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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 
in Evander                                                                      
Harmony Gold Mining Company Ltd                                                 
Incorporated in the Republic of South Africa                                    
Registration number: 1950/038232/06                                             
Share code: HAR                                                                 
ISIN: ZAE000015228                                                              
HARMONY DISPOSES OF ITS ENTIRE INTEREST IN EVANDER                              
Johannesburg. Monday, 30 January 2012.                                          
Introduction                                                                    
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                                                                         
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.                            
The consortium                                                                  
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                                                                       
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 
York Mellon.                                                                    
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.                                                      
Price consideration                                                             
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       
aggregate;                                                                  
-    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.                  
Conditions precedent                                                            
The Transaction is subject to, amongst others, the following conditions         
precedent:                                                                      
-    The Consortium raising the required funding comprising of debt and/or      
    equity;                                                                     
-    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:                                                       
Graham Briggs                                                                   
Chief Executive Officer                                                         
+27 83 265 0274 (mobile)                                                        
Marian van der Walt                                                             
Executive: Corporate and Investor Relations                                     
+27 82 888 1242 (mobile)                                                        
Corporate Office:                                                               
Randfontein Office Park                                                         
P O Box 2                                                                       
Randfontein                                                                     
South Africa 1760                                                               
T +27 (11) 411 2000                                                             
www.harmony.co.za                                                               
Sponsor:                                                                        
J.P. Morgan Equities Limited                                                    
Date: 30/01/2012 16:00:01 Supplied by www.sharenet.co.za                     
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