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HAR - Harmony - The Preferred Bidder For Pamodzi Gold`s Free State Assets

Release Date: 26/06/2009 17:20:01      Code(s): HAR
HAR - Harmony - The Preferred Bidder For Pamodzi Gold`s Free State Assets       
PRESS RELEASE                                                                   
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration Number: 1950/038232/06                                             
JSE Code:  HAR                                                                  
NYSE Code: HMY                                                                  
NASDAQ Code: HMY                                                                
ISIN: ZAE000015228                                                              
Johannesburg, 26 June 2009. Harmony Gold Mining Company Limited ("Harmony") is  
pleased to announce that the provisional liquidators of Pamodzi Gold Free       
State (Proprietary) Limited (in liquidation) ("Pamodzi Free State") have        
chosen Harmony as the preferred bidder of Pamodzi Free State`s assets           
("Pamodzi Free State Assets").  The Pamodzi Free State Assets consist of        
President Steyn 1 and 2 shafts, Loraine 3 shaft, Freddies 7 shaft and Freddies  
9 shaft, a metallurgical gold plant and a dormant tailings storage facility.    
The Pamodzi Free State Assets will be purchased free from all liabilities,      
save for all rehabilitation and environmental liabilities associated with the   
Pamodzi Free State Assets. Harmony`s acquisition strategy has been focused on   
acquiring long-life assets that offer higher grades and have potential          
synergies with its own assets.                                                  
A due diligence investigation has been completed.  The outcome of the due       
diligence investigation indicates that the Pamodzi Free State Assets are a      
good fit with Harmony`s Free State assets for the following reasons:            
-    the Pamodzi Free State Assets have the potential to generate recovered     
grades of approximately 5g/t in the medium term. This will enhance Harmony`s    
recovered grade in the Free State;                                              
-    the Pamodzi Free State Assets have the potential, in the longer term, to   
add 150,000 higher quality ounces per year to Harmony`s production;             
-    Loraine 3 shaft and Freddies 9 shaft respectively have an estimated life   
of mine in excess of 10 years;                                                  
-    Loraine 3 shaft (including Loraine 1 shaft) has similar geology to that    
of Harmony`s Target mine ("Target");                                            
-    Loraine 3 shaft and Target can be managed as one unit due to geological    
similarities and geographical proximity;                                        
-    synergies exist between Freddies 7 shaft and Freddies 9 shaft and          
Harmony`s Tshepong Mine from an ore body and mining perspective;                
-    Harmony`s Target metallurgical gold plant is 10 kilometers from the        
Loraine 3 shaft which will have cost benefits;                                  
-    the President Steyn 2 shaft pillar can only be optimally extracted from    
Harmony`s West Mine shaft (currently on care and maintenance) and part of       
Bambanani mine;                                                                 
-    Harmony`s management is very familiar with Pamodzi Free State`s ore        
-    Pamodzi Free State`s dormant tailings storage facility can be cost         
effectively processed through Harmony`s Phoenix plant or through Harmony`s St   
Helena plant (when completed).                                                  
-    cash flow can be generated at an early stage from the President Steyn 2    
shaft pillar, as well as from the demolition of Pamodzi Free State`s            
metallurgical gold plant                                                        
-    Harmony is familiar with the infrastructure challenges of the Pamodzi      
Free State Assets and will implement the same standards as those implemented    
in respect of its own assets to ensure the safety of its employees.  Some       
capital expenditure will therefore be required to make the operations safe for  
employees and to optimize the ability to operate the Pamodzi Free State         
-    by purchasing the Pamodzi Free State Assets, Harmony will be able to       
better control potential issues which may affect its own mines, such as fires,  
flooding and restricting illegal miners gaining access to Harmony`s shafts.     
The acceptance of Harmony`s offer by the provisional liquidators is subject to  
the approval of the Industrial Development Corporation of South Africa and the  
relevant trade unions and the conclusion of definitive written sale             
One of the essential conditions precedent to the transaction would be the       
conversion of Pamodzi Free State`s mining rights and the consent to the         
transfer thereof by the Minister of Minerals and Energy.  Harmony, together     
with the provisional liquidators, has agreed to give this condition precedent   
their urgent attention.                                                         
"Strategically this transaction is a good fit for Harmony`s Free State          
assets.  Harmony has excellent synergies that could be leveraged in respect of  
tailings disposal, plant processing and management and it would allow us to     
control potential issues that could influence our own mines", Chief Executive   
Officer, Graham Briggs said.                                                    
This acquisition falls below the JSE categorisation thresholds and is for       
information purposes only.                                                      
Issued by Harmony Gold Mining Company Limited                                   
For more details contact:                                                       
Graham Briggs                                                                   
Chief Executive Officer                                                         
on +27(0)83 265 0274                                                            
Marian van der Walt                                                             
Executive: Corporate and Investor Relations                                     
on +27(0)82 888 1242                                                            
Corporate Office:                                                               
Randfontein Office Park                                                         
P O Box 2                                                                       
South Africa 1760                                                               
T +27 (11) 411 2000                                                             
JP Morgan Equities Limite                                                       
Financial adviser to Harmony                                                    
Deutsche Securities SA (Pty) Limited                                            
Legal adviser to Harmony                                                        
Cliffe Dekker Hofmeyr Inc                                                       
Date: 26/06/2009 17:20:01 Supplied by www.sharenet.co.za                     
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