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HAR - Harmony Gold Mining Company Limited - Review for second quarter and

Release Date: 02/02/2007 08:00:04      Code(s): HAR
    HAR - Harmony Gold Mining Company Limited - Review for second quarter and   
                                                 six-month interim period ended 
                                                 31 December 2006               
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                                          
    Review for second quarter and six-month interim period ended 31 December    
    2006                                                                        
    QUARTERLY Operating and Financial Results (Rand/Metric) (unaudited)         
Underground production - South Africa                                       
                                                        Quality       Growth    
                                                         Ounces     Projects    
    Ore Milled                - t`000       Dec-06        1 561          399    
Sep-06        1 665          398    
    Gold Produced                - kg       Dec-06        7 953        2 228    
                                            Sep-06        9 392        1 842    
    Yield                   - g/tonne       Dec-06         5.09         5.58    
Sep-06         5.64         4.63    
    Cash Operating Costs       - R/kg       Dec-06       99 318      106 782    
                                            Sep-06       81 992      123 439    
    Cash Operating Costs    - R/tonne       Dec-06          506          596    
Sep-06          463          571    
    Working Revenue         - (R`000)       Dec-06    1 147 318      322 362    
                                            Sep-06    1 350 838      264 626    
    Cash Operating Costs    - (R`000)       Dec-06      789 877      237 910    
Sep-06      770 067      227 374    
    Cash Operating Profit   - (R`000)       Dec-06      357 441       84 452    
                                            Sep-06      580 771       37 252    
    Capital Expenditure     - (R`000)       Dec-06      178 951      189 203    
Sep-06      179 183      193 000    
                                                                                
                                                      Leveraged                 
                                                         Ounces    Sub-total    
Ore Milled                - t`000       Dec-06        1 401        3 361    
                                            Sep-06        1 288        3 351    
    Gold Produced                - kg       Dec-06        5 885       16 066    
                                            Sep-06        5 497       16 731    
Yield                   - g/tonne       Dec-06         4.20         4.78    
                                            Sep-06         4.27         4.99    
    Cash Operating Costs       - R/kg       Dec-06      109 427      104 056    
                                            Sep-06      117 741       98 302    
Cash Operating Costs    - R/tonne       Dec-06          460          497    
                                            Sep-06          503          491    
    Working Revenue         - (R`000)       Dec-06      847 812    2 317 492    
                                            Sep-06      788 244    2 403 708    
Cash Operating Costs    - (R`000)       Dec-06      643 976    1 671 763    
                                            Sep-06      647 225    1 644 666    
    Cash Operating Profit   - (R`000)       Dec-06      203 836      645 729    
                                            Sep-06      141 019      759 042    
Capital Expenditure     - (R`000)       Dec-06      101 355      469 509    
                                            Sep-06       91 164      463 347    
                                                                                
    Quality Ounces     - Evander shafts, Randfontein Cooke shafts, Target,      
Tshepong, Masimong                                     
    Growth Projects    - Doornkop shaft and South Reef Project, Elandsrand      
    shaft                                                                       
                         and New Mine Project, Phakisa shaft, Tshepong Decline  
Project                                                
    Leveraged Ounces   - Bambanani, Joel, West, St Helena 8, Harmony 2,         
                         Merriespruit 1 and 3, Unisel, Brand 3 and Orkney 2, 4  
                         and 7.                                                 
QUARTERLY OPERATING AND FINANCIAL RESULTS (Rand/Metric) (unaudited)         
                                                                                
                                                  South Africa South Africa     
                                                       Surface        Total     
Ore Milled              - t`000      Dec-06          1 097        4 458     
                                         Sep-06            905        4 256     
    Gold Produced              - kg      Dec-06            770       16 836     
                                         Sep-06            692       17 423     
Yield                 - g/tonne      Dec-06           0.70         3.78     
                                         Sep-06           0.76         4.09     
    Cash Operating Costs    - R/kg       Dec-06         79 000      102 910     
                                         Sep-06         95 750       98 199     
Cash Operating Costs  - R/tonne      Dec-06             55          389     
                                         Sep-06             73          402     
    Working Revenue       - (R`000)      Dec-06        110 451    2 427 943     
                                         Sep-06        105 010    2 508 718     
Cash Operating Costs  - (R`000)      Dec-06         60 830    1 732 593     
                                         Sep-06         66 259    1 710 925     
    Cash Operating Profit - (R`000)      Dec-06         49 621      695 350     
                                         Sep-06         38 751      797 793     
Capital Expenditure   - (R`000)      Dec-06            769      470 278     
                                         Sep-06          1 159      464 506     
                                                                                
                                                  Australia        Harmony      
Total          Total      
    Ore Milled              - t`000       Dec-06         777          5 235     
                                          Sep-06         799          5 055     
    Gold Produced              - kg       Dec-06       1 888         18 724     
Sep-06       2 049         19 472     
    Yield                 - g/tonne       Dec-06        2.43           3.58     
                                          Sep-06        2.56           3.85     
    Cash Operating Costs     - R/kg       Dec-06     115 024        104 132     
Sep-06      91 914         97 538     
    Cash Operating Costs  - R/tonne       Dec-06         279            372     
                                          Sep-06         236            376     
    Working Revenue       - (R`000)       Dec-06     277 089      2 705 032     
Sep-06     281 490      2 790 208     
    Cash Operating Costs  - (R`000)       Dec-06     217 166      1 949 759     
                                          Sep-06     188 331      1 899 256     
    Cash Operating Profit - (R`000)       Dec-06      59 923        755 273     
Sep-06      93 159        890 952     
    Capital Expenditure   - (R`000)       Dec-06     100 974        571 252     
                                          Sep-06     112 770        577 276     
                                                                                
Total Operations - Quarterly Financial Results (Rand/metric) (unaudited)    
                                                                                
                                      Quarter ended Quarter ended Quarter ended 
                                        31 December  30 September   31 December 
2006          2006          2005 
    Ore milled           - t`000              5 235         5 055         4 857 
    Gold produced        - kg                18 724        19 472        20 316 
    Gold price received  - R/kg             144 467       143 283       102 333 
Cash operating costs - R/kg             104 132        97 538        83 154 
                                                                                
                                          R million     R million     R million 
    Revenue                                   2 705         2 790         2 079 
Cash operating costs                      1 950         1 899         1 690 
    Cash operating profit                       755           891           389 
    Amortisation and depreciation of                                            
    mining properties,                                                          
mine development costs and mine                                             
    plant facilities                          (287)         (308)         (249) 
    Corporate, administration and                                               
    other expenditure                          (62)          (59)          (72) 
Provision for rehabilitation costs          (3)           (2)           (2) 
    Operating profit                            403           522            66 
    Amortisation and depreciation,                                              
    other than mining                                                           
properties, mine development costs                                          
    and mine plant facilities                  (16)          (17)          (10) 
    Employment termination and                                                  
    restructuring costs                           -             -          (15) 
Care and maintenance costs                 (19)          (20)          (27) 
    Share-based compensation                   (14)          (12)          (27) 
    Exploration expenditure                    (60)          (41)          (32) 
    Profit on sale of investment in                                             
Gold Fields                                   -             -           306 
    Marked-to-market of listed                                                  
    investments                                  27            24            22 
    Interest paid                             (103)          (95)          (98) 
Interest received                            42            39            48 
    Other expenses income/(expenses) - net     (36)            15          (29) 
    Gain/(loss) on financial instruments         17            18         (183) 
    Loss on sale of listed investments                                          
and subsidiaries                              -             1             - 
    Profit/(loss) from associates                30          (48)             - 
    Profit on sale of property,                                                 
    plant and equipment                          73            13            12 
Profit on sale of investment                                                
    in associate                                236             -             - 
    Profit before tax                           580           399            33 
    Current tax - expense                         -             -           (4) 
Deferred tax - expense                    (112)         (122)           (5) 
    Net profit                                  468           277            24 
    Loss per share - cents                                                      
    - Basic earnings                            118            70             6 
- Headline earnings/(loss)                   44            66          (75) 
    - Fully diluted earnings ** ***             116            69             6 
    Dividends per share - (cents)                                               
    - Interim                                     -             -             - 
- Proposed final                              -             -             - 
    * Calculated on weighted average                                            
    number of shares in issue at                                                
    quarter-end December 2006:                                                  
397.7 million (September 2006:                                              
    396.8 million) (December 2005:                                              
    392.7 million).                                                             
    ** Calculated on weighted average                                           
number of diluted shares in issue                                           
    at quarter-end December 2006:                                               
    403.7 million (September 2006:                                              
    402.9 million) (December 2005:                                              
398.5 million).                                                             
    *** The effect of the share options                                         
    is anti-dilutive.                                                           
    Reconciliation of headline                                                  
profit/(loss):                                                              
    Net profit                                  468           277            24 
    Adjustments:                                                                
    - Profit on sale of assets                 (73)          (13)          (12) 
- Profit on sale of GBS investment            -           (1)             - 
    - Loss on disposal of Sangold                                               
    investment                                    -             -             1 
    - Profit on disposal of investment                                          
in Gold Fields                                -             -         (306) 
    - Profit on sale of Western Areas                                           
    investment                                (220)             -             - 
    Headline profit/(loss)                      175           263         (293) 

    Total Operations - Year to Date Financial Results (Rand/metric) (unaudited) 
                                              Year to date         Year to date 
                                          31 December 2006     31 December 2005 

    Ore milled             - t`000                  10 290                9 457 
    Gold produced          - kg                     38 196               39 535 
    Gold price received    - R/kg                  143 863               97 256 
Cash operating costs   - R/kg                  100 770               84 406 
                                                                                
                                                 R million            R million 
    Revenue                                          5 495                3 845 
Cash operating costs                             3 849                3 337 
    Cash operating profit                            1 646                  508 
    Amortisation and depreciation of                                            
    mining properties,                                                          
mine development costs and mine plant                                       
    facilities                                       (595)                (493) 
    Corporate, administration and other                                         
    expenditure                                      (121)                (128) 
Provision for rehabilitation costs                 (5)                  (5) 
    Operating profit/(loss)                            925                (118) 
    Amortisation and depreciation, other                                        
    than mining                                                                 
properties, mine development costs                                          
    and mine plant facilities                         (33)                 (21) 
    Employment termination and                                                  
    restructuring costs                                  -                  (2) 
Care and maintenance costs                        (39)                 (27) 
    Share-based compensation                          (26)                 (57) 
    Exploration expenditure                          (101)                 (50) 
    Profit on sale of investment in Gold                                        
Fields                                               -                  306 
    Marked-to-market of listed investments              51                   43 
    Interest paid                                    (198)                (194) 
    Interest received                                   81                  100 
Other expenses - net                              (21)                 (42) 
    Gain/(loss) on financial instruments                35                (298) 
    Loss on foreign exchange                             -                  (1) 
    Loss on sale of listed investments                                          
and subsidiaries                                     1                  (1) 
    Loss from associates                              (18)                    - 
    Profit on sale of property, plant and                                       
    equipment                                           86                   27 
Profit on sale of investment in                                             
    associate                                          236                    - 
    Profit/(loss) before tax                           979                (335) 
    Current tax - expense                                -                  (4) 
Deferred tax - (expense)/benefit                 (234)                   43 
    Net profit/(loss)                                  745                (296) 
    Earnings/(loss) per share - cents *                                         
    - Basic earnings/(loss)                            188                 (77) 
- Headline earnings/(loss)                         110                (160) 
    - Fully diluted earnings/(loss)** ***              185                 (77) 
    Dividends per share - (cents)                                               
    - Interim                                            -                    - 
- Proposed final                                     -                    - 
    * Calculated on weighted average                                            
    number of shares                                                            
    in issue for six months to December                                         
2006: 397.3 million                                                         
    (December 2005: 392.6 million).                                             
    ** Calculated on weighted average                                           
    number of diluted shares                                                    
in issue for six months to December                                         
    2006: 402.9 million                                                         
    (December 2005: 396.7 million).                                             
    *** The effect of the share options                                         
is anti-dilutive.                                                           
    Reconciliation of headline                                                  
    profit/(loss):                                                              
    Net profit/(loss)                                  745                (296) 
Adjustments:                                                                
    - Profit on sale of assets                        (86)                 (27) 
    - Profit on sale of GBS Gold                                                
    International investment                           (1)                    - 
- Loss on disposal of Sangold                                               
    investment                                           -                    1 
    - Profit on disposal of investment in                                       
    Gold Fields                                          -                (306) 
- Profit on sale of Western Areas                                           
    investment                                       (220)                    - 
    Headline profit/(loss)                             438                (628) 
                                                                                
ABRIDGED BALANCE SHEET AT 31 DECEMBER 2006 (Rand)                           
                                                                                
                                           At              At                At 
                                  31 December    30 September       31 December 
2006            2006              2005 
                                    R million       R million         R million 
                                  (unaudited)     (unaudited)       (unaudited) 
    Assets                                                                      
Non-current assets                                                          
    Property, plant and equipment      23 973          23 849            22 735 
    Intangible assets                   2 270           2 270             2 268 
    Investment financial assets         4 440           2 306             2 111 
Investments in associates               -           1 860                 - 
    Trade and other receivables            92              82                80 
                                       30 775          30 367            27 194 
    Current assets                                                              
Inventories                           742             730               560 
    Trade and other receivables           934             871               744 
    Income and mining taxes                28              25                24 
    Cash and cash equivalents             904             868             2 914 
2 608           2 494             4 242 
    Total assets                       33 383          32 861            31 436 
    Equity and liabilities                                                      
    Share capital and reserves                                                  
Share capital                      25 588          25 521            25 334 
    Other reserves                      (186)            (88)             (578) 
    Accumulated loss                  (1 270)         (1 738)           (1 677) 
                                       24 132          23 695            23 079 
Non-current liabilities                                                     
    Borrowings                          2 687           2 637             2 506 
    Net deferred taxation                                                       
    liabilities                         2 541           2 449             2 122 
Deferred financial instruments        484             609               498 
    Provisions for other                                                        
    liabilities and charges               984           1 009               943 
                                        6 696           6 704             6 069 
Current liabilities                                                         
    Trade and other payables            1 245           1 184               892 
    Accrued liabilities                   301             264               309 
    Borrowings                          1 001           1 006          1    079 
Shareholders for dividends              8               8                 8 
                                        2 555           2 462           2   288 
    Total equity and liabilities       33 383          32 861          31   436 
    Number of ordinary shares in                                                
issue                         398 678 495     397 549 945       394 161 367 
    Net asset value per share                                                   
    (cents)                             6 053           5 960           5   853 
                                                                                
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED           
    31 DECEMBER 2006 (Rand) (unaudited)                                         
                                      Issued share     Other  Retained          
                                         capital  reserves  earnings      Total 
R million R million R million  R million 
    Balance at 1 July 2006                25 489     (271)   (2 015)     23 203 
    Issue of share capital                    99                             99 
    Currency translation adjustment                                             
and other                                          85                    85 
    Net earnings                                                 745        745 
    Balance at 31 December 2006           25 588     (186)   (1 270)     24 132 
    Balance at 1 July 2005                25 289     (587)   (1 381)     23 321 
Issue of share capital                    45                             45 
    Currency translation adjustment                                             
    and other                                           9                     9 
    Net loss                                                   (296)      (296) 
Balance at 31 December 2005           25 334     (578)   (1 677)     23 079 
                                                                                
    SUMMARISED CASH FLOW STATEMENT FOR THE PERIOD ENDED                         
    31 DECEMBER 2006 (Rand) (unaudited)                                         
Six       Six                     
                                           months    months   Quarter   Quarter 
                                            ended     ended     ended     ended 
                                               31        31        31        30 
December  December  December September 
                                             2006      2005      2006      2006 
                                        R million R million R million R million 
    Cash flow from operating activites                                          
Cash generated/(utilised) by                                                
    operations                                958     (320)       487       471 
    Interest and dividends received            81       100        42        39 
    Interest paid                            (95)      (94)      (50)      (45) 
Income and mining taxes paid              (6)       (2)       (6)         - 
    Cash generated/(utilised) by                                                
    operating activities                      938     (316)       473       465 
    Cash flow from investing activities                                         
Net proceeds on disposal of                                                 
    listed investments                         30     2 461         -        30 
    Net additions to property, plant                                            
    and equipment                         (1 058)     (786)     (497)     (562) 
Other investing activities               (14)         4      (15)         - 
    Cash (utilised)/generated by                                                
    investing activities                  (1 042)     1 679     (512)     (532) 
    Cash flow from financing activities                                         
Long-term loans repaid                    (1)     (295)         -         - 
    Ordinary shares issued - net of                                             
    expenses                                   98        45        66        32 
    Dividends paid                              -         -         -         - 
Cash generated/(utilised) by                                                
    financing activities                       97     (250)        66        32 
    Foreign currency translation                                                
    adjustments                                 5      (29)         9       (3) 
Net (decrease)/increase in cash                                             
    and equivalents                           (2)     1 084        36      (38) 
    Cash and equivalents - beginning of                                         
    period                                    906     1 830       868       906 
Cash and equivalents - end of period      904     2 914       904       868 
                                                                                
    NOTES TO THE RESULTS FOR THE QUARTER ENDED 31 DECEMBER 2006 (unaudited)     
    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.               
                                                                                
    2. Commodity contracts                                                      

    The Harmony Group`s outstanding commodity contracts against future          
    production, by type at 31 December 2006 are indicated below. The total net  
    delta of the hedge book at 31 December 2006 was 229 636oz (7 143kg).        
30 June     30 June     30 June             
    Year                               2007        2008        2009       Total 
    Australian                                                                  
    Dollar Gold:                                                                
Forward contracts  Kilograms        933       3 110       3 110       7 153 
                       Ounces        30 000     100 000     100 000     230 000 
                       A$ per oz        518         518         518         518 
    Total commodity                                                             
contracts          Kilograms        933       3 110       3 110       7 153 
                       Ounces        30 000     100 000     100 000     230 000 
    Total net gold **  Delta (kg)       933       3 108       3 102       7 143 
                       Delta (oz)    29 995      99 923      99 718     229 636 

    ** The Delta of the hedge position indicated above, is the equivalent gold  
    position that would have the same marked-to-market sensitivity for a small  
    change in the gold price.                                                   
These contracts are classified as speculative and the                       
    marked-to-market movement is reflected in the income statement.             
    The marked-to-market movement for the quarter of these contracts was a      
    positive R100.5 million (positive US$13.7 million) at 31 December 2006 (at  
30 September 2006: positive R73 million or positive US$10 million).         
    Harmony closed out a further 62 000oz of forward positions during the       
    quarter. 20 000oz of these closed positions, together with 30 000oz of      
    closed positions from last quarter were settled during the quarter ended 31 
December 2006 at a cost of R82.9 million (US$11.8 million). The additional  
    42 000oz closed out during the quarter will be settled during the next      
    quarter ending 31 March 2007. During the quarter ended 30 September 2006,   
    Harmony settled 25 000oz of the forward contracts at a cost of R41 million  
(US$5.8 million).                                                           
    The marked-to-market value of the hedge book was a negative A$87.3 million  
    on 31 December 2006 (at 30 September 2006: negative A$105.1 million). The   
    values at 31 December 2006 were based on a gold price of US$634 (A$801) per 
ounce, exchange rates of US$1/R7.0375 and A$1/US$0.79 and prevailing market 
    interest rates and volatilities at that date. These valuations were         
    provided by independent risk and treasury management experts.               
    At 24 January 2007, the marked-to-market value of the hedge book was a      
negative A$91.6 million (negative US$71.6 million), based on a gold price   
    of US$643 (A$822) per ounce, exchange rate of A$1/US$0.78 and prevailing    
    market interest rates at that time.                                         
    These marked-to-market valuations are not predictive of the future value of 
the hedge position, nor of the future impact on the revenue of the company. 
    The valuation represents the cost of buying all hedge contracts at the time 
    of the valuation, at market prices and rates available at the time.         
    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*,                                                   
    Dr D S Lushaba*, F T De Buck*, M Motloba*,                                  
    N V Qangule, C M L Savage*                                                  
(*non-executive) (Mozambique)                                               
                                                                                
    Investor Relations                                                          
                                                                                
Amelia Soares                                                               
    Investor Relations Manager                                                  
    Telephone:                 +27 11 684 0146                                  
    Fax:                       +27 11 684 0188                                  
Cell:                  +27 (0) 82 654 9241                                  
    E-mail:        amelia.soares@harmony.co.za                                  
                                                                                
    Lizelle du Toit                                                             
Investor Relations Officer                                                  
    Telephone:                 +27 11 684 0149                                  
    Fax:                       +27 11 684 0188                                  
    Cell:                  +27 (0) 82 465 1244                                  
E-mail:       lizelle.dutoit@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:    marian.vanderwalt@harmony.co.za                                  

    South African Share Transfer Secretaries                                    
                                                                                
    Link Market Services South Africa (Proprietary) Limited                     
(Registration number 2000/007239/07)                                        
    5th Floor, 11 Diagonal Street                                               
    Johannesburg, 2001                                                          
    South Africa                                                                
PO Box 4844                                                                 
    Johannesburg, 2000                                                          
    South Africa                                                                
    Telephone:                 +27 11 832 2652                                  
Fax:                       +27 11 834 4398                                  
                                                                                
    United Kingdom Registrars                                                   
                                                                                
Capita Registrars                                                           
    The Registry                                                                
    34 Beckenham Road                                                           
    Beckenham                                                                   
Kent BR3 4TU                                                                
    United Kingdom                                                              
    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                                  
                                                                                
    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                                  
    Issuer code                           HAPS                                  

    Registration number 1950/038232/06                                          
    Incorporated in the Republic of South Africa                                
    ISIN: ZAE000015228                                                          
Date: 02/02/2007 08:00:03 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  



                                        
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