| Mon 20 Dec 2004, 16:41 | | NEWS RELEASE FROM HARMONY |
|
HARMONY GOLD MINING COMPANY LIMITED - NEWS RELEASE FROM HARMONY
HARMONY GOLD MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1950/038232/06)
Share code: HAR ISIN: ZAE000015228
(`Harmony`)
NEWS RELEASE FROM HARMONY
20 December 2004
Harmony reports ore reserves of 59.1 million ounces
Harmony today announced a mineral reserve of 59.1 million ounces, a decrease
of 3.1 million ounces on the 62,2 million ounces as reported in the company`s
Annual Report in June 2004. The decrease includes 1.7 million ounces mined for
the period 1 July to 15 December 2004. A gold price of R92 000/kg was used for
the declaration.
Tonnes(`000) Oz/t Oz(`000)
Total Proven and probable 256 494 0.181 46 403
underground above infrastructure
Proven and probable 56 493 0.222 12 534
below infrastructure
Vamping 5 989 0.188 1 129
Inferred in Life of 36 720 0.162 5 947
Mine (Doornkop and
Masimong Projects plus
Australia LoM
extensions)
Total underground 355 696 0.186 66 013
Surface Proven and probable 39 777 0.019 738
sources
Sub-total 395 473 0.169 66 751
Less (11 494) 0.149 (1 718)
depletion
(estimate)
Less inferred (36 720) 0.162 (5 947)
LOM
Mineral 347 259 0.170 59 086
Reserves
Note; silver mineral reserves from Hidden Valley (PNG) have been excluded.
In metric terms the company reported Mineral Reserves of 315 million tonnes at a
mill delivered grade of 5.83g/t indicating 1,838 tons of gold.
Excluded from the mineral reserves are 3.3 million ounces from the Doornkop
South Reef Project and 1.6 million ounces from the Masimong Expansion Project.
Also excluded are 0.9 million ounces from inferred life of mine extensions at
Australia and 0.1 million ounces at Joel. The Doornkop South Reef and Masimong
Expansion projects have been approved by the board with capital expenditure
currently underway. On the completion of underground development and drilling
programmes to firm up confidence in the inferred mineral resources, these
approximately 4.9 million ounces will be transferred to reserve category.
Mineral reserve estimates are based on many factors, including, data with
respect to mining, drilling and sampling. Mineral reserves are determined from
estimates of future technical factors, future production costs, future capital
expenditure, future gold prices and exchange rates. Because mineral reserves are
only estimates based on the factors and assumptions described herein, future
estimates may need to be revised. For example if production costs or gold price
should increase or decrease, a potion of the Mineral Reserves may become
economical or uneconomical and would therefore result in a higher or lower
estimated Mineral Reserve.
Of the total 59.1 million ounces of mineral reserves, 12.5 million ounces or
21.2% is currently inaccessible as these ounces are below infrastructure. These
are ounces related to the Poplar and Rolspruit projects in the Evander region.
In the Gold Fields 2004 Annual Report, the company reported that 37.2% or 22.6
million ounces of its South African mineral reserves were inaccessible from
current infrastructure and would require further capital expenditure to exploit
these reserves.
Harmony has commissioned Steffen, Robertson and Kirsten (South Africa) (Pty) Ltd
to complete an Independent Persons Report (CPR) which is being prepared in
compliance with the Listing Requirements of the JSE Johannesburg Securities
Exchange. The CPR does not solely relate to Mineral Reserves and Resources, but
includes a technical analysis of all disciplines (including; geology,
exploration, mineral resources, mineral reserve estimation and classification,
mining, rock engineering and geotechnics, ventilation, metallurgy, tailings
deposition, infrastructure, capital expenditure, human resources, occupational
health and environmental rehabilitation).
The result of the CPR is a summary equity evaluation for the company and is
based on a sum-of- the-parts approach comprising net asset values for the mining
assets and supplemental information (balance sheet items and interests in listed
and unlisted companies) as provided by Harmony. This CPR should be completed by
January 2005.
To complete this report SRK has indicated that it will have visited Harmony`s 48
shafts and 15 metallurgical plants, exploration properties and operating mines
in Western Australia and Papua New Guinea.
Harmony and Gold Fields shareholders should note that in the recent action filed
in the United States District Court for the Southern New York, Judge Berman
found that Gold Fields argument relating to the misstatement of gold reserves
`is not persuasive`. He noted that Harmony submitted testimony of three experts
on that issue, much which was unchallenged and further noted that Gold Fields
expert who testified in court, Bernard Guarnero, conceded that if Harmony had
done everything it said it did in the preparation and declaration of its mineral
reserves, the company`s conclusion relating to its gold reserves would be
justified. For all these reasons, and despite Gold Fields constant reference to
the alleged discrepancy in the reported reserves, which it litigated in the New
York case, Judge Berman soundly and without ambiguity rejected Gold Fields
argument.
`With this report the perceived uncertainty regarding the Harmony ore reserves
has now been adequately addressed. This now allows Gold Fields management and
shareholders the opportunity to focus on the value proposition of our offer to
merge the two companies, thereby creating the world`s largest gold producer. Our
subsequent offer which was launched in mid-December is planned to close in
February 2005, with the approval of the transaction by the Competition
Commission` concluded Bernard.`
ENDS
Issued by (direct line, mobile, email):
Harmony Gold
Ferdi Dippenaar +27 11 684 0140 +27 82 807 3684
Graham Briggs +27 11 684 0146 +27 83 265 0274
South Africa - Beachhead Media & Investor Relations
Jennifer Cohen +27 (0)11 214 2401 +27 (0)82 468 6469 jennifer@bmsa.co.za
Patrick Lawlor +27 (0)11 214 2410 +27 (0)82 459 6709 patrick@bmsa.co.za
United States - Financial Dynamics Business Communications
Hollis Rafkin-Sax +1 212 850 5789 +1 917 509 0255 hrafkin-sax@fd-us.com
Torie Pennington +1 212 850 5629 +1 917 838 1369 tpennington@fd-us.com
United Kingdom - Financial Dynamics Business Communications
Nic Bennett +44(0)207 269 7115 +44(0)7979 536 619 nic.bennett@fd.com
Charles Watenphul +44(0)207 269 7216 +44(0)7866 438 013
charles.watenphul@fd.com
US Information Agent - MacKenzie Partners, Inc
Daniel Burch +212 929 5500 proxy@mackenziepartners.com
Steve Balet +800 322 2885
In connection with the proposed merger of Gold Fields, Harmony has filed a
registration statement on Form F-4 (which was declared effective by the
Securities and Exchange Commission (SEC) on November 19, 2004) and filed a final
prospectus, dated November 19, 2004, with the SEC pursuant to Rule 424(b)(5) of
the Securities Act of 1933, to register the Harmony ordinary shares (including
Harmony ordinary shares represented by Harmony American Depositary Shares
(ADSs)) to be issued in exchange for Gold Fields ordinary shares held by Gold
Fields shareholders located in the United States and for Gold Fields ADSs held
by Gold Fields shareholders wherever located, as well as a Statement on Schedule
TO. Investors and holders of Gold Fields securities are strongly advised to
read the registration statement and the preliminary prospectus, the related
exchange offer materials and the final prospectus (when available), the
Statement on Schedule TO and any other relevant documents filed with the SEC, as
well as any amendments and supplements to those documents, because they will
contain important information. Investors and holders of Gold Fields securities
may obtain free copies of the registration statement, the final prospectus,
related exchange offer materials and the Statement on Schedule TO, as well as
other relevant documents filed or to be filed with the SEC, at the SEC`s web
site at www.sec.gov. Investors and holders of Gold Fields securities will
receive information at an appropriate time on how to obtain transaction-related
documents for free from Harmony or its duly designated agent. The final
prospectus and other transaction-related documents may be obtained for free from
MacKenzie Partners, Inc., the information agent for the U.S. offer, at the
following address: 105 Madison Avenue, New York, New York 10016; telephone 1
(212) 929 5500 (call collect) or 1 (800) 322 2885 (toll-free call); e-mail
proxy@mackenziepartners.com.
This communication is for information purposes only. It shall not constitute an
offer to purchase or exchange or the solicitation of an offer to sell or
exchange any securities of Gold Fields or an offer to sell or exchange or the
solicitation of an offer to buy or exchange any securities of Harmony, nor shall
there be any sale or exchange of securities in any jurisdiction in which such
offer, solicitation or sale or exchange would be unlawful prior to the
registration or qualification under the laws of such jurisdiction. The
distribution of this communication may, in some countries, be restricted by law
or regulation. Accordingly, persons who come into possession of this document
should inform themselves of and observe these restrictions. The solicitation of
offers to buy Gold Fields ordinary shares (including Gold Fields ordinary shares
represented by Gold Fields ADSs) in the United States will only be made pursuant
to a prospectus and related offer materials that Harmony has sent to holders of
Gold Fields securities. The Harmony ordinary shares (including Harmony ordinary
shares represented by Harmony ADSs) may not be sold, nor may offers to buy be
accepted, in the United States prior to the time the registration statement
becomes effective. No offering of securities shall be made in the United States
except by means of a prospectus meeting the requirements of Section 10 of the
United States Securities Act of 1933, as amended.
Forward-looking Statements
Statements in this communication include `forward-looking statements` that
express or imply expectations of future events or results. Forward-looking
statements are statements that are not historical facts. These statements
include financial projections and estimates and their underlying assumptions,
statements regarding plans, objectives and expectations with respect to future
operations, products and services, and statements regarding future performance.
Forward-looking statements are generally identified by the words `expect,`
`anticipates,` `believes,` `intends,` `estimates` and similar expressions. All
forward-looking statements involve a number of risks, uncertainties and other
factors, and Harmony cannot give assurances that such statements will prove to
be correct. Risks, uncertainties and other factors that could cause actual
events or results to differ from those expressed or implied by the forward-
looking statements include, without limitation, the satisfaction of closing
conditions, the acceptance or rejection of any agreement by regulators, delays
in the regulatory processes, changes in the economic or political situation in
South Africa, the European Union, the United States of America and/or any other
relevant jurisdiction, changes in the gold industry within any such country or
area or worldwide and the performance of (and cost savings realised by) Harmony.
Although Harmony`s management believes that the expectations reflected in such
forward-looking statements are reasonable, investors and holders of Gold Fields
securities are cautioned that forward-looking information and statements are
subject to various risks and uncertainties, many of which are difficult to
predict and generally beyond the control of Harmony, that could cause actual
results and developments to differ materially from those expressed in, or
implied or projected by, the forward-looking information and statements. These
risks and uncertainties include those discussed or identified in the public
filings with the SEC made by Harmony and Gold Fields, including those listed
under `Cautionary Statement Concerning Forward-Looking Statements` and `Risk
Factors` in the preliminary prospectus included in the registration statement on
Form F-4 that Harmony filed with the SEC. Harmony does not undertake any
obligation to update any forward-looking information or statements. You may
obtain a free copy of the registration statement and preliminary and final
prospectus (when available) and other public documents filed with the SEC in the
manner described above.
The directors of Harmony accept responsibility for the information contained in
this announcement. To the best of the knowledge and belief of the directors of
Harmony (who have taken all reasonable care to ensure that such is the case),
the information contained in this announcement is in accordance with the facts
and does not omit anything likely to affect the import of such information.
