HARMONY GOLD MINING COMPANY LIMITED - Secures cash flow; continues to repay debtRelease Date: 23/02/2016 07:05:00 Code(s): HAR PDF(s):
Secures cash flow; continues to repay debt
Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
JSE share code: HAR
(“Harmony” and/or “the Company”)
Harmony secures cash flow; continues to repay debt
Harmony Gold Mining Company Limited (Harmony and/or the
Company) advises that it has entered into foreign exchange
hedging contracts in respect of the Rand/US dollar (“$” or
“US$”) exchange rate for a nominal US dollar value of
approximately US$400 million.
“The weakness in and volatility of the rand presented an
opportunity to Harmony to establish a very attractive minimum
exchange rate on the US dollars we receive when we sell our
gold, while leaving our shareholders fully exposed to the
upside in the
US$ gold price. At the same time this provides more certainty
on our margins and cash flows, enabling us to reduce our
debt, strengthen our balance sheet and provide us with
further confidence that we can fund the Golpu project”, said
Frank Abbott, financial director of Harmony.
These hedging contracts have been done in the form of zero
cost collars* (“collars”). The collars establish a floor or
minimum exchange rate for Harmony’s future US$ gold sale
proceeds, while also establishing a cap or maximum exchange
rate at which its future US$ gold sale proceeds could be
exchanged into rands.
The hedging contracts are spread over a 12 month period with
an average floor price of R15.59/$ and an average cap price
of R18.60/$. To date, US$400 million (approximately R6.2
billion) has been hedged. This amounts to approximately one
third of Harmony’s expected US$ gold sale proceeds over a 12
Since 31 December 2015, Harmony has repaid a further $20
million on the $250 million revolving credit facility leaving
the utilised balance at $180 million.
* A zero cost collar comprises a purchased put option and a sold call
option, where the premium paid and premium received offset each other.
For more details contact:
Investor Relations Manager
On +27 (0)82 759 1775
Marian van der Walt
Executive: Corporate and Investor Relations
+27(0) 82 888 1242
Johannesburg, South Africa
23 February 2016
J.P. Morgan Equities South Africa Proprietary Limited
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