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HARMONY GOLD MINING COMPANY LIMITED - Operational Update for the nine months ended 31 March 2019

Release Date: 02/05/2019 11:13:00      Code(s): HAR       PDF(s):  
Operational Update for the nine months ended 31 March 2019

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


OPERATIONAL UPDATE
FOR THE NINE MONTHS ENDED 31 MARCH 2019


HARMONY ON TRACK TO DELIVER ON PRODUCTION GUIDANCE

Johannesburg. Thursday, 2 May 2019. Harmony Gold Mining Company Limited ("Harmony" or "the company") is pleased to provide an operational update for the nine months
ended 31 March 2019.

OPERATIONAL UPDATE
NINE MONTHS ENDED MARCH 2019 COMPARED TO NINE MONTHS ENDED MARCH 2018

The South African operations recorded a 4% improvement in the lost time injury frequency rate (per million hours) to 6.16 in the nine months ended 31 March 2019 compared to
6.43 for the nine months ended 31 March 2018.

Total gold production increased by 29% to 33 673kg (1 082 611oz) with underground recovered grade 6% higher compared to the previous comparative period of the March 2018
nine months due to the acquisition of Moab Khotsong (effective 1 March 2018) and build up in production from Hidden Valley (reaching commercial levels of production in June 2018).

The gold price received remained flat in Rand/kg terms at R579 778 for the nine months ended 31 March 2019, compared to R572 513/kg in the previous comparative period. In US$
terms the gold price received decreased by 7 % to US$1 278/oz for the nine months ended 31 March 2019.

Cash operating unit costs increased by 2% to R438 452/kg (decreased by 7% to US$966/oz) and all-in sustaining units cost increased by 5% to R543 432/kg (decreased by 4% to
US$1 198/oz) for the nine months ended 31 March 2019 compared to the previous comparative period.

MARCH 2019 QUARTER

Seasonally, the March quarter performance by Harmony's South African operations is influenced by the slower production start-up after the December holiday period.

The Eskom Stage 4 load shedding at the end of the March 2019 quarter, mainly had an impact on production from surface operations. Ore milling and hoisting scheduling
arrangements implemented to reduce electricity consumption impacted the continuity of ore processing during the quarter.

The performance of Harmony's largest operations are highlighted below:

-     Tshepong Operations: management's focus has seen an improvement in flexibility (face length development and availability) in the March 2019 quarter. Flexibility and
      mining discipline continue to be key focus areas in delivering an improvement in the performance of the operation;
-     Moab Khotsong: the lower recovered grade performance in the March 2019 quarter was due to an increase in higher grade tonnes locked up underground. Mining crews
      and plans have been implemented to address the lock-up tonnes which will be processed in the June 2019 quarter;
-     Hidden Valley: the planned material handling and processing facility maintenance shutdown was successfully conducted in the March 2019 quarter.

Harmony is on track to deliver on annual production guidance.

OPERATING RESULTS SUMMARY
                                                                        Nine months              Nine months                                     Quarter                  Quarter
                                                                              ended                    ended               Variance                ended                    ended               Variance
                                                                         March 2019             March 2018(1)                     %           March 2019             March 2018(1)                     %
Gold produced                                          kg                    33 673                   26 200                     29               10 314                    8 782                     17
                                                       oz                 1 082 611                  842 351                     29              331 603                  282 348                     17
Underground grade                                      g/t                     5.60                     5.28                      6                 5.48                     5.33                      3
Gold price received                                    R/kg                 579 778                  572 513                      1              595 814                  554 718                      7
                                                       US$/oz                 1 278                    1 378                     (7)               1 324                    1 444                     (8)
Cash operating costs                                   R/kg                 438 452                  431 130                     (2)             457 911                  456 237                      0
                                                       US$/oz                   966                    1 038                      7                1 017                    1 118                     14
Production profit                                      Rm                     4 813                    3 473                     39                1 428                      761                     88
                                                       US$m                     341                      269                     27                  102                       64                     59
All-in sustaining cost                                 R/kg                 543 432                  518 861                     (5)             578 785                  559 458                     (3)
                                                       US$/oz                 1 198                    1 249                      4                1 286                    1 456                     12
Total cash operating cost and capital(2)               R/kg                 539 182                  508 708                     (6)             569 775                  539 505                     (6)
                                                       US$/oz                 1 188                    1 227                      3                1 266                    1 404                     10
Exchange rate                                          R/US$                  14.11                    12.92                      9                14.00                    11.95                     17

1 The March 2018 comparative periods include Moab Khotsong for one month only. The operation recorded gold produced of 764kg (24 563oz) attributable to the
  March 2018 month.
2 Excludes investment capital for Hidden Valley in the March 2018 comparative period.

The operational update report has not been reviewed or audited by the company's external auditors. Detailed financial and operational results are provided
on a six-monthly basis at the end of December and June.


WAFI-GOLPU UPDATE

Engagement by the Wafi-Golpu Joint Venture (WGJV) with the Papua New Guinea (PNG) government on the application for a special mining lease (SML) for the Wafi-Golpu
project progressed during the March 2019 quarter.

The independent technical reviews of the project Environmental Impact Statement was progressed by PNG's Conservation and Environmental Protection Authority, along
with discussions with the PNG government on the terms of the mine development contract. The development forum process is expected to commence in the coming
months, where local landowner and provincial government agreements will be progressed.


FY19 GUIDANCE UPDATE

Gold production of 1.45 million ounces remains unchanged. Cost guidance is updated to an all-in sustaining unit cost (AISC) of R540 000/kg taking into account
the performance for the nine months ended 31 March 2019 as reported and Eskom electricity increases implemented on 1 April 2019 (previously an AISC range of
R520 000/kg to R530 000/kg).


HEDGING UPDATE

The volatility and weakening of the Rand exchange rate against the US dollar and higher US$ gold prices during the March 2019 quarter presented an opportunity to
top-up Harmony's hedging programme.

The table below shows the open position at 31 March 2019:

                                            FY2019                                     FY2020                                                 FY2021
                                                Q4                Q1          Q2                  Q3              Q4              Q1              Q2                      Q3         TOTAL
Rand Gold
Forward Contracts         koz                     67               67          67                  67              67             67                  67                  46              515
                          R'000/kg               610              621         637                 642             657            668                 674                 693              649
Dollar Gold
Forward Contracts         koz                   18                 12          11                   9               9              6                3                   1               69
                          US$/oz             1 338              1 351       1 364               1 355           1 363          1 371            1 367               1 387            1 355
Total Gold                koz                   85                 79          78                  76              76             73               70                  47              584
Currency Hedges
Rand Dollar
Zero Cost Collars         $m                    89                 71          69                  64              56              35              24                  17              425
                          Floor R/$          13.52              14.48       14.59               14.80           14.97           15.33           15.18               15.24            14.55
                          Cap R/$            14.17              15.19       15.35               15.57           15.75           16.07           16.18               16.24            15.30
Forward Contracts         $m                    72                 57          54                  54              54              52              17                  12              372
                          R/$                13.81              14.73       15.04               15.33           15.47           15.91           15.74               15.86            15.04
Total Rand Dollar         $m                   161                128         123                 118             110              87              41                  29              797
Dollar Silver
Zero Cost Collars         koz                   90                 90              -                   -               -              -                -                   -           180
                          Floor $/oz         17.33              17.40              -                   -               -              -                -                   -         17.37
                          Cap $/oz           18.33              18.40              -                   -               -              -                -                   -         18.37

Board approved hedging limits:

25% currency (R/US$) over a 24 month period; 20% gold over a 24 month period; 50% silver over a 24 month period.


Operating results - Nine months on Nine months (Rand/metric)

                                                                                                                 South Africa                                                                                                                 South Africa
                                                                                                                           Underground production                                                                                                     Surface production
                                        Nine                                                                                                                                                                                            Central                                                 Total
                                        months              Tshepong        Moab                                                                                                                                  Total                   plant                                        Total    South     Hidden      Total
                                        ended             operations    Khotsong           Bambanani            Joel       Doornkop       Target 1         Kusasalethu         Masimong            Unisel   Underground   Phoenix   reclamation             Dumps          Kalgold   Surface   Africa   Valley(1)   Harmony
    Ore milled              - t'000     Mar-19                 1 211         763                 176             319            578            446                 546              458               189         4 686     4 612         2 884             3 249            1 220    11 965   16 651      2 848     19 499
                                        Mar-18                 1 288          70                 179             347            516            511                 483              483               309         4 186     4 526         2 839             1 794            1 150    10 309   14 495      1 491     15 986
 Yield                       - g/tonne   Mar-19           4.94        8.07          10.80         3.50           4.62        4.80                6.64           3.70        4.90                  5.60      0.121        0.149      0.350         0.74                0.25               1.76        1.55              1.73
                                         Mar-18           5.54       10.91          12.02         3.64           4.84        4.04                6.61           4.21        3.28                  5.28      0.121        0.129      0.410         0.80                0.25               1.70        1.12              1.69
 Gold produced               - kg        Mar-19          5 985       6 156          1 901        1 115          2 673       2 143            3    628       1    694         926             26    221        557          429      1 136          904            3    026          29    247       4 426            33 673
                                         Mar-18          7 133         764          2 152        1 262          2 495       2 063            3    195       2    034       1 013             22    111        548          367        736          919            2    570          24    681       1 519            26 200
 Gold sold                   - kg        Mar-19          5 910       6 121          1 872        1 143          2 664       2 171            3    687       1    667         917             26    152        552          427      1 127          915            3    021          29    173       4 430            33 603
                                         Mar-18          7 066         671          2 132        1 300          2 482       2 067            3    133       2    017       1 004             21    872        544          369        732          900            2    545          24    417       1 485            25 902
 Gold price received         - R/kg      Mar-19        585 776     565 171        586 755      587 488        589 464     586 967          586    219     586    893     585 347            581    691    568 899      587 417    580 913      587 439          581    614         581    683     567 230           579 778
                                         Mar-18        576 149     506 738        575 661      574 590        574 081     576 434          576    150     575    884     575 180            573    603    538 994      577 035    569 490      576 544          566    560         572    869     543 805           572 513
 Gold revenue                (R'000)     Mar-19    3   461 935   3 459 409      1 098 405      671 499    1   570 331   1 274 305      2   161    391     978    351     536 763       15   212    389    314 032      250 827    654 689      537 507      1   757    055   16    969    444   2 512 827      19   482 271
                                         Mar-18    4   071 072     340 021      1 227 310      746 967    1   424 870   1 191 489      1   805    079   1 161    559     577 481       12   545    848    293 213      212 926    416 867      518 890      1   441    896   13    987    744     164 773      14   152 517
 Cash operating cost                     Mar-19    2   991 577   2 368 840        734 150      715 004    1   204 495   1 122 001      1   764    188     914    899     427 880       12   243    034    254 070      163 417    517 656      508 942      1   444    085   13    687    119   1 076 867      14   763 986
 (net of by-product          (R'000)     Mar-18    2   868 705     267 758        669 798      675 206    1   039 499     991 186      1   559    565     865    939     624 806        9   562    462    242 472      141 410    298 662      405 781      1   088    325   10    650    787     104 184      10   754 971
 credits)
 Inventory                   (R'000)     Mar-19      (48 186)      (26   352)    (20   503)     15 102      (10 269)       12   699       24 783          (17    570)     (8    882)        (79    178)    (3   272)      (219)    (5   250)     2   544       (6 197)             (85   375)      (9   150)        (94   525)
 movement                                Mar-18      (32 747)      (32   763)    (13   680)     20 325         (908)        2   900      (30 683)          (7    360)     (4    646)        (99    562)    (3   345)     2 120     (2   595)    (9   591)     (13 411)            (112   973)      37   694         (75   279)
 Operating costs             (R'000)     Mar-19    2 943 391     2 342   488     713   647     730 106    1 194 226     1 134   700    1 788 971          897    329     418    998    12   163    856    250   798    163 198    512   406    511   486    1 437 888        13    601   744    1 067   717    14   669   461
                                         Mar-18    2 835 958       234   995     656   118     695 531    1 038 591       994   086    1 528 882          858    579     620    160     9   462    900    239   127    143 530    296   067    396   190    1 074 914        10    537   814      141   878    10   679   692
 Production profit           (R'000)     Mar-19      518 544     1 116   921     384   758     (58 607)     376 105       139   605      372 420           81    022     117    765     3   048    533     63   234     87 629    142   283     26   021      319 167         3    367   700    1 445   110     4   812   810
                                         Mar-18    1 235 114       105   026     571   192      51 436      386 279       197   403      276 197          302    980     (42    679)    3   082    948     54   086     69 396    120   800    122   700      366 982         3    449   930       22   895     3   472   825
 Capital expenditure         (R'000)     Mar-19      830 211       418   618      46   917     134 225      216 360       227   527      238 760           80    086      30    226     2   222    930      3   495      4 664      6   435     41   391       55 985         2    278   915    1 112   982     3   391   897
                                         Mar-18      732 723        40   089      47   440     185 867      195 210       230   955      216 154           92    796      73    601     1   814    835      2   590     16 430          300     92   984      112 304         1    927   139    1 306   250     3   233   389
 Cash operating              - R/kg      Mar-19      499 846       384   802     386   191     641 259      450 615       523   566      486 270          540    082     462    073         466    917    456   140    380 925    455   683    562   989      477 226              467   984      243   305         438   452
 costs                                   Mar-18      402 174       350   469     311   244     535 029      416 633       480   459      488 127          425    732     616    788         432    475    442   467    385 313    405   791    441   546      423 473              431   538      393   147         431   130
 Cash operating              - R/tonne   Mar-19        2 470         3   105       4   171       2 241        2 084         2   516        3 231            1    998       2    264           2    613           55         57          159          417          121                    822            378               757
 costs                                   Mar-18        2 227         3   825       3   742       1 946        2 015         1   940        3 229            1    793       2    022           2    284           54         50          166          353          106                    735            440               730
 Cash operating cost         - R/kg      Mar-19      638 561       452   803     410   872     761 640      531 558       629   738      552 080          587    358     494    715         551    694    462   415    391 797    461   348    608   775      495 727              545   903     494    769         539   182
 and Capital(2)                          Mar-18      504 897       402   941     333   289     682 308      494 873       592   410      555 781          471    354     689    444         514    554    447   193    430 082    406   198    542   726      467 171              509   620     423    804         508   708
 All-in sustaining           - R/kg      Mar-19      629 215       458   121     424   890     740 118      531 049       623   679      567 756          604    363     506    850         554    392    460   676    390 770    460   374    622   681      499 750              547   994     513    391         543   432
 cost                                    Mar-18      511 169       426   592     353   250     630 641      514 515       604   494      578 648          493    222     694    908         525    926    444   333    423 160    404   463    563   321      471 874              518   855     519    339         518   861
 Operating free cash         %           Mar-19         (10%)            19%           29%        (26%)         10%             (6%)          7%                 (2%)           15%                 5%          18%        33%          20%          (3%)         15%                     6%            10%                6%
 flow margin(3)                          Mar-18          12%              9%           42%        (15%)         13%             (3%)          2%                 17%           (21%)                9%          16%        26%          28%           3%          16%                    10%            38%               10%

(1) No production for Hidden Valley was capitalised during the nine months ending March 2019. Ore milled for the nine months ended March 2018 includes 1 254 000 tonnes
    that was capitalised as part of the pre-stripping of stages 5 and 6. Gold produced for the nine months ended March 2018 includes 1 254 kilograms and gold sold 1 182 kilograms
    that was capitalised.
(2) Excludes investment capital for Hidden Valley included in the nine months ended March 2018 of R1 298 million.
(3) Excludes run of mine costs for Kalgold (Mar-19: R-0.76 million, Mar-18: R-5.554 million) and Hidden Valley (Mar-19: R-70.59 million, Mar-18: R10.016 million) as well as
    Hidden Valley's investment capital as per note 2.

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)
M Msimang*^ (lead independent director)
JM Motloba*^ (deputy chairman)
PW Steenkamp (chief executive officer)
F Abbott (financial director)
JA Chissano*1^, FFT De Buck*^, KV Dicks*^, Dr DSS Lushaba*^
HE Mashego**, KT Nondumo*^
VP Pillay*^, MV Sisulu*^, JL Wetton*^, AJ Wilkens*

* Non-executive
** Executive
^ Independent
1 Mozambican

INVESTOR RELATIONS

E-mail: HarmonyIR@harmony.co.za
Mobile: +27 82 759 1775
Telephone: +27 11 411 2314
Website: www.harmony.co.za

COMPANY SECRETARY

Telephone: +27 11 411 6020
E-mail: companysecretariat@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: 0861 546 572
E-mail: info@linkmarketservices.co.za
Fax: +27 86 674 4381

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 (within US): +1-886-249-2593
Int: +1-718-921-8124
Fax: +1-718-921-8334
*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

REGISTRATION NUMBER:

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

ISIN:
ZAE 000015228

HARMONY'S ANNUAL REPORTS
Harmony's Integrated Annual Report, and its annual
report filed on a Form 20F with the United States' Securities
and Exchange Commission for the financial year ended
30 June 2018 is available on our website
(www.harmony.co.za/invest)


FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the safe harbor
provided by Section 21E of the Exchange Act and Section 27A of the Securities Act of
1933, as amended (the "Securities Act"), 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 forward-looking statements, including, among others, those relating to our
future business prospects, revenues, and the potential benefit of acquisitions (including
statements regarding growth and cost savings) wherever they may occur in this report
and the exhibits, are necessarily 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 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; estimates of provision for silicosis settlement; statements regarding future
debt repayments; estimates of future capital expenditures; the success of our business
strategy, development activities and other initiatives; future financial position, plans,
strategies, objectives, capital expenditures, projected costs and anticipated cost savings
and financing plans; 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, as well as at existing
operations; fluctuations in the market price of gold; the occurrence of hazards associated
with underground and surface gold mining; the occurrence of labor disruptions; power
cost increases as well as power stoppages, fluctuations and usage constraints; supply
chain shortages and increases in the prices of production imports and the availability,
terms and deployment of capital; changes in government regulation and the political
environment, particularly tax, mining rights, environmental regulation and business
ownership including any interpretation thereof; fluctuations in exchange rates and
currency devaluations and other macroeconomic monetary policies; the adequacy of the
Group's insurance coverage; and socio-economic or political instability in South Africa,
Papua New Guinea, Australia 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
and 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 report or to
reflect the occurrence of unanticipated events, except as required by law. The foregoing
factors and others described under "Risk Factors" should not be construed as exhaustive.

www.harmony.co.za

Johannesburg
2 May 2019

Date: 02/05/2019 11:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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