
Cash utilised by operating activities                   15             (27)     
Cash flow from investing activities                                             
Net additions to property, plant and                                            
equipment                                             (60)             (54)     
Other investing activities                               -                -     
Cash utilised by investing activities                 (60)             (54)     
Cash flow from financing activities                                             
Long-term loans repaid                                   -             (45)     
Ordinary shares issued - net of expenses                 -                -     
Dividends paid                                        (15)                -     
Cash utilised by financing activities                 (15)             (45)     
Foreign currency translation                                                    
adjustments                                            (1)                4     
Net decrease in cash and equivalents                  (61)            (122)     
Cash and equivalents - 1 July                          217              275     
Cash and equivalents - 30 September                    156              153     
                                                     Three            Three     
months           months     
                                                     ended            ended     
                                              30 September     30 September     
                                                      2005             2004     
R million        R million     
Cash flow from operating activities                                             
Cash utilised by operations                          (184)              115     
Interest and dividends received                         52               36     
Interest paid                                         (47)             (56)     
Income and mining taxes paid                             -                -     
Cash utilised by operating activities                (179)               95     
Cash flow from investing activities                                             
Net additions to property, plant and                                            
equipment                                            (350)            (383)     
Other investing activities                               -                1     
Cash utilised by investing activities                (350)            (382)     
Cash flow from financing activities                                             
Long-term loans repaid                               (295)                -     
Ordinary shares issued - net of expenses                 -                -     
Dividends paid                                           -             (96)     
Cash utilised by financing activities                (295)             (96)     
Foreign currency translation                                                    
adjustments                                           (35)             (17)     
Net decrease in cash and equivalents                 (859)            (400)     
Cash and equivalents - 1 July                        1 830            1 413     
Cash and equivalents - 30 September                    971            1 013     
Operating activities translated at average rates of: September 2005:            
US$1 = R6.50 (September 2004:US$1 = R6.38).                                     
Closing balance translated at closing rates of: September 2005:                 
US$1 = R6.35 (September 2004:US$1 = R6.48).                                     
SUMMARISED CASH FLOW STATEMENT                                                  
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005 (unaudited)                        
Three            Three     
                                                    months           months     
                                                     ended            ended     
                                                   30 June     30 September     
2005             2005     
                                               US$ million      US$ million     
Cash flow from operating activities                                             
Cash utilised by operations                           (16)             (28)     
Interest and dividends received                          7                8     
Interest paid                                         (12)              (7)     
Income and mining taxes paid                           (1)                -     
Cash utilised by operating activities                 (22)             (27)     
Cash flow from investing activities                                             
Cash held by subsidiaries at acquisition                 1                -     
Net proceeds on disposal of listed investments         382                -     
Net additions to property, plant and equipment        (44)             (54)     
Other investing activities                             (2)                -     
Cash (utilised)/generated by investing                                          
activities                                             337             (54)     
Cash flow from financing activities                                             
Long-term loans repaid                                  18             (45)     
Ordinary shares issued - net of expenses               (4)                -     
Dividends paid                                           -                -     
Cash (utilised)/generated by financing                                          
activities                                              14             (45)     
Foreign currency translation adjustments              (16)                4     
Net (decrease)/increase in cash and equivalents        313            (122)     
Cash and equivalents - beginning of quarter           (38)              275     
Cash and equivalents - end of quarter                  275              153     
                                                        Three         Three     
                                                       months        months     
                                                        ended         ended     
30 September       30 June     
                                                         2005          2005     
                                                    R million     R million     
Cash flow from operating activities                                             
Cash utilised by operations                             (184)          (97)     
Interest and dividends received                            52            45     
Interest paid                                            (47)          (77)     
Income and mining taxes paid                                -           (4)     
Cash utilised by operating activities                   (179)         (133)     
Cash flow from investing activities                                             
Cash held by subsidiaries at acquisition                    -             5     
Net proceeds on disposal of listed investments              -         2 362     
Net additions to property, plant and equipment          (350)         (276)     
Other investing activities                                  -          (13)     
Cash (utilised)/generated by investing activities       (350)         2 078     
Cash flow from financing activities                                             
Long-term loans repaid                                  (295)           110     
Ordinary shares issued - net of expenses                    -          (24)     
Dividends paid                                              -           (2)     
Cash (utilised)/generated by financing activities       (295)            84     
Foreign currency translation adjustments                 (35)            34     
Net (decrease)/increase in cash and equivalents         (859)         2 063     
Cash and equivalents - beginning of quarter             1 830         (233)     
Cash and equivalents - end of quarter                     971         1 830     
Operating activities translated at average rates of: September 2005 quarter:    
US$1 = R6.50 (June 2005 quarter: US$1 = R6.41).                                 
Closing balance translated at closing rates of: September 2005:                 
US$1 = R6.35 (June 2005: US$1 = R6.67).                                         
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                  
FOR THE QUARTER ENDED 30 SEPTEMBER 2005                                         
1. Basis of accounting                                                          
     The unaudited results for the quarter have been prepared using accounting  
policies that comply with International Financial Reporting Standards      
     (IFRS). 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, except for   
the adoption of the revised international accounting standards forthcoming 
     from the IAS improvements project and the changes which are described in   
     Note 2 and 3.                                                              
2. New accounting policies adopted                                              
(a) Share-based payments (IFRS 2) On 1 July 2005, the company adopted the  
         requirements of IFRS 2, Share-based Payments. In accordance with the   
         transitional provisions, IFRS 2 has been applied to all grants of      
         equity-settled payments after 7 November 2002 that were unvested as at 
1 January 2005. The company issues equity-settled instruments to       
         certain qualifying employees under an Employee Share Option Scheme to  
         purchase shares in the company"s authorised but unissued ordinary      
         shares. Equity share-based payments are measured at the fair value of  
the equity instruments at the date of the grant. The total fair value  
         of the options granted is recorded as deferred share-based             
         compensation as a separate component of shareholders" equity with a    
         corresponding amount recorded as share premium.The deferred            
share-based compensation is expensed over the vesting period, based on 
         the company"s estimate of the shares that are expected to eventually   
         vest. The company used the binominal option pricing model in           
         determining the fair value of the options granted.                     
The impact of this adjustment on the net loss is an expense of R33     
         million for the September 2005 quarter (June 2005 quarter: R30         
         million) (September 2004 quarter: R11 million).                        
     (b) Determining whether an arrangement contains a lease (IFRIC 4)          
On 1 July 2005, the company applied the requirements of IFRIC 4,       
         Determining whether an arrangement contains a lease. The objective of  
         the interpretation is to determine whether an arrangement contains a   
         lease that falls within the scope of IAS 17, Leases. The lease is then 
accounted in accordance with IAS 17. The application of the            
         interpretation had no impact on the results of the quarter or any      
         prior reporting period.                                                
3. Change in accounting policy                                                  
Capitalisation of mine development cost                                         
Previously mine development costs were capitalised when the reef horizon was    
intersected. Expenditure for all development that will give access to proven    
and probable ore reserves will now be capitalised.                              
Capitalised costs are amortised over the estimated life of the proven and       
probable reserves to which the costs give access.                               
The impact of this adjustment on the net loss is as follows:                    
- A decrease in the cash operating costs of R136 million for the September      
2005 quarter (June 2005 quarter: R140 million) (September 2004 quarter: R159  
  million).                                                                     
CONTACT DETAILS                                                                 
Harmony Gold Mining Company Limited                                             
Corporate Office                                                                
Suite No. 1                                                                     
Private Bag X1                                                                  
Melrose Arch, 2076                                                              
South Africa                                                                    
First Floor                                                                     
4 The High Street                                                               
Melrose Arch, 2196                                                              
Johannesburg                                                                    
South Africa                                                                    
Telephone:   +27 11 684 0140                                                    
Fax:         +27 11 684 0188                                                    
Website: http://www.harmony.co.za                                               
Directors                                                                       
P T Motsepe (Chairman)*                                                         
Z B Swanepoel (Chief Executive)                                                 
F Abbott*, J A Chissano*# ,F Dippenaar, V N Fakude*                             
T S A Grobicki, Dr D S Lushaba*, R P Menell*                                    
M Motloba*, N V Qangule, C M L Savage*                                          
(*non-executive) (# Mozambique)                                                 
Investor Relations                                                              
Ferdi Dippenaar                                                                 
Director: Corporate Affairs                                                     
Telephone:    +27 11 684 0140                                                   
Fax:          +27 11 684 0188                                                   
Cell:         +27 (0) 82 807 3684                                               
E-mail:       ferdi.dippenaar@harmony.co.za                                     
Vusi Magadana                                                                   
Investor Relations Officer                                                      
Telephone:     +27 11 684 0149                                                  
Fax:           +27 11 684 0188                                                  
Cell:          +27 (0) 72 157 5986                                              
E-mail:        vusi.magadana@harmony.co.za                                      
Marian van der Walt                                                             
Company Secretary                                                               
Telephone:   +27 11 411 2037                                                    
Fax:         +27 11 411 2398                                                    
Cell:        +27 (0) 82 888 1242                                                
E-mail:      mvanderwalt@harmony.co.za                                          
South African Share Transfer Secretaries                                        
Ultra Registrars (Pty) Ltd                                                      
PO Box 4844                                                                     
Johannesburg, 2000                                                              
Telephone:    +27 11 832 2652                                                   
Fax:          +27 11 834 4398                                                   
United Kingdom Registrars                                                       
Capita Registrars                                                               
The Registry                                                                    
34 Beckenham Road                                                               
Beckenham                                                                       
Kent BR3 4TU                                                                    
Telephone:    +44 870 162 3100                                                  
Fax:          +44 208 639 2342                                                  
ADR Depositary                                                                  
The Bank of New York                                                            
101 Barclay Street                                                              
New York, NY 10286                                                              
United States of America                                                        
Telephone:   +1888-BNY ADRS                                                     
Fax:         +1 212 571 3050                                                    
Date: 31/10/2005 08:00:39 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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