HAR - Harmony Gold Mining Company Limited - Randfontein transaction Release Date: 24/10/2008 13:08:11 Code(s): HAR
HAR - Harmony Gold Mining Company Limited - Randfontein transaction
HARMONY GOLD MINING COMPANY LIMITED
Incorporated in 1950
Registration number 1950/038232/06
Share code: HAR
NASDAQ, NYSE: HMY
Johannesburg. 24 October 2008. Harmony Gold Mining Company Limited ("Harmony")
announced on 19 December 2007 that its wholly owned subsidiary, Randfontein
Estates Limited ("Randfontein"), had entered into agreements with Pamodzi
Resources Fund 1, LLP. ("PRF"), in terms of which certain uranium and gold
assets of Randfontein ("Cooke Assets") would be sold into a special purpose
vehicle, Rand Uranium (Proprietary) Limited ("Rand Uranium"), for a purchase
consideration of US$420 million. Shareholders` attention is drawn to the initial
announcement of the transaction made on 19 December 2007, containing the details
of the transaction.
The delay in meeting the conditions precedent, Harmony benefiting from the cash
flow during this period and other market-related adjustments has resulted in a
renegotiation of the purchase consideration. A revised purchase consideration of
US$348 million for the Cooke Assets has been agreed. Harmony will receive a
total purchase consideration of US$209 million for 60% of the issued share
capital of Rand Uranium.
The majority of the conditions precedent, including the approvals from the
Minister of Minerals and Energy Affairs and the issuance of a certificate of
registration by the National Nuclear Regulator, have been fulfilled. It is
anticipated that the remaining conditions precedent will be fulfilled on or
before 20 November 2008 and the transaction will become effective, on 21
In exchange for 60% of the issued share capital of Rand Uranium, Harmony will
receive US$40 million on the effective date of the transaction, a further US$157
million, plus interest thereon at 5% per annum, on 22 April 2009 and the balance
of the purchase consideration of approximately US$12 million as soon as the
second stage of the transaction, which relates to its Old Randfontein assets, is
finalised, which is anticipated to be on or shortly after 22 April 2009. PRF`s
investors, affiliates of First Reserve and AMCI Capital, have provided Harmony
with a guarantee in respect of the payment of the above amounts. In addition,
PRF will pledge its shares in Rand Uranium to Harmony as security for PRF`s
obligation to pay the purchase consideration to Harmony.
Since entering into the agreements with PRF, Rand Uranium has been formed as a
stand-alone company, information on the building of a potential uranium plant
has been compiled and consultants have been involved with feasibility,
metallurgical and environmental studies in respect of the extraction of uranium.
Management capacity under the leadership of John Munro has been built up.
Harmony will supply certain corporate services for a limited period and an
agreement has been entered into for milling of the underground ore.
"The dual commodity (gold and uranium) mix should combine to make the Cooke
Assets a viable, low-cost operation. We look forward to a mutually beneficial
partnership with PRF in developing the significant uranium resource base as a
platform for future growth opportunities within the West Rand", said Graham
Briggs, Chief Executive Officer of Harmony.
Issued by Harmony Gold Mining Company Limited
24 October 2008
For more details contact:
Chief Executive Officer
on +27(0)83 265 0274
Marian van der Walt
Executive: Corporate and Investor Relations
on +27(0)82 888 1242
Randfontein Office Park
P O Box 1
South Africa 1796
T +27 (11) 411 2000
For more information on Harmony, please visit www.harmony.co.za
Merrill Lynch South Africa (Proprietary) Limited
Date: 24/10/2008 13:08:11 Supplied by www.sharenet.co.za
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