Go Back Email this Link to a friend


HAR - Harmony - Results for the second quarter and six months ended 31

Release Date: 08/02/2011 08:22:04      Code(s): HAR
HAR - Harmony - Results for the second quarter and six months ended 31          
December 2010                                                                   
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration number 1950/038232/06                                              
("Harmony" or "Company")                                                        
JSE Share code: HAR                                                             
NYSE Share code: HMY                                                            
ISIN: ZAE000015228                                                              
Results for the second quarter and six months ended 31 December 2010            
SHAREHOLDER INFORMATION                                                         
Issued ordinary share capital                                      429 506 618  
at 31 December 2010                                                     shares  
Market capitalisation                                                           
At 31 December 2010 (ZARm)                                              35 649  
At 31 December 2010 (US$m)                                               5 412  
Harmony ordinary share                                                          
and ADR prices                                                                  
12 month high (1 January 2010 to                                                
31 December 2010) for ordinary shares                                   R88.02  
12 month low (1 January 2010 to                                                 
31 December 2010) for ordinary shares                                   R68.65  
12 month high (1 January 2010 to                                                
31 December 2010) for ADRs                                            US$12.75  
12 month low (1 January 2010 to                                                 
31 December 2010) for ADRs                                             US$8.79  
Free float                                                                      
Ordinary shares                                                           100%  
ADR ratio                                                                  1:1  
JSE Limited                                                                HAR  
Range for quarter                                                               
(1 October 2010 to                                                    R76.18 -  
31 December 2010 - closing prices)                                      R88.02  
Average volume for the                                                          
quarter (1 October 2010 to                                           1 178 082  
31 December 2010)                                               shares per day  
New York Stock                                                                  
Exchange, Inc.                                                             HMY  
Range for quarter                                                               
(1 October 2010 to                                                  US$10.75 -  
31 December 2010 - closing prices)                                    US$12.75  
Average volume for the                                                          
quarter (1 October 2010 to                                           1 961 517  
31 December 2010)                                               shares per day  
Key features                                                                    
- Closed non-profitable operations                                              
- Growth projects in South Africa                                               
* increased production                                                          
* quality ounces                                                                
- Majority of capital expenditure spent                                         
- Hidden Valley a great mine                                                    
* gold and silver recoveries improved                                           
* commissioned and building-up                                                  
- Wafi/Golpu growing quarter on quarter                                         
- Experienced and focused management team                                       
Financial summary for the second quarter and six months ended 31 December 2010  
                                           Quarter       Quarter                
                                          December     September       Q-on-Q   
                                              2010          2010     variance   
%   
Gold produced(1)       - kg                  10 055        10 471          (4)  
                      - oz                 323 275       336 650          (4)   
Cash costs             - R/kg               216 595       228 658            5  
- US$/oz                 979           974          (1)   
Gold sold              - kg                  10 046        10 869          (8)  
                      - oz                 322 986       349 447          (8)   
Gold price             - R/kg               303 354       287 401            6  
received               - US$/oz               1 371         1 224           12  
Cash operating         - R million              867           652           33  
profit                 - US$ million            126            89           42  
Basic                  - SAc/s                   69            24         >100  
earnings               - USc/s                   10             3         >100  
per share*                                                                      
Headline               - Rm                     294           141         >100  
profit*                - US$m                    43            19         >100  
Headline               - SAc/s                   69            33         >100  
earnings               - USc/s                   10             5          100  
per share*                                                                      
Exchange rate          - R/US$                 6.88          7.31          (6)  
6 months     6 months     Year-on-   
                                           December     December         year   
                                               2010         2009     variance   
                                                                            %   
Gold produced(1)       - kg                   20 526       23 283         (12)  
                      - oz                  659 925      748 555         (12)   
Cash costs             - R/kg                222 787      190 172         (17)  
                      - US$/oz                  965          775         (25)   
Gold sold              - kg                   20 915       23 111         (10)  
                      - oz                  672 433      743 034         (10)   
Gold price             - R/kg                295 069      251 968           17  
received               - US$/oz                1 294        1 028           26  
Cash operating         - R million             1 519        1 351           12  
profit                 - US$ million             215          178           21  
Basic                  - SAc/s                    93           21         >100  
earnings               - USc/s                    13            3         >100  
per share*                                                                      
Headline               - Rm                      435          158         >100  
profit*                - US$m                     61           21         >100  
Headline               - SAc/s                   101           37         >100  
earnings               - USc/s                    14            5         >100  
per share*                                                                      
Exchange rate          - R/US$                  7.09         7.63          (7)  
* Reported amounts include continuing operations only                           
(1) Production statistics for Steyn 2 and Target 3 have been included. These    
mines are in a build-up phase and revenue and costs are currently capitalised.  
Revenue capitalised includes: Quarter ending Dec 2010 Steyn 2, 18 kg            
(September 2010 - 31 kg) and Target 3, 170 kg (September 2010 - 111 kg), 6      
months ending Dec 2010 Steyn 2, 49 kg (December 2009 - Nil) and Target 3, 281   
kg (December 2009 - Nil).                                                       
Harmony`s Annual Report, Notice of Annual General Meeting, its 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 2010 are  
available on our website (www.harmony.co.za).                                   
Forward-looking statements                                                      
This quarterly report contains forward-looking statements within the meaning    
of the United States Private Securities Litigation Reform Act of 1995 with      
respect to Harmony`s financial condition, results of operations, business       
strategies, operating efficiencies, competitive positions, growth               
opportunities for existing services, plans and objectives of management,        
markets for stock and other matters. Statements in this quarter that are not    
historical facts are "forward-looking statements" for the purpose of the safe   
harbour provided by Section 21E of the U.S. Securities Exchange Act of 1934,    
as amended, and Section 27A of the U.S. Securities Act of 1933, as amended.     
Forward-looking statements are statements that are not historical facts. These  
statements  include financial projections and estimates and their underlying    
assumptions,  statements regarding plans, objectives and expectations with      
respect to future  operations, products and services, and statements regarding  
future performance.  Forward-looking statements are generally identified by     
the words "expect",  "anticipates", "believes", "intends", "estimates" and      
similar expressions.  These statements are only predictions. All forward-       
looking statements involve  a number of risks, uncertainties and other factors  
and we cannot assure you  that such statements will prove to be correct.        
Risks, uncertainties and other  factors could cause actual events or results    
to differ from those expressed or  implied by the forward-looking statements.   
These forward-looking statements, including, among others, those relating to    
the future business prospects, revenues and income of Harmony, wherever they    
may occur in this quarterly report and the exhibits to this quarterly report,   
are necessarily estimates reflecting the best judgment of the senior            
management of Harmony and involve a number of risks and uncertainties that      
could cause actual results to differ materially from those suggested by the     
forward-looking statements. As a consequence, these forward-looking statements  
should be considered in light of various important factors, including those     
set forth in this quarterly report. Important factors that could cause actual   
results to differ materially from estimates or projections contained in the     
forward looking statements include, without limitation:                         
- overall economic and business conditions in South Africa and elsewhere;       
- the ability to achieve anticipated efficiencies and other cost savings in     
connection with past and future acquisitions;                                   
- increases/decreases in the market price of gold;                              
- the occurrence of hazards associated with underground and surface gold        
mining;                                                                         
- the occurrence of labour disruptions                                          
- availability, terms and deployment of capital;                                
- changes in Government regulation, particularly mining rights and              
environmental regulations;                                                      
- fluctuations in exchange rates;                                               
- currency devaluations and other macro- economic monetary policies; and        
- socio-economic instability in South Africa and regionally.                    
Chief Executive`s Review                                                        
Overview                                                                        
During the course of the second quarter of financial year 2011 we continued to  
see the benefits of the numerous management initiatives coming through, with    
higher production and lower costs evident from our growth projects, namely      
Doornkop, Phakisa and Hidden Valley. It was particularly pleasing to see good   
progress in our Papua New Guinean operations with improved production at        
Hidden Valley and positive developments at Wafi-Golpu. However, we also faced   
certain operational challenges, such as the unplanned production stoppage at    
Kusasalethu during the quarter. The necessary measures to rectify this issue    
are implemented and we are confident the operation will meet its targets next   
quarter. Throughout the company our operational management teams remain         
focused and as such we are confident about meeting our long term production     
targets.                                                                        
Safety                                                                          
It is with deep regret we report that four of our colleagues died in mining-    
related incidents during the quarter. They were Jackson Morena (a rigger at     
Kusasalethu), Msiphani Mashwama (member of the stope team) and Lehlohonolo      
Nchaka (rock drill operator), both from Bambanani, and Petrose Rapeane          
(tramming supervisor at Tshepong). We extend our deepest condolences to their   
families, friends and colleagues.                                               
Safety is the primary priority for every manager at Harmony and we share a      
common vision with the union leadership with regard to safety in the            
workplace. Progress on this front can only be addressed through a co-operative  
approach that ensures that the right environment from a systems, planning,      
communication and training perspective is in place, combined with an            
acceptance of joint responsibility by management and employees for our          
actions. It is important too that such an environment empowers people;          
management, supervisors, workers and union representatives to stop work and     
withdraw when they feel it is unsafe, or prevent others from acting in an       
unsafe way. During the past quarter Harmony restructured its central safety     
function by transferring more senior and experienced personnel to assist and    
advise operational teams. Our continued focus on safety has resulted in an      
improved underlying safety performance.                                         
Gold market                                                                     
In Rand per kilogram terms, the received gold price increased by 6% from R287   
401/kg in the previous quarter to R303 354/kg in the current quarter. Over the  
course of calendar year 2010, the gold price in dollar terms increased by 29%.  
The strength of the Rand continues to place pressure on the R/kg price which,   
in turn, continues to place further pressure on gold miners whose costs are in  
Rand. We feel the continued investment demand for gold will be the critical     
factor supporting the gold price in 2011 and believe that even higher gold      
prices may be achieved this year.                                               
Operating performance                                                           
Production at Doornkop, Phakisa and Hidden Valley improved substantially, by    
19%, 34% and 23%, respectively. However, overall total gold production for the  
past quarter decreased by 4% quarter on quarter from 10 471kg to 10 055kg,      
mainly as a result of safety stoppages at Bambanani and Kusasalethu. While      
volumes were 8% lower than the previous quarter at 4 675 000t, the average      
yield was 4% higher at 2.11g/t. Underground gold production was 5% lower at 8   
273kg, as volumes were 4% lower at 1 759 000t and the underground grade         
declined by 2% to 4.6g/t.                                                       
Both Tshepong and Masimong showed a steady production performance, with         
Masimong still the lowest cost producer at R168 907/kg. Target 3 is back on     
track, with a 57% improvement in tonnes mined, and Joel is also back in         
production. Following the closure of Merriespruit 1, the Virginia operations,   
now comprising solely of Unisel, produced net free cash of R43 million (the     
Virginia operations recorded a loss of R36 million in the previous quarter),    
validating the decision to close the loss-making shafts.                        
The gold production at Hidden Valley increased by 23% to 53 169oz and silver    
production increased by 44% to 382 655oz quarter on quarter (50% attributable   
to Harmony). Hidden Valley is a high value asset for Harmony and it is          
particularly pleasing to see the improving results after some commissioning     
problems.                                                                       
Countering these production improvements was Evander 8, which experienced a     
drop in face grade causing gold production to decrease by 6%. Kalgold`s grade   
and volume was lower quarter on quarter and gold production decreased by 8%.    
Bambanani`s volume was down by 19%, with grade only increasing by 3%. The       
Steyn 2 production plan was revised and the major focus will now be to get the  
shaft pillar into production by August 2011.                                    
The rock/ventilation shaft accident which occurred in October 2010 at           
Kusasalethu restricted hoisting and was the main contributor to the group`s     
overall lower production. The shaft is now back to hoisting capacity and the    
underground accumulations of the December 2010 quarter will be rectified.       
Financial performance                                                           
The Rand per kilogram unit cost for the December 2010 quarter decreased by 5%   
quarter on quarter to R216 595/kg from R228 658/kg. This is mainly              
attributable to the decrease in cash operating costs, which decreased by R225   
million (10%) quarter on quarter. The primary factors for the decrease were     
the lower electricity (winter tariffs of R147 million) and labour costs.        
In Rand per kilogram terms, the gold price received increased by 6% from R287   
401/kg in the September 2010 quarter to R303 354/kg in the current quarter. A   
decrease in the gold sold for the December 2010 quarter of 823kg (8%) to 10     
046 kilograms resulted in a drop in revenue of 3% compared to the previous      
quarter.                                                                        
Capital expenditure increased by R88 million (12%) to R835 million in the       
quarter under review compared with R747 million in September 2010 quarter, in   
line with the company`s mine plans.                                             
Operating profit for the quarter increased by R215 million (33%) to R867        
million, compared with R652 million in the September 2010 quarter.              
Wafi/Golpu                                                                      
The Golpu resource continues to expand to the north as drilling continues to    
define further mineralisation. A significant intersection of 595m @ 2.03%       
copper and 1.65g/t gold (5.0g/t gold equivalent) has been reported in WR363.    
The drilling campaign this quarter included holes to gain metallurgical         
samples of Wafi and geotechnical information for the Watut decline. The pre-    
feasibility study technical work packages have been allocated to various        
consultants and is progressing well (1).                                        
Due to the continuing robustness of the Golpu resource, the study group is      
considering upgrading early works to accommodate likely operating scenarios,    
including the construction of twin declines and purchase of land for early      
infrastructure. This will be assessed by management and, if considered          
appropriate, will be submitted for board approval. Recent exploration has       
produced better than expected results and we are very pleased with the          
progress here.                                                                  
Looking ahead                                                                   
We remain confident that we will reach our long term targets and our focus is   
to increase production to 2Moz of gold by FY13, with costs per tonne milled in  
the lowest quartile of South African producers. The company has turned the      
corner, with the closure of unprofitable operations, our longer-life lower      
cost operations are profitable and sustainable. With the closure of some        
shafts and unplanned production setbacks during the first six months of         
financial year 2011, production for the financial year 2011 will most likely    
be between 1.45Moz and 1.5Moz.                                                  
Harmony is well positioned to reap the benefits of a number of the initiatives  
we have implemented over the last three years aimed at optimising the asset     
portfolio and increasing operational efficiency.                                
We will continue to strive for an improved safety performance and as ever, our  
employees have the right to withdraw from unsafe areas. Overall, we have seen   
improved safety figures and we hope to continue this trend.                     
Given the expertise of our operational management teams, I feel confident in    
our ability to clear any hurdles in reaching our goal of being a sustainable    
low cost high quality producer.                                                 
Graham Briggs                                                                   
Chief Executive Officer                                                         
(1) The technical information on Hidden Valley was compiled by Greg Job,        
Harmony`s New Business Executive for South-East Asia, who has the overall       
responsibility and accountability for the Golpu Project, in terms of            
the South African Code for the Reporting of Exploration Results,                
Mineral Resources and Ore Reserves  (SAMREC) 2007. Mr Job has 21 years          
experience in mine and resource geology and is a member of the Australian       
Institute of Mining and Metallurgy. He is a full time employee of Harmony       
and qualifies as Competent Person as defined in the SAMREC code and the         
Australian Code for Reporting Exploration Results, Mineral Resources and Ore    
Reserves (JORC). Mr Job has consented to the inclusion of the exploration       
details based on the information in the form and context in which it            
appears.                                                                        
Safety and health                                                               
Safety                                                                          
Our approach to safety is comprehensive and includes training, auditing,        
communication, specific management interventions and programmes and on-going    
campaigns. There is not a safety-related event or issue that is not considered  
or addressed in a co-operative way on-mine between unions and management, from  
the introduction of new standards, to training needs, to investigations into    
accidents - and that is the way it should be. We are in this together and       
together our safety target can be reached. Our number one safety rule - that    
every employee has the right to withdraw from an unsafe area - stands and is    
non-negotiable.                                                                 
Tragically, four fatalities occurred in three incidents at the South African    
operations during the December 2010 quarter.                                    
Harmony achieved a single digit figure in respect of its Lost Time Injury       
Frequency Rate (LTIFR) for the ninth quarter in a row. For the year to date,    
the LTIFR (per million hours worked) improved by 3% when compared to the        
actual figure for the previous year (from 7.73 to 7.47) and by 15% quarter on   
quarter (from 8.06 to 6.88).                                                    
The Reportable Injury Frequency Rate (RIFR) (per million hours worked) to date  
regressed by 6% when compared to the actual figure for the previous year (from  
4.19 to 4.43) but improved by 15% quarter on quarter (from 4.78 to 4.08).       
The Fatal Injury Frequency Rate (FIFR) to date rate rose by 5% when compared    
to the actual figure for the previous year (from 0.21 to 0.22), but improved    
by 33% quarter on quarter (from 0.27 to 0.18).                                  
Safety achievements for the quarter included:                                   
Total Harmony surface and                                                       
underground operations:                         1 000 000 fatality free shifts  
South African surface and                                                       
underground operations:                         1 000 000 fatality free shifts  
South African surface operations:               2 000 000 fatality free shifts  
Kusasalethu, Doornkop,                                                          
Evander and Kalgold:                            2 000 000 fatality free shifts  
Masimong:                                       1 000 000 fatality free shifts  
Evander 8:                                        500 000 fatality free shifts  
Unisel and Merriespruit 1:                        500 000 fatality free shifts  
Doornkop:                                         500 000 fatality free shifts  
The following operations completed the December 2010 quarter without an         
injury:                                                                         
Masimong 4                                                                      
Phoenix Plant                                                                   
Target Plant                                                                    
Harmony 1 Plant                                                                 
Free State Commercial Services and Transport                                    
Randfontein Commercial Services and Transport                                   
Evander Workshops                                                               
Evander Services                                                                
Randfontein Surface Operations                                                  
Merriespruit 3                                                                  
The following operations completed two consecutive quarters without an injury   
Phoenix Plant                                                                   
Target Plant                                                                    
Free State Commercial Services and Transport                                    
Randfontein Commercial Services and Transport                                   
Evander Workshops                                                               
Evander Services                                                                
Health                                                                          
During the quarter our pro-active approach to the health and wellness of our    
employees continued. Our objective remains to improve health management         
programmes and effectively utilise clinical information. This includes the      
review of policies, procedures, and processes as well as training, on an on-    
going basis. These efforts have resulted in improved health and a better        
quality of life for our employees.                                              
See our Sustainable Development Report for more details on our website          
www.harmony.co.za.                                                              
Financial overview                                                              
Cash operating profit increased by 33% to R867 million in the December 2010     
quarter. This was mainly due to a decrease in production cost of R225 million   
as a result of lower electricity tariffs and restructuring efforts. This        
decrease was offset by a decrease in revenue, as a result of a 4% lower gold    
production, which resulted in lower gold sales.                                 
Earnings per share                                                              
Basic earnings per share increased from 24 SA cents to 69 SA cents. Similarly   
headline earnings per share increased from 33 SA cents to earnings of 69 SA     
cents.                                                                          
Revenue                                                                         
Revenue decreased from R3 083 million to R2 990 million as a result of the      
lower gold production. This decrease was offset by an increase in the Rand      
gold price received from R287 401/kg to R303 354/kg.                            
Cost of sales                                                                   
Cost of sales decreased from R2 995 million to R2 506 million in the December   
2010 quarter. This was due to the decrease of R225 million in production costs  
and insurance credits to the value of R179 million following the unwinding of   
the previous insurance scheme.                                                  
Other income/expenses                                                           
Other income amounted to R6 million in the December 2010 quarter, compared to   
an expense of R54 million in the September 2010 quarter, which included R47     
million foreign exchange losses from other reserves on the liquidation of       
foreign subsidiaries.                                                           
Gain on financial instruments                                                   
The net gain on financial instruments amounted to R78 million in the December   
2010 quarter, which was an increase in fair value of the Nedbank Equity Linked  
Deposits held by the Environmental Trusts. In the September 2010 quarter this   
amount was R311 million, which comprised mainly of the revaluation of the       
Freegold option by R273 million following the conclusion of the sales           
agreement to sell the option to Wits Gold.                                      
Capital expenditure                                                             
Total capital expenditure increased by 12% to R835 million in the December      
2010 quarter with R750 million spent in South Africa and R85 million in PNG.    
Borrowings                                                                      
During the quarter an additional R750 million funding facility was arranged     
with Nedbank Limited on similar terms to the existing facility. Of this, R500   
million was drawn down while R90 million was repaid on the existing facility.   
The undrawn facility at balance sheet date was R550 million.                    
CONDENSED CONSOLIDATED INCOME STATEMENT (Rand)                                  
Quarter ended                    
                               31 December     30 September     31 December 1   
                                      2010             2010              2009   
                               (Unaudited)      (Unaudited)       (Unaudited)   
Note       R million        R million         R million   
Continuing operations                                                           
Revenue                               2 990            3 083             2 971  
Cost of sales             2         (2 506)          (2 995)           (2 656)  
Production costs                    (2 093)          (2 408)           (2 172)  
Royalty expense                        (30)             (23)                 -  
Amortisation and                                                                
depreciation                          (442)            (426)             (320)  
Impairment of assets                      -                -             (104)  
Employment termination                                                          
and restructuring costs                (54)             (78)               (3)  
Other items                             113             (60)              (57)  
Gross profit                            484               88               315  
Corporate, administration                                                       
and other expenditure                  (96)             (94)              (95)  
Social investment                                                               
expenditure                            (23)             (16)              (20)  
Exploration expenditure   3            (76)             (99)              (45)  
Profit on sale of                                                               
property, plant and                                                             
equipment                                 1               16                 1  
Other income/(expenses) - net             6             (54)              (20)  
Operating profit/(loss)                 296            (159)               136  
(Loss)/profit from                                                              
associates                             (19)              (8)                25  
Profit/(loss) on sale                                                           
of investment                                                                   
in subsidiary                             -                -                 -  
Net gain/(loss) on                                                              
financial instruments     4              78              311                 3  
Investment income                        38               14                54  
Finance cost                           (69)             (59)              (37)  
Profit before taxation                  324               99               181  
Taxation                               (28)                6              (59)  
Normal taxation                           -              (9)              (14)  
Deferred taxation                      (28)               15              (45)  
Net profit/(loss) from                                                          
continuing operations                   296              105               122  
Discontinued operations                                                         
Profit/(loss) from                                                              
discontinued                                                                    
operations                5              23              (3)               (4)  
Net profit/(loss)                       319              102               118  
Attributable to:                                                                
Owners of the parent                    319              102               118  
Non-controlling                                                                 
interest                                  -                -                 -  
Earnings/(loss) per                                                             
ordinary share (cents)    6                                                     
- Earnings/(loss) from                                                          
continuing operations                    69               24                29  
- Earnings/(loss) from                                                          
discontinued                                                                    
operations                                5              (1)               (1)  
Total earnings/(loss)                                                           
per ordinary share (cents)               74               23                28  
Diluted earnings/(loss) per                                                     
ordinary share (cents)    6                                                     
- Earnings/(loss) from                                                          
continuing operations                    69               24                29  
- Earnings/(loss) from                                                          
discontinued operations                   5              (1)               (1)  
Total diluted                                                                   
earnings/(loss) per                                                             
ordinary share (cents)                   74               23                28  
                                        Six months ended           Year ended   
                                  31 December     31 December 1       30 June   
                                         2010              2009          2010   
(Audited)   
                                    R million         R million     R million   
Continuing operations                                                           
Revenue                                  6 073             5 718        11 284  
Cost of sales                          (5 501)           (5 256)      (10 484)  
Production costs                       (4 501)           (4 367)       (8 325)  
Royalty expense                           (53)                 -          (33)  
Amortisation and depreciation            (868)             (670)       (1 375)  
Impairment of assets                         -             (104)         (331)  
Employment termination and                                                      
restructuring costs                      (132)               (3)         (205)  
Other items                                 53             (112)         (215)  
Gross profit                               572               462           800  
Corporate, administration and other                                             
expenditure                              (190)             (174)         (382)  
Social investment expenditure             (39)              (29)          (81)  
Exploration expenditure                  (175)              (93)         (219)  
Profit on sale of property, plant                                               
and equipment                               17                 1           104  
Other income/(expenses) - net             (48)              (94)          (58)  
Operating profit/(loss)                    137                73           164  
(Loss)/profit from associates             (27)                56            56  
Profit/(loss) on sale of investment                                             
in subsidiary                                -                 5          (24)  
Net gain/(loss) on financial                                                    
instruments                                389               (2)            38  
Investment income                           52               125           187  
Finance cost                             (128)              (91)         (246)  
Profit before taxation                     423               166           175  
Taxation                                  (22)              (77)         (335)  
Normal taxation                            (9)              (43)          (84)  
Deferred taxation                         (13)              (34)         (251)  
Net profit/(loss) from continuing                                               
operations                                 401                89         (160)  
Discontinued operations                                                         
Profit/(loss) from discontinued                                                 
operations                                  20                 -          (32)  
Net profit/(loss)                          421                89         (192)  
Attributable to:                                                                
Owners of the parent                       421                89         (192)  
Non-controlling interest                     -                 -             -  
Earnings/(loss) per ordinary share                                              
(cents)                                                                         
- Earnings/(loss) from continuing                                               
operations                                  93                21          (38)  
- Earnings/(loss) from                                                          
discontinued operations                      5                 -           (8)  
Total earnings/(loss) per ordinary                                              
share (cents)                               98                21          (46)  
Diluted earnings/(loss) per                                                     
ordinary share (cents)                                                          
- Earnings/(loss) from continuing                                               
operations                                  93                21          (38)  
- Earnings/(loss) from                                                          
discontinued operations                      5                 -           (8)  
Total diluted earnings/(loss) per                                               
ordinary share (cents)                      98                21          (46)  
1 The comparative figures are re-presented due to Mount Magnet being            
reclassified as a discontinued operation. See note 5 in this regard.            
The accompanying notes are an integral part of these condensed consolidated     
financial statements.                                                           
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (Rand)           
                                                Quarter ended                   
                                 31 December     30 September     31 December   
2010             2010            2009   
                                 (Unaudited)      (Unaudited)     (Unaudited)   
                                   R million        R million       R million   
Net profit/(loss) for the period          319              102             118  
Other comprehensive (loss)/income                                               
for the period, net of income tax       (161)              106            (51)  
Foreign exchange translation            (131)              106            (57)  
Fair value movement of                                                          
available-for-sale investments           (30)                -               6  
Total comprehensive income/(loss)                                               
for the period                            158              208              67  
Attributable to:                                                                
Owners of the parent                      158              208              67  
Non-controlling interest                    -                -               -  
                                           Six months ended        Year ended   
                                    31 December     31 December       30 June   
2010            2009          2010   
                                                                    (Audited)   
                                      R million       R million     R million   
Net profit/(loss) for the period             421              89         (192)  
Other comprehensive (loss)/income for                                           
the period, net of income tax               (55)            (36)         (131)  
Foreign exchange translation                (25)            (38)         (127)  
Fair value movement of                                                          
available-for-sale investments              (30)               2           (4)  
Total comprehensive income/(loss)                                               
for the period                               366              53         (323)  
Attributable to:                                                                
Owners of the parent                         366              53         (323)  
Non-controlling interest                       -               -             -  
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)                                     
                                                          At               At   
31 December     30 September   
                                                        2010             2010   
                                                                  (Unaudited)   
                                        Note       R million        R million   
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment                          30 218           29 873  
Intangible assets                                       2 199            2 199  
Restricted cash                                            26              116  
Restricted investments                                  1 864            1 787  
Investments in financial assets                           264              296  
Investments in associates                                 358              377  
Inventories                                               232              237  
Trade and other receivables                                69               67  
                                                      35 230           34 952   
Current assets                                                                  
Inventories                                               943              902  
Trade and other receivables                               962              649  
Income and mining taxes                                   102               73  
Restricted cash                                             -                -  
Cash and cash equivalents                                 837              772  
                                                       2 844            2 396   
Assets of disposal groups classified as                                         
held for sale                               5               -                -  
2 844            2 396   
Total assets                                           38 074           37 348  
EQUITY AND LIABILITIES                                                          
Share capital and reserves                                                      
Share capital                                          28 277           28 269  
Other reserves                                            266              395  
Retained earnings                                         897              578  
                                                      29 440           29 242   
Non-current liabilities                                                         
Deferred tax                                            3 613            3 572  
Provision for environmental                                                     
rehabilitation                                          1 752            1 723  
Retirement benefit obligation and other                                         
provisions                                                179              169  
Borrowings                                  7           1 243              970  
                                                       6 787            6 434   
Current liabilities                                                             
Borrowings                                  7             344              207  
Income and mining taxes                                    10               13  
Trade and other payables                                1 493            1 452  
1 847            1 672   
Liabilities of disposal groups                                                  
classified as held for sale                 5               -                -  
                                                       1 847            1 672   
Total equity and liabilities                           38 074           37 348  
Number of ordinary shares in issue                429 506 618      428 850 854  
Net asset value per share (cents)                       6 854            6 819  
                                                           At              At   
30 June     31 December   
                                                         2010            2009   
                                                    (Audited)                   
                                                    R million       R million   
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment                           29 556          28 862  
Intangible assets                                        2 210           2 217  
Restricted cash                                            146             167  
Restricted investments                                   1 742           1 697  
Investments in financial assets                             12              20  
Investments in associates                                  385             385  
Inventories                                                214              77  
Trade and other receivables                                 75              74  
                                                       34 340          33 499   
Current assets                                                                  
Inventories                                                987           1 103  
Trade and other receivables                                932           1 108  
Income and mining taxes                                     74              55  
Restricted cash                                              -             280  
Cash and cash equivalents                                  770             808  
                                                        2 763           3 354   
Assets of disposal groups classified as held for                                
sale                                                       245               -  
3 008           3 354   
Total assets                                            37 348          36 853  
EQUITY AND LIABILITIES                                                          
Share capital and reserves                                                      
Share capital                                           28 261          28 096  
Other reserves                                             258             375  
Retained earnings                                          690             971  
                                                       29 209          29 442   
Non-current liabilities                                                         
Deferred tax                                             3 534           3 317  
Provision for environmental rehabilitation               1 692           1 612  
Retirement benefit obligation and other provisions         169             167  
Borrowings                                                 981             565  
                                                        6 376           5 661   
Current liabilities                                                             
Borrowings                                                 209             460  
Income and mining taxes                                      9              11  
Trade and other payables                                 1 410           1 279  
                                                        1 628           1 750   
Liabilities of disposal groups classified as held                               
for sale                                                   135               -  
                                                        1 763           1 750   
Total equity and liabilities                            37 348          36 853  
Number of ordinary shares in issue                 428 654 779     426 079 492  
Net asset value per share (cents)                        6 814           6 910  
The accompanying notes are an integral part of these condensed consolidated     
financial statements.                                                           
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Rand)                    
for the six months ended 31 December 2010                                       
                                                          Share         Other   
                                                        capital      reserves   
                                             Note     R million     R million   
Balance - 30 June 2010                                    28 261           258  
Issue of shares                                               16             -  
Share-based payments                                           -            63  
Total comprehensive income for the period                      -          (55)  
Dividends paid                                   9             -             -  
Balance as at 31 December 2010                            28 277           266  
Balance - 30 June 2009                                    28 091           339  
Issue of shares                                                5             -  
Share-based payments                                           -            72  
Total comprehensive income for the period                      -          (36)  
Dividends paid                                                 -             -  
Balance as at 31 December 2009                            28 096           375  
Retained                 
                                                       earnings         Total   
                                                      R million     R million   
Balance - 30 June 2010                                       690        29 209  
Issue of shares                                                -            16  
Share-based payments                                           -            63  
Total comprehensive income for the period                    421           366  
Dividends paid                                             (214)         (214)  
Balance as at 31 December 2010                               897        29 440  
Balance - 30 June 2009                                     1 095        29 525  
Issue of shares                                                -             5  
Share-based payments                                           -            72  
Total comprehensive income for the period                     89            53  
Dividends paid                                             (213)         (213)  
Balance as at 31 December 2009                               971        29 442  
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Rand)                               
Quarter ended                   
                                 31 December     30 September     31 December   
                                        2010             2010            2009   
                                 (Unaudited)      (Unaudited)     (Unaudited)   
R million        R million       R million   
Cash flow from operating activities                                             
Cash generated by operations              450              703             183  
Interest and dividends received            38               14              52  
Interest paid                            (35)             (30)            (11)  
Income and mining taxes paid             (30)              (4)            (34)  
Cash generated by operating                                                     
activities                                423              683             190  
Cash flow from investing activities                                             
Decrease/(increase) in restricted cash     90               30           (283)  
Proceeds on disposal of                                                         
investment in subsidiary                    -              229               -  
Proceeds on disposal of                                                         
available-for-sale financial assets         2                -              29  
Other investing activities                (6)               10             (3)  
Net additions to property, plant                                                
and equipment                           (846)            (748)           (890)  
Cash utilised by investing                                                      
activities                              (760)            (479)         (1 147)  
Cash flow from financing activities                                             
Borrowings raised                         525                -             686  
Borrowings repaid                       (107)              (7)            (18)  
Ordinary shares issued - net of                                                 
expenses                                    8                8               3  
Dividends paid                              -            (214)               -  
Cash generated/(utilised) by                                                    
financing activities                      426            (213)             671  
Foreign currency translation adjustments (24)               11               -  
Net increase/(decrease) in cash                                                 
and cash equivalents                       65                2           (286)  
Cash and cash equivalents -                                                     
beginning of period                       772              770           1 094  
Cash and cash equivalents - end                                                 
of period                                 837              772             808  
                                           Six months ended        Year ended   
                                    31 December     31 December       30 June   
2010            2009          2010   
                                                                    (Audited)   
                                      R million       R million     R million   
Cash flow from operating activities                                             
Cash generated by operations               1 153             408         1 611  
Interest and dividends received               52             120           187  
Interest paid                               (65)            (20)          (90)  
Income and mining taxes paid                (34)            (59)         (125)  
Cash generated by operating activities     1 106             449         1 583  
Cash flow from investing activities                                             
Decrease/(increase) in restricted cash       120           (286)            15  
Proceeds on disposal of investment                                              
in subsidiary                                229               -            24  
Proceeds on disposal of                                                         
available-for-sale financial assets            2              44            50  
Other investing activities                     4               5          (12)  
Net additions to property, plant and                                            
equipment                                (1 594)         (1 797)       (3 493)  
Cash utilised by investing activities    (1 239)         (2 034)       (3 416)  
Cash flow from financing activities                                             
Borrowings raised                            525             686         1 236  
Borrowings repaid                          (114)            (25)         (391)  
Ordinary shares issued - net of expenses      16               5            18  
Dividends paid                             (214)           (213)         (213)  
Cash generated/(utilised) by                                                    
financing activities                         213             453           650  
Foreign currency translation adjustments    (13)            (10)             3  
Net increase/(decrease) in cash and                                             
cash equivalents                              67         (1 142)       (1 180)  
Cash and cash equivalents -                                                     
beginning of period                          770           1 950         1 950  
Cash and cash equivalents - end of period    837             808           770  
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND         
QUARTER AND SIX MONTHS ENDED 31 DECEMBER 2010                                   
1. Accounting policies                                                          
Basis of accounting                                                             
The condensed consolidated financial statements for the six months ended 31     
December 2010 have been prepared in accordance with IAS 34, Interim Financial   
Reporting, JSE Listing Requirements and in the manner required by the           
Companies Act of South Africa. They should be read in conjunction with the      
annual financial statements for the year ended 30 June 2010, which have been    
prepared in accordance with International Financial Reporting Standards as      
issued by the International Accounting Standards Board (IFRS). The accounting   
policies are consistent with those described in the annual financial            
statements, except for the adoption of applicable revised and/or new standards  
issued by the International Accounting Standards Board.                         
2. Cost of sales                                                                
                                              Quarter ended                     
31 December     30 September     31 December 1   
                                      2010             2010              2009   
                               (Unaudited)      (Unaudited)       (Unaudited)   
                                 R million        R million         R million   
Production costs                      2 093            2 408             2 172  
Royalty expense                          30               23                 -  
Amortisation and depreciation           442              426               320  
Impairment of assets(2)                   -                -               104  
Rehabilitation expenditure                5                4                 4  
Care and maintenance cost of                                                    
restructured shafts                      28               25                14  
Employment termination and                                                      
restructuring costs                      54               78                 3  
Share based payments                     32               31                38  
Insurance credits(3)                  (179)                -                 -  
Provision for post-retirement benefits    1                -                 1  
Total cost of sales                   2 506            2 995             2 656  
                                         Six months ended          Year ended   
                                  31 December     31 December 1       30 June   
                                         2010              2009          2010   
(Audited)   
                                    R million         R million     R million   
Production costs                         4 501             4 367         8 325  
Royalty expense                             53                 -            33  
Amortisation and depreciation              868               670         1 375  
Impairment of assets(2)                      -               104           331  
Rehabilitation expenditure                   9                 8            29  
Care and maintenance cost of                                                    
restructured shafts                         53                31            57  
Employment termination and                                                      
restructuring costs                        132                 3           205  
Share based payments                        63                72           148  
Insurance credits(3)                     (179)                 -             -  
Provision for post-retirement benefits       1                 1          (19)  
Total cost of sales                      5 501             5 256        10 484  
(1) The comparative figures are re-presented due to Mount Magnet being          
reclassified as part of discontinued operations. See note 5 in this regard.     
(2) The impairment for the quarter ended 31 December 2009 and year ended 30     
June 2010 relates mainly to Virginia and Evander, which was recorded as a       
result of shaft closures.                                                       
(3) Proceeds on unwinding of previous insurance agreement.                      
3. Exploration expenditure                                                      
                                               Quarter ended                    
                               31 December     30 September     31 December 1   
2010             2010              2009   
                               (Unaudited)      (Unaudited)       (Unaudited)   
                                 R million        R million         R million   
Total exploration expenditure           102              101                45  
Less: Expenditure capitalised          (26)              (2)                 -  
Exploration expenditure                                                         
per income statement                     76               99                45  
                                         Six months ended          Year ended   
31 December     31 December 1       30 June   
                                         2010              2009          2010   
                                                                    (Audited)   
                                    R million         R million     R million   
Total exploration expenditure              203                93           219  
Less: Expenditure capitalised             (28)                 -             -  
Exploration expenditure                                                         
per income statement                       175                93           219  
4. Net gain/(loss) on financial instruments                                     
On 3 September 2010, Harmony Gold Mining Company Limited (Harmony) entered      
into two transactions with Witwatersrand Consolidated Gold Resources Limited    
(Wits Gold), whereby Wits Gold obtains a prospecting right over Harmony`s       
Merriespruit South area and the option held by ARMGold/Harmony Freegold Joint   
Venture Company (Proprietary) Limited (Freegold), a wholly-owned subsidiary of  
Harmony, is cancelled. The option is to acquire a beneficial interest of up to  
40% in any future mines established by Wits Gold on certain properties in the   
Southern Free State (Freegold option). Harmony will abandon a portion of its    
mining right in respect of the Merriespruit South area to enable Wits Gold to   
include this area in its prospecting right, which is located immediately south  
of the Merriespruit South area.                                                 
The total consideration of the transactions is R336 million of which R275       
million was received for the cancellation of the option agreement by the issue  
of 4 376 194 shares in Wits Gold, following approval by Wits Gold shareholders  
on 5 November 2010. This represents a 13% investment in Wits Gold. The          
remaining R61 million for the prospecting area will be settled in cash or a     
combination of cash and shares in Wits Gold, when all remaining conditions      
precedent have been fulfilled. The Group classifies the investment in Wits      
Gold as an available- for-sale financial asset. During the September 2010       
quarter, a gain of R273 million was recognised on the Freegold option which     
was then classified as a financial asset at fair value through profit or loss.  
5. Disposal groups classified as held for sale and discontinued operations      
The conditions precedent for the sale of Mount Magnet were fulfilled and the    
transaction became effective on 20 July 2010. A total purchase consideration    
of R238 million was received from Ramelius Resources Limited in exchange for    
100% of the issued shares of Mount Magnet. The group recognised a total profit  
of R104 million net of tax, before the realisation of accumulated foreign       
exchange losses of R84 million from other comprehensive income to the           
consolidated income statement. The income statement and earnings per share      
amounts for all comparative periods have been re-presented to disclose the      
operation as a discontinued operation.                                          
6. 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 December 2010:      
429.1 million (30 September 2010: 428.7 million, 31 December 2009: 425.9        
million), and six months ended 31 December 2010: 428.9 million (31 December     
2009: 425.9 million), and the year ended 30 June 2010: 426.4 million.           
The diluted earnings/(loss) per ordinary share is calculated on weighted        
average number of diluted ordinary shares in issue for the quarter ended 31     
December 2010: 429.9 million (30 September 2010: 429.9 million, 31 December     
2009: 427.5 million), and the six months ended 31 December 2010: 429.7 million  
31 December 2009: 427.4 million), and the year ended 30 June 2010: 427.8        
million.                                                                        
Quarter ended                   
                              31 December        30 September   31 December 1   
                                     2010                2010            2009   
                              (Unaudited)         (Unaudited)     (Unaudited)   
Total earnings/(loss) per                                                       
ordinary share (cents):                                                         
Basic earnings/(loss)                   74                  23              28  
Diluted earnings/(loss)                 74                  23              28  
Headline earnings/(loss)                69                  33              49  
- from continuing operations            69                  33              50  
- from discontinued operations           -                   -             (1)  
Diluted headline                                                                
earnings/(loss)                         69                  33              49  
- from continuing operations            69                  33              50  
- from discontinued operations           -                   -             (1)  
                                R million           R million       R million   
Reconciliation of headline                                                      
earnings/(loss):                                                                
Continuing operations                                                           
Net profit/(loss)                      296                 105             122  
Adjusted for:                                                                   
Profit on sale of property,                                                     
plant and equipment                    (1)                (16)               -  
Taxation effect of profit on                                                    
sale of property, plant and equipment    -                   5               -  
Net gain on financial                                                           
instruments                            (1)                   -             (3)  
Taxation effect of net gain on                                                  
financial instruments                    -                   -               1  
Foreign exchange loss/(gain)                                                    
reclassified from other comprehensive                                           
income                                   -                  47               -  
Taxation effect of foreign                                                      
exchange loss/(gain) reclassified from                                          
other comprehensive income               -                   -               -  
Loss on sale of investment in                                                   
subsidiary                               -                   -               -  
Taxation effect of loss on                                                      
sale of investment in subsidiary         -                   -               -  
Impairment of other investments          -                   -               -  
Taxation effect of impairment                                                   
of other investments                     -                   -               -  
Impairment of assets                     -                   -             104  
Taxation effect of impairment                                                   
of assets                                -                   -            (11)  
Headline earnings                      294                 141             213  
                                          Six months ended         Year ended   
                                  31 December     31 December 1       30 June   
2010              2009          2010   
                                                                    (Audited)   
Total earnings/(loss) per ordinary                                              
share (cents):                                                                  
Basic earnings/(loss)                       98                21          (46)  
Diluted earnings/(loss)                     98                21          (46)  
Headline earnings/(loss)                   101                37           (7)  
- from continuing operations               101                37             1  
- from discontinued operations               -                 -           (8)  
Diluted headline earnings/(loss)           101                37           (7)  
- from continuing operations               101                37             1  
- from discontinued operations               -                 -           (8)  
R million         R million     R million   
Reconciliation of headline                                                      
earnings/(loss):                                                                
Continuing operations                                                           
Net profit/(loss)                          401                89         (160)  
Adjusted for:                                                                   
Profit on sale of property, plant                                               
and equipment                             (17)               (1)         (104)  
Taxation effect of profit on sale                                               
of property, plant and equipment             5                 -            22  
Net gain on financial instruments          (1)               (5)           (7)  
Taxation effect of net gain on                                                  
financial instruments                        -                 2             2  
Foreign exchange loss/(gain)                                                    
reclassified from other comprehensive                                           
income                                      47              (22)          (22)  
Taxation effect of foreign exchange                                             
loss/(gain) reclassified from other                                             
comprehensive income                         -                 -             -  
Loss on sale of investment in subsidiary     -                 -            24  
Taxation effect of loss on sale of                                              
investment in subsidiary                     -                 -           (7)  
Impairment of other investments              -                 2             -  
Taxation effect of impairment of                                                
other investments                            -                 -             -  
Impairment of assets                         -               104           331  
Taxation effect of impairment of assets      -              (11)          (75)  
Headline earnings                          435               158             4  
Quarter ended                     
                                31 December    30 September     31 December 1   
                                       2010            2010              2009   
                                (Unaudited)     (Unaudited)       (Unaudited)   
R million       R million         R million   
Discontinued operations                                                         
Net profit/(loss)                         23             (3)               (4)  
Adjusted for:                                                                   
Profit on sale of property, plant                                               
and equipment                              -               -               (2)  
Taxation effect of profit on                                                    
sale of property, plant and equipment      -               -                 -  
Profit on sale of investment in                                                 
subsidiary                                 -           (138)                 -  
Taxation effect of profit on                                                    
sale of investment in subsidiary           -              34                 -  
Foreign exchange (profit)/loss                                                  
reclassified from                                                               
other comprehensive income              (23)             107                 -  
Taxation effect of foreign                                                      
exchange loss reclassified from other                                           
comprehensive income                       -               -                 -  
Headline loss                              -               -               (6)  
Total headline earnings/(loss)           294             141               207  
Six months ended          Year ended   
                                  31 December     31 December 1       30 June   
                                         2010              2009          2010   
                                                                    (Audited)   
R million         R million     R million   
Discontinued operations                                                         
Net profit/(loss)                           20                 -          (32)  
Adjusted for:                                                                   
Profit on sale of property, plant                                               
and equipment                                -               (3)             -  
Taxation effect of profit on sale                                               
of property, plant and equipment             -                 1             -  
Profit on sale of investment in                                                 
subsidiary                               (138)                 -           (1)  
Taxation effect of profit on sale                                               
of investment in subsidiary                 34                 -             -  
Foreign exchange (profit)/loss                                                  
reclassified from                                                               
other comprehensive income                  84                 -             -  
Taxation effect of foreign                                                      
exchange loss reclassified from other                                           
comprehensive income                         -                 -             -  
Headline loss                                -               (2)          (33)  
Total headline earnings/(loss)             435               156          (29)  
(1) The comparative figures are re-presented due to Mount Magnet being          
reclassified as discontinued operation. See note 5 in this regard.              
7. Borrowings                                                                   
                   31 December     30 September       30 June     31 December   
2010             2010          2010            2009   
                                    (Unaudited)     (Audited)                   
                     R million        R million     R million       R million   
Total long-term                                                                 
borrowings                1 243              970           981             565  
Total current                                                                   
portion of borrowings       344              207           209             460  
Total borrowings (1) (2)  1 587            1 177         1 190           1 025  
(1) In December 2009, the company entered into a loan facility with Nedbank     
Limited, comprising of a Term Facility of R900 million and a Revolving Credit   
Facility of R600 million. Interest accrues on a day to day basis over the term  
of the loan at a variable interest rate, which is fixed for a three month       
period, equal to JIBAR plus 3.5%. Interest is repayable quarterly. The Term     
Facility is repayable bi-annually in equal instalments of R90 million over      
five years. The first instalment was paid on 30 June 2010.                      
In December 2010 the Company entered into an additional loan facility with      
Nedbank Limited, comprising of a Term Facility of R500 million and a Revolving  
Credit Facility of R250 million. Interest terms are identical to the original   
facility. The Term Facility is repayable bi-annually in equal instalments of    
R62.5 million over four years, with the first instalment payable on 30 June     
2011. The terms of the original Revolving Credit Facility was amended to        
coincide with the repayment terms of the new Revolving Credit Facility, being   
payable after three years from December 2010.                                   
At 31 December 2010, R550 million of these facilities had not been drawn down.  
(2) Included in the borrowings is R63 million (September 2010: R74 million;     
June 2010: R91 million; December 2009: R102 million) owed to Westpac Bank       
Limited in terms of a finance lease agreement. The future minimum lease         
payments are as follows:                                                        
31 December     30 September        30 June   31 December   
                           2010             2010           2010          2009   
                                     (Unaudited)      (Audited)                 
                      R million        R million      R million     R million   
Due within one year           28               30             33            32  
Due between one and                                                             
five years                    36               46             60            73  
                             64               76             93           105   
Future finance charges       (1)              (2)            (2)           (3)  
Total future minimum                                                            
lease payments                63               74             91           102  
8. Commitments and contingencies                                                
31 December     30 September       30 June     31 December   
                          2010             2010          2010            2009   
                                    (Unaudited)     (Audited)                   
                     R million        R million     R million       R million   
Capital expenditure commitments:                                                
Contracts for                                                                   
capital expenditure         166              188           117             244  
Authorised by the                                                               
directors but not                                                               
contracted for            2 669            3 406         1 006           2 507  
                         2 835            3 594         1 123           2 751   
This expenditure will be financed from existing resources and borrowings where  
necessary.                                                                      
Contingent liability                                                            
For a detailed disclosure on contingent liabilities refer to Harmony`s annual   
report for the financial year ended 30 June 2010, available on the group`s      
website at www.harmony.co.za. There were no significant changes in              
contingencies since 30 June 2010.                                               
9. Dividends paid                                                               
On 13 August 2010, the Board of Directors approved a final dividend for the     
2010 financial year of 50 SA cents per share. The total dividend amounting to   
R214 million was paid on 20 September 2010.                                     
10. Subsequent events                                                           
No subsequent events occurred between close of the current quarter and date of  
this report.                                                                    
11. Segment report                                                              
The segment report follows after note 13.                                       
12. Reconciliation of segment information to consolidated income statements     
and balance sheets                                                              
                                        Six months ended     Six months ended   
                                             31 December        31 December 1   
                                                    2010                 2009   
R million            R million   
The "reconciliation of segment data to                                          
consolidated financials" line item in                                           
the segment report is 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                                 -                    -  
Production costs from:                                                          
Discontinued operations                                 -                    -  
Reconciliation of production profit to                                          
gross profit:                                                                   
Total segment revenue                               6 073                5 718  
Total segment production costs and                                              
royalty expense                                   (4 554)              (4 367)  
Production profit as per segment report             1 519                1 351  
Less: Discontinued operations                           -                    -  
                                                   1 519                1 351   
Cost of sales items other than                                                  
production costs and royalty expense                (947)                (889)  
Amortisation and depreciation                       (868)                (670)  
Impairment of assets                                    -                (104)  
Employment termination and restructuring costs      (132)                  (3)  
Share-based payments                                 (63)                 (72)  
Insurance credits                                     179                    -  
Rehabilitation costs                                  (9)                  (8)  
Care and maintenance costs of                                                   
restructured shafts                                  (53)                 (31)  
Provision for post-retirement benefits                (1)                  (1)  
Gross profit as per income statements *               572                  462  
Six months ended     Six months ended   
                                             31 December        31 December 1   
                                                    2010                 2009   
                                               R million            R million   
Reconciliation of total segment mining                                          
assets to consolidated property, plant                                          
and equipment:                                                                  
Property, plant and equipment not                                               
allocated to a segment                                                          
Mining assets                                         862                  746  
Undeveloped property                                5 139                5 139  
Other non-mining assets                                72                   66  
6 073                5 951   
(1) The comparative figures are re-presented due to Mount Magnet being          
reclassified as discontinued operation. See note 5 in this regard.              
* The reconciliation was done up to the first recognisable line item on the     
income statement. The reconciliation will follow the income statement after     
that.                                                                           
13. Review report                                                               
The condensed consolidated financial statements for the six months ended 31     
December 2010 on pages 16 to 27 have been reviewed in accordance with           
International Standards on Review Engagements 2410 - "Review of interim         
financial information performed by the Independent Auditors of the entity" by   
PricewaterhouseCoopers Inc. Their unqualified review report is available for    
inspection at the Company`s registered office.                                  
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 (Rand/Metric)          
                                   Production        Production        Mining   
                       Revenue       costs(1)     profit/(loss)        assets   
R million      R million         R million     R million   
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Bambanani (2)               502            421                81         1 034  
Doornkop                    360            295                65         2 973  
Evander                     315            316               (1)           946  
Joel                        169            198              (29)           187  
Kusasalethu                 772            643               129         3 098  
Masimong                    730            397               333           821  
Phakisa                     267            223                44         4 207  
Target (2)                  511            358               153         2 670  
Tshepong                  1 000            581               419         3 624  
Virginia                    398            349                49           696  
Surface                                                                         
All other surface                                                               
operations (3)              589            431               158           148  
Total South Africa        5 613          4 212             1 401        20 404  
International                                                                   
Papua New Guinea            460            342               118         3 741  
Total international         460            342               118         3 741  
Total continuing                                                                
operations                6 073          4 554             1 519        24 145  
Discontinued operations                                                         
Mount Magnet                  -              -                 -             -  
Total discontinued                                                              
operations                    -              -                 -             -  
Total operations          6 073          4 554             1 519        24 145  
Reconciliation of the                                                           
segment information to                                                          
the consolidated                                                                
income statement and                                                            
balance sheet (refer                                                            
to note 12)                   -              -                           6 073  
                         6 073          4 554                          30 218   
                                             Capital     Kilograms     Tonnes   
expenditure      produced     milled   
                                           R million           kg*     t`000*   
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Bambanani (2)                                     156         1 716        233  
Doornkop                                          154         1 184        311  
Evander                                           116         1 069        279  
Joel                                               40           556        168  
Kusasalethu                                       189         2 559        497  
Masimong                                           89         2 414        462  
Phakisa                                           194           882        193  
Target (2)                                        252         1 982        401  
Tshepong                                          133         3 316        683  
Virginia                                           49         1 326        366  
Surface                                                                         
All other surface operations (3)                   66         2 024      5 328  
Total South Africa                              1 438        19 028      8 921  
International                                                                   
Papua New Guinea                                  144         1 498        852  
Total international                               144         1 498        852  
Total continuing operations                     1 582        20 526      9 773  
Discontinued operations                                                         
Mount Magnet                                        -             -          -  
Total discontinued operations                       -             -          -  
Total operations                                1 582        20 526      9 773  
Reconciliation of the segment                                                   
information to the consolidated                                                 
income statement and                                                            
balance sheet (refer to note 12)                                                
Notes:                                                                          
(1) Production costs includes royalty expense.                                  
(2) Production statistics for Steyn 2 and Target 3 are shown for information    
purposes. These mines are in build-up phase and revenue and costs are           
currently capitalised until commercial levels of production are reached.        
(3) Includes Kalgold, Phoenix, Dumps and extraction of gold in lock-up at the   
President Steyn plant.                                                          
* Production statistics are not reviewed.                                       
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2009 (Rand/Metric)          
                                      Production     Production        Mining   
Revenue          costs         profit        assets   
                        R million      R million      R million     R million   
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Bambanani                      490            369            121           680  
Doornkop                       259            209             50         2 699  
Evander                        599            559             40           906  
Joel                           291            209             82           135  
Kusasalethu                    741            571            170         2 894  
Masimong                       648            360            288           711  
Phakisa                        161            139             22         3 898  
Target                         414            308            106         2 301  
Tshepong                       886            583            303         3 627  
Virginia                       813            789             24           841  
Surface                                                                         
All other surface                                                               
operations (1)                 416            271            145           141  
Total South Africa           5 718          4 367          1 351        18 833  
International                                                                   
Papua New Guinea (2)             -              -              -         3 805  
Total international              -              -              -         3 805  
Total continuing                                                                
operations                   5 718          4 367          1 351        22 638  
Discontinued operations                                                         
Mount Magnet                     -              -              -           273  
Total discontinued                                                              
operations                       -              -              -           273  
Total operations             5 718          4 367          1 351        22 911  
Reconciliation of the                                                           
segment information to                                                          
the consolidated income                                                         
statement and balance                                                           
sheet (refer to note 12)         -              -                        5 951  
                            5 718          4 367                       28 862   
                                             Capital     Kilograms     Tonnes   
expenditure      produced     milled   
                                           R million           kg*     t`000*   
Continuing operations                                                           
South Africa                                                                    
Underground                                                                     
Bambanani                                          51         1 878        270  
Doornkop                                          151           990        278  
Evander                                           106         2 296        504  
Joel                                               50         1 106        248  
Kusasalethu                                       236         3 012        495  
Masimong                                           85         2 601        469  
Phakisa                                           266           610        158  
Target                                            161         1 700        384  
Tshepong                                          129         3 395        814  
Virginia                                           99         3 253      1 015  
Surface                                                                         
All other surface operations (1)                   44         1 674      4 384  
Total South Africa                              1 378        22 515      9 019  
International                                                                   
Papua New Guinea (2)                              429           768          -  
Total international                               429           768          -  
Total continuing operations                     1 807        23 283      9 019  
Discontinued operations                                                         
Mount Magnet                                        -             -          -  
Total discontinued operations                       -             -          -  
Total operations                                1 807        23 283      9 019  
Reconciliation of the segment                                                   
information to the consolidated                                                 
income statement and                                                            
balance sheet (refer to note 12)                                                
Notes:                                                                          
(1) Includes Kalgold, Phoenix and Dumps.                                        
(2) At 31 December 2009, production statistics for Hidden Valley was shown for  
information purposes. This mine was in build-up phase and revenue and costs     
were capitalised until commercial levels of production were reached.            
* Production statistics are not reviewed.                                       
* The technical information on Hidden Valley was compiled by Greg Job,          
 Harmony`s New Business Executive for South-East Asia, who has the overall      
 responsibility and accountability for the Golpu Project, in terms of           
 the South African Code for the Reporting of Exploration Results,               
Mineral Resources and Ore Reserves  (SAMREC) 2007. Mr Job has 21 years         
 experience in mine and resource geology and is a member of the Australian      
 Institute of Mining and Metallurgy. He is a full time employee of Harmony      
 and qualifies as Competent Person as defined in the SAMREC code and the        
Australian Code for Reporting Exploration Results, Mineral Resources and Ore   
 Reserves (JORC). Mr Job has consented to the inclusion of the exploration      
 details based on the information in the form and context in which it           
 appears.                                                                       
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                                                               
South Africa                                                                    
Telephone: +27 11 411 2000                                                      
Website:   http://www.harmony.co.za                                             
Directors                                                                       
P T Motsepe (Chairman)*                                                         
G P Briggs (Chief Executive Officer)                                            
H O Meyer (Financial Director)                                                  
H E Mashego (Executive Director)                                                
F F T De Buck* (Lead independent director)                                      
F Abbott*, J A Chissano*1, Dr C Diarra*+                                        
K V Dicks*, Dr D S Lushaba*, C Markus*,                                         
M Motloba*, C M L Savage*, A J Wilkens*                                         
* Non-executive                                                                 
1 Mozambican                                                                    
+ US/Mali Citizen                                                               
Independent                                                                     
Investor Relations Team                                                         
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                                                 
Henrika Basterfield                                                             
Investor Relations Officer                                                      
Telephone: +27 11 411 2314                                                      
Fax:       +27 11 692 3879                                                      
Mobile:    +27 82 759 1775                                                      
E-mail:    henrika@harmony.co.za                                                
Company Secretary                                                               
Khanya Maluleke                                                                 
Telephone: +27 11 411 2019                                                      
Fax:       +27 11 411 2070                                                      
Mobile:    +27 82 767 1082                                                      
E-mail:    Khanya.maluleke@harmony.co.za                                        
South African Share Transfer Secretaries                                        
Link Market Services South Africa (Proprietary) Limited                         
(Registration number 2000/007239/07)                                            
16th Floor, 11 Diagonal Street                                                  
Johannesburg, 2001                                                              
PO Box 4844                                                                     
Johannesburg, 2000                                                              
South Africa                                                                    
Telephone: +27 86 154 6572                                                      
Fax:       +27 86 674 4381                                                      
United Kingdom Registrars                                                       
Capita Registrars                                                               
The Registry                                                                    
34 Beckenham Road                                                               
Bechenham                                                                       
Kent BR3 4TU                                                                    
United Kingdom                                                                  
Telephone: 0871 664 0300 (UK)                                                   
(calls cost 10p a minute plus network extras, lines are open                    
8:30 am to 5:30 pm (Monday to Friday)                                           
or         +44 (0) 20 8639 3399 (calls from overseas)                           
Fax:       +44 (0) 20 8639 2220                                                 
ADR Depositary                                                                  
BNY Mellon                                                                      
101 Barclay Street                                                              
New York, NY 10286                                                              
United States of America                                                        
Telephone: +1888-BNY-ADRS                                                       
Fax:       +1 212 571 3050                                                      
Sponsor                                                                         
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                                               
London Stock Exchange Plc: HRM                                                  
Euronext, Brussels: HMY                                                         
Berlin Stock Exchange: HAM1                                                     
Registration number 1950/038232/06                                              
Incorporated in the Republic of South Africa                                    
ISIN: ZAE 000015228                                                             
Date: 08/02/2011 08:22:00 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2019 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.