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HARMONY GOLD MINING COMPANY LIMITED - Q2 FY15 Results for the the second quarter and six months ended 31 December 2014

Release Date: 09/02/2015 07:05:00      Code(s): HAR       PDF(s):  
Q2 FY15 Results for the the second quarter 
and six months ended 31 December 2014

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

Q2 FY15 RESULTS FOR THE SECOND QUARTER 
and six months ended 31 DECEMBER 2014

KEY FEATURES
Quarter on quarter

- South African operations record a fatal-free quarter
- Restructuring for safe, profitable ounces continues
- Gold production decreased by 10% quarter on quarter due to stoppages at Kusasalethu and Hidden Valley
- Majority of operations perform in line with plans, with grade remaining consistent
- Production profit of R618 million
- Headline loss of R496 million, due to lower production and restructuring

RESULTS FOR THE SECOND QUARTER ENDED 31 DECEMBER 2014

                                                                 Q-on-Q Six months    Six months
                                        Quarter    Quarter     variance      Ended         Ended    Variance
                                         Dec-14     Sep-14            %     Dec-14        Dec-13           %

                        – kg              8 459      9 435         (10)     17 894        19 150         (7)
Gold produced           – oz            271 963    303 341         (10)    575 304       615 686         (7)

                        – R/kg          357 111    355 693            –    356 364       316 517        (13)
Cash operating costs    – US$/oz            990      1 028            4      1 008           981         (3)

                        – kg              8 580      9 987          (14)    18 567        19 151         (3)
Gold sold               – oz            275 851    321 089          (14)   596 940       615 717         (3)

Underground grade       – g/t              4.78       4.84           (1)      4.81          4.69           3

                        – R/kg          437 708    418 910           (4)   427 797       382 407        (12)
Total costs and capital – US$/oz          1 213      1 210            –      1 210         1 185         (2)

                        – R/kg          455 202    431 063           (6)   442 218       401 021        (10)
All-in sustaining costs – US$/oz          1 262      1 245           (1)     1 251         1 242         (1)

                        – R/kg          432 963    443 690           (2)   438 733       422 386           4
Gold price received     – US$/oz          1 200      1 282           (6)     1 241         1 309         (5)

                        – R million         618        913          (32)     1 532         2 022        (24)
Production profit       – US$ million        55         85          (35)       138           201        (31)

                        – SAc/s           (197)       (61)        >(100)     (258)          (18)      >(100)
Basic loss per share    – USc/s            (18)        (6)        >(100)      (23)           (2)      >(100)

                        – Rm              (496)      (266)          (86)     (763)          (71)      >(100)
Headline loss           – US$m             (44)       (25)          (76)      (69)           (7)      >(100)

                        – SAc/s           (114)       (61)          (87)     (175)          (16)      >(100)
Headline loss per share – USc/s            (10)         (6)         (67)      (16)           (2)      >(100)

Harmony's Integrated Annual Report and the Form 20-F filed with the United States' Securities and Exchange
Commission for the financial year ended 30 June 2014 are available on our website at
http://www.harmony.co.za/investors/reporting/annual-reports.

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 judgement 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 the countries in which
we operate; the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions; increases or 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
regulations, particularly mining rights and environmental regulations; fluctuations in exchange rates; currency devaluations and other macro-economic monetary policies; and socio-
economic instability in the countries in which we operate.

CONTACT DETAILS

Corporate Office

Randfontein Office Park
PO Box 2, Randfontein, 1760, South Africa
Corner Main Reef Road/Ward Avenue
Randfontein, 1759, South Africa
Telephone: +27 11 411 2000
Website: www.harmony.co.za

Directors

P T Motsepe* Chairman
M Motloba*^ Deputy Chairman
G P Briggs Chief Executive Officer
F Abbott Financial Director
H E Mashego Executive Director
F F T De Buck*^ Lead independent director
J A Chissano*(1)^, K V Dicks*^, Dr D S S Lushaba*^,
C Markus*^, M Msimang*^, K T Nondumo*^,
V P Pillay *^, J L Wetton*^, A J Wilkens*
* Non-executive
^ Independent
(1) Mozambican

Investor relations team

Email: HarmonyIR@harmony.co.za

Marian van der Walt
Executive: Corporate and Investor Relations
Tel: +27 (0)11 411 2037
Mobile: +27 (0)82 888 1242
Email: marian@harmony.co.za

Bobo Ndinisa
Investor Relations
Tel: +27 (0)11 411 2137 / 057 904 4023
Mobile: +27 (0)79 783 2051
Email: bobo@harmony.co.za

Company Secretary

Riana Bisschoff
Telephone: +27 (0)11 411 6020
Mobile: +27 (0)83 629 4706
E-mail: riana.bisschoff@harmony.co.za

South African Share Transfer Secretaries

Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
PO Box 4844, Johannesburg, 2000, South Africa
Telephone: +27 86 154 6572
Fax: +27 86 674 2450
Email: meetfax@linkmarketservices.co.za

ADR(2) Depositary

Deutsche Bank Trust Company Americas
c/o American Stock Transfer and Trust Company
Peck Slip Station
PO Box 2050, New York, NY 10272-2050
Email queries: db@amstock.com
Toll Free: +1-800-937-5449
Intl: +1-718-921-8137
Fax: +1-718-921-8334
(2) ADR: American Depository Receipts

Sponsor

J.P. Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo
Johannesburg, 2196
Private Bag X9936, Sandton, 2146, South Africa
Telephone: +27 11 507 0300
Fax: +27 11 507 0503

Trading Symbols

JSE Limited: HAR
New York Stock Exchange, Inc: HMY
Berlin Stock Exchange: HAM1

Registration number

1950/038232/06
Incorporated in the Republic of South Africa

ISIN

ZAE000015228

Competent person's declaration
Harmony reports in terms of the South African Code for the Reporting of Exploration results, Mineral Resources and Ore Reserves (SAMREC). In
South Africa Harmony appoints an ore reserve manager at each of its operations who takes responsibility for the compilation and reporting of
mineral resources and mineral reserves at their operations. In Papua New Guinea, competent persons are appointed for the mineral resources and
mineral reserves for specific projects and operations.

The mineral resources and mineral reserves in this report are based on information compiled by the following competent persons:
Resources and Reserves South Africa: Jaco Boshoff, BSc (Hons), MSc, MBA, Pr. Sci. Nat., who has 19 years' relevant experience and is registered
with the South African Council for Natural Scientific Professions (SACNASP) and a member of the South African Institute of Mining and Metallurgy
(SAIMM).

Resources and Reserves Papua New Guinea: Gregory Job, BSc, MSc, who has 26 years relevant experience and is a member of the Australian
Institute of Mining and Metallurgy (AusIMM). Mr Job has sufficient experience which is relevant to the styles of mineralisation and types of deposits
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code").

Mr Boshoff and Mr Job are full-time employees of Harmony Gold Mining Company Limited. These competent persons consent to the inclusion in
the report of the matters based on the information in the form and context in which it appears.

Mineral Resource and Reserve information as at 30 June 2014 has not changed.

SHAREHOLDER INFORMATION
Issued ordinary share capital at 31 December 2014         436 094 323
Issued ordinary share capital at 30 September 2014        435 825 447

Market capitalisation
At 31 December 2014 (ZARm)                                      9 424
At 31 December 2014 (US$m)                                        815
At 30 September 2014 (ZARm)                                    10 765
At 30 September 2014 (US$m)                                       953

Harmony ordinary shares and ADR prices

12-month high (1 January 2014 –
31 December 2014) for ordinary shares                           40.32

12-month low (1 January 2014 –
31 December 2014) for ordinary shares                           17.00

12-month high (1 January 2014 –
31 December 2014) for ADRs                                       3.77

12-month low (1 January 2014 –
31 December 2014) for ADRs                                       1.56

Free float                                                       100%

ADR ratio                                                         1:1

JSE Limited                                                       HAR

Range for quarter (1 October–
31 December 2014 closing prices)                      R17.00 – R24.15

Average daily volume for the quarter (1 October –
31 December 2014)                                    2 977 951 shares

Range for quarter (1 July – 30 September 2014
closing prices)                                       R24.70 – R35.21

Average daily volume for the quarter
(1 July – 30 September 2014)                           706 279 shares


New york stock exchange including other
US trading platforms                                              HMY

Range for quarter (1 October– 31 December 2014
closing prices)                                     US$1.56 – US$2.20

Average daily volume for the quarter
(1 October – 31 December 2014)                              4 492 693

Range for quarter (1 July – 30 September 2014
closing prices)                                     US$2.16 – US$3.29

Average daily volume for the quarter
(1 July – 30 September 2014)                                1 771 208

Investors' calendar                                              2015

Q3 FY15 presentation (webcast and conference
calls only)                                                8 May 2015

Q4 FY15 live presentation from Johannesburg            18 August 2015

Q1 FY15 presentation (webcast and conference
calls only)                                           5 November 2015

Annual General Meeting                               20 November 2015

MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

1. SAFETY
Harmony recorded a fatal-free quarter in South Africa – a major
achievement for a deep level underground gold mining company.
Management and employees are commended for their efforts and
commitment to achieving zero harm.

There was one fatality at Hidden Valley in Papua New Guinea
(PNG). An employee was fatally injured when struck by a reversing
loader in the milling area. The matter was investigated and safety
standards were reinforced.

2. GOLPU – A GAME CHANGER
The results of the updated Golpu prefeasibility study (PFS) were
announced on the 15th of December 2014. Please refer to our
website for more details: www harmony.co.za.

The updated PFS supports our view that Golpu is a spectacular ore
body with a large copper component, affordable and mineable.
Our emphasis in preparing the PFS was to create flexibility to allow
the size of the project to adapt to different levels of gold and
copper prices, allowing Golpu to grow over time.

Key objectives of the study have been achieved by reducing the
capital of the project, lowering operating costs and improving
the rate of return. Harmony intends to fund the earlier stages of
the project from internal cash flows, and reviewing other funding
options for the latter stages.

Our application for an environmental permit has been submitted
to the Papua New Guinean Department of Environment and
Conservation. The permit relates to advanced exploration and
feasibility support activities, comprising development of access
roads, decline development to the ore body and associated works.

The Stage 2 Concept Study was completed and demonstrated
a technically feasible and economically viable plan to mine and
process the remaining portion of the Golpu copper-gold reserve
after depletion of Stage 1.

The Golpu project is a significant value accretive game-changer
for Harmony.

3. OPERATIONAL RESULTS
Most of the South African operations delivered in line with their
operational plans. Tshepong had an exceptional performance,
beating its production plan by 16%. Masimong and Unisel
delivered a consistent performance quarter on quarter, with
Bambanani being our most profitable mine at a cash operating
cost of R253 000/kg. Target 3 was placed on care and maintenance
as planned.

On 2 December 2014, Harmony announced that a new plan
would be implemented to return Kusasalethu to profitability.
The new plan will entail mining lower volumes at higher grades
at a reduced cost. Kusasalethu has not returned to profitability
after various setbacks. The underperformance of the mine was
further exacerbated by four fires and associated illegal mining
activities during the past quarter. Harmony's intention is to restore
Kusasalethu to profitability by the end of the fourth quarter of
the current financial year and we have commenced with a Section
189 process in terms of the Labour Relations Act to restructure
the mine.

Hidden Valley also contributed to the quarter's lower production,
due to a fatality and a belt tear on the overland conveyor (OLC).
Both resulted in production stoppages at the mine. There was
no structural damage to the OLC, but belt replacement work
was not completed until January 2015. Maintenance scheduled
for the OLC and the metallurgical plant in the first half of 2015
was brought forward and conducted while the belt was being
replaced. Ore was hauled to the mill by truck during this period,
adversely impacting costs.

Gold production during the March 2015 quarter is expected to
be higher once Kusasalethu's restructuring is finalised and Hidden
Valley returns to full production, positioning our operations to
benefit from higher gold prices.

Lower gold production quarter on quarter and a lower gold price
resulted in a decrease in production profit to R618 million in the
December 2014 quarter, compared to R913 million in the previous
quarter.

Cash operating cost for the December 2014 quarter improved
(decreased) by 10% when compared to the previous quarter.
The decrease is due to lower electricity tariffs for the summer
months, amounting to R200 million. Labour cost also decreased
by R63 million in the December 2014 quarter. Capital expenditure
for the December 2014 quarter increased by 14% to R682 million,
compared to R596 million in the September 2014 quarter, due
to major capital being spent at Phakisa and maintenance capital
expenditure at most of the operations. However, we are still below
the planned capital expenditure for FY15.

4. FINANCIAL RESULTS
Revenue
Revenue decreased by R716 million (16%) to R3 715 million as
a result of the 14% decrease in gold sold to 8 580kg and a 2%
decrease in the Rand gold price received to R432 963/kg in the
December 2014 quarter.

Production costs
The decrease in production costs in the December 2014 quarter is
mainly a result of the decrease in the electricity cost of R200 million
due to the decrease in the electricity price tariffs and Target 3
having been placed on care and maintenance at the end of the
September 2014 quarter.

Other items
Other items included in cost of sales increased to R272 million
in the December 2014 quarter, mainly as a result of employment
termination and restructuring costs of R182 million which include
the retrenchments of management in service areas and employees
at Kusasalethu, Target 3 and Ernest Oppenheimer Hospital.

Scrapping of property, plant and equipment
We embarked on a life-of-mine optimisation process which was
completed during the December 2014 quarter. The optimisation
resulted in a greater focus on mining profitable and higher grade
areas at our South African operations. It also resulted in removing
lower grade and unprofitable areas from the mine plan for most
of the operations. In the case of Kusasalethu and Masimong the
optimisation lead to the abandonment of levels and areas with
a carrying value and such areas were accordingly identified for
scrapping.

Other expenses – net
The decrease to R52 million in expenses in the December 2014
quarter is mainly due to a reduced foreign exchange translation
loss recorded on the US$ syndicated loan of R69 million compared
to R192 million in the September 2014 quarter. The Rand
weakened from US$/R11.32 at 30 September 2014 to US$/R11.57
at 31 December 2014.

Loan to associate
During the December 2014 quarter, Rand Refinery Proprietary
Limited drew down on the shareholders loan, of which Harmony's
portion is R120 million.

Borrowings
The increase in the amount recorded on the balance sheet is due
to the translation effect on the drawn amount of US$ 270 million.
Harmony secured a new revolving credit facility of up to US$250
million with a three year duration. The facility matures in February
2018.

5. GOLD MARKET
During the December 2014 quarter the average US dollar gold
price received decreased by 6% to US$1 200/oz, in comparison to
US$1 282/oz in the previous quarter. The decrease was partially
offset by the weakening of the rand dollar exchange rate to
R11.22/US$, compared to R10.77/US$ in the September 2014
quarter. As a result, the rand gold price received decreased quarter
on quarter from R443 690/kg to R432 963/kg.

The company is positioned to remain competitive in times of low
gold prices and benefit from higher gold prices.

6. RESTRUCTURING FOR PROFITABILITY
6.1  Closure of Target 3
The restructuring process, which began in August 2014, was
concluded during the December 2014 quarter following the
signing of the agreement with all representative trade unions.
The majority of the affected employees were absorbed at other
operations.

6.2 Closure of Ernest Oppenheimer Hospital (EOH)
Our employees have access to medical hubs at our operations,
which provide medical care and wellness advice to our employees.
This strategy was implemented some two years ago. Keeping our
employees healthy as well as our improved safety, resulted in EOH
having fewer and fewer patients.

The hospital was licensed for 450 patients. Occupancy had,
however dropped to below 100. The unit was therefore
economically inefficient. As a result, we decided to close EOH.
Most of the functions that EOH rendered have been moved to
other hospitals in the Welkom area.

Discussions with the Department of Health as new potential owners
of EOH are advanced. Should the transaction be concluded, it will
enhance the ability of the province to supply healthcare to the
community.

6.3 Restructuring of Kusasalethu
On 2 December 2014, notice was given to all representative trade
unions of our intention to restructure Kusasalethu. Agreement was
reached on the establishment of a task team to oversee the fair
implementation of any mitigating alternatives to retrenchment,
which includes transfers to other operations, voluntary separations,
early retirements and re-skilling.

6.4 Voluntary separations for management
There were 59 management employees who opted for voluntary
retrenchment or early retirement packages as part of the central
services management restructuring process.

6.5 Financial effects of the restructuring
Our decision to restructure and optimise our operations,
will contribute to a more profitable Harmony in the future.
Unprofitable areas have been scrapped to the value of R214 million
at Kusasalethu and R216 million at Masimong. Refer to financial
results above. Retrenchment costs of R182 million have been
recorded for the quarter.

7. WAGE NEGOTIATIONS 2015
Preparations for this year's wage negotiations are under way, with
the Gold Wage Caucus meeting regularly, both under the auspices
of the Chamber of Mines and independently.

Harmony is engaging with all union shop stewards on the
fundamentals of gold mining, Harmony's cost structures and
the marginality of our operations. We have also increased our
internal communication efforts to ensure that employees are
aware of the importance of being at work, being productive and
earning their salaries and bonuses.

8. POWER SUPPLY
Since November 2014, the electricity supply in South Africa has
been under pressure, with load shedding occurring at short notice.
The power supplier, Eskom, announced that this will continue in
the medium term. Load shedding has resulted in production losses
during the quarter.

To ensure that our employees remain safe, especially while a shift
is underground and that production continues, electricity needs to
be managed efficiently, thus we have implemented the following
mitigating measures:

-  We are focusing our efforts on the reduction and optimisation
   of the use of electricity at each operation. Our emphasis is on
   reducing our electricity demand especially during peak times.

-  We continue to look for and implement opportunities for
   load shifting where an opportunity presents itself and can be
   implemented with the least disruption to the operation and
   employees.

-  Remaining industrial geysers are being replaced with heat
   pumps which will be finalised in March 2015.

-  We have commissioned a study to identify direct purchase
   opportunities from Independent Power Producers and other
   opportunities to source electricity outside of Eskom. The study
   also focuses on bringing renewable energy into our energy
   portfolio.

-  Harmony is a member of the EIUG (Energy Intensive User Group
   of Southern Africa), who are collaborating with the Minister
   of Energy to implement plans in an attempt to stabilise the
   electricity supply risks in South Africa.

9. SILICOSIS
Harmony, Anglo American South Africa, AngloGold Ashanti, Gold
Fields and Sibanye Gold announced in November 2014, that they
have formed an industry working group to address issues relating
to compensation and medical care for occupational lung disease in
the gold mining industry in South Africa.

The companies have begun to engage all stakeholders on these
matters, including government, organised labour, other mining
companies and legal representatives of claimants who have filed
legal suits against the companies. These legal proceedings are
being defended.

Essentially, the companies are seeking a comprehensive solution
which deals both with the legacy compensation issues and future
legal frameworks and which, while being fair to employees, also
ensure the future sustainability of companies in the industry.

10. MORE EXCITEMENT FROM PNG
(Harmony's 100% owned exploration area)
Drilling at Kili Teke is currently in progress with 732m completed
by quarter end. At this very early stage of the drilling program, the
broad zones of anomalism and their associated alteration styles
and intensity are highly encouraging.

Post quarter end, drill results included 255m @ 0.24% Cu, 0.15 g/t
Au from 146m. The entire drillhole is mineralised below the
overthrust limestone. The intercept contains solid intervals of
higher grade including 55m @ 0.45% Cu, 0.32 g/t Au from 160m,
and some smaller intervals assaying in excess of 1% copper. From
the outset, the drilling has outlined a sequence of highly altered
and mineralized diorite porphyry together with narrower zones of
copper-gold skarn mineralization. This greenfield project has the
potential to develop into a major new copper gold find. Drilling
continues.

11.CONCLUSION
In the current environment of volatile gold prices and possible
deflationary trends, we are focussed – more than ever – on cost
control and cash generation at existing operations. In addition,
shareholder value is created through investing in Golpu, securing
a sustainable, profitable future for Harmony.

Graham Briggs
Chief Executive Officer

THE INVESTMENT CASE FOR HARMONY

Firstly, we are the most efficient South African gold miner, by
focusing on ways to improve our safety, production and cash
operating costs. In addition, we are a company that's focused
on the future. An investment in us is not just for short-term gain
– we aim to provide increasing long-term benefits. We are able
to do this primarily by funding our own capital, which puts us in
control of our business and enables us to make decisions that
have a real impact on our profitability.

Secondly, we produce more than one million ounces of gold and
being a leveraged gold company means that should the gold
price rise our margins would improve dramatically in percentage
terms. Management clearly understands this and we continue to
make tough decisions in loss-making operations when the gold
price softens. However, Harmony has a huge potential upside
when the gold price strengthens, as we believe it will in the
medium to long term.

One of our key strengths at Harmony is our understanding of
where we operate – on both an economic and a social level.
The countries in which we operate and have experience, South
Africa and Papua New Guinea, are both emerging economies.
They are developing countries and we are able to contribute to
local communities in a way that can make a lasting difference.
For this reason, we wholeheartedly embrace our social licences
to mine and endeavour to go beyond compliance.

The final reason to invest in Harmony is Golpu. It's a resource that
we're sure will develop into a world-class copper gold mine, and
will allow us to sustain our business well into the future.

Extract from the Integrated Report for the financial year 2014

"Chief executive officer discusses the major issues of
FY14 and beyond"

www.harmony.co.za

Q2 FY15 RAND RESULTS FOR THE SECOND QUARTER
AND SIX MONTHS ENDED 31 December 2014

Operating results (Rand/Metric) (US$/Imperial)
                                                                                                  

                                                                                                                                 South Africa                                                                                        

                                                                                                  Underground production                                                              Surface production

                               Three                                                                                                                                                                                       Total
                               months    Kusasa-                                                                                                                  Total                                        Total        South    Hidden        Total
                                Ended      lethu    Doornkop    Phakisa  Tshepong    Masimong  Target 1   Bambanani       Joel     Unisel       Target 3    Underground    Phoenix     Dumps      Kalgold    Surface       Africa    Valley      Harmony

                               Dec-14        186         162        142       269         188       203          56        139        111              9          1 465      1 555        666         366      2 587        4 052       384        4 436
Ore milled         – t’000     Sep-14        290         136        158       259         185       183          59        146        114             81          1 611      1 609        636         393      2 638        4 249       521        4 770

                               Dec-14        775         727        773     1 210         705     1 010         664        629        471             41          7 005        223        218         343        784        7 789       670        8 459
Gold produced      – kg        Sep-14      1 334         619        855     1 078         698     1 042         727        533        477            442          7 805        233        222         326        781        8 586       849        9 435

                               Dec-14     24 917      23 374     24 852    38 902      22 666    32 472      21 348     20 223     15 143          1 318        225 215      7 170      7 009      11 028     25 207      250 422    21 541      271 963
Gold produced      – oz        Sep-14     42 889      19 901     27 489    34 658      22 441    33 501      23 374     17 136     15 336         14 211        250 936      7 491      7 137      10 481     25 109      276 045    27 296      303 341

                               Dec-14       4,17        4,49       5,44      4,50        3,75      4,98       11,86       4,53       4,24           4,56           4,78       0,14       0,33        0,94       0,30         1,92      1,74         1,91
Yield              – g/tonne   Sep-14       4,60        4,55       5,41      4,16        3,77      5,69       12,32       3,65       4,18           5,46           4,84       0,14       0,35        0,83       0,30         2,02      1,63         1,98

Cash operating                 Dec-14    590 241     360 688    369 639   327 527     351 210   283 716     252 893    294 693    346 295        386 049        352 329    317 238    376 101     362 942    353 601      352 457   411 216      357 111
                   – R/kg      Sep-14    414 573     440 977    346 363   369 139     367 828   285 610     242 113    369 818    371 111        349 385        356 054    328 605    385 590     373 819    363 676      356 748   345 028      355 693

Cash operating                 Dec-14      1 636       1 000      1 025       908         973       786         701        817        960          1 071            977        879      1 042       1 006        980          977     1 140          990
costs              – $/oz      Sep-14      1 198       1 274      1 001     1 067       1 063       825         699      1 069      1 072          1 009          1 029        949      1 114       1 080      1 051        1 031       997        1 028

Cash operating                 Dec-14      2 459       1 619      2 012     1 473       1 317     1 412       2 999      1 334      1 469          1 759          1 685         45        123         340        107          678       717          681
costs              – R/tonne   Sep-14      1 907       2 007      1 874     1 536       1 388     1 626       2 983      1 350      1 553          1 907          1 725         48        135         310        108          721       562          704

                               Dec-14        844         716        774     1 211         705       992         665        655        472             40          7 074        221        215         324        760        7 834       746        8 580
Gold sold          – Kg        Sep-14      1 433         697        868     1 096         709     1 090         739        630        485            462          8 209        258        239         358        855        9 064       923        9 987

                               Dec-14     27 135      23 020     24 885    38 934      22 666    31 893      21 380     21 059     15 175          1 286        227 433      7 105      6 912      10 417     24 434      251 867    23 984      275 851
Gold sold          – oz        Sep-14     46 072      22 409     27 907    35 237      22 795    35 044      23 759     20 255     15 593         14 854        263 925      8 295      7 684      11 510     27 489      291 414    29 675      321 089

                               Dec-14    368 922     310 710    334 833   523 472     305 679   428 602     288 451    283 735    204 258         17 519      3 066 181     95 610     92 441     139 917    327 968    3 394 149   320 670    3 714 819
Revenue            (R’000)     Sep-14    635 948     309 439    385 455   486 350     314 566   483 669     328 079    279 430    215 453        204 975      3 643 364    114 586    106 905     158 640    380 131    4 023 495   407 641    4 431 136

Cash operating                 Dec-14    457 437     262 220    285 731   396 308     247 603   286 553     167 921    185 362    163 105         15 828      2 468 068     70 744     81 990     124 489    277 223    2 745 291   275 515    3 020 806
costs              (R’000)     Sep-14    553 041     272 965    296 140   397 932     256 744   297 606     176 016    197 113    177 020        154 428      2 779 005     76 565     85 601     121 865    284 031    3 063 036   292 929    3 355 965

Inventory                      Dec-14     24 957     (5 034)      5 278     1 831       2 797   (2 277)       4 359     11 097      2 143          (321)         44 830      (319)      (393)     (4 271)    (4 983)       39 847    35 755       75 602
movement           (R’000)     Sep-14     29 247      35 654      1 826     9 085       1 274    13 923     (1 481)     25 540       (11)          7 238        122 295      9 620      6 603       9 954     26 177      148 472    13 517      161 989

                               Dec-14    482 394     257 186    291 009   398 139     250 400   284 276     172 280    196 459    165 248         15 507      2 512 898     70 425     81 597     120 218    272 240    2 785 138   311 270    3 096 408
Operating costs    (R’000)     Sep-14    582 288     308 619    297 966   407 017     258 018   311 529     174 535    222 653    177 009        161 666      2 901 300     86 185     92 204     131 819    310 208    3 211 508   306 446    3 517 954

                               Dec-14  (113 472)      53 524     43 824   125 333      55 279   144 326     116 171     87 276     39 010          2 012        553 283     25 185     10 844      19 699     55 728      609 011     9 400      618 411
Production profit  (R’000)     Sep-14     53 660         820     87 489    79 333      56 548   172 140     153 544     56 777     38 444         43 309        742 064     28 401     14 701      26 821     69 923      811 987   101 195      913 182

                               Dec-14   (10 112)       4 770      3 905    11 170       4 927    12 862      10 353      7 777      3 476            179         49 307      2 244        967       1 756      4 967       54 274       838       55 112
Production profit  ($’000)     Sep-14      4 984          76      8 127     7 370       5 253    15 991      14 264      5 275      3 571          4 023         68 934      2 638      1 366       2 490      6 494       75 428     9 400       84 828

Capital                        Dec-14    122 185      73 259    127 836    87 070      48 441    69 120      39 338     59 654     31 380              –        658 283        414      2 487       8 770     11 671      669 954    11 814      681 768
expenditure        (R’000)     Sep-14    124 368      55 554     85 185    83 513      40 526    73 614      24 540     30 778     29 229         20 437        567 744        634        503       6 420      7 557      575 301    21 153      596 454

Capital                        Dec-14     10 888       6 528     11 392     7 759       4 317     6 160       3 506      5 316      2 796              –         58 662         37        222         782      1 041       59 703     1 053       60 756
expenditure        ($’000)     Sep-14     11 553       5 160      7 913     7 758       3 765     6 838       2 280      2 859      2 715          1 898         52 739         59         47         596        702       53 441     1 965       55 406

Cash operating                 Dec-14    747 899     461 457    535 016   399 486     419 921   352 151     312 137    389 533    412 919        386 049        446 303    319 094    387 509     388 510    368 487      438 470   428 849      437 708
cost and capital   – R/kg      Sep-14    507 803     530 725    445 994   446 609     425 888   356 257     275 868    427 563    432 388        395 622        428 796    331 326    387 856     393 512    373 352      423 752   369 943      418 910

Cash operating                 Dec-14      2 073       1 279      1 483     1 107       1 164       976         865      1 080      1 144          1 071          1 237        884      1 074       1 077      1 021        1 215     1 189        1 213
cost and capital   – $/oz      Sep-14      1 467       1 533      1 289     1 290       1 231     1 029         797      1 235      1 249          1 143          1 239        957      1 121       1 137      1 079        1 224     1 069        1 210

All-in sustaining              Dec-14    743 336     470 383    503 210   416 470     443 880   374 820     303 254    376 107    435 600        405 170        454 139    320 538    404 276     414 402    384 243      447 513   535 921      455 202
costs              – R/kg      Sep-14    516 475     542 644    455 711   467 277     443 372   369 043     271 532    402 722    446 757        410 359        438 942    336 607    398 180     404 573    382 277      433 919   403 002      431 063

All-in sustaining              Dec-14      2 060       1 304      1 395     1 154       1 230     1 039         841      1 042      1 207          1 123          1 259        889      1 121       1 149      1 065        1 240     1 486        1 262
costs              – $/oz      Sep-14      1 492       1 568      1 317     1 350       1 281     1 066         785      1 164      1 291          1 186          1 268        973      1 150       1 169      1 104        1 254     1 163        1 245

The unaudited condensed consolidated financial statements for the six months ended 31 December 2014 have been prepared by
Harmony Gold Mining Company Limited’s corporate reporting team headed by Herman Perry. This process was supervised by the
financial director, Frank Abbott and approved by the board of Harmony Gold Mining Company Limited. These financial statements have
not been audited or independently reviewed.

CONDENSED CONSOLIDATED INCOME STATEMENTS (Rand)

                                                                Quarter ended                     Six months ended
                                                      31 Dec        30 Sep         31 Dec         31 Dec        31 Dec     30 June
                                                        2014          2014           2013           2014          2013        2014
Figures in million                          Note (Unaudited)   (Unaudited)    (Unaudited)    (Unaudited)    (Reviewed)   (Audited)
Revenue                                                3 715         4 431          4 071          8 146         8 089      15 682
Cost of sales                                2       (3 970)       (4 319)        (3 817)        (8 289)       (7 552)    (16 088)

 Production costs                                    (3 096)       (3 518)        (3 086)        (6 614)       (6 067)    (11 888)
 Amortisation and depreciation                         (602)         (650)          (565)        (1 252)       (1 142)     (2 143)
 Impairment of assets                                      –             –              –              –             –     (1 439)
 Other items                                           (272)         (151)          (166)          (423)         (343)       (618)

Gross (loss)/profit                                    (255)           112            254          (143)           537       (406)
Corporate, administration and other
expenditure                                             (83)         (111)          (102)          (194)         (210)       (430)
Social investment expenditure                           (15)          (24)           (21)           (39)          (59)        (88)
Exploration expenditure                                 (95)          (85)          (112)          (180)         (254)       (458)
Profit on sale of property, plant and
equipment                                                  1             –              –              1            –           30
Loss on scrapping of property, plant and
equipment                                    4         (430)             –              –          (430)            –            –
Other expenses (net)                         6          (52)         (187)          (140)          (239)        (139)        (208)
Operating loss                                         (929)         (295)          (121)        (1 224)        (125)      (1 560)
Profit/(loss) from associates                5             –             –              4              –            7        (109)
(Impairment)/profit on disposal of
investments                                                –             –              –              –          (7)            7
Net gain on financial instruments                          8             7             39             15          113          170
Investment income                                         59            51             50            110           95          220
Finance cost                                            (67)          (65)           (57)          (132)        (117)        (277)
Loss before taxation                                   (929)         (302)           (85)        (1 231)         (34)      (1 549)
Taxation                                                  73            36            (6)            109         (44)          279
 Normal taxation                                         (4)             1              –            (3)         (49)         (24)
 Deferred taxation                                        77            35            (6)            112            5          303

Net loss for the period                                (856)         (266)           (91)        (1 122)         (78)      (1 270)
Attributable to:
Owners of the parent                                   (856)         (266)           (91)        (1 122)         (78)      (1 270)
Loss per ordinary share (cents)              3
Basic loss                                             (197)          (61)           (21)          (258)         (18)        (293)
Diluted loss                                           (197)          (61)           (21)          (258)         (18)        (293)

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Rand)

                                                             Quarter ended             Six months ended
                                                      31 Dec        30 Sep         31 Dec        31 Dec       31 Dec     30 June
                                                        2014          2014           2013          2014         2013        2014
Figures in million                               (Unaudited)   (Unaudited)     (Uaudited)   (Unaudited)   (Reviewed)   (Audited)
Net loss for the period                                (856)         (266)           (91)       (1 122)         (78)     (1 270)
Other comprehensive (loss)/income for the
period, net of income tax                              (114)           179            378            65        (317)       (140)
Items that may be reclassified subsequently to
profit or loss:                                        (114)           179            378            65        (317)       (109)
  Foreign exchange translation                         (114)           179            370            65        (324)       (108)
  Movements on investments                                 –             –              8             –            7         (1)
Items that will be reclassified 
to profit or loss:                                         –             –              –             –            –        (31)
  Actuarial loss recognised during the year                –             –              –             –            –        (38)
  Deferred tax thereon                                     –             –              –             –            –           7

Total comprehensive
(loss)/income for the period                           (970)          (87)            287       (1 057)        (395)     (1 410)
Attributable to:  
Owners of the parent                                   (970)          (87)            287       (1 057)        (395)     (1 410)

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Rand)
for the six months ended 31 December 2014 (unaudited)
                                                                               (Accumulated
                                                                                     loss)/
                                                       Share        Other          retained
Figures in million                                    capital    reserves          earnings      Total
          
Balance – 30 June 2014                                28 325        3 539             (822)     31 042
Share-based payments                                       –          129                 –        129
Net loss for the period                                    –            –           (1 122)    (1 122)
Other comprehensive income for the period                  –           65                 –         65
Balance – 31 December 2014                            28 325        3 733           (1 944)     30 114
Balance – 30 June 2013                                28 325        3 442               448     32 215
Share-based payments                                       –          145                 –        145
Net loss for the period                                    –            –              (78)       (78)
Other comprehensive loss for the period                    –        (317)                 –      (317)
Balance – 31 December 2013                            28 325        3 270               370     31 965

The accompanying notes are an integral part of these condensed consolidated financial statements.
The condensed consolidated statement of changes in equity for the six months ended 31 December 2013 has been reviewed.

CONDENSED CONSOLIDATED BALANCE SHEETS (Rand)
                                                                                       At          At          At            At
                                                                                   31 Dec      30 Sep     30 June        31 Dec
                                                                                     2014        2014        2014          2013
Figures in million                                                       Note (Unaudited) (Unaudited)   (Audited)    (Reviewed)

ASSETS
Non-current assets
Property, plant and equipment                                               4      32 843      33 232      33 069        32 663
Intangible assets                                                                     883         885         886         2 193
Restricted cash                                                                        42          38          42            38
Restricted investments                                                              2 366       2 329       2 299         2 180
Deferred tax assets                                                                    71          76          81            91
Investments in associates                                                   5           –           –           –           115
Loan to associate                                                           5         120           –           –             –
Investments in financial assets                                                         5           4           4             4
Inventories                                                                            50          50          50            57
Total non-current assets                                                           36 380      36 614      36 431        37 341

Current assets
Inventories                                                                         1 337       1 390       1 534         1 423
Trade and other receivables                                                           822         693         951         1 149
Income and mining taxes                                                                43          94         110           106
Restricted cash                                                                        15          15          15            15
Cash and cash equivalents                                                           1 374       2 281       1 829         2 323
                                                                                    3 591       4 473       4 439         5 016
Non-current assets and assets of disposal groups classified as held for
sale                                                                                    –           –           –            46
Total current assets                                                                3 591       4 473       4 439         5 062
 
Total assets                                                                       39 971      41 087      40 870        42 403

EQUITY AND LIABILITIES
Share capital and reserves
Share capital                                                                      28 325      28 325      28 325        28 325
Other reserves                                                                      3 733       3 787       3 539         3 270
(Accumulated loss)/retained earnings                                              (1 944)     (1 088)       (822)           370
Total equity                                                                       30 114      31 024      31 042        31 965

Non-current liabilities
Deferred tax liabilities                                                            2 562       2 640       2 680         3 000
Provision for environmental rehabilitation                                          2 170       2 148       2 098         2 016
Retirement benefit obligation                                                         255         251         247           201
Other non-current liabilities                                               7          42          40          95            71
Borrowings                                                                  6           –           –       2 860         3 280
Total non-current liabilities                                                       5 029       5 079       7 980         8 568

Current liabilities
Borrowings                                                                  6       3 121       3 052           –             –
Income and mining taxes                                                                 –           9           –             –
Trade and other payables                                                            1 707       1 923       1 848         1 870
Total current liabilities                                                           4 828       4 984       1 848         1 870
 
Total equity and liabilities                                                       39 971      41 087      40 870        42 403

The accompanying notes are an integral part of these condensed consolidated financial statements.

                                                          Quarter ended                    Six months ended
                                                                                                                       Year ended
                                                     31 Dec      30 Sep          31 Dec         31 Dec       31 Dec       30 June
                                                       2014        2014            2013           2014         2013          2014
                                                (Unaudited) (Unaudited)     (Unaudited)    (Unaudited)   (Reviewed)     (Audited)
Figures in million                                                            Restated*                   Restated#
Cash flow from operating activities
Cash (utilised)/generated by operations                (64)        1 071            727          1 007        1 031         2 247
Interest and dividends received                          30           25             32             55           58           139
Interest paid                                          (23)         (23)           (21)           (46)         (50)         (121)
Income and mining taxes refunded/(paid)                  39           25           (28)             64         (28)             3
Cash (utilised)/generated by operating
activities                                             (18)        1 098            710          1 080        1 011         2 268
Cash flow from investing activities
(Increase)/decrease in restricted cash                  (4)            4              –              –            –           (6)
Decrease/(increase) in restricted investments             –            1              –              1            –          (24)
Proceeds on disposal of investments                       –            –              –              –            –            51
Loan to associate                                     (120)            –              –          (120)            –             –
Other investing activities                                –            –            (1)              –         (10)             –
Net additions to property, plant and
equipment(1)                                            (748)        (651)          (651)        (1 399)      (1 335)       (2 661)
Cash utilised by investing activities                 (872)        (646)          (652)        (1 518)      (1 345)       (2 640)
Cash flow from financing activities
Borrowings raised                                         –            –              –              –          612           612
Borrowings repaid                                         –            –            (3)              –          (6)         (468)
Cash (utilised)/generated by financing   
activities                                                –            –            (3)              –          606           144 
Foreign currency translation adjustments               (17)            –           (20)           (17)         (38)          (32)
Net (decrease)/increase in cash and cash 
equivalents                                           (907)          452             35          (455)          234         (260)
Cash and cash equivalents – beginning of 
period                                                2 281        1 829          2 288          1 829        2 089         2 089
Cash and cash equivalents – end of period             1 374        2 281          2 323          1 374        2 323         1 829

(1) Includes capital expenditure for Wafi-Golpu and other international projects of R1 million in the December 2014 quarter (September 2014 quarter: R15 million)
    (December 2013 quarter: Rnil) and R12 million in the year ended 30 June 2014.

*  Cash generated by operating activities and cash utilised by investing activities previously reported as R683 million and (R625 million) restated to R710 million and
   (R652 million) respectively in the December 2013 quarter. This is mainly related to the change in accounting policy for IFRIC 20.

#  Cash generated by operating activities and cash utilised by investing activities previously reported as R918 million and (R1 252 million) restated to R1 011 million and
   (R1 345 million) respectively in the six months ended 31 December 2013. This is mainly related to the change in accounting policy for IFRIC 20.

The accompanying notes are an integral part of these condensed consolidated financial statements.

1.    Accounting policies

      Basis of accounting

      The condensed consolidated financial statements for the six months ended 31 December 2014 have been prepared in accordance
      with IAS 34, Interim Financial Reporting, JSE Listings Requirements, SAICA Financial Reporting Guides as issued by the Accounting
      Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, 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 2014, 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.

      The following accounting standards, amendments to standards and new interpretations have been adopted with effect from
      1 July 2014 and had no impact on the financial results of the group:

      IFRSs      Annual Improvements 2010 – 2012 Cycle
      IAS 32     Amendment – Presentation – Offsetting Financial Assets and Financial Liabilities
      IAS 36     Amendment – Impairment of Assets – Recoverable amount disclosures for non-financial assets
      IFRIC 21   Levies

2.    Cost of sales
                                                          Quarter ended                        Six months ended
                                                                                                                    Year ended
                                                 31 Dec        30 Sep        31 Dec         31 Dec       31 Dec        30 June
                                                   2014          2014          2013           2014         2013           2014
      Figures in million                    (Unaudited)   (Unaudited)   (Unaudited)    (Unaudited)   (Reviewed)      (Audited)

      Production costs – excluding royalty        3 074         3 486         3 047          6 560        5 990         11 761
      Royalty expense                                22            32            39             54           77            127
      Amortisation and depreciation                 602           650           565          1 252        1 142          2 143
      Impairment of assets                            –             –             –              –            –          1 439
      Rehabilitation expenditure/(credit)(1)          5            14          (15)             19            –              8
      Care and maintenance cost of
      restructured shafts                            20            17            18             37           35             66
      Employment termination and
      restructuring costs(2)                        182            48            50            230          144            274
      Share-based payments                           66            73           113            139          164            270
      Other                                         (1)           (1)             –            (2)            –              –
      Total cost of sales                         3 970         4 319         3 817          8 289        7 552         16 088

(1) Included in the December 2014 quarter is a credit of R11 million as a result of work performed in the Free State and at Deelkraal, resulting in a reduction in
    the rehabilitation liability.

(2) The September 2014 quarter total includes amounts provided for employees of Target 3. The December 2014 quarter total includes amounts relating to
    management retrenchments and retrenchment of employees at Target 3, Ernest Oppenheimer Hospital and a provision for Kusasalethu.

3.   (Loss)/earnings per share

                                                                  Quarter ended                    Six months ended
                                                                                                                                  Year ended
                                                              31 Dec       30 Sep           31 Dec         31 Dec       31 Dec       30 June
                                                                2014         2014             2013           2014         2013          2014
                                                         (Unaudited)  (Unaudited)      (Unaudited)    (Unaudited)   (Reviewed)     (Audited)

      Weighted average number of shares
      (million)                                                434.2        434.1            432.9         434.1         432.8         433.2
      Weighted average number of diluted
      shares (million)                                         435.2        435.4            433.4         436.1         433.8         434.7
      Total (loss)/earnings per share (cents):
      Basic loss                                               (197)         (61)             (21)         (258)          (18)         (293)
      Diluted loss                                             (197)         (61)             (21)         (258)          (18)         (293)
      Headline (loss)/earnings                                 (114)         (61)             (21)         (175)          (16)            26
      Diluted headline (loss)/earnings                         (114)         (61)             (21)         (175)          (16)            26
      Figures in million    
      Reconciliation of headline (loss)/
      earnings:
      Net loss                                                 (856)        (266)             (91)       (1 122)          (78)       (1 270)
      Adjusted for:
      Impairment/(profit on disposal) of
      investments1                                                 –            –                –             –             7           (7)
      Impairment of assets                                         –            –                –             –             –         1 439
      Taxation effect on impairment of assets                      –            –                –             –             –          (24)
      Profit on sale of property, plant and
      equipment                                                  (1)            –                –           (1)             –          (30)
      Taxation effect of profit on sale of
      property, plant and equipment                                –            –                –             –             –            6
      Loss on scrapping of property, plant and
      equipment                                                  430            –                –           430             –            –
      Taxation effect on loss of scrapping of
      property, plant and equipment                             (69)            –                –          (69)             –            –
      Headline (loss)/earnings                                 (496)        (266)             (91)         (763)          (71)          114
      (1) There is no taxation effect on these items.

4.    Loss on scrapping of property, plant and equipment
      During the financial year, management and the South African operations embarked on a life-of-mine optimisation process which
      was finalised at the end of the December 2014 quarter. The optimisation ensured greater focus on mining profitable and higher
      grade areas at our operations and therefore resulted in the abandonment of lower grade and unprofitable areas from the life-of-
      mine plan for most of the operations.

      In the case of Kusasalethu and Masimong, the optimisation lead to the abandonment of levels and areas with a carrying value. The
      abandonment of these areas, resulted in the derecognition of property, plant and equipment as no future economic benefits are
      expected from its use or disposal and a loss on scrapping of property, plant and equipment of R214 million on Kusasalethu and
      R216 million on Masimong was recorded in the December 2014 quarter.

5.    Investment in associate
      Harmony holds a 10.38% share in Rand Refinery Proprietary Limited (Rand Refinery). Due to the issues experienced at Rand Refinery
      following the implementation of a new Enterprise Resource Planning (ERP) system on 1 April 2013, Harmony provided for its full
      share of loss for the inventory discrepancy and recognised a R127 million loss in the June 2014 quarter.

      As a precautionary measure following the challenges experienced by the implementation of the software system, Rand Refinery's
      shareholders have extended Rand Refinery an irrevocable, subordinated loan facility of up to R1.2 billion. The facility is convertible
      to equity after a period of two years. The agreements relating to the facility were signed on 23 July 2014.

      During the December 2014 quarter, Rand Refinery Proprietary Limited drew down R1.02 billion on the shareholders loan. Harmony's
      portion of the shareholders' loan was R120 million. Interest on the facility is JIBAR plus a margin of 3.5%.

6.    Borrowings
      The drawn level on the US$ syndicated revolving credit facility remains at US$270 million. The weakening of the Rand against the
      US$ resulted in a foreign exchange translation loss of R69 million being recorded in the December 2014 quarter (September 2014
      quarter: R192 million), increasing the borrowings balance and Other expenses (net). The facility is repayable by September 2015. As
      a result, the borrowings balance was reclassified to current liabilities.

      Harmony secured a new revolving credit facility of up to US$250 million with a three-year duration. The facility matures in
      February 2018.

      The debt covenants on all facilities are as follows:

      -    The interest cover ratio shall not be less than five. (EBITDA to interest paid).

      -    Leverage: total net debt to EBITDA ratio shall not be more than 2.5.

      -    Tangible net worth to net debt ratio shall not be less than six times or eight times when dividends are paid.

      At 31 December 2014, the full amount was available on the Nedbank revolving credit facility of R1.3 billion. The facility is available
      until December 2016.

7.    Other non-current liabilities
      During the September 2014 quarter, negotiations were entered into with the claimants in the matter relating to the pumping and
      treatment cost of fissure water in the Klerksdorp, Orkney, Stilfontein and Hartbeesfontein (KOSH) Basin. Payment of R24 million was
      made to Simmer and Jack Investments (Pty) Limited as full and final settlement during the September 2014 quarter. The amount
      owing to Anglogold Ashanti Limited was reclassified to trade and other payables at 30 September 2014 and the full and final
      settlement of R30 million was made in October 2014.

8.    Financial risk management activities

      Fair value determination

      The following table presents the group's assets and liabilities that are measured at fair value by level within the fair value hierarchy:

      Level 1: Quoted prices (unadjusted) in active markets for identical assets;

      Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset, either directly or indirectly (that
               is, as prices) or indirectly (that is derived from prices);

      Level 3: Inputs for the asset that are not based on observable market data (that is unobservable inputs).
 
                                                At             At           At           At
                                            31 Dec         30 Sep      30 June       31 Dec
                                              2014           2014         2014         2013
Figures in million                     (Unaudited)    (Unaudited)    (Audited)   (Reviewed)

Available-for-sale financial assets(1)
Level 1                                         –               –            –          46
Level 2                                         –               –            –           –
Level 3                                         5               4            4           4
Fair value through profit or loss(2)    
Level 1                                         –               –            –           –
Level 2                                       375             632          798         934
Level 3                                         –               –            –           –

(1) Level 1 fair values are directly derived from actively traded shares on the JSE.
    Level 3 fair values have been valued by the directors by performing independent valuations on an annual basis.

(2) The majority of the level 2 fair values are directly derived from the Shareholders Weighted Top 40 index (SWIX 40) on the JSE, and are discounted at market
    interest rate.

9.     Commitments and contingencies

                                                                   At            At          At             At
                                                               31 Dec        30 Sep     30 June         31 Dec
                                                                 2014          2014        2014           2013
      Figures in million                                  (Unaudited)   (Unaudited)   (Audited)     (Reviewed)

      Capital expenditure commitments:
      Contracts for capital expenditure                           172           206         157            322
      Authorised by the directors but not contracted for        1 646         2 359         519          1 152
                                                                1 818         2 565         676          1 474
 
This expenditure will be financed from existing resources and, where appropriate, borrowings.

    Contingent liabilities

    For a detailed disclosure on contingent liabilities refer to Harmony's annual financial statements for the financial year ended
    30 June 2014, available on the group's website (www.harmony.co.za). There were no significant changes in contingencies since
    30 June 2014.

10. Related parties
    Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
    activities of the group, directly or indirectly, including any director (whether executive or otherwise) of the group. There have been
    no transactions with related parties during the six months ended 31 December 2014.

11. Subsequent events
    There were no subsequent events to report.

12. Segment report
    The segment report follows below.

13. Reconciliation of segment information to condensed consolidated income statements and balance sheets

                                                                                                                                      Six months ended

                                                                                                                                      31 Dec          31 Dec
                                                                                                                                        2014            2013
Figures in million                                                                                                               (Unaudited)      (Reviewed)

The “Reconciliation of segment information to condensed consolidated financial statements” line item
in the segment report is broken down in the following elements, to give a better understanding of the
differences between the financial statements and segment report:
Reconciliation of production profit to gross (loss)/profit
Total segment revenue                                                                                                                  8 146           8 089
Total segment production costs                                                                                                       (6 614)         (6 067)
Production profit per segment report                                                                                                   1 532           2 022
Depreciation                                                                                                                         (1 252)         (1 142)
Other cost of sales items                                                                                                              (423)           (343)
Gross (loss)/profit as per income statements(1)                                                                                          (143)             537

(1) The reconciliation was done up to the first recognisable line item on the income statement. The reconciliation will follow the income statement after that.

                                                                                                                                          At               At
                                                                                                                                      31 Dec           31 Dec
                                                                                                                                        2014             2013
Figures in million                                                                                                               (Unaudited)       (Reviewed)

Reconciliation of total segment mining assets to consolidated property, plant and equipment
Property, plant and equipment not allocated to a segment
Mining assets                                                                                                                            791            1 133
Undeveloped property                                                                                                                   5 139            5 139
Other non-mining assets                                                                                                                  162               89
Wafi-Golpu assets                                                                                                                      1 105            1 069
                                                                                                                                       7 197            7 430
Segment report (Rand/Metric)
for the six months ended 31 December 2014 (unaudited)


                                                                                                                  Production                                    Capital             Kilograms
                                                              Revenue               Production cost              (loss)/profit           Mining assets        expenditure#          produced             Tonnes milled
                                                               31 Dec                   31 Dec                      31 Dec                  31 Dec               31 Dec              31 Dec                 31 Dec

                                                            2014         2013         2014         2013          2014         2013     2014     2013      2014         2013     2014         2013    2014        2013

                                                              R million                  R million                 R million                R million           R million                  kg                t'000

     South Africa
     Underground
     Kusasalethu                                           1 005          965        1 065          867          (60)           98    3 526    3 502       247          250    2 109         2 412    476         631
     Doornkop                                                620          707          566          581            54          126    3 332    3 380       129          124    1 346         1 637    298         474
     Phakisa                                                 720          625          589          546           131           79    4 625    4 530       213          189    1 628         1 461    300         293
     Tshepong                                              1 010          861          805          707           205          154    3 997    3 986       171          146    2 288         2 011    528         468
     Masimong                                                620          617          508          516           112          101      879    1 021        89           78    1 403         1 442    373         350
     Target 1                                                912          999          596          525           316          474    2 799    2 690       143          126    2 052         2 322    386         384
                     (a)
     Bambanani                                               617          691          347          356           270          335      842      881        64           62    1 391         1 613    115         129
     Joel                                                    563          580          419          349           144          231      513      354        90           80    1 162         1 371    285         308
     Unisel                                                  420          423          342          311            78          112      625      347        61           42      948           988    225         215
     Target 3                                                222          316          177          289            45           27      546      508        20           72      483           742     90         157
     Surface
     All other surface operations                            709          652          582          485           127          167      475      472        19           25    1 565         1 604  5 225       5 382
     Total South Africa                                    7 418        7 436        5 996        5 532         1 422        1 904   22 159   21 671     1 246        1 194   16 375        17 603  8 301       8 791
     International
     Hidden Valley                                           728          653          618          535           110          118    3 487    3 562        33           68    1 519         1 547    905       1 009
     Total international                                     728          653          618          535           110          118    3 487    3 562        33           68    1 519         1 547    905       1 009

     Total operations                                      8 146        8 089        6 614        6 067         1 532        2 022   25 646   25 233     1 279        1 262   17 894        19 150  9 206       9 800
     Reconciliation of the segment
     information to the condensed
     consolidated financial statements
     (refer to note 13)                                                                                                                   7 197    7 430
                                                           8 146        8 089        6 614         6 067                                 32 843   32 663

     #   Capital expenditure for international operations excludes expenditure spend on Wafi-Golpu of R16 million (2013: Rnil).
     (a) Includes Steyn 2 for the December 2013 amounts.

     The segment report for the six months ended 31 December 2013 has been reviewed, except for production statistics.


DEVELOPMENT RESULTS (METRIC)                                            DEVELOPMENT RESULTS (IMPERIAL)
Quarter ending December 2014                                            Quarter ending December 2014


                                                     Channel                                                                   Channel

                             Reef Sampled    Width     Value     Gold                                  Reef Sampled   Width      Value      Gold
                           Meters  Meters   (Cm's)      (g/t) (Cmg/t)                                 Feet    Feet    (Inch)     (oz/t) (In.oz/t)

Tshepong                                                                Tshepong
Basal                          221    212     7,17   131,56      943    Basal                          723     696     3,00      3,61        11
B Reef                         114     98   160,20     3,56      570    B Reef                         374     322    63,00      0,10         7
All Reefs                      335    310    55,55    14,85      825    All Reefs                     1097    1017    22,00      0,43         9

Phakisa                                                                 Phakisa
Basal                          334    348    55,26    19,16    1 059    Basal                         1097    1142    22,00      0,55        12
All Reefs                      334    348    55,26    19,16    1 059    All Reefs                     1097    1142    22,00      0,55        12

Doornkop                                                                Doornkop
South Reef                     344    384    56,69    16,00      907    South Reef                    1129    1260    22,00      0,47        10
All Reefs                      344    384    56,69    16,00      907    All Reefs                     1129    1260    22,00      0,47        10

Kusasalethu                                                             Kusasalethu
Vcr Reef                       596    348    99,00    10,09      999    Vcr Reef                      1955    1142    39,00      0,29        11
All Reefs                      596    348    99,00    10,09      999    All Reefs                     1955    1142    39,00      0,29        11

Total Target                                                            Total Target
(incl. Target 1 & Target 3)                                             (incl. Target 1 & Target 3)
Elsburg                         77     96   266,00     2,46      654    Elsburg                        253     315   105,00      0,07         8
All Reefs                       77     96   266,00     2,46      654    All Reefs                      253     315   105,00      0,07         8

Masimong 5                                                              Masimong 5
Basal                          591    552    46,56    18,50      861    Basal                         1938    1811    18,00      0,55        10
B Reef                         202    198    59,36    21,81    1 295    B Reef                         662     650    23,00      0,65        15
All Reefs                      792    750    49,94    19,54      976    All Reefs                     2599    2461    20,00      0,56        11

Unisel                                                                  Unisel
Basal                          273    216   170,15     3,31      563    Basal                          896     709    67,00      0,10         6
Leader                         498    402   231,82     6,31    1 463    Leader                        1634    1319    91,00      0,18        17
All Reefs                      771    618   210,27     5,46    1 149    All Reefs                     2529    2028    83,00      0,16        13

Joel                                                                    Joel
Beatrix                        222    291    93,00    11,61    1 080    Beatrix                        730     955    37,00      0,34        12
All Reefs                      222    291    93,00    11,61    1 080    All Reefs                      730     955    37,00      0,34        12

Total Harmony                                                           Total Harmony
Basal                         1419   1328    62,65    14,01      878    Basal                         4654    4357    25,00      0,40        10
Beatrix                        222    291    93,00    11,61    1 080    Beatrix                        730     955    37,00      0,34        12
Leader                         498    402   231,82     6,31    1 463    Leader                        1634    1319    91,00      0,18        17
B Reef                         316    296    92,75    11,37    1 055    B Reef                        1036     971    37,00      0,33        12
Elsburg                         77     96   266,00     2,46      654    Elsburg                        253     315   105,00      0,07         8
South Reef                     344    384    56,69    16,00      907    South Reef                    1129    1260    22,00      0,47        10
Vcr                            596    348    99,00    10,09      999    Vcr                           1955    1142    39,00      0,29        11
All Reefs                     3472   3145    99,42    10,04      998    All Reefs                    11390   10318    39,00      0,29        11
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