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Harmony Gold Mining Company Limited - Firm Intention To Make An Offer

Release Date: 22/06/2006 09:09:01      Code(s): HAR
Harmony Gold Mining Company Limited - Firm Intention To Make An Offer           
Harmony Gold Mining Company Limited                                             
(Incorporated in the Republic of South Africa)                                  
(Registration number 1950/038232/06)                                            
(Share code: HAR)                                                               
(NASDAQ: HMY)                                                                   
NEW YORK STOCK EXCHANGE, INC.: HMY                                              
(ISIN: ZAE000015228)                                                            
("Harmony"                                                                      
FIRM INTENTION TO MAKE AN OFFER TO THE SHAREHOLDERS OF VILLAGE MAIN REEF GOLD   
MINING COMPANY (1934) LIMITED ("Village")                                       
1.   INTRODUCTION                                                               
Village shareholders are referred to the announcement released by Harmony on    
SENS on 21 June 2006 whereby Harmony advised that it had acquired 37.8% of the  
issued ordinary share capital of Village from African Rainbow Minerals Limited  
("ARM") at a purchase price of 20 cents per issued ordinary share in Village    
("Village Shares"). The 37.8% acquired by Harmony comprises 2,292,500 Village   
Shares ("Initial Village Shares").                                              
2.   MANDATORY OFFER                                                            
As Harmony is now the holder of more than 35% of the issued share capital of    
Village it is obliged, in terms of the Securities Regulation Code on Take-overs 
and Mergers and the Rules of the Securities Regulation Panel ("SRP"), to extend 
a mandatory cash offer ("Offer") to the shareholders of Village, other than     
Harmony, to acquire their Village Shares.                                       
3.   RATIONALE                                                                  
Village has been dormant for a number of years.  The Initial Village Shares were
disposed of by ARM as part of its rationalisation process.  Harmony acquired the
initial Village Shares to enhance its strategic positioning.                    
4.   TERMS OF THE OFFER                                                         
The Offer will be made at an offer price of 20 cents per Village Share, being   
the purchase price per Village Share paid by Harmony for the Initial Village    
Shares.                                                                         
Village shareholders are advised that, if Harmony acquires nine-tenths of the   
Village Shares, which it does not already own, under the Offer, it does not     
intend invoking the provisions of section 440K of the Companies Act, 1973 to    
acquire the Village Shares of those Village shareholders who do not accept the  
Offer.                                                                          
5.   CONDITIONS PRECEDENT TO THE OFFER                                          
The implementation of the Offer is subject to the approval of the relevant      
regulatory authorities, including the SRP and the JSE Limited ("JSE").          
6.   DETAILS OF EXISTING HOLDINGS                                               
Other than Harmony"s ownership of the Initial Village Shares, neither Harmony   
nor any person acting in concert with it owns or controls any Village Shares or 
holds any option to purchase Village Shares.                                    
7.   MARKET AND FINANCIAL INFORMATION                                           
Information regarding the price at which Village Shares traded immediately prior
to the announcement released by Harmony on SENS on 21 June 2006 and the         
publication of this announcement, as well as a comparison of the offer price to 
the net asset value and tangible net asset value per Village Share as at 30 June
2005, Village"s financial year end, are set out in the table below.             
                                       Before the   The offer   Change          
Offer(cents  price       %               
                                       per share)   (cents per                  
                                                    share)                      
     Market price on 20 June 2006      55.01        20.0        (63.6)          
30-day volume-weighted average    55.02        20.0        (63.6)          
     price to 20 June 2006                                                      
     Market price on 21 June 2006      60.03        20.0        (66.7)          
     30-day volume-weighted average    57.54        20.0        (65.2)          
price up to 21 June 2006                                                   
     Net asset value                   34.05        20.0        (41.1)          
     Net tangible asset value          34.05        20.0        (41.1)          
Notes:                                                                          
1.   Closing price of Village Shares on the JSE on Tuesday, 20 June 2006, being 
the last trading day preceding the announcement released by Harmony on SENS.    
2.   Volume-weighted average price at which Village Shares traded on the JSE for
the 30 trading days up to and including Tuesday, 20 June 2006, being the last   
trading day preceding the announcement released by Harmony on SENS.             
3.   Closing price of Village Shares on the JSE on Wednesday, 21 June 2006,     
being the last trading day preceding the publication of this announcement.      
4.   Volume-weighted average price at which Village shares traded on the JSE for
the 30 trading days up to and including Wednesday, 21 June 2006, being the last 
trading day preceding the publication of this announcement.                     
5.   Audited net asset value and net tangible asset value per share at 30 June  
2005.                                                                           
8.   CONFIRMATION OF FUNDS                                                      
It has been confirmed, to the satisfaction of the SRP, that Harmony has         
sufficient resources to discharge its obligations under the Offer.              
9.   DOCUMENTATION                                                              
A circular providing further information on the Offer and containing, inter     
alia, a form of acceptance and surrender will be posted to Village shareholders 
in due course.                                                                  
Randfontein                                                                     
22 June 2006                                                                    
Attorneys to Harmony                                                            
Cliffe Dekker                                                                   
Sponsor to Harmony                                                              
Merrill Lynch South Africa (Pty) Limited                                        
Date: 22/06/2006 09:09:11 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                                             
                                                                                
                                                                                
                                                                                



                                        
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