| Tue 8 Jul 2008, 14:48 | | HAR - Harmony And Monarch Renegotiate Sale |
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HAR
HAPS
HAR - Harmony And Monarch Renegotiate Sale
Harmony Gold Mining Company Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1950/038232/06)
Share code: HAR & ISIN: ZAE000015228
("Harmony")
HARMONY AND MONARCH RENEGOTIATE SALE
Johannesburg. Tuesday 8 July 2008. We refer to our second quarter results
released on SENS on 15 February 2008, wherein we advised that Harmony Gold
Mining Company Limited ("Harmony": JSE/HAR) signed a sales contract ("contract")
with Australian-based junior miner Monarch Gold Mining Company ("Monarch":
ASX/DIFX:MON) for the sale of Harmony`s Mount Magnet ("Mt Magnet") operations
for A$65 million.
The Mt Magnet asset package includes Hill 50, Great Fingall, St George, Star and
Big Bell mines, which comprises a resource inventory of 2.7Moz of gold,
tenements covering about 62,000 hectares and 166 exploration licence blocks,
along with a 2.7Mt a year capacity plant.
One of the conditions precedent of the sale was the successful capital raising
of A$35 million by Monarch to finance the cash component of the deal by 30 June
2008. The prevailing unfavourable financial market conditions worldwide have
made it difficult for Monarch to raise the required funds. Consequently, Monarch
has requested an extension of four months to satisfy all the conditions
precedent.
Harmony and Monarch have renegotiated the terms of the sale. Previously
consideration for the transaction, as specified in the contract, was structured
as follows:
Cash A$30 million
Shares A$20 million
Convertible Note A$15 million
Total A$65 million
The proposed restructured consideration and the revised terms which require the
approval of Monarch shareholders are as follows:
Cash (paid to date) A$ 5 million
Cash A$10 million
Deferred Cash A$10 million
Shares A$25 million
Convertible Note A$15 million
Total A$65 million
Monarch shareholders will consider the proposed restructured consideration and
the revised terms at the end of August 2008.
The immediate cash requirement has been reduced by A$15 million and a deferred
payment of A$10 million (payable on the earlier of, production of 50,000oz or
the third anniversary of the closing date) and an increase in the share
allocation of A$5 million (equivalent).
Graham Briggs, chief executive officer of Harmony says, "We believe the
restructured consideration will allow Monarch to complete the transaction and
allow them to focus on the redevelopment of the Mt Magnet asset."
ends.
Issued by Harmony Gold Mining Company Limited
For more details contact:
Graham Briggs
Chief Executive Officer
on +27(0)11 411 2012
or
Amelia Soares
General Manager, Investor Relations
on +27 11 411 2314 or
+27 (0)82 654 9241
8 July 2008
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 08/07/2008 14:48:12 Produced by the JSE SENS Department.
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