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HARMONY GOLD MINING COMPANY LIMITED - Interim results for the six months ended 31 December 2016

Release Date: 02/02/2017 07:05:00      Code(s): HAR       PDF(s):  
Interim results for the six months ended 31 December 2016

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


FY17
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2016


KEY FEATURES

- Safety rates improving
- Repaid most of our debt
- Shareholder returns - interim dividend of 50 SA cents (4 US cents)
- 8% increase in gold production
- 3% increase in grade - upward trend continues
- R627 million (US$45 million) cash inflows from hedging activity
- 4% increase in all-in sustaining costs at R510 506/kg (14% to US$1 136/oz due to exchange rate)
- Headline earnings of 150 SA cents (11 US cents)

                                                                                                                   6 months     6 months
                                                                                                                      ended        ended
                                                                                                                   December         June
                                                                                                                       2016         2016             %
                                                                                                                    (H1FY17)     (H2FY16)     Variance
Gold produced(1)                                        - kg                                                         17 227       15 974             8
                                                        - oz                                                        553 862      513 576             8
Cash operating costs                                    - R/kg                                                      437 996      413 796            (6)
                                                        - US$/oz                                                        974          836           (17)
Gold sold(1)                                            - kg                                                         16 923       15 900             6
                                                        - oz                                                        544 086      511 198             6
Underground grade                                       - g/t                                                          5.04         4.88             3
Total costs and capital(2)                              - R/kg                                                      522 264      485 175            (8)
                                                        - US$/oz                                                      1 162          980           (19)
All-in sustaining costs(2)                              - R/kg                                                      510 506      492 898            (4)
                                                        - US$/oz                                                      1 136          996           (14)
Gold price received                                     - R/kg                                                      585 908      605 476            (3)
                                                        - US$/oz                                                      1 303        1 223             7
Production profit                                       - R million                                                   2 474        3 092           (20)
                                                        - US$ million                                                   177          201           (12)
Basic earnings/(loss) per share                         - SAc/s                                                         352          320            10 
                                                        - USc/s                                                          25           21            19 
Headline earnings/(loss)                                - Rm                                                            657        1 412           (53) 
                                                        - US$m                                                           47           92           (49) 
Headline earnings/(loss) per share                      - SAc/s                                                         150          324           (54) 
                                                        - USc/s                                                          11           21           (48) 
Exchange rate                                           - R/US$                                                       13.98        15.39            (9)

(1) Includes production for Hidden Valley attributable to Stage 5 & 6 capitalised for H1FY17: 81 kilograms (2 618 ounces).
(2) Re-stated to include capitalised stripping.


HARMONY'S ANNUAL REPORTS

Harmony's Integrated Annual Report and the Form 20F with the United States' Securities and Exchange Commission for the financial year
ended 30 June 2016 are available on our website (www.harmony.co.za/investors).

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the safe harbour
provided by Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended, with respect to our 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. These include all statements other than statements of historical fact, including,
without limitation, any statements proceeded by, followed by, or that include the words
"targets", "believes", "expects", "aims" "intends" "will", "may", "anticipates", "would",
"should", "could", "estimates", "forecast", "predict", "continue" or similar expressions or
the negative thereof.

These forward-looking statements, including, among others, those relating to our future
business prospects, revenues and income, wherever they may occur in this report and the
exhibits to this report, are essentially estimates reflecting the best judgment of our senior
management 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 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 South Africa, Papua New
Guinea, Australia and elsewhere, estimates of future earnings, and the sensitivity of earnings
to the gold and other metals prices, estimates of future gold and other metals production
and sales, estimates of future cash costs, estimates of future cash flows, and the sensitivity of
cash flows to the gold and other metals prices, statements regarding future debt repayments,
estimates of future capital expenditures, the success of our business strategy, development
activities and other initiatives, estimates of reserves statements regarding future exploration
results and the replacement of reserves, the ability to achieve anticipated efficiencies and other
cost savings in connection with past and future acquisitions, fluctuations in the market price
of gold, the occurrence of hazards associated with underground and surface gold mining, the
occurrence of labour disruptions, power cost increases as well as power stoppages, fluctuations
and usage constraints, supply chain shortages and increases in the prices of production imports,
availability, terms and deployment of capital, changes in government regulation, particularly
mining rights and environmental regulation, fluctuations in exchange rates, the adequacy of the
group's insurance coverage and socio-economic or political instability in South Africa and Papua
New Guinea and other countries in which we operate.

For a more detailed discussion of such risks and other factors (such as availability of credit
or other sources of financing), see the company's latest Integrated Annual Report on Form
20-F which is on file with the Securities and Exchange Commission, as well as the Company's
other Securities and Exchange Commission filings. The company undertakes no obligation to
update publicly or release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this annual report or to reflect the occurrence of unanticipated
events, except as required by law.


COMPETENT PERSON'S DECLARATION


In South Africa, Harmony employs 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 of South Africa:

Jaco Boshoff, BSc (Hons), MSc, MBA, Pr. Sci. Nat, MSAIMM,
MGSSA, who has 21 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).

Mr Boshoff is Harmony's Lead Competent Person.

Jaco Boshoff

Physical address:                                                         Postal address:

Randfontein Office park                                                   PO Box 2
Corner of Main Reef Road and Ward Avenue                                  Randfontein
Randfontein                                                               1760
South Africa                                                              South Africa

Resources and reserves of Papua New Guinea:

Gregory Job, BSc, MSc, who has 28 years' relevant experience and
is a member of the Australian Institute of Mining and Metallurgy
(AusIMM).

Greg Job

Physical address:                            Postal address:

Level 2                                      PO Box 1562
189 Coronation Drive                         Milton, Queensland
Milton, Queensland 4064                      4064
Australia                                    Australia

Both these competent persons, who are full-time employees of
Harmony Gold Mining Company Limited, consent to the inclusion
in the report of the matters based on the information in the form
and context in which it appears.


SHAREHOLDER INFORMATION

Issued ordinary share capital at 31 December 2016        439 787 199

Issued ordinary share capital at 30 June 2016            437 299 479

MARKET CAPITALISATION

At 31 December 2016 (ZARm)                                    13 866

At 31 December 2016 (US$m)                                     1 014

At 30 June 2016 (ZARm)                                        22 945

At 30 June 2016 (US$m)                                         1 567

HARMONY ORDINARY SHARES AND ADR PRICES

12-month high (1 January 2016 - 31 December 2016)
for ordinary shares                                            67.00

12-month low (1 January 2016 - 31 December 2016)
for ordinary shares                                            15.20

12-month high (1 January 2016 - 31 December 2016)
for ADRs                                                        4.81

12-month low (1 January 2016 - 31 December 2016)
for ADRs                                                        1.06

FREE FLOAT                                                      100%

ADR RATIO                                                        1:1

JSE LIMITED                                                      HAR

Range for six months
(1 July - 31 December 2016 closing prices)           R25.87 - R67.00

Average daily volume for the six months
(1 July - 31 December 2016)                         2 122 890 shares

Range for previous six months
(1 January - 30 June 2016 closing prices)            R15.20 - R62.89

Average daily volume for the previous six months
(1 January - 30 June 2016)                          2 935 000 shares

NEW YORK STOCK EXCHANGE
including other US trading platforms                             HMY

Range for six months
(1 July - 31 December 2016 closing prices)         US$1.89 - US$4.81

Average daily volume for the six months
(1 July - 31 December 2016)                           5 032 529 ADRs

Range for previous six months
(1 January - 30 June 2016 closing prices)          US$1.06 - US$4.17

Average daily volume for the previous six months
(1 January - 30 June 2016)                            5 233 520 ADRs

INVESTORS' CALENDAR

FY 17 year end results                                17 August 2017

Annual general meeting                              23 November 2017


CONTACT DETAILS

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

DIRECTORS
PT Motsepe* (chairman)
FFT De Buck*^ (lead independent director)
JM Motloba*^ (deputy chairman)
PW Steenkamp (chief executive officer)
F Abbott (financial director)
JA Chissano*1^, KV Dicks*^, Dr DSS Lushaba*^
CE Markus*^, HE Mashego**, M Msimang*^
KT Nondumo*^, VP Pillay*^, JL Wetton*^, AJ Wilkens*
* Non-executive
** Executive
^ Independent
1 Mozambican
 
INVESTOR RELATIONS
E-mail: harmonyIR@harmony.co.za
Marian van der Walt
Executive: Corporate and Investor Relations
Telephone: +27 11 411 2037
Fax: +27 86 614 0999
Mobile: +27 82 888 1242
E-mail: marian@harmony.co.za

COMPANY SECRETARY
Riana Bisschoff
Telephone: +27 11 411 6020
Fax: +27 11 696 9734
Mobile: +27 83 629 4706
E-mail: riana.bisschoff@harmony.co.za

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

ADR* 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
E-mail queries: db@amstock.com
Toll free: +1-800-937-5449
Int: +1-718-921-8137
Fax: +1-718-765-8782
*ADR: American Depositary Receipts

SPONSOR
JP Morgan Equities South Africa (Pty) Ltd
1 Fricker Road, corner Hurlingham Road
Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
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:
ZAE 000015228


MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

We achieved all we set out to in the six months from 1 July 2016
to 31 December 2016. We improved our safety performance
and increased production. Safe mines are profitable mines and
profitable mines strengthen our margins.


SAFETY

Despite a significant improvement in our fatality injury frequency
rate quarter on quarter and half year on half year, it is with deep
regret that we report three fatalities in the past six months.

Our underground South African operations recorded a fatality
free quarter for the three months to December 2016, which was
a notable achievement. For the six months from 1 July 2016 to
31  December 2016, Harmony's fatality injury frequency rate
of 0.08 was lower than the previous six month period's rate of
0.10 and lower than the combined rate (0.10) for the main gold
producers in South Africa.

Tshepong achieved its first ever 2.5 million fatality-free shifts (FFS)
on 27 October 2016, equivalent to 794 days without a fatality.
Doornkop achieved its first ever 2 million FFS on 17 December
2016, which equates to 872 days free of fatalities. The Free State
Surface Sources reported 3.5 million FFS on 16 November 2016
(equivalent to 159 months without a fatality or just more than
13 years).

Important to note is that safety is being taken extremely serious
in our company. Each person is bound by our safety pledge. Our
number of white flag days is a good indication of where our safety
efforts need to increase. A white flag day is one where no one
suffered an injury at the mine during the course of one working
day.

The following operations recorded white flag (injury free) months:

- Unisel in December 2016
- Bambanani in September 2016, November 2016 and
  December 2016
- Joel in October 2016


OPERATIONAL RESULTS - 6 months on 6 months

Gold production for the six months ended 31 December 2016
increased by 8% to 17 227kg (553 862 oz), compared to 15 974kg
(513 576oz) for the six months ended June 2016. All-in sustaining
costs for all operations increased by only 4% to R510 506/kg (14%
to US$1 136/oz).

Gold production increased at the following operations:

- Kusasalethu (+307kg, 9 871oz): gold production increased by
  16%, mainly due to a 13% (37 000t) increase in tonnes milled,
  supported by a 3% increase in the recovered grade to 6.75g/t
  (June 2016: 6.55g/t)
- Bambanani (+263kg, 8 456oz): tonnes milled increased by
  16% (17 000t) while the recovered grade improved by 5% to
  12.03g/t (June 2016: 11.48g/t), resulting in a 22% increase in
  gold produced
- Phakisa (+217kg, 6 977oz): gold production increased by 11%,
  due mainly to a 6% increase in the recovered grade to 6.33g/t
  (June 2016: 5.95g/t). Tonnes milled improved by 4% (14 000t)
- Joel (+212kg, 6 816oz): an 18% increase in the recovered grade
  to 4.84g/t (June 2016: 4.11g/t), combined with a 2% increase
  in tonnes milled, resulted in a 20% increase in gold produced.
- Unisel (+183kg, 5 884oz): a 24% increase in gold production
  was due to a 15% increase in the recovered grade to 4.37g/t
  (June 2016: 3.79g/t). Tonnes milled, increased by 7% or
  15 000t
- Masimong (+133kg, 4 277oz): tonnes milled increased by 10%
  (30 000t) and recovered grade increased by 2% to 3.72g/t (June
  2016: 3.65g/t), resulting in a 12% increase in gold production
- Phoenix (+82kg, 2 637oz): gold production increased by 21%
  due mainly to a 17% increase in the recovered grade to 0.14g/t
  (June 2016: 0.12g/t). Tonnes milled increased 7% (231 000t)
- Kalgold (+78kg, 2 508oz) the recovered grade increased to
  0.81g/t (June 2016: 0.71g/t), resulting in a 15% increase in
  gold produced
- Hidden Valley: 1.2Mt were milled, an increase of 24% on the
  previous six months. This was partly offset by a 17% decline in
  the recovered grade to 1.15g/t, resulting in a 39kg (1 253oz)
  (3%) increase in gold produced

The following operations, where production declined, require
more attention:

- Target 1 (-148kg, 4 759oz): Production was severely affected
  by unstable ground conditions which hampered further mining
  in the higher grade areas. The 11% decrease in gold production
  was mainly due to a 17% decrease in the recovered grade to
  3.00g/t (June 2016: 3.62g/t). Additional geological infill drilling
  indicates that we will not meet the mine's existing plan for
  FY17. We will implement a narrow reef mining method to
  access the higher-grade ore, with expected production to be
  about 250kg per month. To this end, a zero-based costing
  exercise has begun to identify opportunities to return the mine
  to profitability and to ensure an acceptable operating margin
  at a reduced production profile
- Tshepong (-67kg, 2 154oz): Tonnes milled declined by 17 000t
  resulting in a 3% decrease in gold production
- Doornkop (-38kg, 1 222oz): A 3% decrease in the recovered
  grade to 4.16g/t (June 2016: 4.29g/t) resulted in a 3% decrease
  in gold produced

HIDDEN VALLEY - progress in line with plan

Since acquiring Hidden Valley, we have made good progress in
positioning the mine for growth. Waste stripping at Stage 5 has
commenced and we have invested in additional and replacement
mobile fleet (9 additional mining trucks were ordered). We are
currently processing the Hamata ore and stockpiles until June 2017,
followed by a five-month mill shut-down. During the shut-down
we plan to do plant maintenance and attend to upgrade projects.

The total re-investment capital will be net US$180 million
(US$70 million in FY17 and US$110 million in FY18). Commercial
levels of production post pre-strip is estimated to be achieved in the
June quarter of calendar year 2018, with steady state production
thereafter of about 180 000oz of gold and 3Moz of silver.

Planned life-of-mine information is as follows:

- Production to be 1.2Moz of gold (after re-investment 1 Moz of
  gold) and 18Moz of silver (after re-investment 16 Moz of silver)
- Recovered gold grade of between 1.4g/t to 1.5g/t and silver at
  approximately 20g/t to 23g/t
- Milling rate of approximately 4Mt per annum
- Mining rate ramps up to 28Mt per annum
- Life of mine all-in sustaining cash cost post re-investment (real)
  ranging from US$850/oz to US$950/oz on average

A regional exploration programme has commenced proximate to
the Hidden Valley mine. In addition, during FY18 a prefeasibility
study will commence to underpin a possible further 7 year mine
life extension through a further cutback on the Hidden Valley
Kaveroi orebody.

Hidden Valley is an asset that we are familiar with - we know
the ore body, have strong relationships with government and
the communities and have a robust re-investment plan that will
generate a return for our shareholders.


FINANCIAL RESULTS

The higher Rand gold and US dollar gold price received over the last
year has improved the profitability of our operations and enabled
the company to enter into favourable hedging arrangements.
Combined with producing safe, profitable ounces, we also focus
on prudent cash management.

H1FY17 to H2FY16

The average spot gold price during the six months ended December
2016 was R569 241/kg, 6% lower than the R605 476/kg recorded
in the previous six months. During the six months to December 2016
the rand strengthened by 9% against the US dollar from an average
of R15.39/US$ in the six months ended June 2016 to an average
of R13.98/US$. The average US dollar gold price for the six months
ended December 2016 increased 4% to US$1 266/oz (June 2016:
US$1 223/oz). After accounting for R233 million (US$17 million)
realised profits resulting from the gold hedge, the average gold
price received increased to R585 908/kg (US$1 303/oz) for the six
months ended December 2016.

Revenue including the gold hedge increased by 3% to
R9.868 billion (13% to US$706 million) in the six months ended
31 December 2016.

Total production profit decreased to R2.474 billion (US$177 million),
from R3.092 billion (US$201 million) in H2FY16 after accounting
for a 14% increase in cash operating costs. Operating costs were
higher due to the inclusion of 100% of Hidden Valley as from 26
October 2016 and increases in labour costs, electricity tariffs and
royalty costs at our South African operations.

All-in sustaining costs (AISC) for all operations increased by 4%
to R510 506/kg in H1FY17, compared to R492 898/kg in H2FY16
(increased by 14% to US$1 136/oz compared to US$996/oz in
H2FY16).

All-in sustaining costs (AISC) for the South African operations
increased by 1% to R505 795/kg (11% to US$1 125/oz) compared
to H2FY16.

All-in sustaining costs (AISC) for Hidden Valley increased to
R567 012/kg (US$1 264/oz) compared to H2FY16: R429 121/kg
(46% to US$867/oz), mainly due to processing the lower grade
stockpiles.

A net profit of R1.5 billion (US$111 million) was recorded in the
six months ended 31 December 2016 compared to a net profit
of R1.4 billion (US$89 million) recorded in the six months ended
30 June 2016.

Headline earnings amounted to 150 SA cents per share (11 US cents
per share) compared to headline earnings of 324 SA cents per share
(21 US cents per share) for the six months ended 30 June 2016.

Accounting for the Hidden Valley transaction

Following the completion of the Hidden Valley transaction, 100%
of the operation's income, expenses, assets and liabilities were
accounted for from the 26th of October 2016. A gain on purchase
of R848 million (US$61 million) was recorded. Refer to note 4 for
further details.

Net debt

Positive cash flow generation from our operations enabled the
company to pay a dividend1 of R218 million (US$16 million)
in September 2016 and reduce net debt from R1.1 billion
(US$74 million) at the end of 30 June 2016 to R289 million
(US$21 million) at the end of 31 December 2016. Refer to note 8
for further details related to borrowings at 31 December 2016.

1 Dividend of 50 SA cents (4 US cents) declared for the year ended 30 June 2016.



HEDGING ACTIVITY

Currency hedging

The foreign currency hedging is in the form of zero cost collars, which establish a minimum (floor) and maximum (cap) rand/US dollar exchange
rate at which to convert US dollars to rands. The nominal value of the hedging contracts as at 31 December 2016 is US$442 million. The
hedging contracts are spread over a 12 month period, and are summarised as follows:

                                                                                     FY17 Q3       FY17 Q4       FY18 Q1       FY18 Q2
Sold call options
Nominal                                                                              US$112m       US$146m       US$111m        US$73m
Average strike price                                                                  R18.59        R17.38        R16.28        R16.22
Lowest strike price                                                                   R17.93        R16.21        R16.20        R16.20
Highest strike price                                                                  R19.08        R18.28        R16.50        R16.30
Purchased put option
Nominal                                                                              US$112m       US$146m       US$111m        US$73m
Average strike price                                                                  R15.56        R15.47        R14.98        R15.00
Lowest strike price                                                                   R15.40        R14.85        R14.85        R15.00
Highest strike price                                                                  R15.80        R16.10        R15.15        R15.00

The realised gain from contracts maturing in the six months to 31 December 2016 amounted to R394 million (US$28 million).

Gold hedging

Gold hedging is in the form of short-term gold forward sale contracts with a maximum term of 24 months. The nominal value hedged 
as at 31 December 2016 was 370 000 ounces, representing approximately 20% of our total production. The breakdown of gold forward 
sale contracts entered into are as follows:
                                                                                            Q1            Q2             Q3            Q4
  FY 2017                                            Kg's                                                             1 680         1 680
                                                     Average R/kg                                               R660 632/kg   R673 143/kg
  FY 2018                                            Kg's                                 1 680         1 680         1 680         1 680
                                                     Average R/kg                   R686 131/kg   R699 540/kg   R712 982/kg   R727 765/kg
  FY 2019                                            Kg's                                 1 431
                                                     Average R/kg                   R709 785/kg

During the six months ended 31 December 2016 a gain of R233 million (US$17 million) was realised on the contracts that matured and is
included in revenue. Cash flow hedge accounting is applied to the contracts.

Refer to note 3 and 7 for further details.

GOLPU

The Wafi-Golpu Joint Venture parties continued to work with the
Papua New Guinea Government to advance our application for a
special mining lease for the Wafi-Golpu project. Work continued
during the first half of the financial year on those areas identified
in the forward work plan.


DIVIDEND

Our strategy to mine safe, profitable ounces and increase our
margins is paying off. As a result, the board has decided to return
cash to shareholders and they have approved a 50 SA cents
(4 US cents) dividend. See below for details.


CONCLUSION

We believe it is important to continue to strengthen our cash flow,
to pay dividends and to finance our growth ambitions, and to
ensure that Harmony's share price correctly reflects its true value.
It is important that shareholders acknowledge that Harmony has a
sustainable investment case based on prudent financial planning
and capital allocation that is aimed at enhancing the value of our
portfolio.

Although the March quarter is traditionally a difficult production
quarter due to the slow start-up after the festive season, we
believe that our annual guidance of approximately 1 050 000oz
of gold at a cash cost of about $1 100/oz (~R495 000/kg at an
exchange rate of R14.00) is achievable.

We will continue our strong operational performance and create
further value uplift.


Peter Steenkamp
Chief Executive Officer


NOTICE OF CASH DIVIDEND

Our dividend declaration for the six months ending 31 December
2016 is as follows:


NOTICE OF CASH DIVIDEND

Declaration of ordinary dividend no. 87

The board has approved and declared an interim dividend of
50 SA cents (4 US cents) per ordinary share in respect of the six
months ended 31 December 2016.

In accordance with paragraphs 11.17(a)(i) to (x) and 11.17(c)
of the JSE Listings Requirements the following additional
information is disclosed:

- The dividend has been declared out of income reserves;
- The local Dividends Tax rate is 15% (fifteen per centum);
- The gross local dividend amount is 50 SA cents per ordinary
  share for shareholders exempt from the Dividends Tax;
- The net local dividend amount is 42.5 SA cents per ordinary
  share for shareholders liable to pay the Dividends Tax;
- Harmony currently has 439 787 199 ordinary shares in issue
  (which includes 559 519 treasury shares); and
- Harmony Gold Mining Company Limited's income tax
  reference number is 9240/012/60/0.

A dividend No. 87 of 50 SA cents per ordinary share, being
the dividend for the six months ended 31 December 2016, has
been declared payable on Monday, 20 March 2017 to those
shareholders recorded in the books of the company at the close
of business on Friday, 17 March 2017. The dividend is declared
in the currency of the Republic of South Africa. Any change in
address or dividend instruction to apply to this dividend must be
received by the company's transfer secretaries or registrar not
later than Friday, 17 March 2017.

Last date to trade ordinary shares                    Tuesday,
cum dividend is                                  14 March 2017

Ordinary shares trade ex-dividend                   Wednesday,
                                                 15 March 2017

Record date                                            Friday,
                                                 17 March 2017

Payment date                                           Monday,
                                                 20 March 2017

No dematerialisation or rematerialisation of share certificates
may occur between Wednesday, 15 March 2017 and Friday,
17 March 2017, both dates inclusive, nor may any transfers
between registers take place during this period.

OPERATING RESULTS - SIX MONTHLY (RAND/METRIC)

                                                                                                                                                   South Africa
                                                                                                                                        Underground production                                                        Surface production
                                     Six                                                                                                                                                                                                                              Total
                                     months                                                                                                                                                     Total                                                 Total           South          Hidden          Total
                                     ended              Tshepong         Phakisa  Bambanani                 Joel       Doornkop         Target 1 Kusasalethu      Masimong       Unisel   Underground     Phoenix       Dumps       Kalgold         Surface          Africa          Valley        Harmony
 Ore milled                - t'000   Dec-16                  518             344        123                  268            317              384         323           331          217         2 825       3 392       1 473           753           5 618           8 443           1 233          9 676
                                     Jun-16                  535             330        106                  264            316              359         286           301          202         2 699       3 161       1 612           745           5 518           8 217             994          9 211
 Yield                     - g/tonne Dec-16                 4.71            6.33      12.03                 4.84           4.16             3.00        6.75          3.72         4.37          5.04        0.14        0.35          0.81            0.28            1.87            1.15           1.78
                                     Jun-16                 4.68            5.95      11.48                 4.11           4.29             3.62        6.55          3.65         3.79          4.88        0.12        0.32          0.71            0.26            1.78            1.38           1.73
 Gold produced(1)          - kg      Dec-16                2 439           2 179      1 480                1 298          1 318            1 151       2 181         1 231          948        14 225         467         510           610           1 587          15 812           1 415         17 227
                                     Jun-16                2 506           1 962      1 217                1 086          1 356            1 299       1 874         1 098          765        13 163         385         518           532           1 435          14 598           1 376         15 974
 Gold sold(1)              - kg      Dec-16                2 393           2 139      1 452                1 313          1 324            1 124       2 131         1 207          930        14 013         461         491           581           1 533          15 546           1 377         16 923
                                     Jun-16                2 496           1 955      1 212                1 008          1 314            1 323       1 806         1 095          761        12 970         379         507           550           1 436          14 406           1 494         15 900
 Gold price                - R/kg    Dec-16              586 751         587 747    587 059              588 313        588 388          584 472     592 875       586 513      587 737       588 029     575 362     589 053       590 523         585 493         587 779         563 456        585 908
 received                            Jun-16              606 220         605 947    605 564              605 463        604 164          605 233     605 817       605 282      606 507       605 631     603 354     602 538       603 629         603 171         605 386         606 342        605 476
 Revenue                   (R'000)   Dec-16            1 404 096       1 257 191    852 409              772 455        779 026          656 946   1 263 416       707 921      546 595     8 240 055     265 242     289 225       343 094         897 561       9 137 616         730 239      9 867 855
                                     Jun-16            1 513 124       1 184 626    733 943              610 307        793 872          800 723   1 094 106       662 784      461 552     7 855 037     228 671     305 487       331 996         866 154       8 721 191         905 875      9 627 066
 Cash operating            (R'000)   Dec-16            1 035 403         844 533    449 586              484 024        597 771          669 110   1 037 058       564 319      425 295     6 107 099     186 986     228 995       323 714         739 695       6 846 794         663 080      7 509 874
 cost                                Jun-16              949 067         705 746    402 786              425 489        533 348          615 907     924 771       518 813      381 831     5 457 758     159 612     224 976       276 081         660 669       6 118 427         491 544      6 609 971
 Inventory                 (R'000)   Dec-16              (19 244)        (17 589)   (14 363)               5 706          1 479          (10 405)    (15 981)      (10 793)      (8 491)      (89 681)       (745)     (5 127)      (14 799)        (20 671)       (110 352)         (5 140)      (115 492)
 movement                            Jun-16               (7 011)         (4 988)      (977)             (33 734)       (25 720)             632     (43 481)       (2 906)     (1 383)      (119 568)     (4 371)    (10 171)        7 888          (6 654)       (126 222)         51 051        (75 171)
 Operating costs           (R'000)   Dec-16            1 016 159         826 944    435 223              489 730        599 250          658 705   1 021 077       553 526      416 804     6 017 418     186 241     223 868       308 915         719 024       6 736 442         657 940      7 394 382
                                     Jun-16              942 056         700 758    401 809              391 755        507 628          616 539     881 290       515 907      380 448     5 338 190     155 241     214 805       283 969         654 015       5 992 205         542 595      6 534 800
 Production profit         (R'000)   Dec-16              387 937         430 247    417 186              282 725        179 776           (1 759)    242 339       154 395      129 791     2 222 637      79 001      65 357        34 179         178 537       2 401 174          72 299      2 473 473
                                     Jun-16              571 068         483 868    332 134              218 552        286 244          184 184     212 816       146 877       81 104     2 516 847      73 430      90 682        48 027         212 139       2 728 986         363 280      3 092 266
 Capital                   (R'000)   Dec-16              193 935         157 692     41 950              120 041        111 258          139 987     138 900        54 919       35 408       994 090       3 848      94 185         8 280         106 313       1 100 403         344 470      1 444 873
 expenditure(2)                      Jun-16              167 480         162 445     52 850              103 098        115 874          160 994     196 209        57 328       32 263     1 048 541       4 736      14 402        19 657          38 795       1 087 336          52 875      1 140 211
 Cash operating            - R/kg    Dec-16              424 519         387 578    303 774              372 900        453 544          581 329     475 497       458 423      448 623       429 322     400 398     449 010       530 679         466 096         433 013         497 061        437 996
 costs                               Jun-16              378 718         359 707    330 966              391 795        393 324          474 139     493 474       472 507      499 125       414 629     414 577     434 317       518 949         460 397         419 128         357 227        413 796
                           - R/tonne Dec-16                1 999           2 455      3 655                1 806          1 886            1 742       3 211         1 705        1 960         2 162          55         155           430             132             811             580            783
                                     Jun-16                1 774           2 139      3 800                1 612          1 688            1 716       3 233         1 724        1 890         2 022          50         140           371             120             745             495            718
 Cash operating            - R/kg    Dec-16              504 034         459 947    332 119              465 381        537 958          702 951     539 183       503 037      485 974       499 205     408 638     633 686       544 252         533 086         502 605         755 285        522 264
 cost and Capital(2)                 Jun-16              445 549         442 503    374 393              486 728        478 777          598 076     598 175       524 719      541 299       494 287     426 878     462 120       555 898         487 431         493 613         395 653        485 175
 All-in sustaining         - R/kg    Dec-16              508 970         472 471    332 778              427 123        565 877          731 710     557 443       517 240      499 891       508 197     412 332     459 209       561 556         483 901         505 795         567 012        510 506
 cost(2)                             Jun-16              456 159         453 534    375 987              445 332        486 741          604 176     614 069       546 615      561 454       501 430     422 997     461 111       568 425         492 154         499 511         429 121        492 898
 Operational free          %         Dec-16                   12              20         42                   22              9              (23)          7            13           16            14          28         (12)            3               5              13             (19)            11
 cash flow margin(3)                 Jun-16                   26              27         38                   13             18                3          (2)           13           10            17          28          22            12              20              17              41             20

(1) Gold produced and sold for Hidden Valley includes 81 kilograms for the six months ended December 2016 that has been capitalised.
(2) Capital expenditure for Kalgold and Hidden Valley for the six months ended June 2016 has been re-stated to include capitalised stripping.
(3) Excludes run of mine costs for Kalgold (Dec-16: -R2.288m, Jun-16: R5.214m) and Hidden Valley (Dec-16: R140.794m, Jun-16: R8.881m).

The quarter on quarter operating results is available on Harmony's website at www.harmony.co.za/investors


CONDENSED CONSOLIDATED INCOME STATEMENTS
(RAND)

                                                                                 Six months ended                   Year ended
                                                                   31 December         30 June      31 December        30 June
                                                                          2016            2016             2015           2016
Figures in million                                        Note      (Unaudited)     (Unaudited)      (Unaudited)      (Audited)

Revenue                                                                  9 868           9 627            8 707         18 334
Cost of sales                                                2          (9 066)         (7 780)          (8 006)       (15 786)

  Production costs                                                      (7 394)         (6 535)          (6 715)       (13 250)
  Amortisation and depreciation                                         (1 274)         (1 084)          (1 086)        (2 170)
  Reversal of impairment of assets                                           -              43                -             43
  Other items                                                             (398)           (204)            (205)          (409)

Gross profit/(loss)                                                        802           1 847              701          2 548
Corporate, administration and other expenditure                           (226)           (227)            (182)          (409)
Social investment expenditure                                              (27)            (33)             (25)           (58)
Exploration expenditure                                                   (144)            (88)            (103)          (191)
Loss on scrapping of property, plant and equipment                           -             (64)               -            (64)
Foreign exchange translation gain/(loss) - net               3             713             606             (798)          (192)
Other income/(expenses) - net                                               48             (31)             (11)           (42)

Operating profit/(loss)                                                  1 166           2 010             (418)         1 592
Gain on bargain purchase                                     4             848               -                -              -
Profit/(loss) from associates                                6             (13)            (28)              35              7
Net gain/(loss) on financial instruments                                     5              28              (13)            15
Investment income                                                          135             127              114            241
Finance cost                                                              (128)           (133)            (141)          (274)

Profit/(loss) before taxation                                            2 013           2 004             (423)         1 581
Taxation                                                                  (474)           (610)             (22)          (632)

  Normal taxation                                                         (363)           (122)              (1)          (123)
  Deferred taxation                                                       (111)           (488)             (21)          (509)

Net profit/(loss) for the period                                         1 539           1 394             (445)           949

Attributable to:
Owners of the parent                                                     1 539           1 394             (445)           949

Earnings/(loss) per ordinary share (cents)                   5
Basic earnings/(loss)                                                      352             320             (102)           218
Diluted earnings/(loss)                                                    333             306             (102)           213


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




The condensed consolidated financial statements for the six months ended 31 December 2016 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 STATEMENTS OF
COMPREHENSIVE INCOME (RAND)

                                                                                     Six months ended                   Year ended
                                                                         31 December         30 June   31 December         30 June
                                                                                2016            2016          2015            2016
Figures in million                                                        (Unaudited)     (Unaudited)   (Unaudited)       (Audited)

Net profit/(loss) for the period                                               1 539           1 394          (445)            949
Other comprehensive income/(loss) for the period, net
of income tax                                                                  1 076            (329)          472             143
Items that may be reclassified subsequently to profit or
loss:                                                                          1 076            (333)          472             139
   Foreign exchange translation gain/(loss)                                     (190)           (333)          472             139
   Remeasurement of derivative instruments
      Gain deferred on gold hedging contracts                                  1 591               -             -               -
      Deferred tax thereon                                                      (325)              -             -               -

Items that will not be reclassified to profit or loss:                             -               4             -               4
   Remeasurement of retirement benefit obligation
    Actuarial gain recognised during the year                                      -               3             -               3
    Deferred taxation thereon                                                      -               1             -               1

Total comprehensive income/(loss) for the period                               2 615           1 065            27           1 092

Attributable to:
Owners of the parent                                                           2 615           1 065            27           1 092

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 2016 (Unaudited)




                                                                                               Other    Accumulated
Figures in million                                                     Share capital        reserves           loss          Total
Balance - 30 June 2016                                                        28 336           4 252         (4 409)        28 179
Share-based payments                                                               -             182              -            182
Net profit for the period                                                          -               -          1 539          1 539
Other comprehensive income for the period                                          -           1 076              -          1 076
Dividends paid1                                                                    -               -           (218)          (218)
Balance - 31 December 2016                                                    28 336           5 510         (3 088)        30 758
Balance - 30 June 2015                                                        28 324           3 787         (5 358)        26 753
Share-based payments                                                               -              99              -             99
Net loss for the period                                                            -               -           (445)          (445)
Other comprehensive income for the period                                          -             472              -            472
Balance - 31 December 2015                                                    28 324           4 358         (5 803)        26 879

1 Dividend of 50 SA cents declared on 15 August 2016.


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


CONDENSED CONSOLIDATED BALANCE SHEETS (RAND)

 
                                                                                                        At         At              At
                                                                                               31 December    30 June     31 December
                                                                                                      2016       2016            2015
Figures in million                                                                 Note         (Unaudited)  (Audited)     (Unaudited)

ASSETS
Non-current assets

Property, plant and equipment                                                          4            30 639     29 919          30 101
Intangible assets                                                                                      863        870             878
Restricted cash                                                                                         58         62              55
Restricted investments                                                                               2 584      2 496           2 434
Investments in associates                                                                                -          -              10
Investments in financial assets                                                                          5          5               5
Inventories                                                                                             37         37              36
Trade and other receivables                                                                            185        172              74
Derivative financial assets                                                            7               645          -               -
                                                                                                                          
Total non-current assets                                                                            35 016     33 561          33 593

Current assets

Inventories                                                                            4             1 616      1 167           1 260
Restricted cash                                                                                         17         17              16
Trade and other receivables                                                            6               820        654             658
Income and mining taxes                                                                                  -          6              11
Derivative financial assets                                                            7             1 514        369               -
Cash and cash equivalents                                                              4             1 215      1 256             876
                                                                                                                                    -
Total current assets                                                                                 5 182      3 469           2 821
                                                                                                                                    -
Total assets                                                                                        40 198     37 030          36 414

EQUITY AND LIABILITIES

Share capital and reserves

Share capital                                                                                       28 336     28 336          28 324
Other reserves                                                                                       5 510      4 252           4 358
Accumulated loss                                                                                    (3 088)    (4 409)         (5 803)
                                                                                                                                    
Total equity                                                                                        30 758     28 179          26 879

Non-current liabilities

Deferred tax liabilities                                                                             2 849      2 413           1 926
Provision for environmental rehabilitation                                             4             2 721      2 183           2 364
Retirement benefit obligation                                                                          173        169             170
Other non-current liabilities                                                                           17         16              41
Borrowings                                                                             8             1 504      2 039           3 092
                                                                                                                                    
Total non-current liabilities                                                                        7 264      6 820           7 593

Current liabilities

Borrowings                                                                             8                 -        300             299
Income and mining taxes                                                                                 66         40               1
Trade and other payables                                                               4             2 110      1 691           1 642
                                                                                                                                    
Total current liabilities                                                                            2 176      2 031           1 942
                                                                                                                                    
Total equity and liabilities                                                                        40 198     37 030          36 414

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


CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(RAND)
                                                                                            Six months ended                 Year ended
                                                                            31 December            30 June    31 December       30 June
                                                                                   2016               2016           2015          2016
Figures in million                                                 Note      (Unaudited)        (Unaudited)    (Unaudited)     (Audited)

Cash flow from operating activities
Cash generated by operations                                                      2 280              2 923          1 736          4 659
Interest and dividends received                                                      40                 27             47             74
Interest paid                                                                       (74)              (116)           (39)          (155)
Income and mining taxes (paid)/refunded                                            (332)               (83)            18            (65)

Cash generated by operating activities                                            1 914              2 751          1 762          4 513
Cash flow from investing activities
(Increase)/decrease in restricted cash                                                4                 (5)            (7)           (12)
Decrease in amounts invested in restricted investments                                3                 36              3             39
Loan to associate repaid                                                              -                  -              7              7
Loan to ARM BBEE Trust                                                                -               (200)             -           (200)
Cash on acquisition of Hidden Valley                                   4            459                  -              -              -
Net additions to property, plant and equipment                        10         (1 434)            (1 265)        (1 168)        (2 433)

Cash utilised by investing activities                                              (968)            (1 434)        (1 165)        (2 599)

Cash flow from financing activities
Borrowings raised                                                      8              -                  -            300            300
Borrowings repaid                                                      8           (710)              (928)        (1 117)        (2 045)
Dividends paid                                                                     (218)                 -              -              -

Cash utilised by financing activities                                              (928)              (928)          (817)        (1 745)

Foreign currency translation adjustments                                            (59)                (9)            29             20

Net increase/(decrease) in cash and cash equivalents                                (41)               380           (191)           189
Cash and cash equivalents - beginning of period                                   1 256                876          1 067          1 067

Cash and cash equivalents - end of period                                         1 215              1 256            876          1 256

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


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
for the six months ended 31 December 2016 (Rand)

1  Accounting policies
   Basis of accounting
   The condensed consolidated financial statements for the six months ended 31 December 2016 have been prepared in
   accordance with IAS 34, Interim Financial Reporting, JSE Listing 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 2016, 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 standards, amendments to standards and new interpretations have been adopted with effect 1 July 2016 and
   had no impact on the results of the group (other than disclosure where relevant):

   IFRSs                                Annual Improvements 2012-2014 cycle
   IAS 1 (Amendments)                   Presentation of Financial Statements

   New amendments to standards which had an effect on the condensed consolidated financial statements:

   IFRS 11 (Amendments)            Joint Arrangements - Acquisitions of interests in joint operations

   The principles and disclosure requirements of IFRS 3 Business Combinations were applied to the acquisition of an
   additional interest in a joint operation which related to Harmony's acquisition of Newcrest Mining Limited's (Newcrest) 50%
   interest in the Hidden Valley operation in PNG. Refer to note 4 for further details.

2  Cost of sales  
                                                                                               Six months ended                         Year ended
                                                                            31 December            30 June          31 December            30 June
                                                                                   2016               2016                 2015               2016
   Figures in million                                                        (Unaudited)        (Unaudited)          (Unaudited)          (Audited)
   Production costs - excluding royalty                                           7 246              6 427                6 652             13 079
   Royalty expense                                                                  148                108                   63                171
   Amortisation and depreciation                                                  1 274              1 084                1 086              2 170
   Reversal of impairment1                                                            -                (43)                   -                (43)
   Rehabilitation expenditure/(credit)2                                              82                (69)                  28                (41)
   Care and maintenance cost of restructured shafts                                  57                 56                   58                114
   Employment termination and restructuring costs 3                                  61                  1                   15                 16
   Share-based payments                                                             201                224                  105                329
   Other                                                                             (3)                (8)                  (1)                (9)

   Total cost of sales                                                            9 066              7 780                8 006             15 786

   1 The net reversal of impairment of long-lived assets in the June 2016 period consists of a reversal of impairment of R738 million on Doornkop,
     offset by an impairment of R466 million on Hidden Valley and R229 million on Masimong.
   2 Included in the total for the June 2016 period is a credit of R110 million relating to the change in estimate following the annual reassessment.
   3 The R61 million recorded for the six months ended 31 December 2016 relates to consulting and contractor fees resulting from the acquisition of
     Newcrest's 50% interest in the Hidden Valley operation.


3  Foreign exchange translation gain/(loss)
                                                                                              Six months ended                          Year ended
                                                                            31 December            30 June          31 December            30 June
                                                                                   2016               2016                 2015               2016
   Figures in million                                                        (Unaudited)        (Unaudited)          (Unaudited)          (Audited)
   Translation gain/(loss) on US$ revolving credit facility (a)                     134                135                 (800)              (665)
   Unrealised derivative gain (b)                                                   200                369                    -                369
   Realised derivative gain (b)                                                     394                 77                    -                 77
   Other                                                                            (15)                25                    2                 27
   Total foreign exchange translation gain/(loss)                                   713                606                 (798)              (192)
   Rand/US$ exchange rate:
   Closing/spot                                                                   13.79              14.72                15.62              14.72
   Average                                                                        13.98              15.39                13.62              14.50

   a) Refer to note 8 for details on the US$ revolving credit facility.
   b) Refer to note 7 for details relating to the forex hedging contracts.


4  Acquisition of full ownership of Hidden Valley

   Background prior to the transaction

   The group had a 50% interest in the mining and exploration assets located in the Morobe province, PNG. Newcrest Mining
   Limited (Newcrest) owned the remaining 50% interest in these assets. The assets include the Hidden Valley mine and the
   Wafi-Golpu projects. This partnership was formed during the 2009 financial year through a range of transactions, and was
   completed by 30 June 2009. This partnership was considered a joint arrangement and was assessed to be a joint operation.

   Hidden Valley transaction

   On 19 September 2016 Harmony announced the agreement to purchase Newcrest PNG 1 Ltd, the wholly owned subsidiary
   of Newcrest which holds Newcrest's 50% interest in the Hidden Valley joint venture, for a cash consideration of US$1. As
   part of the transaction, Newcrest made a once-off contribution of US$22.5 million (R309 million) towards Hidden Valley's
   future estimated environmental liability. The transaction was conditional upon certain regulatory approvals which were
   obtained on 25 October 2016 and Harmony gained control over Hidden Valley on this date.

   The completion of the transaction gives Harmony 100% ownership of the Hidden Valley mine and surrounding exploration
   tenements. The acquisition of the additional 50% interest in the Hidden Valley mine is aligned with the group's growth
   aspirations. The Hidden Valley operation is an open-pit gold and silver mining operation which includes the processing plant.
   The mine reached commercial levels of production in the 2009 financial year. There is an established quality management
   team that have good relationships with key stakeholders including the community and a stable workforce. Full ownership of
   the mine has enabled management to commit to the re-investment of capital at the operation (previously delayed by the joint
   venture partners) and commence the stripping of stages 5 and 6 which is expected to extend the life of mine of the
   operation.

   Since the close of the transaction, the additional 50% interest in Hidden Valley contributed revenue of R198 million and
   R5 million loss to the group. If the acquisition had occurred on 1 July 2016 , the group's unaudited consolidated revenue
   would have increased by R533 million and profit would have decreased by R34 million.

   IFRS does not currently provide guidance how to account for step-up transactions from joint operations to control and the
   group has elected to apply the principles of IFRS 3 Business Combinations to such transactions. The purchase price
   allocation has been prepared on a provisional basis in accordance with IFRS 3.

   If new information obtained within one year of the acquisition date, about facts and circumstances that existed at the
   acquisition date identifies adjustments to the below amounts, or any additional provisions that existed at the date of
   acquisition, then the accounting for the acquisition will be revised.

   Consideration transferred

   The cash consideration paid to acquire Newcrest's 50% interest in Hidden Valley amounted to US$1. The group acquired a
   cash balance of R459 million which is presented within the cash flow statement as a net inflow of cash from investing
   activities. The cash paid by Newcrest as a once-off contribution to the rehabilitation liability is included in the cash balance
   presented as part of the net assets acquired in the transaction.

   Acquisition related costs

   The Group incurred acquisition related costs of R4 million on advisory and legal fees. These costs are recognised as
   transaction costs in profit or loss.

   Identifiable assets acquired and liabilities assumed

   The fair value of the identifiable net assets acquired was determined on the expected discounted cash flows based on the
   life-of-mine plan of Hidden Valley at a post-tax real discount rate of 12.53%, exchange rate of PGK/US$3.17, gold price of
   US$1 189/oz and silver price of US$17.80/oz. The valuation was performed at 26 October 2016. The fair values are as
   follows:


                                                                                Previously held           Acquired             Total
   Figures in million                                                                  interest           interest(1)          (100%)
   Fair value of identifiable net assets acquired
   Property, plant and equipment                                                            636                636             1 272
   Inventories (current)                                                                    491                491               982
   Trade and other receivables (current)                                                     22                 19                41
   Cash and cash equivalents                                                                 54                459               513
   Provision for environmental rehabilitation                                              (483)              (483)             (966)
   Trade and other payables (current)                                                      (114)              (274)             (388)
                                                                                            606                848             1 454
   Less fair value of previously held interest(2)                                                                               (606)
   Net fair value of identifiable net assets acquired                                                                            848

   (1) Harmony acquired the legal entity which held Newcrest's interest in Hidden Valley. This subsidiary contained certain
       assets and liabilities which were different to those held by Harmony with respect to its interest in Hidden Valley.

   (2) The fair value of the previously held interest equalled the carrying amount of the assets and liabilities recognised by
       Harmony relating to the previously held interest at the date of acquisition and no gain or loss was recognised with respect to
       the deemed disposal of the previously held interest.

   The fair value of the previously held interest at 30 June 2016 was R615 million which consisted of Harmony's long term
   assets and related rehabilitation provision for its interest in Hidden Valley totalling R319 million and the working capital
   relating to Harmony's interest in Hidden Valley totalling R296 million.

   On the date of acquisition, the fair value of the previously held interest does not equal 50% of the fair value of the total
   identifiable assets and liabilities assumed primarily because the acquired legal entity which held Newcrest's interest in
   Hidden Valley included the cash paid by Newcrest (R309 million or US$22.5 million) and other assets and liabilities which
   differed from the assets and liabilities held in Harmony's previously held interest.

   Gain on bargain purchase

   A gain on bargain purchase arising from the acquisition has been determined as follows:

   Figures in million
   Consideration paid                                                                                                             -
   Fair value of identifiable net assets acquired                                                                               848
   Gain on bargain purchase                                                                                                     848

   Since Harmony only paid US$1 for the 50% share a gain on bargain purchase results. A strategic review of the Hidden
   Valley operation conducted by Newcrest resulted in their decision to exit the operation as it represented a non-core asset.


5  Earnings/(loss) per share
                                                                                  Six months ended                     Year ended
                                                                  31 December          30 June       31 December          30 June
                                                                         2016             2016              2015             2016
                                                                   (Unaudited)      (Unaudited)       (Unaudited)        (Audited)
   Weighted average number of shares (million)                          437.3            436.3             435.2            435.7
   Weighted average number of diluted shares (million)                  462.1            455.9             436.9            446.4

   Total earnings/(loss) per share (cents):

   Basic earnings/(loss)                                                  352              320              (102)             218
   Diluted earnings/(loss)                                                333              306              (102)             213
   Headline earnings/(loss)                                               150              324              (103)             221
   Diluted headline earnings/(loss)                                       142              310              (103)             216
   Figures in million

   Reconciliation of headline earnings/(loss):

   Net profit/(loss)                                                    1 539            1 394              (445)             949
   Adjusted for:
   Gain on bargain purchase(1)                                           (848)               -                 -                -
   Reversal of impairment of assets                                         -              (43)                -              (43)
   Taxation effect on reversal of impairment of assets                      -               12                 -               12

   Profit on sale of property, plant and equipment                        (43)              (3)               (4)              (7)
   Taxation effect on profit on sale of property, plant and
   equipment                                                                9                -                 -                1
   Loss on scrapping of property, plant and equipment                       -               64                 -               64
   Taxation effect on loss on scrapping of property, plant                                                     -
   and equipment                                                            -              (12)                -              (12)
   Headline earnings/(loss)                                               657            1 412              (449)             964

   (1) There is no taxation effect on this item.

6  Investment in associate

   Harmony's gross portion of the subordinated shareholders' loan extended to Rand Refinery Proprietary Limited (Rand
   Refinery) in December 2014 amounts to R120 million. This loan forms part of the net investment in associate. For the six
   months ended 31 December 2016, Harmony set off its share of losses from associate of R13 million against the loan. The
   recoverable amount of the loan at 31 December 2016 is R49 million (June 2016: R62 million; December 2015: R80 million).
   The shareholders are in the process of entering into and finalising agreements which will result in the conversion of the loan
   into shares. Harmony holds a 10.38% share in Rand Refinery.

7  Derivative financial assets

                                                                                            At               At               At
                                                                                   31 December          30 June      31 December
                                                                                          2016             2016             2015
   Figures in million                                                               (Unaudited)        (Audited)      (Unaudited)
   Non-current
   Gold forward sale contracts (a)                                                         645                -                -
   Current
   Gold forward sale contracts (a)                                                         946                -                -
   Foreign exchange hedging contracts (b)                                                  568              369                -

   (a) During July 2016, Harmony started a hedging programme and entered into gold forward sale contracts (gold hedge
       contracts) for a total of 13 440 kg (432 000 oz) over a period of 24 months. Cash flow hedge accounting is applied to
       these contracts, resulting in the unrealised gains and losses being recorded in other comprehensive income (other
       reserves). During the six months ended 31 December 2016, the contracts that matured realised a gain of R233 million
       which has been included in revenue.

   (b) Harmony has entered into foreign exchange hedging contracts (forex hedging contracts) in the form of zero cost collars,
       which establish a minimum (floor) and maximum (cap) Rand/US Dollar exchange rate at which to convert US dollars to
       Rands. The nominal value of open forex hedging contracts at 31 December 2016 is US$442 million (30 June 2016:
       US$500 million). The hedging contracts are spread over a 12 month period with a weighted average cap price of
       US$1=R17.23 (30 June 2016: US$1=R18.27) and weighted average floor price of US$1=R15.30 (30 June 2016:
       US$1=R15.55). As hedge accounting is not applied, the gains have been recorded in the income statement. Refer to
       note 3 for further details.

8  Borrowings

   During the six months ended 31 December 2016, R300 million was repaid on the R1.3 billion Nedbank revolving credit
   facility. US$30 million (R410 million) was repaid on the US$ revolving credit facility. Refer to note 3 for details on the foreign
   exchange translation movement.

                                                                                                                    US$ facility       Rand facility
   Figures in million                                                                                                  US dollar             SA rand
   Borrowings summary at 31 December 2016
   Facility                                                                                                                  250               1 300
   Drawn down                                                                                                                110                   -
   Undrawn committed borrowing facilities                                                                                    140               1 300
   Maturity                                                                                                             February            February
                                                                                                                            2018                2017
   Interest rate                                                                                                      LIBOR + 3%        JIBAR + 3.5%

   On 23 December 2016, the Nedbank facility was extended on the same terms until 23 February 2017. Harmony is currently
   finalising a similar Rand denominated facility.

9  Financial risk management activities

   Fair value determination
   The fair value levels of hierarchy are as follows:

   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).

   The following table presents the group's assets and liabilities that are measured at fair value at reporting date:

                                                                                                            At                   At               At
                                                                                Fair value         31 December              30 June      31 December
                                                                                 hierarchy                2016                 2016             2015
                                                                                     level          (Unaudited)            (Audited)      (Unaudited)
   Available-for-sale financial assets
   Investment in financial assets(1)                                               Level 3                   5                    5                5
   Fair value through profit or loss financial assets
   Restricted investments(2)                                                       Level 2                 643                  639              614
   Derivative financial assets(3)                                                  Level 2               2 159                  369                -

   (1)   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 Top 40 index on the JSE, and are discounted at market interest rate. This
         relates to equity-linked deposits in the group's environmental rehabilitation trust funds.
   (3)   The mark-to market remeasurement of the forex hedging contracts (zero cost collars) is derived from a Black-Scholes valuation technique,
         derived from spot Rand/US$ exchange rate inputs and discounted at market interest rate. The mark-to-market remeasurement of the gold
         hedging contracts (forward sale contracts) is derived from spot Rand/US$ exchange rate, Rand and dollar interest rates (forward points),
         spot US$ gold price, differential between the US interest rate and gold lease interest rate and discounted at market interest rate.


   For all other financial instruments, fair value approximates carrying value.


10 Net additions to property, plant and equipment
                                                                                          Six months ended                      Year ended
                                                                         31 December           30 June       31 December           30 June
                                                                                2016              2016              2015              2016
   Figures in million                                                     (Unaudited)       (Unaudited)       (Unaudited)         (Audited)
   Capital expenditure - operations                                            1 136             1 125             1 027             2 152
   Capital and capitalised exploration and evaluation
   expenditure for Golpu                                                         116               126               114               240
   Additions resulting from stripping activities at Hidden
   Valley                                                                        226                14                28                42
   Other(1)                                                                      (44)                -                (1)               (1)


   Net additions                                                               1 434             1 265             1 168             2 433

   (1) Includes sale of Ernest Oppenheimer Hospital in the six months ended 31 December 2016.


11 Commitments and contingencies
                                                                                                  At               At               At
                                                                                         31 December          30 June      31 December
                                                                                                2016             2016             2015
   Figures in million                                                                     (Unaudited)        (Audited)      (Unaudited)

   Capital expenditure commitments:
   Contracts for capital expenditure                                                             311               264             166
   Authorised by the directors but not contracted for                                          1 298               516           1 607
                                                                                               1 609               780           1 773

   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 2016, available on the group's website (www.harmony.co.za). There were no significant changes in contingencies
   since 30 June 2016.

12 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.

   (a) Movement in shares owned by directors/prescribed officers for the six months ended 31 December 2016:

                                                                                               Shares                        Performance
                                                                                         purchased in    Shares sold in    shares vested
   Name of director/prescribed officer                                                    open market       open market     and retained
   Frank Abbott (Financial director)(1)                                                             -                 -           84 952
   Beyers Nel (Chief Operating Officer: SA)                                                         -                 -           14 646
   Johannes van Heerden (Chief executive officer (South East Asia))                                 -                 -           25 000
   
   (1) These shares have been voluntarily locked-up in terms of the minimum shareholding requirement of the 2006 Share Plan but remains
       beneficially owned.

13 Subsequent events

   On 31 January 2017, the board declared a dividend of 50 SA cents for the six months ended 31 December 2016 payable on
   20 March 2017.

14 Segment report

   The segment report follows below.


15 Reconciliation of segment information to condensed consolidated income statements and balance sheets
                                                                                                                          Six months ended
                                                                                                                    31 December         31 December
                                                                                                                           2016                2015
   Figures in million                                                                                                (Unaudited)         (Unaudited)
   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 profit
   Total segment revenue                                                                                                  9 868               8 707
   Total segment production costs                                                                                        (7 394)             (6 715)
   Production profit per segment report                                                                                   2 474               1 992
   Amortisation and depreciation                                                                                         (1 274)             (1 086)
   Other cost of sales items                                                                                               (398)               (205)
   Gross profit/(loss) as per income statements1                                                                            802                 701

   (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 December         31 December
                                                                                                                           2016                2015
   Figures in million                                                                                                (Unaudited)         (Unaudited)
   Reconciliation of total segment mining assets to consolidated property, plant and
   equipment
   Property, plant and equipment not allocated to a segment
   Mining assets                                                                                                          1 280               1 277
   Undeveloped property                                                                                                   5 139               5 139
   Other non-mining assets                                                                                                  160                 183
   Wafi-Golpu assets                                                                                                      1 769               1 814
                                                                                                                          8 348               8 413

Segment report (Rand/Metric)
for the six months 31 December 2016 (unaudited)


                                                    Revenue                Production cost        Production profit/(loss)         Mining assets       Capital expenditure#   Kilograms produced       Tonnes milled
                                                  31 December                31 December                31 December                  31 December            31 December            31 December         31 December
                                               2016         2015          2016         2015          2016         2015           2016         2015       2016        2015       2016        2015     2016        2015
                                                   R million                  R million                  R million                    R million               R million                 kg                 t'000
South Africa
Underground
Tshepong                                      1 404        1 243         1 016          902          388           341          4 251        4 079        194         139      2 439       2 525      518         553
Phakisa                                       1 257        1 002           827          674          430           328          4 188        4 274        158         161      2 179       2 026      344         356
Bambanani                                       852          883           435          410          417           473            777          810         42          53      1 480       1 796      123         126
Joel                                            772          610           490          439          282           171            821          673        120         112      1 298       1 192      268         278
Doornkop                                        779          686           599          539          180           147          2 986        2 237        111          92      1 318       1 374      317         314
Target 1                                        657        1 032           659          633           (2)          399          2 795        2 840        140         161      1 151       2 088      384         380
Kusasalethu                                   1 263          984         1 021          935          242            49          3 636        3 661        139         163      2 181       1 989      323         382
Masimong                                        708          655           554          522          154           133            453          797         55          53      1 231       1 334      331         349
Unisel                                          547          463           417          374          130            89            527          567         35          30        948         939      217         222
Surface
All other surface operations                    899          734           718          617          181           117            434          474        107          23      1 587       1 537    5 618       5 467
Total South Africa                            9 138        8 292         6 736        6 045        2 402         2 247         20 868       20 412      1 101         987     15 812      16 800    8 443       8 427
International
Hidden Valley                                   730          415           658          670           72          (255)         1 423        1 276        344          50      1 415         881    1 233         735
Total international                             730          415           658          670           72          (255)         1 423        1 276        344          50      1 415         881    1 233         735
Total operations                              9 868        8 707         7 394        6 715        2 474         1 992         22 291       21 688      1 445       1 037     17 227      17 681    9 676       9 162
Reconciliation of the segment
information to the condensed
consolidated financial statements
(refer to note 15)                                                                                                              8 348        8 413
                                              9 868        8 707         7 394        6 715         2 474        1 992         30 639       30 101

# Capital expenditure for international operations exclude expenditure spent on Golpu of R112 million (2015: R114 million).


DEVELOPMENT RESULTS
6 MONTH AVG. JULY 2016 - DECEMBER 2016


METRIC                                                       IMPERIAL
                                         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             512     432      8.86   125.06    1 108    Basal            1 681    1 417     3.00       4.24        13
B Reef            279     236    142.78     5.08      725    B Reef             914      774    56.00       0.15         8
All Reefs         791     668     56.17    17.32      973    All Reefs        2 595    2 192    22.00       0.51        11
Phakisa                                                      Phakisa
Basal             682     700     54.91    23.64    1 298    Basal            2 237    2 297    22.00       0.68        15
All Reefs         682     700     54.91    23.64    1 298    All Reefs        2 237    2 297    22.00       0.68        15
Bambabani                                                    Bambabani 
Basal              41      56    148.00    17.42    2 579    Basal             133      184     58.00       0.51        30
All Reefs          41      56    148.00    17.42    2 579    All Reefs         133      184     58.00       0.51        30
Doornkop                                                     Doornkop
Main Reef                  90     99.57     2.77      275    Main Reef                   295    39.00       0.08         3
South Reef        675     648     51.96    21.42    1 113    South Reef       2 213    2 126    20.00       0.64        13
All Reefs         675     738     57.77    17.50    1 011    All Reefs        2 213    2 421    23.00       0.50        12
Kusasalethu                                                  Kusasalethu
VCR Reef          508     560    108.72    15.76    1 713    VCR Reef         1 668    1 837    43.00       0.46        20
All Reefs         508     560    108.72    15.76    1 713    All Reefs        1 668    1 837    43.00       0.46        20
Target 1                                                     Target 1
Elsburg           104     116    292.48     5.59    1 636    Elsburg           342      381    115.00       0.16        19
All Reefs         104     116    292.48     5.59    1 636    All Reefs         342      381    115.00       0.16        19
Masimong 5                                                   Masimong 5
Basal             636     580     85.72    12.76    1 094    Basal            2 087    1 903    34.00       0.37        13
B Reef            430     456    107.06    15.66    1 677    B Reef           1 410    1 496    42.00       0.46        19
All Reefs        1 066   1036     95.11    14.20    1 350    All Reefs        3 497    3 399    37.00       0.42        16
Unisel                                                       Unisel
Basal             477     258    133.06     8.47    1 128    Basal            1 564      846    52.00       0.25        13
Leader            706     690    194.99     5.79    1 130    Leader           2 316    2 264    77.00       0.17        13
All Reefs        1 183    948    178.13     6.34    1 129    All Reefs        3 880    3 110    70.00       0.19        13
Joel                                                         Joel
Beatrix           763     792    149.45     8.32    1 243    Beatrix          2 502    2 598    59.00       0.24        14
All Reefs         763     792    149.45     8.32    1 243    All Reefs        2 502    2 598    59.00       0.24        14
Total Harmony                                                Total Harmony
Basal            2 347   2 026    66.44    18.26    1 213    Basal            7 701    6 647    26.00       0.54        14
Beatrix            763     792   149.45     8.32    1 243    Beatrix          2 502    2 598    59.00       0.24        14
Leader             706     690   194.99     5.79    1 130    Leader           2 316    2 264    77.00       0.17        13
B Reef             709     692   119.24    11.34    1 352    B Reef           2 324    2 270    47.00       0.33        16
Elsburg            104     116   292.48     5.59    1 636    Elsburg            342      381   115.00       0.16        19
South Reef         675     648    51.96    21.42    1 113    South Reef       2 213    2 126    20.00       0.64        13
VCR                508     560   108.72    15.76    1 713    VCR              1 668    1 837    43.00       0.46        20
Main Reef                   90    99.57     2.77      275    Main Reef                   295    39.00       0.08         3
All Reefs        5 811   5 614   108.21    11.61    1 256    All Reefs       19 066   18 419    43.00       0.34        14

Date: 02/02/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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