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HAR - Harmony Gold Mining Company - Financial Review For The Third Quarter And

Release Date: 08/05/2009 08:00:06      Code(s): HAR
HAR - Harmony Gold Mining Company - Financial Review For The Third Quarter And  
                                  Nine Months Ended 31 March 2009               
Harmony Gold Mining Company Limited                                             
Incorporated in the Republic of South Africa                                    
Registration Number 1950/038232/06                                              
("Harmony" or "Company")                                                        
JSE Share code: HAR                                                             
NYSE Share code: HMY                                                            
ISIN Code: ZAE000015228                                                         
Financial review for the third quarter and nine months ended 31 March 2009      
Quarter at a glance                                                             
* Continue to be safety conscious                                               
* Achieved zero net debt                                                        
* Headline earnings up by 5%                                                    
* Strong cash flow, with cash operating profit at R1.2 billion                  
* Five years of accumulated losses reversed                                     
* Capital expenditure reduced, as predicted                                     
* Elandsrand: both production and cash operating cost (R/kg) results have       
improved                                                                        
* Target: improved production and cash operating cost (R/kg) results            
* 3% decline in total gold production                                           
* 2% increase in cash operating costs (R/kg)                                    
Financial summary for the third quarter                                         
ended 31 March 2009                                                             
                             Quarter      Quarter                  Quarter      
                               March     December       Q-on-Q       March      
                                2009         2008     variance        2008      
Gold produced     - kg         10 880       11 267       (3,4%)      10 133     
                 - oz        349 801      362 242       (3,4%)     325 783      
Cash costs        - R/kg      171 361      168 299       (1,8%)     147 097     
                 - $/oz          537          527       (1,9%)         624      
Gold sold         - kg         10 247       12 415      (17,5%)      10 347     
                 - oz        329 447      399 150      (17,5%)     332 663      
Cash operating                                                                  
profit            - Rm          1 176        1 113         5,7%         817     
- US$m          118          112         5,4%         110      
Basic profit      - SAc/s         231          324      (28,7%)          86     
                 - USc/s          23           33      (30,3%)          12      
Headline profit   - SAc/s         123          121         1,7%          63     
- USc/s          12           12            -           8      
Harmony`s Annual Report, Notice of Meeting, Sustainable Development Report and  
its Annual Report filed on a Form 20F with the United States` Securities and    
Exchange Commission for the year ended 30 June 2008 are available on our        
website at www.harmony.co.za.                                                   
Chief Executive Officer`s Review                                                
"Harmony is financially healthy. We have delivered on our promise to reduce our 
debt, preserve cash and position the company to become net debt-free. Our       
shareholders have invested in an uncomplicated, safety-conscious company with a 
strong cash flow, growing pipeline, a steady margin, completely unhedged and    
geared for gold bulls."                                                         
                                     Graham Briggs, Chief Executive Officer     
Overview                                                                        
A number of initiatives have been implemented to address safety, throughput,    
grade, production, costs and Harmony`s financial position.                      
We have made excellent progress with safety, achieving improved safety rates    
and receiving safety awards. We continue to drive our behaviour-based safety    
programme, which is aimed at changing the attitudes and mindsets of all within  
the company on and off the mines.                                               
We have taken cognisance of the Presidential Mine Safety Audit report that was  
released in February 2009 and will continue to address safety in a pro-active   
manner. Only safe production within Harmony is rewarded.                        
Strategic planning for the financial year 2009/2010 began during the past       
quarter. Harmony`s executive management met in February 2009 to address how to  
further improve safety, how production targets would be achieved and            
maintained, and how sustainable profits would be generated. Planning parameters 
have been agreed and shaft strategic plans will be signed off in July 2009. Our 
planning has been done at a gold price of R225 000/kg, leaving Harmony with a   
reasonably strong margin.                                                       
Safety                                                                          
We are deeply saddened by the deaths of three of our colleagues. We extend our  
heartfelt condolences to their families, friends and team members.              
Those who died were: Mziwabantu Bondlani, a driller at Elandsrand;              
-    Zolane Maboza, a miner at Tshepong, and Patrick Mabitsoa, a loco driver at 
Masimong.                                                                       
Year on year, the Fatality Injury Frequency Rate (FIFR) deteriorated by 30%     
quarter on quarter (from 0.10 to 0.13) as a result of the three fatalities.     
Despite the deterioration, all our other rates have improved and we have seen   
significant safety achievements from most of our operations. Quarter on quarter 
the Lost Time Injury Frequency Rate (LTIFR) and the Reportable Injury Frequency 
Rate improved.                                                                  
The aforementioned deterioration in our FIFR is, of course, a cause of          
considerable concern to us. Detailed investigation of recent fatalities         
indicates that falls of ground (FOG) - both gravity and seismicity induced -    
and trucks and tramming are the primary causes.                                 
This finding has prompted a number of interventions. A safety workshop on 2     
April 2009 focused on FOG prevention and on safer trucks and tramming           
operations, amongst other safety- and health- related matters.                  
In respect of FOG prevention, it has been decided to: adopt the Mine            
Occupational Safety and Health entry examination process in terms of which      
entire crews sign safe work declarations; introduce FOG committees at all       
operations; investigate the use of netting and/or mesh in development ends;     
enforce effective use of rock bolting; and investigate mechanisation prospects  
- specifically remote drilling - to remove workers from potential hazard        
situations.                                                                     
To effect safer trucks and tramming operations, we are: investigating the       
implementation an anti-collision warning system; completing and implementing    
the Department of Minerals and Energy`s Rail-bound Equipment Code of Practice.  
Production and costs                                                            
In the past quarter, most of the shafts experienced a slow start-up after the   
Christmas break. While underground volumes decreased, grade remained static,    
resulting in a marginal decrease in gold production.                            
Quality training, development programmes, a motivating climate, disciplined     
mining, team-building initiatives to improve team work, pro- active human       
resources policies and practices, and improved logistics have all been          
implemented to address productivity. We believe that improved productivity will 
result in increased production and lower costs. Some mines have already shown   
improvement, but it will take some time before all our mines are performing at  
the desired levels.                                                             
Harmony`s operating costs for the quarter declined due mainly to lower          
production and, to a limited extent, the drop in prices of consumables. The     
R/kg costs were slightly higher due to lower production.                        
Gold market                                                                     
The past quarter saw the gold price at record highs, at levels above R300       
000/kg and US$900/oz. Gold has become a currency rather than a commodity - a    
good reason for us to remain bullish about the gold price. We believe that the  
uncertainty in world-wide markets will support a stronger gold price. Gold      
remains a safe investment, as can be seen with ETF funds continuing to increase 
their gold stockpile and from China`s recent announcement that it has increased 
its gold reserves by 75%.                                                       
We have been a gold producer for the past 60 years and we believe that we have  
the correct mix of assets to benefit from stronger gold prices. Harmony is      
well-leveraged against the gold price with no hedging and an uncomplicated      
structure, and we are working towards increasing gold production to benefit     
from the higher gold prices.                                                    
Debt position                                                                   
Harmony sold 60% of certain uranium and gold assets of Randfontein Estates      
Limited (a wholly-owned subsidiary of Harmony) to Pamodzi Resources Fund 1 LLP  
("PRF"). The uranium and gold assets were sold into a company, Rand Uranium     
(Proprietary) Limited ("Rand Uranium"), for a purchase consideration of US$348  
million. Harmony retains 40% of Rand Uranium`s shareholding and in exchange for 
60% of the issued share capital of Rand Uranium, Harmony would receive US$209   
million. PRF paid the first tranche of US$40 million in November 2008. The      
second tranche of US$169 million, plus interest thereon at 5% per annum, was    
payable in April 2009. Shareholders` attention is drawn to various              
announcements made relating to the transaction on 19 December 2007, 24 October  
2008 and 21 November 2008.                                                      
On 20 April 2009 PRF paid approximately US$172 million to Harmony as final      
payment in terms of the Rand Uranium transaction. We are excited about the      
future of Rand Uranium and look forward to sharing in Rand Uranium`s success,   
together with PRF and its investors, First Reserve Corporation and AMCI         
Capital.                                                                        
We have completed our planned capital raising, exploiting favourable market     
conditions by issuing a second tranche of shares for cash in the open market,   
pursuant to our mandate given by shareholders at the Annual General Meeting.    
In the capital raising, 7 540 646 shares were placed between 10 February 2009   
and 6 March 2009 at an average subscription price of R124.45, raising R938      
million before costs. The average issue price compares favourably with the      
weighted average share price on the JSE over the same period of R122.75 per     
share. The number of shares issued is equivalent to 1,9% of Harmony`s issued    
share capital as at 30 September 2008. Combined with the share issue announced  
in December 2008, the cumulative shares issued amounts to R1.9 billion or 4,5%  
of the issued share capital. To date, the total number of shares in issue is    
425 763 329. The cost of the second placement was approximately R15 million or  
1,6% of the value of the shares issued.                                         
JP Morgan Equities Limited acted as transaction advisor.                        
The combined effect of the above is that Harmony is net debt free.              
The proceeds from the capital raising and the Rand Uranium transaction,         
totalling R2.7 billion, will be used to repay Harmony`s convertible bond due in 
May 2009 and its short-term debt, leaving a positive cash balance of            
approximately R1.6 billion.                                                     
Class action                                                                    
During January 2009, the Plaintiff filed with the Court an Amended Complaint.   
The company has filed a Motion to Dismiss that Amended Complaint, and the       
Plaintiff has filed an opposition to that Motion. The company will be filing a  
Reply Memorandum in further support of its Motion. It is not possible to        
predict with certainty when the Court will rule on the Motion, but we would     
estimate that such a decision will be made within the next six months.          
Mergers and acquisitions                                                        
We continue conducting due diligences but have not identified available assets  
which could potentially increase the quality of our own asset base.             
Royalty payment delayed                                                         
In February 2009 the National Treasury announced that the implementation of a   
mining royalty would be delayed by 10 months, taking into account the potential 
impact of the economic slowdown on the mining industry.                         
Looking forward                                                                 
Harmony is in excellent financial health with a strong balance sheet,           
reflecting the benefits of the various remedial measures taken in the past 18   
months.                                                                         
Our strategic plans support our target of achieving 2.2 million ounces in 2012. 
Phakisa, Doornkop and Elandsrand will be in full production in 2012 and higher  
grades from the Tshepong Decline, the Bambanani shaft pillar and the Evander 8  
Decline are expected. We continue to focus on creating a better understanding   
of Harmony`s orebodies through exploration drilling and development, our        
interpretation of the geology, building credible geological models and          
formulating clear development strategies.                                       
Construction of the Hidden Valley gold mine in Papua New Guinea has progressed  
well and the mine will be commissioned mid-2009. Final commissioning of the     
overland conveyor in September 2009 will mean that both Hidden Valley ore and   
ore from the Hamata pit will be processed through the metallurgical plant,      
adding to production volumes.                                                   
The Evander South project and the St Helena tailings project in the Free State  
provide us with exciting organic growth opportunities to take us to greater     
levels of production post-2012.                                                 
We have positioned the company in such a way that we are able to deliver on our 
promise of paying a dividend in future. Our focus now remains on achieving our  
overall targets and delivering consistent results.                              
Chief Executive Officer                                                         
Graham Briggs                                                                   
CONDENSED CONSOLIDATED INCOME STATEMENT (Rand)(Unaudited)                       
Quarter ended                  
                                     March          December         March      
                                      2009              2008          2008      
                       Notes     R million         R million     R million      
Continuing operations                                                           
Revenue                               3 005             3 146         2 334     
Cost of sales               2       (2 206)           (2 383)       (1 820)     
Production cost                     (1 830)           (2 033)       (1 517)     
Amortisation and                                                                
depreciation                          (303)             (310)         (189)     
Employment termination                                                          
and restructuring costs                (11)              (16)          (86)     
Other items                            (62)              (24)          (28)     
Gross profit                            799               763           514     
Corporate,                                                                      
administration and                                                              
other expenditure                      (80)              (92)          (55)     
Exploration expenditure                (71)              (75)          (55)     
Other income/(expenses)                                                         
- net                       3           326                78          (16)     
Operating profit                        974               674           388     
Profit/(loss) from                                                              
associates                               14              (52)          (10)     
Profit on sale of                                                               
investment in associate                   -                 -             -     
Impairment of                                                                   
investment in associate                   -                 -             -     
Profit on sale of                                                               
investment in                                                                   
subsidiary                                6                 -             -     
Mark-to-market of                                                               
listed investments                        -                 -             -     
Loss on sale of listed                                                          
investments                               -                 -             -     
Investment income                       152               107            54     
Finance cost                           (40)              (61)         (123)     
Profit/(loss) before                                                            
taxation                              1 106               668           309     
Taxation                              (125)             (220)         (156)     
Net profit/(loss) from                                                          
continuing operations                   981               448           153     
Discontinued operations     4                                                   
(Loss)/profit from                                                              
discontinued operations                 (9)               868           192     
Net profit/(loss)                       972             1 316           345     
Earnings/(loss) per                                                             
ordinary share (cents)      5                                                   
- Earnings/(loss) from                                                          
continuing operations                   233               110            38     
- (Loss)/earnings from                                                          
discontinued operations                 (2)               214            48     
Total earnings/(loss)                                                           
per ordinary share                                                              
(cents)                                 231               324            86     
Diluted earnings/(loss)                                                         
per ordinary share                                                              
(cents)                     5                                                   
- Earnings/(loss) from                                                          
continuing operations                   232               110            38     
- (Loss)/earnings from                                                          
discontinued operations                 (2)               213            48     
Total diluted                                                                   
earnings/(loss) per                                                             
ordinary share (cents)                  230               323            86     
Nine months ended      
                                                       March         March      
                                                        2009          2008      
                                                   R million     R million      
Continuing operations                                                           
Revenue                                                 8 833         6 590     
Cost of sales                                         (6 814)       (5 893)     
Production cost                                       (5 737)       (5 048)     
Amortisation and depreciation                           (921)         (618)     
Employment termination and restructuring costs           (39)         (162)     
Other items                                             (117)          (65)     
Gross profit                                            2 019           697     
Corporate, administration and other expenditure         (263)         (196)     
Exploration expenditure                                 (191)         (141)     
Other income/(expenses) - net                             910         (127)     
Operating profit                                        2 475           233     
Profit/(loss) from associates                            (37)          (10)     
Profit on sale of investment in associate                   1             -     
Impairment of investment in associate                   (112)             -     
Profit on sale of investment in subsidiary                  6             -     
Mark-to-market of listed investments                        -            33     
Loss on sale of listed investments                          -         (459)     
Investment income                                         337           194     
Finance cost                                            (186)         (383)     
Profit/(loss) before taxation                           2 484         (392)     
Taxation                                                (580)         (207)     
Net profit/(loss) from continuing operations            1 904         (599)     
Discontinued operations                                                         
(Loss)/profit from discontinued operations                785           424     
Net profit/(loss)                                       2 689         (175)     
Earnings/(loss) per ordinary share (cents)                                      
- Earnings/(loss) from continuing operations              464         (150)     
- (Loss)/earnings from discontinued operations            191           106     
Total earnings/(loss) per ordinary share (cents)          655          (44)     
Diluted earnings/(loss) per ordinary share (cents)                              
- Earnings/(loss) from continuing operations              462         (150)     
- (Loss)/earnings from discontinued operations            190           106     
Total diluted earnings/(loss) per ordinary share                                
(cents)                                                   652          (44)     
The accompanying notes are an integral part of these condensed consolidated     
financial statements.                                                           
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (Rand)(Unaudited)          
                                                 Quarter ended                  
                                         March      December         March      
2009          2008          2008      
                                     R million     R million     R million      
Net profit/(loss) for the period            972         1 316           345     
Attributable to:                                                                
Owners of the parent                        972         1 316           345     
Non-controlling interest                      -             -             -     
Other comprehensive (loss)/income for                                           
the period, net of income tax             (220)         (115)           643     
Foreign exchange translation                                                    
(loss)/profit                             (203)         (208)           696     
Mark-to-market of available-for-sale                                            
investments                                (17)            93          (53)     
Total comprehensive income for the                                              
period                                      752         1 201           988     
Attributable to:                                                                
Owners of the parent                        752         1 201           988     
Non-controlling interest                      -             -             -     
                                                         Nine months ended      
                                                       March         March      
                                                        2009          2008      
R million     R million      
Net profit/(loss) for the period                        2 689         (175)     
Attributable to:                                                                
Owners of the parent                                    2 689         (175)     
Non-controlling interest                                    -             -     
Other comprehensive (loss)/income for the period,                               
net of income tax                                       (247)         1 057     
Foreign exchange translation (loss)/profit              (292)           623     
Mark-to-market of available-for-sale investments           45           434     
Total comprehensive income for the period               2 442           882     
Attributable to:                                                                
Owners of the parent                                    2 442           882     
Non-controlling interest                                    -             -     
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)                                     
                                        At              At              At      
                                     March        December            June      
2009            2008            2008      
                               (Unaudited)                       (Audited)      
                     Notes       R million       R million       R million      
ASSETS                                                                          
Non-current assets                                                              
Property, plant and                                                             
equipment                            28 103          27 786          27 556     
Intangible assets                     2 223           2 223           2 209     
Restricted cash                         167             169              78     
Restricted investments                1 608           1 567           1 465     
Investments in                                                                  
financial assets                         17              28              67     
Investments in                                                                  
associates                6             242             228             145     
Trade and other                                                                 
receivables                              73              56             137     
32 433          32 057          31 657      
Current assets                                                                  
Inventories                             914             898             693     
Trade and other                                                                 
receivables                           2 871           2 732             875     
Income and mining                                                               
taxes                                    58             108              82     
Cash and cash                                                                   
equivalents                           2 839           1 645             413     
                                     6 682           5 383           2 063      
Non-current assets                                                              
classified as held                                                              
for sale                  4             425             407           1 537     
                                     7 107           5 790           3 600      
Total assets                         39 540          37 847          35 257     
EQUITY AND LIABILITIES                                                          
Share capital and                                                               
reserves                                                                        
Share capital             7          28 081          27 126          25 895     
Other reserves                          503             671             676     
Retained                                                                        
earnings/(accumulated                                                           
loss)                                   857           (114)         (1 832)     
                                    29 441          27 683          24 739      
Non-current                                                                     
liabilities                                                                     
Borrowings                8             159             188             242     
Deferred income tax                   3 796           3 699           2 990     
Provisions for other                                                            
liabilities and                                                                 
charges                               1 366           1 342           1 273     
                                     5 321           5 229           4 505      
Current liabilities                                                             
Trade and other                                                                 
payables                              1 489           1 613           1 372     
Provisions and                                                                  
accrued liabilities                     268             273             287     
Borrowings                8           2 681           2 671           3 857     
                                     4 438           4 557           5 516      
Liabilities directly                                                            
associated with                                                                 
non-current assets                                                              
classified as held                                                              
for sale                  4             340             378             497     
4 778           4 935           6 013      
Total equity and                                                                
liabilities                          39 540          37 847          35 257     
Number of ordinary                                                              
shares in issue                 425 763 329     417 637 697     403 253 756     
Net asset value per                                                             
share (cents)                         6 915           6 628           6 135     
The accompanying notes are an integral part of these condensed consolidated     
financial statements.                                                           
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Rand)(Unaudited)         
                                                    Retained                    
                       Issued                      earnings/                    
share         Other     (accumulated                    
                      capital      reserves            loss)         Total      
                    R million     R million        R million     R million      
Note                         7                                                  
Balance - 30 June                                                               
2008                    25 895           676          (1 832)        24 739     
Issue of share                                                                  
capital                  2 186             -                -         2 186     
Deferred share-based                                                            
payments                     -            74                -            74     
Comprehensive                                                                   
(loss)/income for                                                               
the period                   -         (247)            2 689         2 442     
Balance as at 31                                                                
March 2009              28 081           503              857        29 441     
Balance - 30 June                                                               
2007                    25 636         (349)          (1 581)        23 706     
Issue of share                                                                  
capital                    230             -                -           230     
Deferred share-based                                                            
payments                     -            23                -            23     
Comprehensive                                                                   
income/(loss) for                                                               
the period                   -         1 057            (175)           882     
Balance as at 31                                                                
March 2008              25 866           731          (1 756)        24 841     
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Rand)(Unaudited)                    
                                                  Three months ended            
March       December         March      
                                         2009           2008          2008      
                                                  (Restated)                    
                          Notes     R million      R million     R million      
Cash flow from operating                                                        
activities                                                                      
Cash generated by                                                               
operations                    13           985            623           794     
Interest and dividends                                                          
received                                   156            112            64     
Interest paid                             (41)           (62)         (123)     
Income and mining taxes                                                         
paid                                     (133)          (142)          (41)     
Cash generated by                                                               
operating activities                       967            531           694     
Cash flow from investing                                                        
activities                                                                      
Decrease/(increase) in                                                          
restricted cash                              1             13            20     
Net proceeds on disposal                                                        
of listed investments                        -              -             -     
Net additions to property,                                                      
plant and equipment           13         (645)          (308)         (884)     
Other investing activities               (163)             64             6     
Cash utilised by investing                                                      
activities                               (807)          (231)         (858)     
Cash flow from financing                                                        
activities                                                                      
Long-term loans raised                       -              -             -     
Long-term loans repaid                    (20)          (698)           (6)     
Ordinary shares issued -                                                        
net of expenses                            955            980            40     
Cash generated by                                                               
financing activities                       935            282            34     
Foreign currency                                                                
translation adjustments                     99          (122)            43     
Net increase/(decrease) in                                                      
cash and cash equivalents                1 194            460          (87)     
Cash and cash equivalents                                                       
- beginning of period                    1 646          1 186           435     
Cash and cash equivalents                                                       
- end of period                          2 840          1 646           348     
Cash and cash equivalents                                                       
comprises:                                                                      
Continuing operations                    2 839          1 645           346     
Discontinued operations                      1              1             2     
Total cash and cash                                                             
equivalents                              2 840          1 646           348     
Nine months ended      
                                                       March         March      
                                                        2009          2008      
                                                   R million     R million      
Cash flow from operating activities                                             
Cash generated by operations                            1 871           472     
Interest and dividends received                           350           209     
Interest paid                                           (215)         (300)     
Income and mining taxes paid                            (276)          (62)     
Cash generated by operating activities                  1 730           319     
Cash flow from investing activities                                             
Decrease/(increase) in restricted cash                   (89)           223     
Net proceeds on disposal of listed investments              -         1 310     
Net additions to property, plant and equipment              7       (2 451)     
Other investing activities                               (89)            20     
Cash utilised by investing activities                   (171)         (898)     
Cash flow from financing activities                                             
Long-term loans raised                                      -         2 098     
Long-term loans repaid                                (1 306)       (1 808)     
Ordinary shares issued - net of expenses                1 943            64     
Cash generated by financing activities                    637           354     
Foreign currency translation adjustments                  229            79     
Net increase/(decrease) in cash and cash equivalents    2 425         (146)     
Cash and cash equivalents - beginning of period           415           494     
Cash and cash equivalents - end of period               2 840           348     
Cash and cash equivalents comprises:                                            
Continuing operations                                   2 839           346     
Discontinued operations                                     1             2     
Total cash and cash equivalents                         2 840           348     
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                        
FOR THE PERIOD ENDED 31 MARCH 2009                                              
1.   Accounting policies                                                        
(a)   Basis of accounting                                                       
The condensed consolidated interim financial statements for the period ended 31 
March 2009 have been prepared using accounting policies that comply with        
International Financial Reporting Standards (IFRS), which are consistent with   
the accounting policies used in the audited annual financial statements for the 
year ended 30 June 2008. These condensed consolidated interim financial         
statements are prepared in accordance with IAS 34, Interim Financial Reporting, 
and should be read in conjunction with the financial statements for the year    
ended 30 June 2008.                                                             
2.   Cost of sales                                                              
                                                Quarter ended                   
                                   March          December           March      
2009              2008            2008      
                             (Unaudited)       (Unaudited)     (Unaudited)      
                               R million         R million       R million      
Production costs                    1 830             2 033           1 517     
Amortisation and depreciation         303               310             189     
(Reversal of                                                                    
provision)/provision for                                                        
rehabilitation costs                  (1)                 4               -     
Care and maintenance cost of                                                    
restructured shafts                    11                10              24     
Employment termination and                                                      
restructuring costs                    11                16              86     
Share-based compensation               52                 9               4     
Provision for post-retirement                                                   
benefits                                -                 1               -     
Total cost of sales                 2 206             2 383           1 820     
Nine months ended      
                                                     March           March      
                                                      2009            2008      
                                               (Unaudited)     (Unaudited)      
R million       R million      
Production costs                                      5 737           5 048     
Amortisation and depreciation                           921             618     
(Reversal of provision)/provision for                                           
rehabilitation costs                                      9               -     
Care and maintenance cost of restructured shafts         33              42     
Employment termination and restructuring costs           39             162     
Share-based compensation                                 74              23     
Provision for post-retirement benefits                    1               -     
Total cost of sales                                   6 814           5 893     
3.   Other income/(expenses) - net                                              
Included in other income in the March 2009 quarter is R437 million profit on    
sale of 10% of Harmony`s Papua New Guinea gold and copper assets to Newcrest    
Mining Limited in terms of the farm-in agreement. The total included for the    
year to date relating to the Newcrest transaction is R852 million.              
4.   Non-current assets held for sale and discontinued operations               
The assets and liabilities related to Mount Magnet (operations in Australia)    
have been presented as held for sale following approval of the intention to     
dispose of the assets by the Group`s management on 20 April 2007. Management is 
still intent on the disposal of Mount Magnet despite the asset being classified 
as held for sale for more than 12 months.                                       
The assets and liabilities relating to the Cooke 1, Cooke 2, Cooke 3 and Cooke  
plant and relating surface operations (operations in the Gauteng area) have     
been presented as held for sale following the approval of the intention to      
dispose of the assets by the Group`s management on 16 October 2007. These       
operations were also deemed to be discontinued operations.                      
The conditions precedent on the sale of Randfontein`s Cooke assets to Rand      
Uranium have been fulfilled and the transaction became effective on 21 November 
2008. In exchange for 60% of the issued share capital of Rand Uranium, Harmony  
received US$40 million out of the total purchase consideration of US$209        
million on the effective date of the transaction. The balance of the            
consideration, amounting to US$172 million including interest, was received on  
20 April 2009.                                                                  
As a result of the transaction, the Group recognised a profit on sale of assets 
of R1 722 million before tax in the income statement in the December 2008       
quarter.                                                                        
5.   Earnings/(loss) per ordinary share                                         
Earnings/(loss) per ordinary share is calculated on the weighted average number 
of ordinary shares in issue for the quarter ended 31 March 2009: 421.0 million  
(31 December 2008: 406.8 million, 31 March 2008: 400.7 million) and the nine    
months ended 31 March 2009: 410.3 million (31 March 2008: 400.0 million).       
The fully diluted earnings/(loss) per ordinary share is calculated on weighted  
average number of diluted ordinary shares in issue for the quarter ended 31     
March 2009: 423.6 million (31 December 2008: 409.1 million, 31 March 2008:      
403.5 million) and the nine months ended 31 March 2009: 412.4 million (31 March 
2008: 402.5 million).                                                           
                                               Quarter ended                    
                                   March          December           March      
2009              2008            2008      
                             (Unaudited)       (Unaudited)     (Unaudited)      
Total earnings/(loss) per                                                       
ordinary share (cents):                                                         
Basic earnings/(loss)                 231               324              86     
Fully diluted earnings/(loss)         229               323              86     
Headline earnings                     123               121              63     
- Continuing operations               131               129              39     
- Discontinued operations             (8)               (8)              24     
                               R million         R million       R million      
Reconciliation of headline                                                      
earnings/(loss):                                                                
Continuing operations                                                           
Net profit/(loss)                     981               448             153     
Adjusted for (net of tax):                                                      
(Profit)/loss on sale of                                                        
property, plant and equipment       (431)                78             (1)     
Loss on sale of listed                                                          
investment                              -                 -               -     
Impairment of investment in                                                     
associates                              -                 -               -     
Provision for doubtful debt             -                 -               4     
Headline profit/(loss)                550               526             156     
Discontinued operations                                                         
Net (loss)/profit                     (9)               868             192     
Adjusted for (net of tax):                                                      
Profit on sale of property,                                                     
plant and equipment                  (28)             (901)           (100)     
Impairment of property, plant                                                   
and equipment                           3               (1)               4     
Headline (loss)/profit               (34)              (34)              96     
Total headline profit                 516               492             252     
Nine months ended      
                                                     March           March      
                                                      2009            2008      
                                               (Unaudited)     (Unaudited)      
Total earnings/(loss) per ordinary share                                        
(cents):                                                                        
Basic earnings/(loss)                                   655            (44)     
Fully diluted earnings/(loss)                           652            (44)     
Headline earnings                                       275              34     
- Continuing operations                                 271            (45)     
- Discontinued operations                                 4              79     
                                                 R million       R million      
Reconciliation of headline earnings/(loss):                                     
Continuing operations                                                           
Net profit/(loss)                                     1 904           (599)     
Adjusted for (net of tax):                                                      
(Profit)/loss on sale of property, plant and                                    
equipment                                             (904)            (28)     
Loss on sale of listed investment                         -             392     
Impairment of investment in associates                  112               -     
Provision for doubtful debt                               -              57     
Headline profit/(loss)                                1 112           (178)     
Discontinued operations                                                         
Net (loss)/profit                                       785             424     
Adjusted for (net of tax):                                                      
Profit on sale of property, plant and equipment       (921)            (49)     
Impairment of property, plant and equipment             154            (55)     
Headline (loss)/profit                                   18             320     
Total headline profit                                 1 130             142     
6.   Investment in associates                                                   
Harmony Gold Mining Company owns 32,4% of Pamodzi Gold Limited. During the      
December 2008 quarter the Group recognised a loss of R34 million, its share of  
the associate loss, resulting in a carrying value of R0.                        
On 21 November 2008, Harmony Group sold 60% of the issued share capital of Rand 
Uranium to PRF. Refer to note 4 for details. This resulted in the Group owning  
40% of Rand Uranium. The book value of the investment at 31 March 2009 was R242 
million (December 2008:                                                         
R228 million).                                                                  
7.   Share capital                                                              
Wafi-Golpu royalty                                                              
On 1 December 2008, Harmony issued 3 364 675 shares to Rio Tinto Limited. The   
Harmony shares were issued to cancel the Rio Tinto royalty rights over          
Wafi-Golpu in Papua New Guinea. The value of issued shares was R242 million     
(US$24 million) at R71.98 per share.                                            
Capital raising                                                                 
Harmony engaged in capital raising by issuing two tranches of shares following  
the resolution passed by shareholders at the Annual General Meeting held on 24  
November 2008. The first tranche was issued into the open market between 25     
November 2008 and 19 December 2008.                                             
In this tranche, 10 504 795 Harmony shares were issued at an average            
subscription price of R93.20, resulting in R979 million before costs being      
raised. The cost of the issue was R15 million or 1,5% of the value of shares    
issued.                                                                         
A second tranche of shares was issued for cash into the open market between 10  
February 2009 and 6 March 2009. This tranche consisted of 7 540 646 Harmony     
shares issued at an average subscription price of R124.45, resulting in R938    
million before costs being raised. The cost of the issue was R15 million or     
1,6% of the value of shares issued. The combined share issue amounts to R1.9    
billion or 4,5% of the issued share capital as at 30 September 2008.            
8.   Borrowings                                                                 
March      December          June      
                                          2009          2008          2008      
                                   (Unaudited)                   (Audited)      
                                     R million     R million     R million      
Total long-term borrowings                  159           188           242     
Total current portion of borrowings       2 681         2 671         3 857     
Total borrowings*                         2 840         2 859         4 099     
* Included in the borrowings is R168 million (December 2008: R198 million) owed 
to Wespac Bank Limited in terms of a finance lease agreement. The future        
minimum lease payments to the loan are as follows:                              
                                         March      December          June      
                                          2009          2008          2008      
(Unaudited)                   (Audited)      
                                     R million     R million     R million      
Due within one year                          45            63            57     
Due between one and five years              133           156           228     
178           219           285      
Future finance charges                     (10)          (21)          (27)     
Total future minimum lease payments         168           198           258     
9.   Commitments and contingencies                                              
March      December          June      
                                          2009          2008          2008      
                                   (Unaudited)                   (Audited)      
                                     R million     R million     R million      
Capital expenditure commitments                                                 
Contracts for capital expenditure           790           692         1 164     
Authorised by the directors but not                                             
contracted for                            1 478         1 689         1 720     
2 268         2 381         2 884      
This expenditure will be financed from existing resources.                      
Contingent liability                                                            
Class action                                                                    
During January 2009, the Plaintiff filed with the Court an Amended Complaint.   
The company has filed a Motion to Dismiss that Amended Complaint and the        
Plaintiff has filed an opposition to that Motion. The company will be filing a  
Reply Memorandum in further support of its Motion. It is not possible to        
predict with certainty when the Court will rule on the Motion, but we would     
estimate that such a decision will be made within the next six months.          
10. Subsequent events                                                           
On 17 April 2009, the Group entered into an agreement with Avoca Resources      
Limited (Avoca), in which Avoca purchased the Group`s Dioro Exploration NL      
shares, totalling 11 428 572 shares, in exchange for 3 809 524 Avoca shares.    
The total consideration received by the Group was A$5.7 million.                
On 20 April 2009, Harmony received approximately US$172 million from PRF as a   
final payment in terms of the Rand Uranium transaction (for details refer to    
note 4).                                                                        
On 21 April 2009, the Nedbank loan of R750 million was settled.                 
11. Segment report                                                              
The segment report follows after note 13.                                       
12. Reconciliation of segment information to consolidated income statements and 
   balance sheets                                                               
                                                       Nine months ended        
March           March      
                                                      2009            2008      
                                               (Unaudited)     (Unaudited)      
                                                 R million       R million      
The "reconciliation of segment data to                                          
consolidated financials" line item in the                                       
segment reports                                                                 
are broken down in the following elements, to                                   
give a better understanding of the differences                                  
between the income statement, balance sheet and                                 
segment report:                                                                 
Revenue from:                                                                   
Discontinued operations                                 614           1 913     
Production costs from:                                                          
Discontinued operations                                 447           1 472     
Reconciliation of cash operating profit to                                      
gross profit:                                                                   
Total segment revenue                                 9 447           8 503     
Total segment production costs                      (6 184)         (6 520)     
Cash operating profit as per segment report           3 263           1 983     
Less: Discontinued operations                         (167)           (441)     
Cash operating profit as per segment report           3 096           1 542     
Cost of sales items other than production costs     (1 077)           (845)     
Amortisation and depreciation                         (921)           (618)     
Employment termination and restructuring costs         (39)           (162)     
Share-based compensation                               (74)            (23)     
Rehabilitation costs                                    (9)               -     
Care and maintenance costs of restructured                                      
shafts                                                 (33)            (42)     
Provision for former employees` post-retirement                                 
benefits                                                (1)               -     
Gross profit as per income statements *               2 019             697     
Reconciliation of total segment mining assets to                                
consolidated property, plant and equipment:                                     
Property, plant and equipment not allocated to                                  
a segment:                                                                      
Mining assets                                           496             416     
Undeveloped property                                  4 809           4 809     
Other non-mining assets                                  53              78     
Less: Discontinued operations                         (268)         (1 125)     
5 090           4 179      
* The reconciliation was done up to the first identifiable line item on the     
income statement. The reconciliation to profit before taxation and discontinued 
operations would comprise of the income statement line items after that.        
13. Adjustments to previously issued cash flow statements                       
Included as capital expenditure in the cash flow statements for the quarter     
ended 31 December 2008, was an amount of R532 million contributed by Newcrest   
in terms of the Papua New Guinea ("PNG") farm-in agreement. The group only      
accounts for its interest in capital expenditures by Newcrest, together with    
the additional interest in the PNG joint venture to be transferred to Newcrest  
in exchange for such capital expenditures, upon completion of the relevant      
milestones in terms of the PNG farm-in agreement. Therefore, as the relevant    
milestone of US$150 million was not yet met on 31 December 2008, the capital    
expenditure incurred by Newcrest was correctly excluded from the balance sheets 
and income statements, but not from the cash flow statements. The adjustments,  
which decrease cash generated from operations and additions to property, plant  
and equipment, offset each other and therefore have no impact on the net        
increase in the cash balance, net profit or shareholders` equity for any of the 
periods presented.                                                              
The adjustments are as follows:                                                 
Previously shown     Adjustments      Restated      
                                   R million       R million     R million      
Cash generated by operations            1 155           (532)           623     
Additions to property, plant                                                    
and equipment                           (840)             532         (308)     
Effect on Net increase in                                                       
cash and cash equivalents                                   -                   
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2009 (Unaudited)(Rand/Metric) 
Production     Operating        Mining      
                        Revenue           cost        profit        assets      
                      R million      R million     R million     R million      
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Tshepong                   1 407            743           664         3 637     
Phakisa                      117             72            45         3 541     
Bambanani                    728            499           229           671     
Doornkop                     248            214            34         2 396     
Elandsrand                 1 090            827           263         2 642     
Target                       500            385           115         2 730     
Masimong                     907            488           419           674     
Evander                    1 166            736           430         1 185     
Virginia                   1 568          1 095           473           932     
Other(1)                     394            278           116           240     
Surface                                                                         
Other(2)                     708            400           308           148     
Total South Africa         8 833          5 737         3 096        18 796     
International                                                                   
Papua New Guinea(3)            -              -             -         3 949     
Total international            -              -             -         3 949     
Total continuing                                                                
operations                 8 833          5 737         3 096        22 745     
Discontinued operations                                                         
Cooke operations             614            447           167             -     
Other operations               -              -             -           268     
Total discontinued                                                              
operations                   614            447           167           268     
Total operations           9 447          6 184         3 263        23 013     
Reconciliation of the                                                           
segment                                                                         
information to the                                                              
consolidated                                                                    
income statement and                                                            
balance                                                                         
sheet (refer to note 12)   (614)          (447)                       5 090     
                          8 833          5 737                      28 103      
                                          Capital                   Tonnes      
                                      expenditure     Kilograms     milled      
R million          sold      t`000      
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Tshepong                                       181         5 561      1 027     
Phakisa                                        357           449        118     
Bambanani                                       34         2 930        379     
Doornkop                                       302           950        401     
Elandsrand                                     311         4 345        729     
Target                                         249         1 960        477     
Masimong                                        97         3 563        668     
Evander                                        154         4 657        877     
Virginia                                       127         6 181      1 696     
Other(1)                                        38         1 572        382     
Surface                                                                         
Other(2)                                        52         2 836      6 470     
Total South Africa                           1 902        35 004     13 224     
International                                                                   
Papua New Guinea(3)                          1 376             -          -     
Total international                          1 376             -          -     
Total continuing operations                  3 278        35 004     13 224     
Discontinued operations                                                         
Cooke operations                                87         2 667      1 287     
Other operations                                 -             -          -     
Total discontinued operations                   87         2 667      1 287     
Total operations                             3 365        37 671     14 511     
Reconciliation of the segment                                                   
information to the consolidated                                                 
income statement and balance                                                    
sheet (refer to note 12)                                                        
Notes:                                                                          
(1) Includes Joel and St Helena.                                                
(2) Includes Kalgold, Phoenix and Dumps.                                        
(3) Included in the capital expenditure is an amount of R1 137 million          
contribution by Newcrest in terms of the farm-in agreement.                     
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2008 (Unaudited)(Rand/Metric) 
Production         Operating        Mining      
                    Revenue           cost     profit/(loss)        assets      
                  R million      R million         R million     R million      
Continuing                                                                      
operations                                                                      
South Africa                                                                    
Underground                                                                     
Tshepong               1 183            697               486         3 563     
Phakisa                   15              9                 6         3 044     
Bambanani                707            596               111           748     
Doornkop                 181            174                 7         2 005     
Elandsrand               617            543                74         2 296     
Target                   354            257                97         2 496     
Masimong                 500            483                17           600     
Evander                1 055            717               338         1 330     
Virginia               1 091            958               133           910     
Other(1)                 278            301              (23)           236     
Surface                                                                         
Other(2)                 609            313               296           228     
Total South Africa     6 590          5 048             1 542        17 456     
International                                                                   
Papua New Guinea           -              -                 -         3 869     
Total international        -              -                 -         3 869     
Total continuing                                                                
operations             6 590          5 048             1 542        21 325     
Discontinued                                                                    
operations                                                                      
Cooke operations       1 056            690               366           599     
Other operations         857            782                75           518     
Total discontinued                                                              
operations             1 913          1 472               441         1 117     
Total operations       8 503          6 520             1 983        22 442     
Reconciliation of                                                               
the segment                                                                     
information to the                                                              
consolidated                                                                    
income statement                                                                
and balance                                                                     
sheet (refer to                                                                 
note 12)             (1 913)        (1 472)                           4 179     
6 590          5 048                          26 621      
                                          Capital                   Tonnes      
                                      expenditure     Kilograms     milled      
                                        R million          sold      t`000      
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Tshepong                                       145         6 538      1 100     
Phakisa                                        196            71         15     
Bambanani                                       85         3 936        694     
Doornkop                                       249         1 030        322     
Elandsrand                                     223         3 394        597     
Target                                         165         1 978        464     
Masimong                                        88         2 771        605     
Evander                                        186         5 920      1 012     
Virginia                                       110         6 009      1 608     
Other(1)                                        34         1 552        349     
Surface                                                                         
Other(2)                                        91         3 334      6 386     
Total South Africa                           1 572        36 533     13 152     
International                                                                   
Papua New Guinea                               760             -          -     
Total international                            760             -          -     
Total continuing operations                  2 332        36 533     13 152     
Discontinued operations                                                         
Cooke operations                               119         5 787      2 723     
Other operations                               147         5 039      1 827     
Total discontinued operations                  266        10 826      4 550     
Total operations                             2 598        47 359     17 702     
Reconciliation of the segment                                                   
information to the consolidated                                                 
income statement and balance                                                    
sheet (refer to note 12)                                                        
Notes:                                                                          
(1)   Includes Joel and St Helena.                                              
(2)   Includes Kalgold, Phoenix and Dumps.                                      
No material changes were made to Harmony`s Mineral Resources and Ore Reserves   
for the period ended March 2009. Taking into account the last nine months`      
depletion of reserves, the Harmony Mineral Resources and Ore Reserves as        
stated in Harmony`s 2008 Annual Report are an accurate reflection of the        
company`s current position. The Mineral Resources and Ore Reserves are          
comprehensively audited by a team of internal competent persons that operate    
independently from the operating units.                                         
CONTACT DETAILS                                                                 
HARMONY GOLD MINING COMPANY LIMITED                                             
Corporate Office                                                                
Randfontein Office Park                                                         
PO Box 2                                                                        
Randfontein, 1760                                                               
South Africa                                                                    
Corner Main Reef Road and Ward Avenue                                           
Randfontein, 1759                                                               
Johannesburg                                                                    
South Africa                                                                    
Telephone :    +27 11 411 2000                                                  
Website   :    http://www.harmony.co.za                                         
Directors                                                                       
P T Motsepe (Chairman)*                                                         
G Briggs (Chief Executive Officer)                                              
F Abbott (Interim Financial Director)                                           
J A Chissano*^                                                                  
F F T De Buck*, Dr C Diarra*+,                                                  
K V Dicks*, Dr D S Lushaba*, C Markus*,                                         
M Motloba*, C M L Savage*, A J Wilkens*                                         
(* non-executive)                                                               
(^ Mocambican)                                                                  
(+ US/Mali Citizen)                                                             
Investor Relations Team                                                         
Esha Brijmohan                                                                  
Investor Relations Officer                                                      
Telephone        :    +27 11 411 2314                                           
Fax              :    +27 11 692 3879                                           
Mobile           :    +27 82 922 4584                                           
E-mail           :    esha@harmony.co.za                                        
Marian van der Walt                                                             
Executive: Corporate and Investor Relations                                     
Telephone        :    +27 11 411 2037                                           
Fax              :    +27 86 614 0999                                           
Mobile           :    +27 82 888 1242                                           
E-mail           :    marian@harmony.co.za                                      
Company Secretary                                                               
Khanya Maluleke                                                                 
Telephone        :    +27 11 411 2019                                           
Fax              :    +27 11 411 2070                                           
E-mail           :    Khanya.maluleke@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                                                              
PO Box 4844                                                                     
Johannesburg, 2000                                                              
South Africa                                                                    
Telephone         :   +27 86 154 6572                                           
Fax               :   +27 11 834 4389                                           
United Kingdom Registrars                                                       
Capita Registrars                                                               
The Registry                                                                    
34 Beckenham Road                                                               
Bechenham                                                                       
Kent BR3 4TU                                                                    
United Kingdom                                                                  
Telephone         :   +44 870 162 3100                                          
Fax               :   +44 208 636 2342                                          
ADR Depositary                                                                  
The Bank of New York Mellon Inc                                                 
101 Barclay Street                                                              
New York, NY 10286                                                              
United States of America                                                        
Telephone         :   +1888-BNY-ADRS                                            
Fax               :   +1 212 571 3050                                           
Sponsors                                                                        
JP Morgan Equities Limited                                                      
1 Fricker Road, Corner Hurlingham Road                                          
Illovo, Johannesburg, 2196                                                      
Private Bag X9936, Sandton, 2146                                                
Telephone         :   +27 11 507 0300                                           
Fax               :   +27 11 507 0503                                           
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                                  
Registration Number 1950/038232/06                                              
Incorporated in the Republic of South Africa                                    
ISIN: ZAE000015228                                                              
Date: 08/05/2009 08:00:04 Supplied by www.sharenet.co.za                     
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