HAR - Harmony Gold Mining Company Ltd - Harmony disposes of its entire interest Release Date: 30/01/2012 16:00:01 Code(s): HAR
HAR - Harmony Gold Mining Company Ltd - Harmony disposes of its entire interest
Harmony Gold Mining Company Ltd
Incorporated in the Republic of South Africa
Registration number: 1950/038232/06
Share code: HAR
HARMONY DISPOSES OF ITS ENTIRE INTEREST IN EVANDER
Johannesburg. Monday, 30 January 2012.
Shareholders are informed that Harmony Gold Mining Company Limited ("Harmony")
has signed a sale of shares and claims agreement ("the Agreement") with Pan
African Resources plc ("Pan African Resources") and Witwatersrand Consolidated
Gold Resources Limited ("Wits Gold") (the "Consortium") for the disposal of
Harmony`s entire interest in Evander Gold Mines Limited ("Evander"). The
disposal will be for an aggregate purchase consideration of R1.7 billion,
excluding the proceeds of the Taung Gold Transaction (as defined below), payable
as set out below (the "Transaction").
Evander is a wholly-owned subsidiary of Harmony. The Evander operations comprise
the Evander 8 shaft which is located in Mpumalanga. Evander also includes
several potential development projects namely Rolspruit, Poplar, Evander South
and Libra. Evander 8 shaft currently has an expected life of mine of more than
10 years. Evander has an estimated resource of 34.4 million ounces of gold of
which approximately 8 million ounces are in reserve.
Pan African Resources
Pan African Resources is a precious metals producer with a dual primary listing
on the Main Board of JSE Limited ("JSE"), and the Alternative Investment Market
of the London Stock Exchange, and operates in South Africa and Mozambique.
Wits Gold is a gold and uranium exploration company with assets located in the
Witwatersrand Basin in South Africa. Wits Gold is primary listed on the Main
Board of the JSE and secondary listed on the Toronto Stock Exchange, and
operates an American Depository Receipt (ADR) programme through the Bank of New
Harmony currently holds a 12.69% shareholding in Wits Gold which was acquired
pursuant to the purchase of an option from one of Harmony`s wholly owned
subsidiaries by Wits Gold.
The purchase consideration of R1.7 billion, less certain distributions made by
Evander to Harmony between 1 April 2012 and the closing date of the Transaction
("Closing Date") will be payable as follows:
- R1.4 billion less certain distributions made by Evander to Harmony between
1 April 2012 and the Closing Date of the Transaction;
- four cash payments of R25 million each, payable quarterly and commencing
three months after the Closing Date, amounting to R100 million in the
- a further R100 million payable 19 months after the Closing Date, provided
the average rand gold price exceeds R410,000 per kg over the preceding 12
months. This payment can be made in either cash or shares (or a combination
of both) at the election of the Consortium and should the Consortium elect
to make payment wholly or partially in shares, each of Pan African and Wits
Gold will issue shares to Harmony in equal value proportions; and
- R100 million payable 31 months after the Closing Date, provided the average
rand gold price exceeds R450,000 per kg during the preceding 12 months.
This payment can be made in either cash or shares (or a combination of
both) at the election of the Consortium and should the Consortium elect to
make payment wholly or partially in shares, each of Pan African and Wits
Gold will issue shares to Harmony in equal value proportions.
Taung Gold transaction
Evander has previously entered into an agreement with a subsidiary of Taung Gold
Secunda (Proprietary) Limited ("Taung Gold"), to dispose of Evander 6 Shaft and
Twistdraai to Taung Gold for R225 million ("Taung Gold Transaction"). The Taung
Gold Transaction remains conditional upon the obtaining of the requisite
approvals from the Department of Mineral Resources.
Once the Taung Gold Transaction completes, the disposal proceeds, net of any
taxes incurred by Evander, will be remitted to Harmony. It is anticipated that
such net disposal proceeds will be approximately R160 million.
The Transaction is subject to, amongst others, the following conditions
- The Consortium raising the required funding comprising of debt and/or
- Each of the Consortium members obtaining the requisite shareholder
approvals for the acquisition;
- Obtaining of all relevant regulatory approvals, including approval from the
Financial Surveillance Department of the Reserve Bank of South Africa, any
required approvals from the various exchanges on which each of the
Consortium members are listed and Competition Commission approval; and
- Approval by the Department of Mineral Resources of the acquisition by the
Consortium of the entire issued share capital of Evander.
The Takeover Regulation Panel has exempted all parties from compliance with the
relevant provisions of the Companies Act (Act 71 of 2008) relating to Affected
Transactions as defined therein and the relevant Companies Regulations 2011 in
respect of the Transaction. The Transaction is below the JSE transaction
thresholds and has been published for information purposes only.
Graham Briggs, chief executive of Harmony commented: "Evander would require
significant capital to develop the potential projects further. Harmony does not
intend spending capital on developing these projects as it is not in line with
our growth strategy. The disposal proceeds from the Evander transaction will
assist in the funding of the Wafi-Golpu project."
Issued by Harmony Gold Mining Company Limited
30 January 2012
For more details contact:
Chief Executive Officer
+27 83 265 0274 (mobile)
Marian van der Walt
Executive: Corporate and Investor Relations
+27 82 888 1242 (mobile)
Randfontein Office Park
P O Box 2
South Africa 1760
T +27 (11) 411 2000
J.P. Morgan Equities Limited
Date: 30/01/2012 16:00:01 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.