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HARMONY GOLD MINING COMPANY LIMITED - Harmony positioned to benefit from higher Rand gold prices

Release Date: 03/02/2014 07:06:00      Code(s): HAR       PDF(s):  
Harmony positioned to benefit from higher Rand gold prices

Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
JSE share code: HAR
(“Harmony” or “the company”)


Harmony positioned to benefit from higher Rand gold prices

Harmony Gold Mining Company Limited („Harmony?) is pleased to advise that
it has reduced overall costs quarter on quarter, while production was
stable at 9 515kg (305 913oz). All-in sustaining costs reduced from R404
694/kg to R397 503/kg (US$1 264/oz to US$1 222/oz) quarter on quarter,
and by 23% in dollar terms since commencing with austerity measures.

Operating profit for the December 2013 quarter was 5% lower than in the
previous quarter at R986 million (US$97 million), due to a 3% decrease in
the gold price received as well as underperformance in production, mainly
at Kusasalethu – resulting in gold production remaining the same quarter
on quarter.

Our group all-in sustaining cost is US$1 222/oz or lower than the R400
000/kg on which our financial year 2014 strategic planning is based. By
the end of this financial year (June 2014), we plan to reduce our costs
to a sustainable average of between US$1 100/oz and US$1 150/oz.

Harmony is sustainable, thriving with gold at the current price, and will
continue to finance capital expenditure from working profit. Five of our
mines are very profitable at an all-in cost of below US$1 000/oz. Target
1 (US$854/oz), Bambanani (US$742/oz), Joel (US$921/oz), Steyn 2
(US$811/oz) and Phoenix (US$861/oz) are each operating at an all-in
sustaining cost of less than US$1 000/oz.

In addition, three of our mines are profitable at an all-in cost of below
US$1 210/oz, being Kalgold, Unisel and Hidden Valley. We have
restructured and right-sized Hidden Valley in Papua New Guinea (PNG),
reducing all-in sustaining cost from approximately    US$1600/oz in the
previous quarter to US$1 209/oz in the quarter under review.

Our focus at Doornkop, Kusasalethu, Masimong, Phakisa, Target 3 and
Tshepong is to drive costs down to below US$1 250/oz. At Doornkop we have
eliminated the unprofitable lowest grade reserves (the Kimberley reef)
and we are already seeing improvements in grade and all-in costs.
Management changes were made at Kusasalethu, Masimong and Tshepong.
Phakisa and Target 3, through infrastructure spending, will build up in
production.

The studies at Golpu on underground access, as well as a scalable/modular
approach to the project, are underway. Exploration drilling continues to
refine our knowledge of the Golpu resource.

“Harmony?s strength has always been its ability to adjust quickly and
efficiently to adverse conditions. We have positioned the company to
remain sustainable for many years to come, managing costs and production
to ensure profitability at all gold prices. Harmony has positioned itself
to thrive at current gold prices and provide investors with handsome
returns when market conditions improve”, said Graham Briggs, chief
executive officer.

Please refer to http://www.harmony.co.za/investors for details of our
dial-in and webcast information for today's results' calls and to
download the quarterly booklet and presentation in support of our
presentation, webcast and calls.

For more details contact:

Henrika Ninham
Investor Relations Manager
+27 (0) 82 759 1775 (mobile)

Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0) 82 888 1242 (mobile)

3 February 2014

Sponsor:
J.P. Morgan Equities South Africa Proprietary Limited

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