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HAR
HAPS
HAR - Harmony Gold Mining Company Limited - Review for second quarter and
six-month interim period ended
31 December 2006
Harmony Gold Mining Company Limited
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
Trading Symbols
JSE Limited HAR
New York Stock Exchange, Inc. HMY
NASDAQ HMY
London Stock Exchange plc HRM
Euronext Paris HG
Euronext Brussels HMY
Berlin Stock Exchange HAM1
Review for second quarter and six-month interim period ended 31 December
2006
QUARTERLY Operating and Financial Results (Rand/Metric) (unaudited)
Underground production - South Africa
Quality Growth
Ounces Projects
Ore Milled - t`000 Dec-06 1 561 399
Sep-06 1 665 398
Gold Produced - kg Dec-06 7 953 2 228
Sep-06 9 392 1 842
Yield - g/tonne Dec-06 5.09 5.58
Sep-06 5.64 4.63
Cash Operating Costs - R/kg Dec-06 99 318 106 782
Sep-06 81 992 123 439
Cash Operating Costs - R/tonne Dec-06 506 596
Sep-06 463 571
Working Revenue - (R`000) Dec-06 1 147 318 322 362
Sep-06 1 350 838 264 626
Cash Operating Costs - (R`000) Dec-06 789 877 237 910
Sep-06 770 067 227 374
Cash Operating Profit - (R`000) Dec-06 357 441 84 452
Sep-06 580 771 37 252
Capital Expenditure - (R`000) Dec-06 178 951 189 203
Sep-06 179 183 193 000
Leveraged
Ounces Sub-total
Ore Milled - t`000 Dec-06 1 401 3 361
Sep-06 1 288 3 351
Gold Produced - kg Dec-06 5 885 16 066
Sep-06 5 497 16 731
Yield - g/tonne Dec-06 4.20 4.78
Sep-06 4.27 4.99
Cash Operating Costs - R/kg Dec-06 109 427 104 056
Sep-06 117 741 98 302
Cash Operating Costs - R/tonne Dec-06 460 497
Sep-06 503 491
Working Revenue - (R`000) Dec-06 847 812 2 317 492
Sep-06 788 244 2 403 708
Cash Operating Costs - (R`000) Dec-06 643 976 1 671 763
Sep-06 647 225 1 644 666
Cash Operating Profit - (R`000) Dec-06 203 836 645 729
Sep-06 141 019 759 042
Capital Expenditure - (R`000) Dec-06 101 355 469 509
Sep-06 91 164 463 347
Quality Ounces - Evander shafts, Randfontein Cooke shafts, Target,
Tshepong, Masimong
Growth Projects - Doornkop shaft and South Reef Project, Elandsrand
shaft
and New Mine Project, Phakisa shaft, Tshepong Decline
Project
Leveraged Ounces - Bambanani, Joel, West, St Helena 8, Harmony 2,
Merriespruit 1 and 3, Unisel, Brand 3 and Orkney 2, 4
and 7.
QUARTERLY OPERATING AND FINANCIAL RESULTS (Rand/Metric) (unaudited)
South Africa South Africa
Surface Total
Ore Milled - t`000 Dec-06 1 097 4 458
Sep-06 905 4 256
Gold Produced - kg Dec-06 770 16 836
Sep-06 692 17 423
Yield - g/tonne Dec-06 0.70 3.78
Sep-06 0.76 4.09
Cash Operating Costs - R/kg Dec-06 79 000 102 910
Sep-06 95 750 98 199
Cash Operating Costs - R/tonne Dec-06 55 389
Sep-06 73 402
Working Revenue - (R`000) Dec-06 110 451 2 427 943
Sep-06 105 010 2 508 718
Cash Operating Costs - (R`000) Dec-06 60 830 1 732 593
Sep-06 66 259 1 710 925
Cash Operating Profit - (R`000) Dec-06 49 621 695 350
Sep-06 38 751 797 793
Capital Expenditure - (R`000) Dec-06 769 470 278
Sep-06 1 159 464 506
Australia Harmony
Total Total
Ore Milled - t`000 Dec-06 777 5 235
Sep-06 799 5 055
Gold Produced - kg Dec-06 1 888 18 724
Sep-06 2 049 19 472
Yield - g/tonne Dec-06 2.43 3.58
Sep-06 2.56 3.85
Cash Operating Costs - R/kg Dec-06 115 024 104 132
Sep-06 91 914 97 538
Cash Operating Costs - R/tonne Dec-06 279 372
Sep-06 236 376
Working Revenue - (R`000) Dec-06 277 089 2 705 032
Sep-06 281 490 2 790 208
Cash Operating Costs - (R`000) Dec-06 217 166 1 949 759
Sep-06 188 331 1 899 256
Cash Operating Profit - (R`000) Dec-06 59 923 755 273
Sep-06 93 159 890 952
Capital Expenditure - (R`000) Dec-06 100 974 571 252
Sep-06 112 770 577 276
Total Operations - Quarterly Financial Results (Rand/metric) (unaudited)
Quarter ended Quarter ended Quarter ended
31 December 30 September 31 December
2006 2006 2005
Ore milled - t`000 5 235 5 055 4 857
Gold produced - kg 18 724 19 472 20 316
Gold price received - R/kg 144 467 143 283 102 333
Cash operating costs - R/kg 104 132 97 538 83 154
R million R million R million
Revenue 2 705 2 790 2 079
Cash operating costs 1 950 1 899 1 690
Cash operating profit 755 891 389
Amortisation and depreciation of
mining properties,
mine development costs and mine
plant facilities (287) (308) (249)
Corporate, administration and
other expenditure (62) (59) (72)
Provision for rehabilitation costs (3) (2) (2)
Operating profit 403 522 66
Amortisation and depreciation,
other than mining
properties, mine development costs
and mine plant facilities (16) (17) (10)
Employment termination and
restructuring costs - - (15)
Care and maintenance costs (19) (20) (27)
Share-based compensation (14) (12) (27)
Exploration expenditure (60) (41) (32)
Profit on sale of investment in
Gold Fields - - 306
Marked-to-market of listed
investments 27 24 22
Interest paid (103) (95) (98)
Interest received 42 39 48
Other expenses income/(expenses) - net (36) 15 (29)
Gain/(loss) on financial instruments 17 18 (183)
Loss on sale of listed investments
and subsidiaries - 1 -
Profit/(loss) from associates 30 (48) -
Profit on sale of property,
plant and equipment 73 13 12
Profit on sale of investment
in associate 236 - -
Profit before tax 580 399 33
Current tax - expense - - (4)
Deferred tax - expense (112) (122) (5)
Net profit 468 277 24
Loss per share - cents
- Basic earnings 118 70 6
- Headline earnings/(loss) 44 66 (75)
- Fully diluted earnings ** *** 116 69 6
Dividends per share - (cents)
- Interim - - -
- Proposed final - - -
* Calculated on weighted average
number of shares in issue at
quarter-end December 2006:
397.7 million (September 2006:
396.8 million) (December 2005:
392.7 million).
** Calculated on weighted average
number of diluted shares in issue
at quarter-end December 2006:
403.7 million (September 2006:
402.9 million) (December 2005:
398.5 million).
*** The effect of the share options
is anti-dilutive.
Reconciliation of headline
profit/(loss):
Net profit 468 277 24
Adjustments:
- Profit on sale of assets (73) (13) (12)
- Profit on sale of GBS investment - (1) -
- Loss on disposal of Sangold
investment - - 1
- Profit on disposal of investment
in Gold Fields - - (306)
- Profit on sale of Western Areas
investment (220) - -
Headline profit/(loss) 175 263 (293)
Total Operations - Year to Date Financial Results (Rand/metric) (unaudited)
Year to date Year to date
31 December 2006 31 December 2005
Ore milled - t`000 10 290 9 457
Gold produced - kg 38 196 39 535
Gold price received - R/kg 143 863 97 256
Cash operating costs - R/kg 100 770 84 406
R million R million
Revenue 5 495 3 845
Cash operating costs 3 849 3 337
Cash operating profit 1 646 508
Amortisation and depreciation of
mining properties,
mine development costs and mine plant
facilities (595) (493)
Corporate, administration and other
expenditure (121) (128)
Provision for rehabilitation costs (5) (5)
Operating profit/(loss) 925 (118)
Amortisation and depreciation, other
than mining
properties, mine development costs
and mine plant facilities (33) (21)
Employment termination and
restructuring costs - (2)
Care and maintenance costs (39) (27)
Share-based compensation (26) (57)
Exploration expenditure (101) (50)
Profit on sale of investment in Gold
Fields - 306
Marked-to-market of listed investments 51 43
Interest paid (198) (194)
Interest received 81 100
Other expenses - net (21) (42)
Gain/(loss) on financial instruments 35 (298)
Loss on foreign exchange - (1)
Loss on sale of listed investments
and subsidiaries 1 (1)
Loss from associates (18) -
Profit on sale of property, plant and
equipment 86 27
Profit on sale of investment in
associate 236 -
Profit/(loss) before tax 979 (335)
Current tax - expense - (4)
Deferred tax - (expense)/benefit (234) 43
Net profit/(loss) 745 (296)
Earnings/(loss) per share - cents *
- Basic earnings/(loss) 188 (77)
- Headline earnings/(loss) 110 (160)
- Fully diluted earnings/(loss)** *** 185 (77)
Dividends per share - (cents)
- Interim - -
- Proposed final - -
* Calculated on weighted average
number of shares
in issue for six months to December
2006: 397.3 million
(December 2005: 392.6 million).
** Calculated on weighted average
number of diluted shares
in issue for six months to December
2006: 402.9 million
(December 2005: 396.7 million).
*** The effect of the share options
is anti-dilutive.
Reconciliation of headline
profit/(loss):
Net profit/(loss) 745 (296)
Adjustments:
- Profit on sale of assets (86) (27)
- Profit on sale of GBS Gold
International investment (1) -
- Loss on disposal of Sangold
investment - 1
- Profit on disposal of investment in
Gold Fields - (306)
- Profit on sale of Western Areas
investment (220) -
Headline profit/(loss) 438 (628)
ABRIDGED BALANCE SHEET AT 31 DECEMBER 2006 (Rand)
At At At
31 December 30 September 31 December
2006 2006 2005
R million R million R million
(unaudited) (unaudited) (unaudited)
Assets
Non-current assets
Property, plant and equipment 23 973 23 849 22 735
Intangible assets 2 270 2 270 2 268
Investment financial assets 4 440 2 306 2 111
Investments in associates - 1 860 -
Trade and other receivables 92 82 80
30 775 30 367 27 194
Current assets
Inventories 742 730 560
Trade and other receivables 934 871 744
Income and mining taxes 28 25 24
Cash and cash equivalents 904 868 2 914
2 608 2 494 4 242
Total assets 33 383 32 861 31 436
Equity and liabilities
Share capital and reserves
Share capital 25 588 25 521 25 334
Other reserves (186) (88) (578)
Accumulated loss (1 270) (1 738) (1 677)
24 132 23 695 23 079
Non-current liabilities
Borrowings 2 687 2 637 2 506
Net deferred taxation
liabilities 2 541 2 449 2 122
Deferred financial instruments 484 609 498
Provisions for other
liabilities and charges 984 1 009 943
6 696 6 704 6 069
Current liabilities
Trade and other payables 1 245 1 184 892
Accrued liabilities 301 264 309
Borrowings 1 001 1 006 1 079
Shareholders for dividends 8 8 8
2 555 2 462 2 288
Total equity and liabilities 33 383 32 861 31 436
Number of ordinary shares in
issue 398 678 495 397 549 945 394 161 367
Net asset value per share
(cents) 6 053 5 960 5 853
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED
31 DECEMBER 2006 (Rand) (unaudited)
Issued share Other Retained
capital reserves earnings Total
R million R million R million R million
Balance at 1 July 2006 25 489 (271) (2 015) 23 203
Issue of share capital 99 99
Currency translation adjustment
and other 85 85
Net earnings 745 745
Balance at 31 December 2006 25 588 (186) (1 270) 24 132
Balance at 1 July 2005 25 289 (587) (1 381) 23 321
Issue of share capital 45 45
Currency translation adjustment
and other 9 9
Net loss (296) (296)
Balance at 31 December 2005 25 334 (578) (1 677) 23 079
SUMMARISED CASH FLOW STATEMENT FOR THE PERIOD ENDED
31 DECEMBER 2006 (Rand) (unaudited)
Six Six
months months Quarter Quarter
ended ended ended ended
31 31 31 30
December December December September
2006 2005 2006 2006
R million R million R million R million
Cash flow from operating activites
Cash generated/(utilised) by
operations 958 (320) 487 471
Interest and dividends received 81 100 42 39
Interest paid (95) (94) (50) (45)
Income and mining taxes paid (6) (2) (6) -
Cash generated/(utilised) by
operating activities 938 (316) 473 465
Cash flow from investing activities
Net proceeds on disposal of
listed investments 30 2 461 - 30
Net additions to property, plant
and equipment (1 058) (786) (497) (562)
Other investing activities (14) 4 (15) -
Cash (utilised)/generated by
investing activities (1 042) 1 679 (512) (532)
Cash flow from financing activities
Long-term loans repaid (1) (295) - -
Ordinary shares issued - net of
expenses 98 45 66 32
Dividends paid - - - -
Cash generated/(utilised) by
financing activities 97 (250) 66 32
Foreign currency translation
adjustments 5 (29) 9 (3)
Net (decrease)/increase in cash
and equivalents (2) 1 084 36 (38)
Cash and equivalents - beginning of
period 906 1 830 868 906
Cash and equivalents - end of period 904 2 914 904 868
NOTES TO THE RESULTS FOR THE QUARTER ENDED 31 DECEMBER 2006 (unaudited)
1. Basis of accounting
The unaudited results for the quarter have been prepared using accounting
policies that comply with International Financial Reporting Standards
(IFRS). These consolidated quarterly statements are prepared in accordance
with IFRS 34, Interim Financial Reporting. The accounting policies are
consistent with those applied in the previous financial year.
2. Commodity contracts
The Harmony Group`s outstanding commodity contracts against future
production, by type at 31 December 2006 are indicated below. The total net
delta of the hedge book at 31 December 2006 was 229 636oz (7 143kg).
30 June 30 June 30 June
Year 2007 2008 2009 Total
Australian
Dollar Gold:
Forward contracts Kilograms 933 3 110 3 110 7 153
Ounces 30 000 100 000 100 000 230 000
A$ per oz 518 518 518 518
Total commodity
contracts Kilograms 933 3 110 3 110 7 153
Ounces 30 000 100 000 100 000 230 000
Total net gold ** Delta (kg) 933 3 108 3 102 7 143
Delta (oz) 29 995 99 923 99 718 229 636
** The Delta of the hedge position indicated above, is the equivalent gold
position that would have the same marked-to-market sensitivity for a small
change in the gold price.
These contracts are classified as speculative and the
marked-to-market movement is reflected in the income statement.
The marked-to-market movement for the quarter of these contracts was a
positive R100.5 million (positive US$13.7 million) at 31 December 2006 (at
30 September 2006: positive R73 million or positive US$10 million).
Harmony closed out a further 62 000oz of forward positions during the
quarter. 20 000oz of these closed positions, together with 30 000oz of
closed positions from last quarter were settled during the quarter ended 31
December 2006 at a cost of R82.9 million (US$11.8 million). The additional
42 000oz closed out during the quarter will be settled during the next
quarter ending 31 March 2007. During the quarter ended 30 September 2006,
Harmony settled 25 000oz of the forward contracts at a cost of R41 million
(US$5.8 million).
The marked-to-market value of the hedge book was a negative A$87.3 million
on 31 December 2006 (at 30 September 2006: negative A$105.1 million). The
values at 31 December 2006 were based on a gold price of US$634 (A$801) per
ounce, exchange rates of US$1/R7.0375 and A$1/US$0.79 and prevailing market
interest rates and volatilities at that date. These valuations were
provided by independent risk and treasury management experts.
At 24 January 2007, the marked-to-market value of the hedge book was a
negative A$91.6 million (negative US$71.6 million), based on a gold price
of US$643 (A$822) per ounce, exchange rate of A$1/US$0.78 and prevailing
market interest rates at that time.
These marked-to-market valuations are not predictive of the future value of
the hedge position, nor of the future impact on the revenue of the company.
The valuation represents the cost of buying all hedge contracts at the time
of the valuation, at market prices and rates available at the time.
Contact details
Harmony Gold Mining Company Limited
Corporate Office
Suite No. 1
Private Bag X1
Melrose Arch, 2076
South Africa
First Floor
4 The High Street
Melrose Arch, 2196
Johannesburg
South Africa
Telephone: +27 11 684 0140
Fax: +27 11 684 0188
Website: http://www.harmony.co.za
Directors
P T Motsepe (Chairman)*
Z B Swanepoel (Chief Executive)
F Abbott*, J A Chissano*,
Dr D S Lushaba*, F T De Buck*, M Motloba*,
N V Qangule, C M L Savage*
(*non-executive) (Mozambique)
Investor Relations
Amelia Soares
Investor Relations Manager
Telephone: +27 11 684 0146
Fax: +27 11 684 0188
Cell: +27 (0) 82 654 9241
E-mail: amelia.soares@harmony.co.za
Lizelle du Toit
Investor Relations Officer
Telephone: +27 11 684 0149
Fax: +27 11 684 0188
Cell: +27 (0) 82 465 1244
E-mail: lizelle.dutoit@harmony.co.za
Marian van der Walt
Company Secretary
Telephone: +27 11 411 2037
Fax: +27 11 411 2398
Cell: +27 (0) 82 888 1242
E-mail: marian.vanderwalt@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
5th Floor, 11 Diagonal Street
Johannesburg, 2001
South Africa
PO Box 4844
Johannesburg, 2000
South Africa
Telephone: +27 11 832 2652
Fax: +27 11 834 4398
United Kingdom Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Telephone: +44 870 162 3100
Fax: +44 208 639 2342
ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1888-BNY ADRS
Fax: +1 212 571 3050
Trading Symbols
JSE Limited HAR
New York Stock Exchange, Inc. HMY
NASDAQ HMY
London Stock Exchange plc HRM
Euronext Paris HG
Euronext Brussels HMY
Berlin Stock Exchange HAM1
Issuer code HAPS
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
ISIN: ZAE000015228
Date: 02/02/2007 08:00:03 Produced by the JSE SENS Department.
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