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Harmony acquires a stake in Western Areas Limited - Financial effects on Harmony

Release Date: 13/03/2006 08:09:00      Code(s): HAR
Harmony acquires a stake in Western Areas Limited - Financial effects on Harmony
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                                    
NASDAQ                                   HMY                                    
London Stock Exchange plc                HRM                                    
Euronext Paris                           HG                                     
Euronext Brussels                        HMY                                    
Berlin Stock Exchange                    HAM1                                   
HARMONY ACQUIRES A STAKE IN WESTERN AREAS LIMITED - FINANCIAL EFFECTS ON HARMONY
Further to the announcement released earlier today, the financial effects on    
Harmony are disclosed below.                                                    
The pro forma financial effects of the acquisition have been prepared for       
illustrative purposes only and are set out below:                               
                                             Column 1     Column 2              
Note    Before the    After the   Change     
                                          acquisition  acquisition      (%)     
                                              (cents)      (cents)              
Earnings per share                    1          (77)         (97)    (31%)     
Headline earnings per share         1,2         (162)        (176)    (10%)     
Net asset value per share             3       (5 853)      (5 853)       0%     
Net tangible asset value per          4       (5 278)      (5 278)       0%     
share                                                                           
Number of shares in issue         394.16                                        
(`million)                                                                      
Weighted average number of        392.60                                        
shares in issue (`million)                                                      
Notes:                                                                          
Column 1 reflects the unaudited earnings and headline earnings per share for the
6 months ended 31 December 2005.  Column 2 reflects the effective earnings and  
headline earnings per share for the 6 months ended 31 December 2005 based on the
following principal assumptions:                                                
* the acquisition was effective 1 July 2005;                                    
* an equity stake of 29.2% was purchased in Western Areas; and                  
* the acquisition was funded using R985m in cash (earning an average            
after tax interest rate of 3.6%) and R1 000m in interest bearing              
  debt at an average after tax interest rate of 6.4%.                           
The Western Areas loss for the 6 month period to December 2005 includes a once- 
off R24m impairment of mining assets and investments attributable to Harmony.   
Column 1 reflects the unaudited net asset value per share at 31 December 2005.  
Column 2 reflects the effective net asset value per share on 31 December 2005   
assuming the transaction was effected on 31 December 2005.                      
Column 1 reflects the unaudited net tangible asset value per share at 31        
December 2005. Column 2 reflects the effective net tangible asset value per     
share on 31 December 2005 assuming the transaction was effected on 31 December  
2005. Assumes an attributable tangible asset value in Western Areas of R1 140m  
to Harmony.                                                                     
The net asset value attributable to Harmony"s holding in Western Areas as at 31 
December 2005 was R1 985m. The net loss after taxation for the 6 months ended 31
December 2005 attributable Harmony"s holding in Western areas was R29m.         
The financial effects have been prepared using accounting policies that comply  
with International Financial Reporting Standards (IFRS). 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 adoption of IFRS 2, Share-based Payments.      
Issued by Harmony Gold Mining Company Limited                                   
Johannesburg                                                                    
10 March 2006                                                                   
For more details contact:                                                       
Bernard Swanepoel                                                               
Chief Executive                                                                 
on +27(0)83 303 9922                                                            
or                                                                              
Philip Kotze                                                                    
Executive, Investor Relations                                                   
on +27(0)83 453 0544                                                            
Investor Relations Officer                                                      
Vusi Magadana                                                                   
Office: +27 11 684 0149                                                         
Mobile: +27(0)72 157 5986                                                       
vusi.magadana@harmony.co.za                                                     
Debt underwriter                                                                
Rand Merchant Bank                                                              
Merchant Bank                                                                   
Rand Merchant Bank Corporate Finance                                            
Transactional sponsor                                                           
Rand Merchant Bank Corporate Finance                                            
Sponsor                                                                         
Merrill Lynch South Africa (Pty) Limited                                        
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: 13/03/2006 08:09:03 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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