HRM Harmony Gold

RNS Number:4691U
Harmony Gold Mining Co Ld
12 April 2002


Free Gold

For release
Friday 12 April 2002

PRESS ANNOUNCEMENT

Free Gold Joint Venture returns 54% increase in Cash Operating Profits

Johannesburg, 12 April 2002 - African Rainbow Minerals Limited (ARMgold) and
Harmony Gold Mining Company Limited today reported excellent performance by
their newly formed Free Gold Joint Venture company, and that it had exceeded all
expectations.

The company assumed operational control on 3 January 2002 with all the remaining
conditions precedent having been met by 10 April 2002.

The Free Gold operations reported a cash operating profit of R402,8 million, an
increase of 54% over the R261,5 million reported for the December 2001 quarter.

These newly acquired mines are now operating at a R50 717/kg or a 47% cash
operating profit margin. This is an improvement of 87% on the R27 144/kg margin
reported during the December 2001 quarter.

Patrice Motsepe, executive chairman of ARMgold said: "The first quarter
following an acquisition, is usually a period during which the re-structuring
and changeover in management impacts on both employees and the overall
performance of the operations. This improvement in profit margin reflects the
gearing present from our restructuring process in extracting value from mature
turnaround assets."

Following the implementation of the due diligence recommendations, labour
restructuring was undertaken at all the mines. A total of 4 108 positions, in
mainly service or supporting departments, were identified as being in excess of
the needs of the operations. A total of 1 763 employees requested voluntary
retrenchment.


Although the R/Kg gold price increased by 22% from R88 530/kg to R107 657/kg,
when measured in US$/oz terms, the cash operating margin increased by 86% from
US$73/oz to US$136/oz, quarter on quarter. These increases occurred despite a
mere 11,1% increase in the gold price in US$/oz terms, and a 11,9% depreciation
of our local currency.

For comparison purposes, it is worth noting that production was affected by the
period under review being seven days shorter than normal. March 2002 composed of
only 58 production days compared to 69 days in December 2001. The impact of the
shorter reporting period is visible in underground production results with 18%
less tonnes available for milling. A higher underground recovery grade of 7,70 g
/t however contributed to net gold recovered being 16% lower at 7 127 kgs.

The Bambanani and Tshepong operations both returned improved results mainly due
to the higher recovery grades and the increase in the gold price. Matjhabeng,
which was placed in closure mode by the previous owners, continued operating and
contributed to the operations' profit, albeit at lower production levels. The
significant variance in Joel's performance can be attributed to the fact that
only underground results have been included in the R5,2 million for the March
2002 quarter, as opposed to previous results which reflected both surface and
underground operations.

As a result of the lower cost structure now envisaged at Free Gold, management
has commenced the re-opening of West, Sable and Kudu mines. It is estimated that
these mines will contribute approximately 184 kgs per month to the overall
production figure. A total of R6,8 million in costs was capitalised to re-open
these shafts.

"The current JV Steering Committee consisting of three representatives from ARM
and Harmony respectively, has proved to be very successful. Mr Peter Steenkamp
will assume overall management responsibility for the Free Gold operations. He
will be assisted by the necessary personnel, from both partners, to ensure that
the broad strategies formulated during the due diligence process, are accurately
converted and incorporated into the mining and metallurgical plans. We
anticipate that further benefits from the restructuring of the operations will
be partially offset by the impact of grades, slowly recovering to the average
mining grade of the orebodies." commented Bernard Swanepoel chief executive of
Harmony.

"Our investment on behalf of our shareholders has been a sound one and we look
forward to reporting back in July 2002", he concluded.



Ends

For further details contact:

Bernard Swanepoel on +27(0)83-303-9922

or

Ferdi Dippenaar

on +27(0)82-807-3684

or

Patrice Motsepe

on +27(0)82-560-0930

or

Mangisi Gule

on +27(0)82-805-3863

Issued by

African Rainbow Minerals Gold Limited (ARMgold) and Harmony Gold Mining Company
Limited

Contact:

Corne Bobbert

Tel +27 11 411 2036
Mobile +27(0)83-380-6614

Disclaimer

This statement includes certain information that is based on management's
reasonable expectations and assumptions. These "forward-looking statements"
include, but are not limited to, statements regarding estimates, intentions and
beliefs, as well as anticipated future production, mine life, market conditions
and costs. While management has prepared this information using the best of
their experience and judgment, and in all good faith, there are risks and
uncertainties involved which could cause results to differ from projections.

Cautionary Note to US Investors - The United States Securities and Exchange
Commission (the "SEC") permits mining companies, in their filings with the SEC,
to disclose only those mineral deposits that a company can economically ad
legally extract or produce. We use certain terms in this quarterly review, such
as "resources", that the SEC guidelines strictly prohibit us from including in
our filings with the SEC. U.S. Investors are urged to consider closely the
disclosure in our public filings with the SEC available from us at Harmony Gold
Mining Company Limited, P.O. Box 2, Randfontein, 1760, South Africa, Attention:
Mr. Ferdi Dippenaar. You can also obtain these filings from the SEC by calling
1-800-SEC-0330.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

x

Harmony Gold (LSE:HRM)
Historical Stock Chart
From Oct 2024 to Nov 2024

Harmony Gold (LSE:HRM)
Historical Stock Chart
From Nov 2023 to Nov 2024