UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934
For 5 May 2011
Harmony Gold Mining Company
Limited
Randfontein Office Park
Corner Main Reef Road and Ward Avenue
Randfontein, 1759
South Africa
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-
F or Form 40-F.)
Form 20-F X
Form 40-F
(Indicate by check mark whether the registrant by
furnishing the information contained in this form
is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes
No X
SHAREHOLDER INFORMATION
Issued ordinary share capital
429 807 371
at 31 March 2011
shares
Market capitalisation
At 31 March 2011 (ZARm)
42 676
At 31 March 2011 (US$m)
6 304
Harmony ordinary share
and ADR prices
and ADR prices
12 month high (1 April 2010 to
31 March 2011) for ordinary shares
R102.26
12 month low (1 April 2010 to
31 March 2011) for ordinary shares
R68.65
12 month high (1 April 2010 to
31 March 2011) for ADRs
US$15.26
12 month low (1 April 2010 to
31 March 2011) for ADRs
US$9.04
Free float
Ordinary shares
100%
ADR ratio
1:1
JSE Limited
HAR
Range for quarter
(1 January 2011 to 31 March 2011
R74.77 –
closing prices)
R102.26
Average daily volume of shares
for the quarter (1 January 2011
1 685 549
to 31 March 2011)
shares per day
New York Stock
Exchange, Inc.
Exchange, Inc.
HMY
Range for quarter
(1 January 2011 to
US$10.56 –
31 March 2011 – closing prices)
US$15.26
Average daily volume of shares
for the quarter (1 January 2011
2 720 867
to 31 March 2011)
shares per day
Highlights
Cash operating profit of R855 million
• Net profit of R238 million
• Net profit of R238 million
Slight increase in underground grade to 4.64g/t
Stable cash operating cost
• despite production being 2% down
• despite production being 2% down
Headline earnings per share up 32% at 91 SA cents
Excellent drilling results at Wafi-Golpu
• Share price 20% higher quarter-on-quarter
• Share price 20% higher quarter-on-quarter
Financial summary for the third quarter and nine months ended
31 March 2011
31 March 2011
Quarter
Quarter
9 months
9 months
Year-on-
March
December
Q-on-Q
March
March
year
2011
2010
Variance
2011
2010
variance
%
%
Gold produced
(1)
– kg
9 857
10 055
(2)
30 383
33 649
(10)
– oz
316 909
323 275
(2)
976 834
1 081 831
(10)
Cash operating
– R/kg
217 802
216 595
(1)
221 166
193 274
(14)
costs
– US$/oz
970
979
1
962
792
(21)
Gold sold
– kg
9 716
10 046
(3)
30 631
33 468
(8)
– oz
312 378
322 986
(3)
984 811
1 076 012
(8)
Gold price
– R/kg
312 029
303 354
3
300 386
256 525
17
received
– US$/oz
1 389
1 371
1
1 324
1 051
26
Cash operating
– R million
855
867
(1)
2 374
1 985
20
profit
– US$ million
122
126
(3)
336
261
29
Basic
– SAc/s
55
69
(20)
149
(45)
>100
earnings/(loss)
– USc/s
8
10
(20)
21
(6)
>100
per share*
Headline
– Rm
390
294
33
826
54
>100
profit/(loss)*
– US$m
56
43
30
117
7
>100
Headline
– SAc/s
91
69
32
192
13
>100
earnings/(loss)
– USc/s
13
10
30
27
2
>100
per share*
Exchange rate
– R/US$
6.99
6.88
2
7.06
7.59
(7)
* Reported amounts include continuing operations only.
(1) Production statistics for Steyn 2 and Target 3 have been included. These mines are in a build-up phase and revenue and
costs are currently capitalised. Revenue capitalised includes: Quarter ending Mar 2011 Steyn 2, 14 kg (Dec 2010 – 18 kg)
and Target 3, 250 kg (Dec 2010 – 170 kg), 9 months ending Mar 2011 Steyn 2 , 63 kg (Mar 2010 – Nil) and Target 3, 531 kg
(Mar 2010 – Nil).
costs are currently capitalised. Revenue capitalised includes: Quarter ending Mar 2011 Steyn 2, 14 kg (Dec 2010 – 18 kg)
and Target 3, 250 kg (Dec 2010 – 170 kg), 9 months ending Mar 2011 Steyn 2 , 63 kg (Mar 2010 – Nil) and Target 3, 531 kg
(Mar 2010 – Nil).
Harmony’s Annual Report, Notice of Annual General Meeting, its Sustainable Development Report and
its annual report filed on a Form 20F with the United States’ Securities and Exchange Commission for
the year ended 30 June 2010 are available on our website (www.harmony.co.za).
its annual report filed on a Form 20F with the United States’ Securities and Exchange Commission for
the year ended 30 June 2010 are available on our website (www.harmony.co.za).
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
(“Harmony” or “Company”)
Registration number 1950/038232/06
(“Harmony” or “Company”)
Results for the third quarter and nine months ended 31 March 2011
JSE Share code: HAR | NYSE Share code: HMY | ISIN: ZAE 000015228
2
Results for the third quarter and nine months
ended 31 March 2011
Forward-looking statements
This quarterly report contains forward-looking
statements within the meaning of the United
States Private Securities Litigation Reform Act
of 1995 with respect to Harmony’s 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. Statements
in this quarter that are not historical facts are
“forward-looking statements” for the purpose of
the safe harbour provided by Section 21E of the
U.S. Securities Exchange Act of 1934, as amended,
and Section 27A of the U.S. Securities Act of
1933, as amended. 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. These statements are
only predictions. All forward-looking statements
involve a number of risks, uncertainties and
other factors and we cannot assure you that
such statements will prove to be correct. Risks,
uncertainties and other factors could cause actual
events or results to differ from those expressed or
implied by the forward-looking statements.
statements within the meaning of the United
States Private Securities Litigation Reform Act
of 1995 with respect to Harmony’s 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. Statements
in this quarter that are not historical facts are
“forward-looking statements” for the purpose of
the safe harbour provided by Section 21E of the
U.S. Securities Exchange Act of 1934, as amended,
and Section 27A of the U.S. Securities Act of
1933, as amended. 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. These statements are
only predictions. All forward-looking statements
involve a number of risks, uncertainties and
other factors and we cannot assure you that
such statements will prove to be correct. Risks,
uncertainties and other factors could cause actual
events or results to differ from those expressed or
implied by the forward-looking statements.
These forward-looking statements, including,
among others, those relating to the future
business prospects, revenues and income of
Harmony, wherever they may occur in this
quarterly report and the exhibits to this quarterly
report, are necessarily estimates reflecting the
best judgment of the senior management of
Harmony 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 quarterly report.
Important factors that could cause actual results
to differ materially from estimates or projections
contained in the forward-looking statements
include, without limitation:
among others, those relating to the future
business prospects, revenues and income of
Harmony, wherever they may occur in this
quarterly report and the exhibits to this quarterly
report, are necessarily estimates reflecting the
best judgment of the senior management of
Harmony 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 quarterly 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
the countries in which we operate;
the countries in which we operate;
the ability to achieve anticipated efficiencies
and other cost savings in connection with past
and future acquisitions;
and other cost savings in connection with past
and future acquisitions;
increases or decreases in the market price
of gold;
of gold;
the occurrence of hazards associated with
underground and surface gold mining;
underground and surface gold mining;
the occurrence of labour disruptions
availability, terms and deployment of capital;
changes in government regulation, particularly
mining rights and environmental regulations;
mining rights and environmental regulations;
fluctuations in exchange rates;
currency devaluations and other macro-
economic monetary policies; and
economic monetary policies; and
socio-economic instability in the countries in
which we operate.
which we operate.
Contents
Page
Chief Executive’s Review
3
Safety and health
5
Financial overview
6
Operational overview
6
– Group operational results
6
– Build-up and steady operations
6
– Doornkop
6
– Kusasalethu
7
– Phakisa
7
– Masimong
7
– Target 1
7
– Target 3
7
– Tshepong
7
– Hidden Valley
8
– Other South African operations
8
– Bambanani
8
– Steyn 2
8
– Evander
8
– Joel
8
– Unisel
8
– Total South African surface operations
9
– Kalgold
9
– Phoenix
9
– Surface dumps
9
Development
10
Exploration
11
Operating results (Rand/Metric) (US$/Imperial)
16
Condensed consolidated income statement (Rand)
18
Condensed consolidated statement of other comprehensive income (Rand)
19
Condensed consolidated balance sheet (Rand)
20
Condensed consolidated statement of changes in equity (Rand)
21
Condensed consolidated cash flow statement (Rand)
22
Notes to the condensed consolidated financial statements
23
Segment report (Rand/Metric)
28
Operating results (US$/Imperial)
30
Condensed consolidated income statement (US$)
32
Condensed consolidated statement of other comprehensive income (US$)
33
Condensed consolidated balance sheet (US$)
34
Condensed consolidated statement of changes in equity (US$)
35
Condensed consolidated cash flow statement (US$)
36
Segment report (US$/Imperial)
37
Development results – metric and imperial
39
Contact details
40
3
Chief Executive’s Review
Introduction
The past quarter has been an exciting one with our share price reaching
record highs for FY11 primarily on the back of more exploration
successes on the Golpu deposit and an analyst visit to our Papua New
Guinea (PNG) operations.
record highs for FY11 primarily on the back of more exploration
successes on the Golpu deposit and an analyst visit to our Papua New
Guinea (PNG) operations.
We remain committed to our long term strategy of generating earnings
to fund growth. We have invested significant capital to build and
commission some of the best South African gold mining assets and
the results of these efforts will be fully realised in the future.
to fund growth. We have invested significant capital to build and
commission some of the best South African gold mining assets and
the results of these efforts will be fully realised in the future.
Our transformational efforts and strategic initiatives undertaken over
the last few years are all aimed at achieving robust and sustainable
financial results, with better cash costs and improved grade.
the last few years are all aimed at achieving robust and sustainable
financial results, with better cash costs and improved grade.
Our strategy also includes a focus on both regional and asset
diversification. In PNG, we have built a mine producing both gold
and silver and are currently busy with further exploration in the area
which includes 8 000km
diversification. In PNG, we have built a mine producing both gold
and silver and are currently busy with further exploration in the area
which includes 8 000km
2
of exploration tenements outside of the joint
venture. The early findings from Wafi/Golpu has justified management’s
long held belief that this is a world-class asset and will be a mine.
long held belief that this is a world-class asset and will be a mine.
Taking a holistic view, Harmony has several world-class mines in South
Africa which are currently in the build-up phase and these, together
with Hidden Valley, will be significant contributors to Harmony’s set
production targets.
Africa which are currently in the build-up phase and these, together
with Hidden Valley, will be significant contributors to Harmony’s set
production targets.
Safety
It is with deep regret that I report that two of our colleagues died
in work-related incidents during the quarter. Those who died were:
Tello Motloung, a scraper winch operator at Bambanani and Tjakama
Ntsohi, a winch operator at Unisel. I would like to extend my deepest
condolences to their families, friends and colleagues.
in work-related incidents during the quarter. Those who died were:
Tello Motloung, a scraper winch operator at Bambanani and Tjakama
Ntsohi, a winch operator at Unisel. I would like to extend my deepest
condolences to their families, friends and colleagues.
Fall of ground is still the major contributor to fatalities in the Company
and a high level task team has been established to formulate and
implement a comprehensive fall of ground strategy.
and a high level task team has been established to formulate and
implement a comprehensive fall of ground strategy.
Overall, improved discipline and management of seismicity and falls of
ground, value based safety behaviour and visible leadership from the
operational management resulted in improved safety at most of our
operations. See more on safety on page 5.
ground, value based safety behaviour and visible leadership from the
operational management resulted in improved safety at most of our
operations. See more on safety on page 5.
Gold market
We do not hedge gold and our shareholders have complete exposure
to spot gold prices and current exchange rates. We maintain our bullish
stance on the gold price and believe it will increase further, especially
in light of the weaker dollar and global economic uncertainty. Gold
has proven itself to be a currency and a store of wealth in times of
uncertainty. Although we have seen record high gold prices in the past
quarter in dollar terms, the stronger Rand resulted in the R/kg gold
price increasing by only 3% from R303 354/kg in the previous quarter
to R312 029/kg in the current quarter.
to spot gold prices and current exchange rates. We maintain our bullish
stance on the gold price and believe it will increase further, especially
in light of the weaker dollar and global economic uncertainty. Gold
has proven itself to be a currency and a store of wealth in times of
uncertainty. Although we have seen record high gold prices in the past
quarter in dollar terms, the stronger Rand resulted in the R/kg gold
price increasing by only 3% from R303 354/kg in the previous quarter
to R312 029/kg in the current quarter.
Operational results for quarter 3 of FY11
Gold production decreased by 2% quarter on quarter, from 10 055kg
to 9 857kg. Underground production was only 1% lower at 8 164kg,
despite volumes decreasing by 3% mainly as a result of the December
break. However, tonnage was made up with surface tonnes being 2%
higher quarter on quarter.
to 9 857kg. Underground production was only 1% lower at 8 164kg,
despite volumes decreasing by 3% mainly as a result of the December
break. However, tonnage was made up with surface tonnes being 2%
higher quarter on quarter.
Underground operations
Tonnes milled for the quarter decreased by 3% or 58 000 tonnes
when compared to the December 2010 quarter. Recovered grade
increased from 4.60g/t to 4.64g/t quarter on quarter. Gold production
achieved in the March 2011 quarter was 8 164 kilograms, compared to
8 273 kilograms produced in the December 2010 quarter.
when compared to the December 2010 quarter. Recovered grade
increased from 4.60g/t to 4.64g/t quarter on quarter. Gold production
achieved in the March 2011 quarter was 8 164 kilograms, compared to
8 273 kilograms produced in the December 2010 quarter.
A 3% decrease in cash operating cost in Rand terms negated the
decrease in gold produced and resulted in a 1% decrease in unit
cost achieved for the March 2011 quarter at R216 799/kg compared
to R218 881/kg in the previous quarter. Capital expenditure for the
March 2011 quarter decreased by 18% (R124 million) to R572 million,
compared to R696 million in the December 2010 quarter.
decrease in gold produced and resulted in a 1% decrease in unit
cost achieved for the March 2011 quarter at R216 799/kg compared
to R218 881/kg in the previous quarter. Capital expenditure for the
March 2011 quarter decreased by 18% (R124 million) to R572 million,
compared to R696 million in the December 2010 quarter.
Surface operations
Tonnes milled increased by 2%, mainly due to a 111 000 tonnes (14%)
increase in material from the dumps. This was due to the plants
continuing to mill waste over the December break. The recovered
grade decreased by 8% from 0.38g/t to 0.35g/t in the quarter under
review, mainly attributed to a 9% decrease at Kalgold. Gold produced
decreased by 56kg from 955kg in the December 2010 quarter to 899kg
in the March 2011 quarter, a 6% decrease. Cash operating unit cost
increased by 6% from R215 422/kg to R227 335/kg in the quarter
under review.
increase in material from the dumps. This was due to the plants
continuing to mill waste over the December break. The recovered
grade decreased by 8% from 0.38g/t to 0.35g/t in the quarter under
review, mainly attributed to a 9% decrease at Kalgold. Gold produced
decreased by 56kg from 955kg in the December 2010 quarter to 899kg
in the March 2011 quarter, a 6% decrease. Cash operating unit cost
increased by 6% from R215 422/kg to R227 335/kg in the quarter
under review.
Operating profit decreased by 11% to R69 million in the March 2011
quarter compared to R78 million in the previous quarter.
quarter compared to R78 million in the previous quarter.
Hidden Valley
Gold and silver production decreased by 4% and 21%, respectively,
compared to the previous quarter with 794kg (25 528oz) gold and
4 704kg (151 249oz) silver produced. Plant throughput was 4% lower
at 815 000 (850 000 in the previous quarter) tonnes, which is primarily
attributable to the belt breakage of the Hidden Valley conveying circuit.
This is expected to negatively impact quarter four as well. See page 8
for more on the Hidden Valley mine.
compared to the previous quarter with 794kg (25 528oz) gold and
4 704kg (151 249oz) silver produced. Plant throughput was 4% lower
at 815 000 (850 000 in the previous quarter) tonnes, which is primarily
attributable to the belt breakage of the Hidden Valley conveying circuit.
This is expected to negatively impact quarter four as well. See page 8
for more on the Hidden Valley mine.
Financial overview
Quarter on quarter the Rand per kilogram unit cost were kept at
bay with a mere increase of 1% to R217 802/kg, in comparison to
R216 595/kg in the previous quarter. This was mainly as a result of the
2% decrease in gold production as cash operating cost in Rand terms
decreased by 2% (R48 million).
bay with a mere increase of 1% to R217 802/kg, in comparison to
R216 595/kg in the previous quarter. This was mainly as a result of the
2% decrease in gold production as cash operating cost in Rand terms
decreased by 2% (R48 million).
In R/kg terms the gold price received increased by 3% from
R303 354/kg in the December 2010 quarter to R312 029/kg in the
current quarter. Revenue for the March 2011 quarter decreased by 1%
as a result of a 330kg (3%) decrease in the gold sold.
current quarter. Revenue for the March 2011 quarter decreased by 1%
as a result of a 330kg (3%) decrease in the gold sold.
Quarter on quarter the capital expenditure decreased by
R168 million (20%).
R168 million (20%).
Cash operating cost for the March 2011 quarter decreased by
R48 million or 2% when compared to the previous quarter due to cost
savings, decreased electricity and labour costs.
R48 million or 2% when compared to the previous quarter due to cost
savings, decreased electricity and labour costs.
Operating profit decreased by 1% to R855 million when compared to
the R868 million recorded in the December 2010 quarter.
the R868 million recorded in the December 2010 quarter.
4
Results for the third quarter and nine months
ended 31 March 2011
Wafi/Golpu
Drilling at the Wafi-Golpu project continues to be successful. The latest
results confirm our previously held belief that this deposit is truly a
world-class discovery and the pre-feasibility study will be completed
towards the end of December 2011. The latest drill hole results at
our Wafi-Golpu JV project (50% held by Harmony) have provided the
highest mineralisation values to date.
results confirm our previously held belief that this deposit is truly a
world-class discovery and the pre-feasibility study will be completed
towards the end of December 2011. The latest drill hole results at
our Wafi-Golpu JV project (50% held by Harmony) have provided the
highest mineralisation values to date.
In October 2010, Harmony reported on drilling of the Wafi-Golpu
deposit, which extended the mineralisation beyond the porphyry
copper-gold resource of 16Moz of gold and 4.8Mt of copper.
deposit, which extended the mineralisation beyond the porphyry
copper-gold resource of 16Moz of gold and 4.8Mt of copper.
On 3 March 2011 we released the following drilling results:
•
WR377: 883m @ 2.15% Cu and 2.23g/t Au (5.33g/t Au equivalents*)
from 913m including 628m @ 2.82% Cu and 3.06g/t Au (7.13g/t Au
equivalents*) from 1 043m.
equivalents*) from 1 043m.
* Gold equivalents calculated using a gold price of US$950/oz and copper price of US$2.00/lb
and assuming 100% recovery for all metals.
The intercept correlates with a zone of chalcopyrite and bornite
mineralisation in the porphyry and surrounding metasediment. This
mineralisation in the porphyry and surrounding metasediment. This
hole extends the known porphyry mineralisation significantly outside
the current resource shell. Mineralisation is open at depth and to the
north of this intercept. This intersection continues to support our
Exploration Target of 30 million ounces of gold and 8 million tonnes
of copper.
the current resource shell. Mineralisation is open at depth and to the
north of this intercept. This intersection continues to support our
Exploration Target of 30 million ounces of gold and 8 million tonnes
of copper.
This project is growing with each new drill hole result and we are
confident that this will be a mine.
confident that this will be a mine.
Conclusion
The Company is showing significant progress both in the growth of its
resources as well as its diversity. The key short-term objective for us
is the build up of our production and to get there, the main focus is on
getting the assets, in which we have invested considerable amounts
of cash over the last few years, into full production.
resources as well as its diversity. The key short-term objective for us
is the build up of our production and to get there, the main focus is on
getting the assets, in which we have invested considerable amounts
of cash over the last few years, into full production.
Harmony is a company which has dramatically improved the quality
of its ounces, which will continue to do so with better cash costs and
free cash flow in the future.
of its ounces, which will continue to do so with better cash costs and
free cash flow in the future.
Graham Briggs
Chief Executive Officer
Chief Executive Officer
5
Safety and health
Safety
Safety remains Harmony’s number one priority. We dedicate our time
and resources to ensure that safety-related events are avoided and we
continue to proactively identify potential hazards.
and resources to ensure that safety-related events are avoided and we
continue to proactively identify potential hazards.
Tragically, two fatalities occurred at the South African operations
during the March 2011 quarter. Fall of ground incidents remain the
biggest challenge. Harmony has implemented a formal Ground Control
Strategy, the main objective of which is to formalise and consolidate
all efforts focused on the prevention of fall of ground incidents and
accidents and to promote an even safer and stable underground
environment.
during the March 2011 quarter. Fall of ground incidents remain the
biggest challenge. Harmony has implemented a formal Ground Control
Strategy, the main objective of which is to formalise and consolidate
all efforts focused on the prevention of fall of ground incidents and
accidents and to promote an even safer and stable underground
environment.
The strategy is divided into two main components, being ground
behaviour and ground control, where ground behaviour deals with
the strategic aspects of mine design in order to prevent or minimise
damage to rock surrounding mining excavations. Knowledge of
the mining environment and ground stability together with an
understanding of the in situ and induced stress regimes plays a role
in the ideal plan for each condition. Integration of support systems in
the overall mine design plus the monitoring of the rock mass response
form part of the ground behaviour.
behaviour and ground control, where ground behaviour deals with
the strategic aspects of mine design in order to prevent or minimise
damage to rock surrounding mining excavations. Knowledge of
the mining environment and ground stability together with an
understanding of the in situ and induced stress regimes plays a role
in the ideal plan for each condition. Integration of support systems in
the overall mine design plus the monitoring of the rock mass response
form part of the ground behaviour.
Ground control deals with the operational aspects of the mine with the
objective being to protect personnel and equipment from fall of ground
incidents. It is the hazard identification and treatment system where
support elements, layout standards and procedures are implemented
by means of training, supervision and management systems that
address all requirements.
objective being to protect personnel and equipment from fall of ground
incidents. It is the hazard identification and treatment system where
support elements, layout standards and procedures are implemented
by means of training, supervision and management systems that
address all requirements.
Central to this approach are components that deal with behavioural
aspects, competency training and development, research and new
technologies.
aspects, competency training and development, research and new
technologies.
Harmony achieved a single digit figure in respect of its Lost Time Injury
Frequency Rate (LTIFR) for the tenth consecutive quarter. The year
to date rate improved by 2% when compared to the previous year
(from 7.72 to 7.86), but regressed by 26% quarter on quarter (from
6.88 to 8.65).
Frequency Rate (LTIFR) for the tenth consecutive quarter. The year
to date rate improved by 2% when compared to the previous year
(from 7.72 to 7.86), but regressed by 26% quarter on quarter (from
6.88 to 8.65).
The Reportable Injury Frequency Rate (RIFR) (per million hours worked)
to date rate regressed by 7% when compared to the previous year
(from 4.19 to 4.49) and by 13% quarter on quarter (from 4.08 to 4.62).
to date rate regressed by 7% when compared to the previous year
(from 4.19 to 4.49) and by 13% quarter on quarter (from 4.08 to 4.62).
The Fatal Injury Frequency Rate (FIFR) to date rate improved by 14%
when compared to the previous year (from 0.21 to 0.18) and by 50%
quarter on quarter (from 0.18 to 0.09).
when compared to the previous year (from 0.21 to 0.18) and by 50%
quarter on quarter (from 0.18 to 0.09).
Safety achievements for the quarter included:
Total Harmony surface and
underground operations:
underground operations:
2 000 000 fatality free shifts
South African surface and
underground operations:
underground operations:
1 000 000 fatality free shifts
Kusasalethu:
500 000 fatality free shifts
Evander total operations:
500 000 fatality free shifts
Tshepong:
500 000 fatality free shifts
Target 1:
500 000 fatality free shifts
The following operations completed the March 2011 quarter without
an injury:
an injury:
• Target Plant
• Joel Plant
• Harmony 1 Plant
• Free State Commercial Services and Transport
• Randfontein Commercial Services and Transport
• Evander Workshops
• Randfontein Surface Operations
• Kusasalethu Plant
Health
Our pro-active approach to the health and wellness of our employees
continues and various programmes and initiatives are supported and
sponsored by the company to ensure the wellbeing of our employees.
Our objective remains to improve health management programmes
and effectively utilise clinical information. This includes the review of
policies, procedures and processes, as well as training, on an on-going
basis.
continues and various programmes and initiatives are supported and
sponsored by the company to ensure the wellbeing of our employees.
Our objective remains to improve health management programmes
and effectively utilise clinical information. This includes the review of
policies, procedures and processes, as well as training, on an on-going
basis.
See our Sustainable Development Report for more details on our
website www.harmony.co.za.
website www.harmony.co.za.
6
Results for the third quarter and nine months
ended 31 March 2011
Financial overview
Cash operating profits were stable showing a 1% decrease to
R855 million, as the decrease in revenue was largely offset by a
decrease in production cost.
R855 million, as the decrease in revenue was largely offset by a
decrease in production cost.
Earnings per share
Basic earnings per share decreased from 69 SA cents to 55 SA cents,
while headline earnings per share increased from 69 SA cents to
91 SA cents. Headline earnings are higher than basic earnings as the
impairment charge on associates is added back.
while headline earnings per share increased from 69 SA cents to
91 SA cents. Headline earnings are higher than basic earnings as the
impairment charge on associates is added back.
Revenue
Revenue decreased from R2 990 million to R2 949 million as a result
of the lower gold sales volume. The decrease was partially offset
by an increase in the Rand gold price received from R303 354/kg
to R312 029/kg.
of the lower gold sales volume. The decrease was partially offset
by an increase in the Rand gold price received from R303 354/kg
to R312 029/kg.
Cost of sales
Cost of sales increased from R2 506 million to R2 623 million in
the March 2011 quarter. The amount reported in the December
2010 quarter included an insurance credit of R179 million related
to the unwinding of the previous insurance scheme, which was a
once-off entry. Production costs and employment and restructuring
costs decreased in the March 2011 quarter, resulting in a saving
of R57 million.
the March 2011 quarter. The amount reported in the December
2010 quarter included an insurance credit of R179 million related
to the unwinding of the previous insurance scheme, which was a
once-off entry. Production costs and employment and restructuring
costs decreased in the March 2011 quarter, resulting in a saving
of R57 million.
Impairment of investment in associate
On 28 April 2011, Gold One International (Gold One) and Rand Uranium
(Proprietary) Limited (Rand Uranium) announced that the shareholders
of Rand Uranium have accepted an offer by Gold One for the shares in
Rand Uranium. Harmony holds 40% in Rand Uranium. The investment
has been classified as held for sale on the balance sheet and an
impairment of R160 million was recognised as the carrying value was
in excess of the expected proceeds.
(Proprietary) Limited (Rand Uranium) announced that the shareholders
of Rand Uranium have accepted an offer by Gold One for the shares in
Rand Uranium. Harmony holds 40% in Rand Uranium. The investment
has been classified as held for sale on the balance sheet and an
impairment of R160 million was recognised as the carrying value was
in excess of the expected proceeds.
Investment income
Included in the amount for the March 2011 quarter is an amount
of R43 million relating to interest and interest refunds from the
South African Revenue Service (SARS).
of R43 million relating to interest and interest refunds from the
South African Revenue Service (SARS).
Taxation
The taxation credit of R297 million includes a deferred tax credit of
R333 million. SARS previously disallowed Freegold’s “post 1973
gold mine” additional capital allowance claim, and also disallowed
Freegold’s application of mining ringfencing. The disputed matters
were set down to be heard in the Income Tax Court of Johannesburg
on 14 March 2011, but SARS withdrew the additional capital allowance
claim on 10 March 2011, conceding that the Freegold operations are
entitled to claim this capital allowance. The inclusion of the capital
allowance caused an increase in the deferred tax asset on the balance
sheet and the resulting credit in the income statement.
R333 million. SARS previously disallowed Freegold’s “post 1973
gold mine” additional capital allowance claim, and also disallowed
Freegold’s application of mining ringfencing. The disputed matters
were set down to be heard in the Income Tax Court of Johannesburg
on 14 March 2011, but SARS withdrew the additional capital allowance
claim on 10 March 2011, conceding that the Freegold operations are
entitled to claim this capital allowance. The inclusion of the capital
allowance caused an increase in the deferred tax asset on the balance
sheet and the resulting credit in the income statement.
Capital expenditure
Capital expenditure decreased from R835 million in the December 2010
quarter to R667 million for the March 2011 quarter.
quarter to R667 million for the March 2011 quarter.
Trade and other receivables – current
The balance at March 2011 includes an amount of R409 million owed
by SARS for VAT refunds. An amount of R200 million was overdue at
31 March 2011, the majority of which has been refunded subsequent
to balance sheet date.
by SARS for VAT refunds. An amount of R200 million was overdue at
31 March 2011, the majority of which has been refunded subsequent
to balance sheet date.
Borrowings
During the March 2011 quarter, R250 million was drawn from the
Nedbank facility. The undrawn facility at balance sheet date was
R300 million.
Nedbank facility. The undrawn facility at balance sheet date was
R300 million.
Operational overview
Group operational results
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
4 646
4 675
(1)
Grade
g/t
2.06
2.11
(2)
Gold produced
kg
9 857
10 055
(2)
Gold sold
kg
9 716
10 046
(3)
Cash operating costs
R/kg
217 802
216 595
(1)
Operating profit
R’000
855 078
867 489
(1)
Quarter on quarter Harmony continued to control its cash cost, which
resulted in a saving of R48 million. Lower production was due to the
Christmas break, under-performance at Bambanani, Masimong, Unisel,
Phakisa, a plant breakdown at Doornkop and the belt breakage of the
conveying circuit at Hidden Valley.
resulted in a saving of R48 million. Lower production was due to the
Christmas break, under-performance at Bambanani, Masimong, Unisel,
Phakisa, a plant breakdown at Doornkop and the belt breakage of the
conveying circuit at Hidden Valley.
Build-up and steady operations
SOUTH AFRICA
Doornkop
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
173
171
1
Grade
g/t
3.30
3.76
(12)
Gold produced
kg
571
643
(11)
Cash operating costs
R/kg
229 447
229 894
–
Operating profit
R’000
46 314
44 938
3
Tonnes milled at Doornkop improved slightly by 1% quarter on quarter,
with more square metres being broken. The Doornkop plant
experienced breakdowns, mainly due to a breakdown on the stream
thickener. The plant is currently under “intensive care” to ensure that
its efficiency and availability are improved.
with more square metres being broken. The Doornkop plant
experienced breakdowns, mainly due to a breakdown on the stream
thickener. The plant is currently under “intensive care” to ensure that
its efficiency and availability are improved.
7
The plant breakdown resulted in an 11% decrease in gold production.
Cash operating costs remained stable at R229 447/kg, despite a
decrease in production, whilst the operating profit improved by 3%
to R46 million.
decrease in production, whilst the operating profit improved by 3%
to R46 million.
Kusasalethu
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
297
228
30
Grade
g/t
4.93
4.59
7
Gold produced
kg
1 464
1 046
40
Cash operating costs
R/kg
200 579
274 201
27
Operating profit
R’000
146 982
40 192
>100
Kusasalethu recovered well after the previous quarter’s lower
performance following the shaft accident, with a 30% increase
in tonnes milled quarter on quarter to 297 000 tonnes. The grade
increased by 7% to 4.93g/t, as a result of the improved face grade and
improved mine call factor.
performance following the shaft accident, with a 30% increase
in tonnes milled quarter on quarter to 297 000 tonnes. The grade
increased by 7% to 4.93g/t, as a result of the improved face grade and
improved mine call factor.
Cash operating costs decreased by 27% to R200 579/kg, with a
substantial increase in operating profit to R147 million.
substantial increase in operating profit to R147 million.
Phakisa
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
88
107
(18)
Grade
g/t
4.64
4.72
(2)
Gold produced
kg
408
505
(19)
Cash operating costs
R/kg
286 765
221 491
(30)
Operating profit
R’000
9 674
43 769
(78)
Phakisa had a challenging quarter with volumes down by 18% quarter
on quarter at 88 000 tonnes milled, resulting in a 19% decrease in
gold production to 408kg. Stoppages at this mine, due to ice plant
difficulties and settler failure at Nyala, resulted in lower production
and a decrease in operating profit to R10 million. Cash operating
cost increased to R286 765/kg, compared to the R221 491/kg in the
previous quarter.
on quarter at 88 000 tonnes milled, resulting in a 19% decrease in
gold production to 408kg. Stoppages at this mine, due to ice plant
difficulties and settler failure at Nyala, resulted in lower production
and a decrease in operating profit to R10 million. Cash operating
cost increased to R286 765/kg, compared to the R221 491/kg in the
previous quarter.
Masimong
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
216
219
(1)
Grade
g/t
4.81
5.26
(9)
Gold produced
kg
1 039
1 151
(10)
Cash operating costs
R/kg
175 496
168 907
(4)
Operating profit
R’000
140 570
160 961
(13)
Masimong’s tonnes milled for the quarter remained fairly steady
with a 1% decline in volumes to 216 000 tonnes. Lower recovery
grades of 4.81g/t resulted in a 10% reduction in gold production
quarter on quarter.
with a 1% decline in volumes to 216 000 tonnes. Lower recovery
grades of 4.81g/t resulted in a 10% reduction in gold production
quarter on quarter.
The cash operating costs were well controlled despite the lower
production and showed only a 4% increase to R175 496/kg.
production and showed only a 4% increase to R175 496/kg.
Target 1
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
161
196
(18)
Grade
g/t
4.88
4.41
11
Gold produced
kg
785
865
(9)
Cash operating costs
R/kg
203 459
191 083
(7)
Operating profit
R’000
59 007
98 380
(40)
Gold production at Target 1 decreased by 9%, as a result of 18% less
tonnes milled during the quarter, mainly due to problems experienced
with the decline belt which resulted in unplanned stoppages. A new
belt has been ordered. However, it is anticipated that the delay in
having the belt delivered may have an effect on Target’s fourth quarter
production.
tonnes milled during the quarter, mainly due to problems experienced
with the decline belt which resulted in unplanned stoppages. A new
belt has been ordered. However, it is anticipated that the delay in
having the belt delivered may have an effect on Target’s fourth quarter
production.
Cash operating costs were 7% higher quarter on quarter at
R203 459/kg, as a result of lower production.
The grade increased by 11% compared to the previous quarter.
Target 3
March
December
%
Indicator
Unit
2011
2010
variance
Gold produced
kg
250
170
47
Build-up at the shaft continued this quarter, with a 47% increase in
gold production to 250kg. The extensive infrastructure improvements
will result in further improvements in gold production.
gold production to 250kg. The extensive infrastructure improvements
will result in further improvements in gold production.
Tshepong
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
333
345
(3)
Grade
g/t
5.04
4.72
7
Gold produced
kg
1 679
1 628
3
Cash operating costs
R/kg
170 662
176 052
3
Operating profit
R’000
236 045
212 948
11
Tshepong had a pleasing quarter with a production increase of 3%,
supported by an increase in the recovery grade of 7% to 5.04g/t in
comparison to the December 2010 quarter of 4.72g/t. Tshepong
is the lowest cost producer in the company for the quarter at
supported by an increase in the recovery grade of 7% to 5.04g/t in
comparison to the December 2010 quarter of 4.72g/t. Tshepong
is the lowest cost producer in the company for the quarter at
R170 662/kg and contributed 11% more in operating profit quarter on
quarter at R236 million.
quarter at R236 million.
8
Results for the third quarter and nine months
ended 31 March 2011
INTERNATIONAL
Hidden Valley
(held in Morobe Mining Joint Venture – 50% of attributable production
reflected)
reflected)
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
407
425
(4)
Grade
g/t
1.95
1.95
–
Gold produced
kg
794
827
(4)
Cash operating costs
R/kg
216 981
195 605
(11)
Operating profit
R’000
83 202
99 265
(16)
Hidden Valley’s grade remained stable at 1.95g/t. Volumes were 4% down
due to less tonnes milled during the quarter, resulting in gold production
being 4% lower quarter on quarter at 794kg. Silver production, which is
treated as a credit to cash operating cost, decreased by 20% to 4 704kg
compared to 5 951kg in the previous quarter.
due to less tonnes milled during the quarter, resulting in gold production
being 4% lower quarter on quarter at 794kg. Silver production, which is
treated as a credit to cash operating cost, decreased by 20% to 4 704kg
compared to 5 951kg in the previous quarter.
Lower volumes and production were due to the poor performance
and the belt breakage of the Hidden Valley conveying circuit. Process
plant throughput declined as a result of this constraint to supply ore to
the Hidden Valley pit. In order to mitigate the impact of the conveyor
outage during the quarter, additional contractor haulage trucks were
mobilised and assigned to haul ore from the Hidden Valley stockpile to
the Hamata stockpile.
and the belt breakage of the Hidden Valley conveying circuit. Process
plant throughput declined as a result of this constraint to supply ore to
the Hidden Valley pit. In order to mitigate the impact of the conveyor
outage during the quarter, additional contractor haulage trucks were
mobilised and assigned to haul ore from the Hidden Valley stockpile to
the Hamata stockpile.
The cost of trucking ore to the plant and lower production resulted in
higher cash operating costs of R216 981/kg. The conveyor belt issue
may affect the fourth quarter production.
higher cash operating costs of R216 981/kg. The conveyor belt issue
may affect the fourth quarter production.
Hidden Valley mine is now connected to the PNG Power Ltd grid
and is receiving up to 10MW of grid power (more than 60% of total
requirements), reducing demand on the site’s diesel-fired power station.
and is receiving up to 10MW of grid power (more than 60% of total
requirements), reducing demand on the site’s diesel-fired power station.
Other underground South African operations
Bambanani
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
81
104
(22)
Grade
g/t
6.90
7.27
(5)
Gold produced
kg
559
756
(26)
Cash operating costs
R/kg
333 259
260 147
(28)
Operating profit
R’000
(12 961)
34 468
(>100)
Bambanani had another disappointing quarter. Gold production
decreased by 26% to 559kg. Cash operating costs were 28% higher at
R333 259/kg, as a result of lower production.
decreased by 26% to 559kg. Cash operating costs were 28% higher at
R333 259/kg, as a result of lower production.
Short interval control processes have been re-introduced at Bambanani
to address deficiencies and ineffectiveness at the operation.
to address deficiencies and ineffectiveness at the operation.
Steyn 2
March
December
%
Indicator
Unit
2011
2010
variance
Gold produced
kg
14
18
(22)
Most of the quarter at Steyn 2 was spent on maintenance of equipment
and addressing operational challenges. At the beginning of April 2011
production on all the available faces started and some revenue will be
generated in the fourth quarter of FY11.
and addressing operational challenges. At the beginning of April 2011
production on all the available faces started and some revenue will be
generated in the fourth quarter of FY11.
Evander
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
130
139
(7)
Grade
g/t
3.72
3.72
–
Gold produced
kg
483
517
(7)
Cash operating costs
R/kg
298 153
300 698
1
Operating profit/(loss)
R’000
7 304
1 330
>100
Evander increased its operating profit to R7 million by managing its
cash operating costs and keeping it stable at R298 153/kg, despite
lower tonnes and lower kilograms produced for the quarter. Several
panels were stopped due to low grade and eight crews in the decline
were moved to higher grade areas to improve the average mining
grade. This had an adverse effect on the square metres mined and the
volumes mined, but improved the average mining grade.
cash operating costs and keeping it stable at R298 153/kg, despite
lower tonnes and lower kilograms produced for the quarter. Several
panels were stopped due to low grade and eight crews in the decline
were moved to higher grade areas to improve the average mining
grade. This had an adverse effect on the square metres mined and the
volumes mined, but improved the average mining grade.
Mining is now taking place further away from the edge of the payshoot
with more consistent grade distribution. Stoping crews on the decline
are set to deliver improved results in the June quarter.
with more consistent grade distribution. Stoping crews on the decline
are set to deliver improved results in the June quarter.
Joel
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
118
128
(8)
Grade
g/t
3.77
3.19
18
Gold produced
kg
445
408
9
Cash operating costs
R/kg
238 256
276 787
14
Operating (loss)/profit
R’000
30 997
2 127
>100
Gold production increased by 9% to 445kg, mainly due to the 18%
uplift in grade to 3.77g/t, supported by improvements in the belt grade.
Despite lower volumes at 118 000 tonnes, gold production increased
by 9% to 445 kg, mainly as a result of the increase in grade.
uplift in grade to 3.77g/t, supported by improvements in the belt grade.
Despite lower volumes at 118 000 tonnes, gold production increased
by 9% to 445 kg, mainly as a result of the increase in grade.
Cash operating costs were 14% lower at R238 256/kg. Higher
production resulted in operating profit increasing to R31 million.
production resulted in operating profit increasing to R31 million.
Unisel
(only operational shaft remaining under the Virginia operations)
March
December
%
Indicator
Units
2011
2010
variance
Tonnes milled
000
104
122
(15)
Grade
g/t
4.49
4.64
(3)
Gold produced
kg
467
566
(18)
Cash operating costs
R/kg
227 266
197 512
(15)
Operating profit
R’000
38 814
51 426
(25)
Unisel produced results slightly below its plan with lower production
at 467kg, compared to the 566kg of the previous quarter, mainly due
to less tonnes milled and a decline in the grade of 3% to 4.49g/t.
at 467kg, compared to the 566kg of the previous quarter, mainly due
to less tonnes milled and a decline in the grade of 3% to 4.49g/t.
The cash operating costs increased by 15% to R227 266/kg due to
lower outputs.
lower outputs.
9
Total South African surface operations
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
2 538
2 491
2
Grade
g/t
0.35
0.38
(8)
Gold produced
kg
899
955
(6)
Gold sold
kg
880
898
(2)
Cash operating costs
R/kg
227 335
215 422
(6)
Operating profit
R’000
69 130
77 685
(11)
Tonnes mined increased by 2% for the quarter, but the lower grade
recovery grade of 0.35g/t resulted in a 6% decline in gold production.
The cash operating costs were 6% higher as a result and operating
profit was 11% lower at R69 million.
recovery grade of 0.35g/t resulted in a 6% decline in gold production.
The cash operating costs were 6% higher as a result and operating
profit was 11% lower at R69 million.
Kalgold
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
373
413
(10)
Grade
g/t
0.74
0.82
(10)
Gold produced
kg
276
339
(19)
Cash operating costs
R/kg
231 188
246 475
6
Operating profit
R’000
19 740
16 976
16
Volumes declined by 10%, due to the mill standing for six days as a
mill bearing had to be replaced. Grade was 10% lower as a result of a
decrease in waste stripping in the pit, resulting in less volumes being
moved and a 19% decrease in gold production to 276kg. The cash
operating cost decreased by 6% quarter on quarter to R231 188/kg,
mainly due to less volumes being mined.
mill bearing had to be replaced. Grade was 10% lower as a result of a
decrease in waste stripping in the pit, resulting in less volumes being
moved and a 19% decrease in gold production to 276kg. The cash
operating cost decreased by 6% quarter on quarter to R231 188/kg,
mainly due to less volumes being mined.
Phoenix (tailings)
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
1 242
1 266
(2)
Grade
g/t
0.12
0.11
9
Gold produced
kg
149
138
8
Cash operating costs
R/kg
259 966
241 659
(8)
Operating profit
R’000
12 508
8 728
43
Higher operational profit of R13 million was supported by higher
production at 149kg, resulting from a 9% increase in grade. Cash
operating unit cost were higher at R259 966/kg.
production at 149kg, resulting from a 9% increase in grade. Cash
operating unit cost were higher at R259 966/kg.
Surface dumps
March
December
%
Indicator
Units
2011
2010
variance
Tonnes
000
923
812
14
Grade
g/t
0.51
0.59
(14)
Gold produced
Kg
474
478
(1)
Cash operating costs
R/kg
214 833
185 824
(16)
Operating profit
R’000
36 882
51 981
(29)
The surface dumps managed to treat 14% more tonnes during the
quarter, and despite a decrease in recovery grade at 0.51g/t, gold
production remained fairly stable. The cash operating costs were
higher at R214 833/kg, with operating profit subsequently lower
quarter, and despite a decrease in recovery grade at 0.51g/t, gold
production remained fairly stable. The cash operating costs were
higher at R214 833/kg, with operating profit subsequently lower
at R37 million.
10
Results for the third quarter and nine months
ended 31 March 2011
Development
Note:
The ore reserve block grades reflect the grades of the blocks in the life-of-mine plans for the various operations. These blocks are to a large degree the blocks
above a certain cut-off grade that has been targeted for mining. The development grades are those as sampled in the ongoing on-reef development at the
operations and no selectivity has been applied from a grade point of view.
Ore reserve block grade (cmg/t)
Rolling 4 quarter average development grade (cmg/t)
Current quarter average development grade (cmg/t)
Bambanani
In the southern part of the mine, development grades are lower than in
the previous quarter, while in the shaft pillar the grade remains above
3 000cmg/t – in line with expectations.
the previous quarter, while in the shaft pillar the grade remains above
3 000cmg/t – in line with expectations.
Doornkop
The South Reef development grades are mostly in line with expectations
with some areas showing better than expected grades. No on-reef
development was planned for the Kimberly Reef.
with some areas showing better than expected grades. No on-reef
development was planned for the Kimberly Reef.
Evander 8
Almost all on-reef development is now concentrated on the Kinross
payshoot in the decline area of the mine and the grades sampled are
good and in line with expectations.
payshoot in the decline area of the mine and the grades sampled are
good and in line with expectations.
Joel
As expected, there was a quarter on quarter improvement in the
development grades. Grades remain good in the winzes, being
developed from 121 level to 129 level in the very prospective north
western portion of the mine.
development grades. Grades remain good in the winzes, being
developed from 121 level to 129 level in the very prospective north
western portion of the mine.
Kusasalethu
On-reef development returned grades that are in line with the overall
ore body grade and also as predicted for the areas that are being
developed.
ore body grade and also as predicted for the areas that are being
developed.
Masimong
There was a quarter on quarter drop in the grade for both the Basal
and B reef development. The drop in grade on the Basal reef is due to
the intersection of a sill that affects the reef on the eastern side of the
mine. On the B reef, most of the on-reef development is still in areas
outside of the main B reef channels.
and B reef development. The drop in grade on the Basal reef is due to
the intersection of a sill that affects the reef on the eastern side of the
mine. On the B reef, most of the on-reef development is still in areas
outside of the main B reef channels.
Phakisa
Most of the development at Phakisa is taking place in the lower grade
central block with its very erratic nature in terms of grade. However,
positive grade trends are emerging from the development towards the
north, as expected, which has resulted in a quarter on quarter increase
in the development grade at the mine.
central block with its very erratic nature in terms of grade. However,
positive grade trends are emerging from the development towards the
north, as expected, which has resulted in a quarter on quarter increase
in the development grade at the mine.
Target (narrow reef mining)
At the Target 1 shaft, there was a decrease in development grade
quarter on quarter as a result of the development advancing away
from the higher grade sub-outcrop area on the Dreyerskuil reefs
into the Elsburgh conglomerates. It is important to note that this is
not representative of the Target 1 shaft as a whole as it excludes the
massive mining as well as the raises developed for rock engineering
requirements.
quarter on quarter as a result of the development advancing away
from the higher grade sub-outcrop area on the Dreyerskuil reefs
into the Elsburgh conglomerates. It is important to note that this is
not representative of the Target 1 shaft as a whole as it excludes the
massive mining as well as the raises developed for rock engineering
requirements.
At the recently restarted Target 3 shaft, there has been an improvement
in both grade and metres quarter on quarter with the start-up of more
development ends.
in both grade and metres quarter on quarter with the start-up of more
development ends.
Tshepong
In general lower than expected grades were sampled for most of the
Basal reef raises while the B reef continued to yield positive results in
the areas that has been targeted.
Basal reef raises while the B reef continued to yield positive results in
the areas that has been targeted.
Virginia (Unisel)
At Unisel, the development grades of all the reefs being developed
(Leader, Basal and Middle reefs) were in line with expectations and
showed an improvement quarter on quarter.
(Leader, Basal and Middle reefs) were in line with expectations and
showed an improvement quarter on quarter.
Ore reserve block grades v development grades
11
Exploration
International (Papua New Guinea)
Morobe Mining Joint Venture (50% Harmony)
Wafi-Golpu
Drilling at the Wafi-Golpu project in Papua New Guinea (PNG) has
indicated further significant exploration intersections at Golpu.
Golpu is a copper-gold porphyry deposit. The best intersections are
listed below.
indicated further significant exploration intersections at Golpu.
Golpu is a copper-gold porphyry deposit. The best intersections are
listed below.
Hole_ID
Target
Depth
Width
Au g/t
(m)
(m)
Cu %
Au g/t
equivalent*
WR361
Golpu
446 186
2.01
0.35
3.25
WR362
Golpu
160 274
1.07
0.29
1.83
WR359
Golpu
1017
860
1.37
0.70
2.68
WR363
Golpu
914 595
2.03
1.65
4.58
WR377
Golpu
913 883
2.15
2.23
5.33
* Based on gold price of US$950/oz and copper price of US$ 2/lb
During the quarter the results of the spectacular WR377 drill hole was
released as 883m @ 2.15% Cu and 2.23g/t Au (5.33g/t Au equivalents*)
from 913m including 628m @ 2.82% Cu and 3.06g/t Au (7.13g/t Au
equivalents*) from 1 043m.
released as 883m @ 2.15% Cu and 2.23g/t Au (5.33g/t Au equivalents*)
from 913m including 628m @ 2.82% Cu and 3.06g/t Au (7.13g/t Au
equivalents*) from 1 043m.
Drilling has identified a new prospect to the west of Golpu with drill
hole WR392 returning 85m @ 3.18 g/t Au from 302m. All assays for
this hole have not yet been received. Geochemistry and alteration
indicate it is part of a high sulphidation system. The intercept is more
than 300m from any known mineralised system. The orientation of the
mineralisation is not known.
hole WR392 returning 85m @ 3.18 g/t Au from 302m. All assays for
this hole have not yet been received. Geochemistry and alteration
indicate it is part of a high sulphidation system. The intercept is more
than 300m from any known mineralised system. The orientation of the
mineralisation is not known.
Drilling results from Golpu during the quarter have confirmed and
extended the mineralisation 125m north from the 21125N section as
well as indicating that the best grades seen to date are found north of
21125N. Golpu remains open to the north and at depth.
extended the mineralisation 125m north from the 21125N section as
well as indicating that the best grades seen to date are found north of
21125N. Golpu remains open to the north and at depth.
The pre-feasibility study is well on track and planned completion is
at the end of the 2011 calendar year. Drilling activities continued this
quarter, with five rigs that drilled 11 356 metres targeting infill and
extensions of Golpu, drill holes to gain samples for metallurgical testing
of Wafi and geotechnical information for the Watut decline path.
at the end of the 2011 calendar year. Drilling activities continued this
quarter, with five rigs that drilled 11 356 metres targeting infill and
extensions of Golpu, drill holes to gain samples for metallurgical testing
of Wafi and geotechnical information for the Watut decline path.
Wafi Structural corridor
Morobe Mining Joint Venture Land Position (Harmony 50%)
12
Results for the third quarter and nine months
ended 31 March 2011
Exploration along the Wafi corridor focused on prospect development
work at Zimake and Mt Tonn with 795 surface samples collected during
the quarter:
work at Zimake and Mt Tonn with 795 surface samples collected during
the quarter:
Zimake (EL1590)
The Zimake target is a circular magnetic anomaly approximately
5km x 6km. Historic pan concentrate samples from the target area
contain anomalous grades of up to 7.9ppm Au. Reconnaissance field
work commenced during the quarter included mapping and rock chip
sampling and ridge and spur soil sampling. Initial observations have
been encouraging with alluvial gold workings mapped in association
5km x 6km. Historic pan concentrate samples from the target area
contain anomalous grades of up to 7.9ppm Au. Reconnaissance field
work commenced during the quarter included mapping and rock chip
sampling and ridge and spur soil sampling. Initial observations have
been encouraging with alluvial gold workings mapped in association
with both propylitic and phyllic altered sedimentary rocks, adjacent
a granodiorite contact. Fieldwork is continuing to the north where
alteration intensity appears to become more intense. Rock chip and
surface sample results are pending.
a granodiorite contact. Fieldwork is continuing to the north where
alteration intensity appears to become more intense. Rock chip and
surface sample results are pending.
Mt Tonn (EL1316)
Grid based sampling results were received during the quarter and have
been encouraging. The anomaly remains open to the south off the grid,
and has distinctly elevated copper assays. Mapping showed strong
pervasive biotite-chlorite alteration with weak to moderate fracturing
and weak disseminated quartz-carbonate and/or pyrite veining.
been encouraging. The anomaly remains open to the south off the grid,
and has distinctly elevated copper assays. Mapping showed strong
pervasive biotite-chlorite alteration with weak to moderate fracturing
and weak disseminated quartz-carbonate and/or pyrite veining.
Wafi transfer zone – an emerging mineral district
Wafi-Golpu Project*
4.8Mt Cu. 16 Moz Au. 55 Kt
13
PNG Exploration (Harmony 100%)
Hidden Valley satellite deposit exploration
Work to delineate additional resources around Hidden Valley has
focussed on 3 main prospect areas:
• Avina magnetic target surface sampling
• Mungowe prospect mapping and surface sampling
• Kulang prospect drilling
Avina Magnetic Target (ML151)
Project generation work identified a magnetic target immediately
south of the Yafo-Avina prospect on the Hidden Valley ML. Ridge and
spur soil geochemistry obtained elevated zinc values peripheral to the
magnetic target, suggesting potential for a porphyry system at depth.
Preliminary gold assays were received and show a high order gold
anomaly north of the Yafo prospect drilling, with assay values up to
3.64 g/t Au. The anomaly is over 200m long approximately 100m wide
(roughly parallel with the Hamata oreody) and remains open off the
grid. Further work to scope out the size potential is underway.
Mungowe prospect (EL497)
The Mungowe prospect lies 6 km to 8 km northeast of the Hamata
Processing plant and represents an area of high order stream sediment
anomalism. Systematic field mapping at 1: 2 500 scale at Mungowe
commenced on 18 March 2011. Initial work has concentrated on areas
along the mine access road southwest of the Eddie Creek, but will
extend west to include mapping and sampling of the surrounding
drainages. Three kilometres of mapping was completed at Mungowe.
commenced on 18 March 2011. Initial work has concentrated on areas
along the mine access road southwest of the Eddie Creek, but will
extend west to include mapping and sampling of the surrounding
drainages. Three kilometres of mapping was completed at Mungowe.
Kulang prospect (EL497)
First pass drilling at Kulang prospect (located 4km north-northeast
of Kerimenge) comprised six holes (2 929m). The drilling forms part
of a broader programme to explore a major clay-pyrite alteration
zone extending over 5km from the Kerimenge prospect in the south,
to the Kulang prospect in the north. At the Kulang prospect, drilling
was designed to test outcropping carbonate base-metal veins with
anomalous surface gold geochemistry.
of Kerimenge) comprised six holes (2 929m). The drilling forms part
of a broader programme to explore a major clay-pyrite alteration
zone extending over 5km from the Kerimenge prospect in the south,
to the Kulang prospect in the north. At the Kulang prospect, drilling
was designed to test outcropping carbonate base-metal veins with
anomalous surface gold geochemistry.
Although no ore grade intercepts have been obtained to date,
preliminary gold results for the first four holes indicate widespread Au
anomalism associated with colloform-banded quartz, rhodochrosite,
and base metal sulphide veins.
preliminary gold results for the first four holes indicate widespread Au
anomalism associated with colloform-banded quartz, rhodochrosite,
and base metal sulphide veins.
Morobe Coast EL1403
In the Siu-Yagen area, grid based soil sampling was completed over a
3.6km
3.6km
2
area to test the potential of an argillic alteration associated with
a diorite intrusive.
14
Results for the third quarter and nine months
ended 31 March 2011
Amanab project (EL1708)
Results from soil samples obtained in the previous quarter within
the Yup River East prospect area has identified a 2 by 1km2 zone of
anomalous gold within the exposed Amanab Metadiorite basement
(gold to +100ppb).
the Yup River East prospect area has identified a 2 by 1km2 zone of
anomalous gold within the exposed Amanab Metadiorite basement
(gold to +100ppb).
No fieldwork was undertaken during the quarter. A desktop review was
completed to assess the merits of the Yup River East target and to
identify any other potential zones of interest. A regional-scale thrust
within the Biaka area, coincident with an 8km x 2km zone of gold
anomalous stream geochemistry, was identified as a potential source
for observed alluvial gold, using a structurally controlled vein gold
model. A compulsory 50% reduction was also prepared and submitted
to the department as part of the desktop review process. Fieldwork
scheduled for the next quarter will focus on reconnaissance mapping
within the Biaka and eastern Yup River East targets.
completed to assess the merits of the Yup River East target and to
identify any other potential zones of interest. A regional-scale thrust
within the Biaka area, coincident with an 8km x 2km zone of gold
anomalous stream geochemistry, was identified as a potential source
for observed alluvial gold, using a structurally controlled vein gold
model. A compulsory 50% reduction was also prepared and submitted
to the department as part of the desktop review process. Fieldwork
scheduled for the next quarter will focus on reconnaissance mapping
within the Biaka and eastern Yup River East targets.
Mount Hagen Project (EL1611 & EL1596)
Exploration activities for the current quarter focused on ridge and
spur soil sampling and detailed mapping at the Kurunga and Bakil
prospects. Preliminary soil sampling and reconnaissance mapping was
also completed at the Penamb prospect, a potential Cu-Au porphyry
system hosted within the Kurunga Intrusive Complex, 3.5km southeast
of Kurunga. A total of 1 731 soil and rock chip samples were taken.
spur soil sampling and detailed mapping at the Kurunga and Bakil
prospects. Preliminary soil sampling and reconnaissance mapping was
also completed at the Penamb prospect, a potential Cu-Au porphyry
system hosted within the Kurunga Intrusive Complex, 3.5km southeast
of Kurunga. A total of 1 731 soil and rock chip samples were taken.
Kurunga prospect
Results received from surface sampling at Kurunga East have outlined
3 discrete Cu anomalies (+320 ppm) roughly 500m – 700m diameter.
The anomalies sit in close proximity within a 2.5 by 1.5km area, east of
the outcropping magnetite skarns at Kurunga. The Kurunga anomaly
displays well-developed metal zonation, with a major Cu zone
containing patchy but high tenor (+100ppb) Au anomalism. Peak values
of 0.14% Cu, and 0.34 g/t Au were recorded. The central Cu-Au zone is
surrounded by distal Zn-Pb anomalism.
3 discrete Cu anomalies (+320 ppm) roughly 500m – 700m diameter.
The anomalies sit in close proximity within a 2.5 by 1.5km area, east of
the outcropping magnetite skarns at Kurunga. The Kurunga anomaly
displays well-developed metal zonation, with a major Cu zone
containing patchy but high tenor (+100ppb) Au anomalism. Peak values
of 0.14% Cu, and 0.34 g/t Au were recorded. The central Cu-Au zone is
surrounded by distal Zn-Pb anomalism.
Detailed mapping indicates that Cu anomalism is related to structurally-
controlled phyllic alteration (quartz-pyrite-sericite), epithermal veins
and a diffuse quartz-pyrite ± chalcopyrite vein stockwork within the
mid-Miocene Kimil Diorite. Single, 600m diamond holes have been
planned to intersect the central zone of each of the three main copper
anomalies (total 1 800m), due to start in the first half of April 2011.
controlled phyllic alteration (quartz-pyrite-sericite), epithermal veins
and a diffuse quartz-pyrite ± chalcopyrite vein stockwork within the
mid-Miocene Kimil Diorite. Single, 600m diamond holes have been
planned to intersect the central zone of each of the three main copper
anomalies (total 1 800m), due to start in the first half of April 2011.
Bakil prospect
Infill ridge and spur soil sampling over the Bakil copper anomaly was
completed during the quarter (596 samples). Results received were low
order compared to the Kurunga anomaly, but regionally significant zinc
anomalism combined with the mapped zoned propyllitic and argillic
alteration indicates that the system is exposed at a high level relative
to the interpreted porphyry system at depth.
completed during the quarter (596 samples). Results received were low
order compared to the Kurunga anomaly, but regionally significant zinc
anomalism combined with the mapped zoned propyllitic and argillic
alteration indicates that the system is exposed at a high level relative
to the interpreted porphyry system at depth.
Penamb prospect
The Penamb prospect is located approximately 3.5km southeast
of Kurunga camp. Ridge and spur soil sampling (165 samples) and
reconnaissance mapping was completed on the western half of
the Penamb mountain. Assay results are pending. Preliminary field
observations combined with historic data indicate the presence of a
of Kurunga camp. Ridge and spur soil sampling (165 samples) and
reconnaissance mapping was completed on the western half of
the Penamb mountain. Assay results are pending. Preliminary field
observations combined with historic data indicate the presence of a
fertile Cu-Au porphyry system with significant phyllic and propyllitic
alteration zones within the main Penamb creek and along several
ridges. Several float samples from Penamb creek contain outer
potassic alteration assemblages (secondary biotite and minor
potassium feldspar). Stream and ridge mapping will commence in the
next quarter, combined with soil sampling of the eastern half of the
mountain.
alteration zones within the main Penamb creek and along several
ridges. Several float samples from Penamb creek contain outer
potassic alteration assemblages (secondary biotite and minor
potassium feldspar). Stream and ridge mapping will commence in the
next quarter, combined with soil sampling of the eastern half of the
mountain.
Note:
The technical information was compiled by Greg Job,
Harmony’s New Business Executive for South-East Asia, who
has the overall responsibility and accountability for the Golpu
project, in terms of the South African Code for the Reporting
of Exploration Results, Mineral Resources and Ore Reserves
(SAMREC) 2007. Mr Job has 21 years’ experience in mine and
resource geology and is a member of the Australian Institute of
Mining and Metallurgy. He is a full time employee of Harmony
and qualifies as Competent Person as defined in the SAMREC
Code and the Australian Code for Reporting Exploration
Results, Mineral Resources and Ore Reserves (JORC). Mr Job
has consented to the inclusion of the exploration details based
on the information in the form and context in which it appears.
has the overall responsibility and accountability for the Golpu
project, in terms of the South African Code for the Reporting
of Exploration Results, Mineral Resources and Ore Reserves
(SAMREC) 2007. Mr Job has 21 years’ experience in mine and
resource geology and is a member of the Australian Institute of
Mining and Metallurgy. He is a full time employee of Harmony
and qualifies as Competent Person as defined in the SAMREC
Code and the Australian Code for Reporting Exploration
Results, Mineral Resources and Ore Reserves (JORC). Mr Job
has consented to the inclusion of the exploration details based
on the information in the form and context in which it appears.
South Africa
Uranium Project Tshepong, Phakisa, Masimong Project (TPM)
TPM evaluates the potential for the economic recovery of uranium from
the ore mined at the Tshepong, Phakisa and Masimong operations in
the Free State. The project will produce an average of 600 000 lbs of
uranium per annum from 280 000 tonnes per month of underground
ore from Tshepong, Phakisa and Masimong over an 18 year life. The
processing of the uranium enhances the gold recovery resulting in
increased gold production from these operations. When the uranium is
treated as a by-product and therefore a credit to costs, operating costs
of the contributing shafts will be reduced.
the ore mined at the Tshepong, Phakisa and Masimong operations in
the Free State. The project will produce an average of 600 000 lbs of
uranium per annum from 280 000 tonnes per month of underground
ore from Tshepong, Phakisa and Masimong over an 18 year life. The
processing of the uranium enhances the gold recovery resulting in
increased gold production from these operations. When the uranium is
treated as a by-product and therefore a credit to costs, operating costs
of the contributing shafts will be reduced.
The resource totals 169.6 Mt and contains 82 M lbs of uranium. The
feasibility study that is presently being completed will incorporate
these tonnes and grades in the mining model.
feasibility study that is presently being completed will incorporate
these tonnes and grades in the mining model.
The feasibility study is progressing well and remains on track for
the gate review in the next quarter. Test work on the resin in pulp
demonstration plant was completed during the quarter. It has shown
the resin to have good durability and the results are being incorporated
into the feasibility study.
the gate review in the next quarter. Test work on the resin in pulp
demonstration plant was completed during the quarter. It has shown
the resin to have good durability and the results are being incorporated
into the feasibility study.
15
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
(“Harmony” or “Company”)
Registration number 1950/038232/06
(“Harmony” or “Company”)
Results for the third quarter and nine months ended 31 March 2011
JSE Share code: HAR | NYSE Share code: HMY | ISIN: ZAE 000015228
Financial results for
the third quarter and nine months
ended 31 March 2011
(Rand) and (US$)
16
Results for the third quarter and nine months
ended 31 March 2011
17
Operating results
(Rand/Metric) (US$/Imperial)
Underground production – South Africa
Surface production – South Africa
Total
South
South
Quarter
Kusasa-
Under-
Total
Africa
Africa
Hidden
Harmony
Ended
Bambanani
Doornkop
Evander
Joel
lethu
Masimong
Phakisa
Steyn 2
Target 1
Target 3
Tshepong
Unisel
ground
Kalgold
Phoenix
Dumps
Surface
Other
Total
Valley
Total
Ore milled
– t’000
Mar-11
81
173
130
118
297
216
88
–
161
–
333
104
1 701
373
1 242
923
2 538
–
4 239
407
4 646
Dec-10
104
171
139
128
228
219
107
–
196
–
345
122
1 759
413
1 266
812
2 491
–
4 250
425
4 675
Gold produced
– kg
Mar-11
559
571
483
445
1 464
1 039
408
14
785
250
1 679
467
8 164
276
149
474
899
–
9 063
794
9 857
Dec-10
756
643
517
408
1 046
1 151
505
18
865
170
1 628
566
8 273
339
138
478
955
–
9 228
827
10 055
Gold produced
– oz
Mar-11
17 972
18 358
15 529
14 307
47 069
33 405
13 117
450
25 238
8 038
53 981
15 014
262 478
8 874
4 790
15 239
28 903
–
291 381
25 528
316 909
Dec-10
24 306
20 673
16 622
13 117
33 630
37 005
16 236
579
27 810
5 466
52 341
18 197
265 982
10 899
4 437
15 368
30 704
–
296 686
26 589
323 275
Yield
– g/tonne
Mar-11
6.90
3.30
3.72
3.77
4.93
4.81
4.64
–
4.88
–
5.04
4.49
4.64
0.74
0.12
0.51
0.35
–
2.08
1.95
2.06
Dec-10
7.27
3.76
3.72
3.19
4.59
5.26
4.72
–
4.41
–
4.72
4.64
4.60
0.82
0.11
0.59
0.38
–
2.13
1.95
2.11
Cash operating costs
– R/kg
Mar-11
333 259
229 447
298 153
238 256
200 579
175 496
286 765
–
203 459
–
170 662
227 266
216 799
231 188
259 966
214 833
227 335
–
217 876
216 981
217 802
Dec-10
260 147
229 894
300 698
276 787
274 201
168 907
221 491
–
191 083
–
176 052
197 512
218 881
246 475
241 659
185 824
215 422
–
218 516
195 605
216 595
Cash operating costs
– $/oz
Mar-11
1 484
1 022
1 327
1 061
893
781
1 277
–
906
–
760
1 012
965
1 029
1 157
957
1 012
–
970
966
970
Dec-10
1 176
1 039
1 359
1 251
1 239
763
1 001
–
864
–
796
893
989
1 114
1 092
840
974
–
988
884
979
Cash operating costs
– R/tonne
Mar-11
2 300
757
1 108
899
989
844
1 330
–
992
–
860
1 021
1 007
171
31
110
81
–
452
423
450
Dec-10
1 891
864
1 118
882
1 258
888
1 045
–
843
–
831
916
1 006
202
26
109
83
–
465
381
457
Gold sold
– Kg
Mar-11
541
543
523
405
1 545
1 005
394
14
707
250
1 624
452
8 003
263
147
470
880
–
8 883
833
9 716
Dec-10
765
634
464
413
981
1 176
511
18
881
170
1 648
578
8 239
282
138
478
898
–
9 137
909
10 046
Gold sold
– oz
Mar-11
17 394
17 458
16 815
13 021
49 673
32 311
12 667
450
22 731
8 038
52 213
14 532
257 303
8 456
4 726
15 111
28 293
–
285 596
26 782
312 378
Dec-10
24 595
20 384
14 918
13 278
31 540
37 809
16 429
579
28 325
5 466
52 984
18 583
264 890
9 066
4 437
15 368
28 871
–
293 761
29 225
322 986
Revenue
(R’000)
Mar-11
169 264
169 602
162 346
126 329
480 596
314 222
123 501
–
221 194
–
507 523
141 255
2 415 832
81 888
45 861 147 391
275 140
–
2 690 972
258 327
2 949 299
Dec-10
231 965
192 144
140 589
125 035
296 220
356 059
155 108
–
267 003
–
500 078
175 198
2 439 399
85 258
42 077 145 633
272 968
–
2 712 367
278 094
2 990 461
Cash operating
(R’000)
Mar-11
186 292
131 014
144 008
106 024
293 648
182 340
117 000
–
159 715
–
286 542
106 133
1 712 716
63 808
38 735 101 831
204 374
–
1 917 090
172 283
2 089 373
costs
Dec-10
196 671
147 822
155 461
112 929
286 814
194 412
111 853
–
165 287
–
286 612
111 792
1 769 653
83 555
33 349
88 824
205 728
–
1 975 381
161 765
2 137 146
Inventory
(R’000)
Mar-11
(4 067)
(7 726)
11 034
(10 692)
39 966
(8 688)
(3 173)
–
2 472
–
(15 064)
(3 692)
370
(1 660)
(5 382)
8 678
1 636
–
2 006
2 842
4 848
movement
Dec-10
826
(616)
(16 202)
9 979
(30 786)
686
(514)
–
3 336
–
518
11 980
(20 793)
(15 273)
–
4 828
(10 445)
–
(31 238)
17 064
(14 174)
Operating costs
(R’000)
Mar-11
182 225
123 288
155 042
95 332
333 614
173 652
113 827
–
162 187
–
271 478
102 441
1 713 086
62 148
33 353
110 509
206 010
–
1 919 096
175 125
2 094 221
Dec-10
197 497
147 206
139 259
122 908
256 028
195 098
111 339
–
168 623
–
287 130
123 772
1 748 860
68 282
33 349
93 652
195 283
–
1 944 143
178 829
2 122 972
Operating pro t
(R’000)
Mar-11
(12 961)
46 314
7 304
30 997
146 982
140 570
9 674
–
59 007
–
236 045
38 814
702 746
19 740
12 508
36 882
69 130
–
771 876
83 202
855 078
Dec-10
34 468
44 938
1 330
2 127
40 192
160 961
43 769
–
98 380
–
212 948
51 426
690 539
16 976
8 728
51 981
77 685
–
768 224
99 265
867 489
Operating profit
($’000)
Mar-11
(1 856)
6 629
1 047
4 436
21 040
20 122
1 385
–
8 446
–
33 788
5 556
100 593
2 826
1 791
5 279
9 896
–
110 489
11 910
122 399
Dec-10
5 008
6 530
193
310
5 840
23 386
6 360
–
14 295
–
30 941
7 472
100 335
2 467
1 268
7 553
11 288
–
111 623
14 423
126 046
Capital expenditure
(R’000)
Mar-11
37 321
67 049
29 981
14 733
85 915
40 588
81 737
37 009
74 469
22 026
67 259
14 225
572 312
1 246
5 844
12 353
19 443
7 112
598 867
67 982
666 849
Dec-10
29 419
84 573
56 709
21 686
84 178
48 327
102 675
43 886
81 114
52 601
72 715
18 639
696 522
6 726
10 352
15 260
32 338
20 862
749 722
84 971
834 693
Capital expenditure
($’000)
Mar-11
5 342
9 598
4 292
2 109
12 298
5 810
11 700
5 298
10 660
3 153
9 628
2 036
81 924
178
837
1 768
2 783
1 018
85 725
9 731
95 456
Dec-10
4 275
12 288
8 240
3 151
12 231
7 022
14 919
6 377
11 786
7 643
10 566
2 708
101 206
977
1 504
2 217
4 698
3 031
108 935
12 346
121 281
Production statistics for Steyn 2 and Target 3 have been included. These mines are in a build-up phase and revenue and costs are currently
capitalised, until commercial production levels are reached.
18
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED INCOME STATEMENT
(Rand)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March¹
31 March
31 March¹
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Note
R million
R million
R million
R million
R million
R million
Continuing operations
Revenue
Revenue
2 949
2 990
2 521
9 023
8 239
11 284
Cost of sales
2
(2 623)
(2 506)
(2 581)
(8 125)
(7 837)
(10 484)
Production costs
(2 064)
(2 093)
(1 882)
(6 565)
(6 249)
(8 325)
Royalty expense
(30)
(30)
(5)
(84)
(5)
(33)
Amortisation and depreciation
(431)
(442)
(324)
(1 299)
(994)
(1 375)
Impairment of assets
–
–
(196)
–
(300)
(331)
Employment termination and
restructuring costs
restructuring costs
(26)
(54)
(120)
(158)
(123)
(205)
Other items
(72)
113
(54)
(19)
(166)
(215)
Gross profit/(loss)
326
484
(60)
898
402
800
Corporate, administration and
other expenditure
other expenditure
(93)
(96)
(83)
(283)
(257)
(382)
Social investment expenditure
(27)
(23)
(25)
(66)
(54)
(81)
Exploration expenditure
3
(77)
(76)
(66)
(251)
(159)
(219)
Profit/(loss) on sale of property,
plant and equipment
plant and equipment
8
1
(1)
24
3
104
Other (expenses)/income – net
(8)
6
(2)
(56)
(95)
(58)
Operating profit/(loss)
129
296
(237)
266
(160)
164
(Loss)/profit from associates
(24)
(19)
5
(51)
61
56
Impairment of investment in associate
6
(160)
–
–
(160)
–
–
Loss on sale of investment
in subsidiary
in subsidiary
–
–
(24)
–
(24)
(24)
Net gain on financial instruments
4
3
78
–
392
3
38
Investment income
64
38
61
116
186
187
Finance cost
(71)
(69)
(60)
(199)
(152)
(246)
(Loss)/profit before taxation
(59)
324
(255)
364
(86)
175
Taxation
297
(28)
(25)
275
(108)
(335)
Normal taxation
(12)
–
(22)
(22)
(63)
(84)
Deferred taxation
5
309
(28)
(3)
297
(45)
(251)
Net profit/(loss) from
continuing operations
continuing operations
238
296
(280)
639
(194)
(160)
Discontinued operations
Profit/(loss) from discontinued operations
Profit/(loss) from discontinued operations
6
–
23
(15)
20
(12)
(32)
Net profit/(loss)
238
319
(295)
659
(206)
(192)
Attributable to:
Owners of the parent
Owners of the parent
238
319
(295)
659
(206)
(192)
Non-controlling interest
–
–
–
–
–
–
Earnings/(loss) per ordinary share (cents)
7
– Earnings/(loss) from continuing operations
55
69
(65)
149
(45)
(38)
– Earnings/(loss) from discontinued operations
–
5
(4)
5
(3)
(8)
Total earnings/(loss) per ordinary
share (cents)
share (cents)
55
74
(69)
154
(48)
(46)
Diluted earnings/(loss) per ordinary
share (cents)
share (cents)
7
– Earnings/(loss) from continuing operations
55
69
(65)
149
(45)
(38)
– Earnings/(loss) from discontinued operations
–
5
(3)
5
(3)
(8)
Total diluted earnings/(loss) per
ordinary share (cents)
ordinary share (cents)
55
74
(68)
154
(48)
(46)
¹ The comparative figures are re-presented due to Mount Magnet being reclassified as a discontinued operation. See note 6 in this regard.
The accompanying notes are an integral part of these condensed consolidated financial statements.
19
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
(Rand)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March
31 March
31 March
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Net profit/(loss) for the period
238
319
(295)
659
(206)
(192)
Other comprehensive income/(loss) for
the period, net of income tax
the period, net of income tax
6
(161)
71
(50)
35
(131)
Foreign exchange translation
22
(131)
72
(3)
34
(127)
Fair value movement of
available-for-sale investments
available-for-sale investments
(16)
(30)
(1)
(47)
1
(4)
Total comprehensive income/(loss)
for the period
for the period
244
158
(224)
609
(171)
(323)
Attributable to:
Owners of the parent
Owners of the parent
244
158
(224)
609
(171)
(323)
Non-controlling interest
–
–
–
–
–
–
20
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED BALANCE SHEET
(Rand)
At
At
At
At
31 March
31 December
30 June
31 March
2011
2010
2010
2010
(Unaudited)
(Audited)
(Unaudited)
Note
R million
R million
R million
R million
ASSETS
Non-current assets
Property, plant and equipment
30 557
30 218
29 556
29 403
Intangible assets
2 188
2 199
2 210
2 210
Restricted cash
27
26
146
147
Restricted investments
1 866
1 864
1 742
1 726
Investments in financial assets
236
264
12
18
Investments in associates
–
358
385
391
Inventories
227
232
214
81
Deferred tax asset
2 310
1 925
1 875
1 891
Trade and other receivables
69
69
75
76
37 480
37 155
36 215
35 943
Current assets
Inventories
954
943
987
1
152
Trade and other receivables
8
1 111
962
932
1 217
Income and mining taxes
119
102
74
44
Cash and cash equivalents
656
837
770
481
2 840
2 844
2 763
2 894
Assets of disposal groups classified as held for sale
6
174
–
245
–
3 014
2 844
3 008
2 894
Total assets
40 494
39 999
39 223
38 837
EQUITY AND LIABILITIES
Share capital and reserves
Share capital
28 290
28 277
28 261
28 102
Other reserves
299
266
258
535
Retained earnings
1
135
897
690
676
29 724
29 440
29 209
29 313
Non-current liabilities
Deferred tax liability
5 623
5 538
5 409
5 217
Provision for environmental rehabilitation
1 785
1 752
1 692
1 704
Retirement benefit obligation and other provisions
179
179
169
167
Borrowings
9
1 487
1 243
981
780
9 074
8 712
8 251
7 868
Current liabilities
Borrowings
9
336
344
209
221
Income and mining taxes
17
10
9
17
Trade and other payables
1 343
1 493
1 410
1 418
1 696
1 847
1 628
1 656
Liabilities of disposal groups classified as held for sale
6
–
–
135
–
1 696
1 847
1 763
1 656
Total equity and liabilities
40 494
39 999
39 223
38 837
Number of ordinary shares in issue
429 807 371
429 506 618
428 654 779
426 191 965
Net asset value per share (cents)
6 916
6 854
6 814
6 878
The accompanying notes are an integral part of these condensed consolidated financial statements.
21
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Rand)
for the nine months ended 31 March 2011
Share
Other
Retained
capital
reserves
earnings
Total
R million
R million
R million
R million
Balance – 30 June 2010
28 261
258
690
29 209
Issue of shares
29
–
–
29
Share-based payments
–
91
–
91
Total comprehensive income for the period
–
(50)
659
609
Dividends paid
–
–
(214)
(214)
Balance as at 31 March 2011
28 290
299
1 135
29 724
Balance – 30 June 2009
28 091
339
1 095
29 525
Issue of shares
11
–
–
11
Share-based payments
–
108
–
108
AVRD share issue reserve*
–
151
–
151
Repurchase of equity interest
–
(98)
–
(98)
Total comprehensive loss for the period
–
35
(206)
(171)
Dividends paid
–
–
(213)
(213)
Balance as at 31 March 2010
28 102
535
676
29 313
* This relates to the transaction with Africa Vanguard Resources (Doornkop) (Proprietary) Limited (AVRD).
22
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Rand)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March
31 March
31 March
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Cash flow from operating activities
Cash generated by operations
Cash generated by operations
213
450
295
1 366
703
1
611
Interest and dividends received
64
38
66
116
186
187
Interest paid
(34)
(35)
(32)
(99)
(52)
(90)
Income and mining taxes refund/(paid)
8
(30)
(11)
(26)
(70)
(125)
Cash generated by operating activities
251
423
318
1 357
767
1
583
Cash flow from investing activities
Decrease in restricted cash
Decrease in restricted cash
–
90
301
120
15
15
Proceeds on disposal of investment in subsidiary
–
–
24
229
24
24
Proceeds on disposal of available-for-sale
financial assets
financial assets
–
2
–
1
44
50
Other investing activities
16
(6)
(8)
20
(3)
(12)
Net additions to property, plant and equipment
(687)
(846)
(988)
(2 281)
(2 785)
(3 493)
Cash utilised by investing activities
(671)
(760)
(671)
(1 911)
(2 705)
(3 416)
Cash flow from financing activities
Borrowings raised
Borrowings raised
250
525
250
775
936
1
236
Borrowings repaid
(17)
(107)
(260)
(130)
(285)
(391)
Ordinary shares issued – net of expenses
13
8
6
29
11
18
Dividends paid
–
–
–
(214)
(213)
(213)
Cash generated/(utilised) by financing activities
246
426
(4)
460
449
650
Foreign currency translation adjustments
(7)
(24)
30
(20)
20
3
Net (decrease)/increase in cash and
cash equivalents
cash equivalents
(181)
65
(327)
(114)
(1 469)
(1 180)
Cash and cash equivalents – beginning of period
837
772
808
770
1
950
1
950
Cash and cash equivalents – end of period
656
837
481
656
481
770
23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the third quarter and nine months ended 31 March 2011
for the third quarter and nine months ended 31 March 2011
1.
Accounting policies
Basis of accounting
The condensed consolidated financial statements for the nine months ended 31 March 2011 have been prepared in accordance with IAS 34,
Interim Financial Reporting, JSE Limited Listings Requirements and in the manner required by the Companies Act of South Africa. They should
be read in conjunction with the annual financial statements for the year ended 30 June 2010, which have been prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). The accounting policies are
consistent with those described in the annual financial statements, except for the adoption of applicable revised and/or new standards issued
by the International Accounting Standards Board.
Interim Financial Reporting, JSE Limited Listings Requirements and in the manner required by the Companies Act of South Africa. They should
be read in conjunction with the annual financial statements for the year ended 30 June 2010, which have been prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). The accounting policies are
consistent with those described in the annual financial statements, except for the adoption of applicable revised and/or new standards issued
by the International Accounting Standards Board.
2.
Cost of sales
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March¹
31 March
31 March¹
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Production costs
2 064
2 093
1 882
6 565
6 249
8 325
Royalty expense
30
30
5
84
5
33
Amortisation and depreciation
431
442
324
1 299
994
1
375
Impairment of assets
(2)
–
–
196
–
300
331
Rehabilitation expenditure
4
5
7
13
16
29
Care and maintenance cost of
restructured shafts
restructured shafts
35
28
11
88
42
57
Employment termination and
restructuring costs
restructuring costs
26
54
120
158
123
205
Share based payments
28
32
36
91
108
148
Insurance adjustment/(credit)
(3)
5
(179)
–
(174)
–
–
Provision for post-retirement benefits
–
1
–
1
–
(19)
Total cost of sales
2 623
2 506
2 581
8 125
7 837
10 484
(1)
The comparative figures are re-presented due to Mount Magnet being reclassified as part of discontinued operations. See note 6 in this regard.
(2)
The impairments for the quarter ended 31 March 2010, nine months ended 31 March 2010 and year ended 30 June 2010 relates mainly to Virginia and Evander, which
was recorded as a result of shaft closures.
(3)
Net proceeds on unwinding of previous insurance agreement.
3.
Exploration expenditure
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March
31 March
31 March
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Total exploration expenditure
87
102
66
287
159
219
Less:
Expenditure
capitalised
(10)
(26)
–
(36)
–
–
Exploration expenditure per
income statement
income statement
77
76
66
251
159
219
4.
Net gain on financial instruments
During the September 2010 quarter, a gain of R273 million was recognised on the Freegold option, which was classified as a financial asset
at fair value through profit or loss. This was following Harmony Gold Mining Company Limited (Harmony) entering into two transactions with
Witwatersrand Consolidated Gold Resources Limited (Wits Gold), whereby Wits Gold obtains a prospecting right over Harmony’s Merriespruit
South area and the option held by ARMgold/Harmony Freegold Joint Venture Company (Proprietary) Limited (Freegold), a wholly owned
subsidiary of Harmony, is cancelled.
at fair value through profit or loss. This was following Harmony Gold Mining Company Limited (Harmony) entering into two transactions with
Witwatersrand Consolidated Gold Resources Limited (Wits Gold), whereby Wits Gold obtains a prospecting right over Harmony’s Merriespruit
South area and the option held by ARMgold/Harmony Freegold Joint Venture Company (Proprietary) Limited (Freegold), a wholly owned
subsidiary of Harmony, is cancelled.
During the December 2010 quarter, an amount of R78 million was recognised, being the increase in the fair value of the Nedbank Equity Linked
Deposits held by the Environmental Trusts.
Deposits held by the Environmental Trusts.
24
Results for the third quarter and nine months
ended 31 March 2011
5.
Deferred taxation
The taxation credit of R297 million includes a deferred tax credit of R333 million. The South African Revenue Service (SARS) previously disallowed
Freegold’s “post 1973 gold mine” additional capital allowance claim, and also disallowed Freegold’s application of mining ringfencing. The
disputed matters were set down to be heard in the Income Tax Court of Johannesburg on 14 March 2011, but SARS withdrew the additional
capital allowance claim on 10 March 2011, conceding that the Freegold operations are entitled to claim this capital allowance. The inclusion
of the capital allowance caused an increase in the deferred tax asset on the balance sheet and the resulting credit in the income statement.
Freegold’s “post 1973 gold mine” additional capital allowance claim, and also disallowed Freegold’s application of mining ringfencing. The
disputed matters were set down to be heard in the Income Tax Court of Johannesburg on 14 March 2011, but SARS withdrew the additional
capital allowance claim on 10 March 2011, conceding that the Freegold operations are entitled to claim this capital allowance. The inclusion
of the capital allowance caused an increase in the deferred tax asset on the balance sheet and the resulting credit in the income statement.
6.
Disposal groups classified as held for sale and discontinued operations
Mount Magnet
The conditions precedent for the sale of Mount Magnet were fulfilled and the transaction became effective on 20 July 2010. A total purchase
consideration of R238 million was received from Ramelius Resources Limited in exchange for 100% of the issued shares of Mount Magnet.
The group recognised a total profit of R104 million net of tax, before the realisation of accumulated foreign exchange losses of R84 million
from other comprehensive income to the consolidated income statement. The income statement and earnings per share amounts for all
comparative periods have been re-presented to disclose the operation as a discontinued operation.
consideration of R238 million was received from Ramelius Resources Limited in exchange for 100% of the issued shares of Mount Magnet.
The group recognised a total profit of R104 million net of tax, before the realisation of accumulated foreign exchange losses of R84 million
from other comprehensive income to the consolidated income statement. The income statement and earnings per share amounts for all
comparative periods have been re-presented to disclose the operation as a discontinued operation.
Investment in associate
The investment in Rand Uranium has been classified as held for sale following the decision by the shareholders to sell the business. In terms
of the binding offer accepted by the shareholders on 21 April 2011, the subordinated shareholder’s loan of R63 million due to the group will
be repaid out of the sale proceeds. As the investment is carried at fair value, and the carrying value of the investment exceeds the expected
proceeds, an impairment of R160 million has been recognised in the income statement.
of the binding offer accepted by the shareholders on 21 April 2011, the subordinated shareholder’s loan of R63 million due to the group will
be repaid out of the sale proceeds. As the investment is carried at fair value, and the carrying value of the investment exceeds the expected
proceeds, an impairment of R160 million has been recognised in the income statement.
7.
Earnings/(loss) per ordinary share
Earnings/(loss) per ordinary share is calculated on the weighted average number of ordinary shares in issue for the quarter ended
31 March 2011: 429.5 million (31 December 2010: 429.1 million, 31 March 2010: 426.1 million), and nine months ended 31 March 2011:
429.1 million (31 March 2010: 425.9 million), and the year ended 30 June 2010: 426.4 million.
31 March 2011: 429.5 million (31 December 2010: 429.1 million, 31 March 2010: 426.1 million), and nine months ended 31 March 2011:
429.1 million (31 March 2010: 425.9 million), and the year ended 30 June 2010: 426.4 million.
The diluted earnings/(loss) per ordinary share is calculated on weighted average number of diluted ordinary shares in issue for the
quarter ended 31 March 2011: 430.7 million (31 December 2010: 429.9 million, 31 March 2010: 429.6 million), and the nine months ended
31 March 2011: 430.2 million (31 March 2010: 429.6 million), and the year ended 30 June 2010: 427.8 million.
quarter ended 31 March 2011: 430.7 million (31 December 2010: 429.9 million, 31 March 2010: 429.6 million), and the nine months ended
31 March 2011: 430.2 million (31 March 2010: 429.6 million), and the year ended 30 June 2010: 427.8 million.
25
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March¹
31 March
31 March¹
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
Total earnings/(loss) per ordinary
share (cents):
share (cents):
Basic earnings/(loss)
55
74
(69)
154
(48)
(46)
Diluted earnings/(loss)
55
74
(68)
154
(48)
(46)
Headline earnings/(loss)
91
69
(27)
192
10
(7)
– from continuing operations
91
69
(24)
192
13
1
– from discontinued operations
–
–
(3)
–
(3)
(8)
Diluted headline earnings/(loss)
91
69
(27)
192
10
(7)
– from continuing operations
91
69
(24)
192
13
1
– from discontinued operations
–
–
(3)
–
(3)
(8)
R million
R million
R million
R million
R million
R million
Reconciliation of headline
earnings/(loss):
earnings/(loss):
Continuing operations
Net profit/(loss)
238
296
(280)
639
(194)
(160)
Adjusted for:
Profit on sale of property, plant and equipment
Profit on sale of property, plant and equipment
(8)
(1)
(3)
(24)
(3)
(104)
Taxation effect of profit on sale of property,
plant and equipment
plant and equipment
2
–
1
7
1
22
Net gain on financial instruments
(3)
(1)
–
(4)
(5)
(7)
Taxation effect of net gain on financial instruments
1
–
–
1
2
2
Impairment of investments in associate*
160
–
–
160
–
–
Foreign exchange loss/(gain) reclassified from
other comprehensive income*
other comprehensive income*
–
–
–
47
(22)
(22)
Loss on sale of investment in subsidiary
–
–
24
–
24
24
Taxation effect of loss on sale of investment
in subsidiary
in subsidiary
–
–
(7)
–
(7)
(7)
Impairment of other investments*
–
–
–
–
2
–
Impairment of assets
–
–
196
–
301
331
Taxation effect of impairment of assets
–
–
(34)
–
(45)
(75)
Headline earnings/(loss)
390
294
(103)
826
54
4
Discontinued operations
Net profit/(loss)
–
23
(15)
20
(12)
(32)
Adjusted for:
Loss/(profit) on sale of property, plant
and equipment
Loss/(profit) on sale of property, plant
and equipment
–
–
2
–
(1)
–
Taxation effect of loss/(profit) on sale of property,
plant and equipment
plant and equipment
–
–
(1)
–
–
Profit on sale of investment in subsidiary
–
–
–
(138)
–
(1)
Taxation effect of profit on sale of
investment in subsidiary
investment in subsidiary
–
–
–
34
–
–
Foreign exchange (gain)/loss reclassified from
other comprehensive income*
other comprehensive income*
–
(23)
–
84
–
–
Headline loss
–
–
(14)
–
(13)
(33)
Total headline earnings/(loss)
390
294
(117)
826
41
(29)
(1) The comparative figures are re-presented due to Mount Magnet being reclassified as discontinued operation. See note 6 in this regard.
*
There is no taxation effect on these items.
26
Results for the third quarter and nine months
ended 31 March 2011
8.
Trade and other receivables
Included in the balance at 31 March 2011 is an amount of R409 million for VAT claims receivable. This is an increase of R191 million from the
balance of R218 million at 31 December 2010.
balance of R218 million at 31 December 2010.
9.
Borrowings
31 March
31 December
30 June
31 March
2011
2010
2010
2010
(Unaudited)
(Audited)
(Unaudited)
R million
R million
R million
R million
Total long-term borrowings
1 487
1 243
981
780
Total current portion of borrowings
336
344
209
221
Total borrowings
(1) (2)
1 823
1 587
1 190
1 001
(1) In December 2009, the Company entered into a loan facility with Nedbank Limited, comprising a Term Facility of R900 million and a Revolving Credit Facility of R600 million.
Interest accrues on a day-to-day basis over the term of the loan at a variable interest rate, which is fixed for a three month period, equal to JIBAR plus 3.5%. Interest is
repayable quarterly. The Term Facility is repayable bi-annually in equal instalments of R90 million over 5 years. The first instalment was paid on 30 June 2010.
repayable quarterly. The Term Facility is repayable bi-annually in equal instalments of R90 million over 5 years. The first instalment was paid on 30 June 2010.
In December 2010 the Company entered into an additional loan facility with Nedbank Limited, comprising a Term Facility of R500 million and a Revolving Credit Facility of
R250 million. Interest terms are identical to the original facility. The Term Facility is repayable bi-annually in equal instalments of R62.5 million over four years, with the first
instalment payable on 30 June 2011. The terms of the original Revolving Credit Facility was amended to coincide with the repayment terms of the new Revolving Credit
Facility, being payable after 3 years from December 2010.
R250 million. Interest terms are identical to the original facility. The Term Facility is repayable bi-annually in equal instalments of R62.5 million over four years, with the first
instalment payable on 30 June 2011. The terms of the original Revolving Credit Facility was amended to coincide with the repayment terms of the new Revolving Credit
Facility, being payable after 3 years from December 2010.
At 31 March 2011, R300 million (31 December 2010: R550 million) of these facilities had not been drawn down.
(2) Included in the borrowings is R58 million (31 December 2010: R63 million; June 2010: R91 million; March 2010: R99 million) owed to Westpac Bank Limited in terms of a
finance lease agreement. The future minimum lease payments are as follows:
31 March
31 December
30 June
31 March
2011
2010
2010
2010
(Unaudited)
(Audited)
(Unaudited)
R million
R million
R million
R million
Due within one year
29
28
33
33
Due between one and five years
30
36
60
69
59
64
93
102
Future finance charges
(1)
(1)
(2)
(3)
Total future minimum lease payments
58
63
91
99
10. Commitments and contingencies
31 March
31 December
30 June
31 March
2011
2010
2010
2010
(Unaudited)
(Audited)
(Unaudited)
R million
R million
R million
R million
Capital expenditure commitments:
Contracts for capital expenditure
191
166
117
271
Authorised by the directors but not contracted for
2 175
2 669
1 006
1 667
2 366
2 835
1 123
1 884
This expenditure will be financed from existing resources and borrowings where necessary.
Contingent liability
For a detailed disclosure on contingent liabilities refer to Harmony’s annual report for the financial year ended 30 June 2010, available on the
group’s website at www.harmony.co.za. There were no significant changes in contingencies since 30 June 2010.
group’s website at www.harmony.co.za. There were no significant changes in contingencies since 30 June 2010.
11. Subsequent events
On 29 April 2011, Taung Gold Limited (Taung) paid R100 million to Harmony in terms of the amended agreement for the purchase of the
Evander 6 shaft and Twistdraai areas. In terms of the amended agreement, the amount is repayable to Taung should the outstanding conditions
for the transactions not be fulfilled.
Evander 6 shaft and Twistdraai areas. In terms of the amended agreement, the amount is repayable to Taung should the outstanding conditions
for the transactions not be fulfilled.
On 28 April 2011, Gold One International (Gold One) and Rand Uranium (Proprietary) Limited (Rand Uranium) announced that the shareholders
of Rand Uranium have accepted an offer by Gold One for the shares in Rand Uranium for an amount of US$250 million. Of this US$36 million
accrues to Harmony to settle both the shareholder loan and the sale of shares.
of Rand Uranium have accepted an offer by Gold One for the shares in Rand Uranium for an amount of US$250 million. Of this US$36 million
accrues to Harmony to settle both the shareholder loan and the sale of shares.
12. Segment report
The segment report follows on page 28.
27
13. Reconciliation of segment information to consolidated income statements and balance sheet
Nine months
Nine months
ended
ended
31 March
31 March¹
2011
2010
R million
R million
The “Reconciliation of segment information to consolidated income statement and balance
sheet” line item in the segment report is broken down in the following elements, to give a
better understanding of the differences between the income statement, balance sheet and
segment report:
sheet” line item in the segment report is broken down in the following elements, to give a
better understanding of the differences between the income statement, balance sheet and
segment report:
Revenue from:
Discontinued operations
Discontinued operations
–
–
Production costs from:
Discontinued operations
Discontinued operations
–
–
Reconciliation of production profit to gross profit:
Total segment revenue
Total segment revenue
9 023
8 239
Total segment production costs and royalty expense
(6 649)
(6 254)
Production profit as per segment report
2 374
1 985
Less: Discontinued operations
–
–
2 374
1 985
Cost of sales items other than production costs and royalty expense
(1 476)
(1 583)
Amortisation and depreciation
(1 299)
(994)
Impairment of assets
–
(300)
Employment termination and restructuring costs
(158)
(123)
Share-based payments
(91)
(108)
Net insurance credit
174
–
Rehabilitation costs
(13)
(16)
Care and maintenance costs of restructured shafts
(88)
(42)
Provision for post-retirement benefits
(1)
–
Gross profit as per income statements *
898
402
Reconciliation of total segment mining assets to consolidated property, plant and equipment:
Property, plant and equipment not allocated to a segment:
Mining assets
885
767
Undeveloped property
5 139
5 328
Other non-mining assets
69
346
6 093
6 441
(1) The comparative figures are re-presented due to Mount Magnet being reclassified as discontinued operation. See note 6 in this regard.
* The reconciliation was done up to the first recognisable line item on the income statement. The reconciliation will follow the income statement after that.
28
Results for the third quarter and nine months
ended 31 March 2011
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2011 (Rand/Metric) (Unaudited)
Production
Production
Mining
Capital
Kilograms
Tonnes
Revenue
cost
(1)
profit
assets
expenditure
produced
milled
R million
R million
R million
R million
R million
kg
t’000
Continuing operations
South Africa
Underground
Bambanani
(2)
671
603
68
1 087
231
2 289
314
Doornkop
530
418
112
3 027
221
1 755
484
Evander
477
471
6
936
146
1
552
409
Joel
295
293
2
181
55
1
001
286
Kusasalethu
1 252
976
276
3 151
274
4 023
794
Masimong
1
045
571
474
831
129
3
453
678
Phakisa
390
337
53
4 263
276
1 290
281
Target
(2)
732
520
212
2 711
348
3 017
562
Tshepong
1 508
852
656
3 630
201
4 995
1 016
Virginia
539
451
88
696
63
1
793
470
Surface
All other surface operations
(3)
866
640
226
143
93
2
923
7
866
Total South Africa
8 305
6 132
2 173
20 656
2 037
28 091
13 160
International
Papua New Guinea
718
517
201
3 808
212
2 292
1 259
Total international
718
517
201
3 808
212
2 292
1 259
Total continuing operations
9 023
6 649
2 374
24 464
2 249
30 383
14 419
Discontinued operations
Mount Magnet
–
–
–
–
–
–
–
Total discontinued operations
–
–
–
–
–
–
–
Total operations
9 023
6 649
2 374
24 464
2 249
30 383
14 419
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 13)
information to the consolidated
income statement and
balance sheet (refer to note 13)
–
–
6 093
9 023
6 649
30 557
Notes:
(1)
Production costs includes royalty expense.
(2)
Production statistics for Steyn 2 and Target 3 are shown for information purposes. These mines are in build-up phase and revenue and costs are currently capitalised until
commercial levels of production are reached.
(3)
Includes Kalgold, Phoenix, Dumps and President Steyn plant clean-up.
29
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2010 (Rand/Metric) (Unaudited)
Production
Production
Mining
Capital
Kilograms
Tonnes
Revenue
cost
(1)
profit
assets
expenditure
produced
milled
R million
R million
R million
R million
R million
kg
t’000
Continuing operations
South Africa
Underground
Bambanani
762
536
226
947
114
2 938
399
Doornkop
373
298
75
2 473
238
1 442
401
Evander
736
690
46
909
137
2
898
642
Joel
426
289
137
138
70
1 628
348
Kusasalethu
1 026
849
177
2 943
344
4 044
721
Masimong
916
524
392
745
133
3 639
681
Phakisa
250
225
25
3
983
368
955
244
Target
627
479
148
2 502
269
2 578
578
Tshepong
1 308
837
471
3 646
191
5 031
1 174
Virginia
1 137
1 094
43
659
142
4 495
1 415
Surface
All other surface operations
(2)
678
433
245
128
56
2 683
6
661
Total South Africa
8 239
6 254
1 985
19 073
2 062
32 331
13 264
International
Papua New Guinea
(3)
–
–
–
3 872
467
1 318
–
Total international
–
–
–
3 872
467
1 318
–
Discontinued operations
Mount Magnet
–
–
–
17
–
–
–
Total discontinued operations
–
–
–
17
–
–
–
Total operations
8 239
6 254
1 985
22 962
2 529
33 649
13 264
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 13)
information to the consolidated
income statement and
balance sheet (refer to note 13)
–
–
6
441
8 239
6 254
29 403
Notes:
(1)
Production costs include royalty expenses.
(2)
Includes Kalgold, Phoenix, Dumps and President Steyn plant clean-up.
(3)
Production statistics for Hidden Valley, President Steyn and Target 3 are shown for information purposes. The mine is in a build-up phase and revenue and costs are currently
capitalised until commercial levels of production are reached.
30
Results for the third quarter and nine months
ended 31 March 2011
31
Operating results
(US$/Imperial)
Underground production – South Africa
Surface production – South Africa
Total
South
South
Quarter
Kusasa-
Under-
Total
Africa
Africa
Hidden
Harmony
Ended
Bambanani
Doornkop
Evander
Joel
lethu
Masimong
Phakisa
Steyn 2
Target 1
Target 3
Tshepong
Unisel
ground
Kalgold
Phoenix
Dumps
Surface
Other
Total
Valley
Total
Ore milled
– t’000
Mar-11
89
191
143
130
328
238
97
–
178
–
367
115
1 876
411
1 370
1 018
2 799
–
4 675
449
5 124
Dec-10
115
189
153
141
251
241
118
–
216
–
380
135
1 939
455
1 396
895
2 746
–
4 685
469
5 154
Gold produced
– oz
Mar-11
17 972
18 358
15 529
14 307
47 069
33 405
13 117
450
25 238
8 038
53 981
15 014
262 478
8 874
4 790
15 239
28 903
–
291 381
25 528
316 909
Dec-10
24 306
20 673
16 622
13 117
33 630
37 005
16 236
579
27 810
5 466
52 341
18 197
265 982
10 899
4 437
15 368
30 704
–
296 686
26 589
323 275
Yield
– oz/t
Mar-11
0.202
0.096
0.109
0.110
0.144
0.140
0.135
–
0.142
–
0.147
0.131
0.135
0.022
0.003
0.015
0.010
–
0.061
0.057
0.060
Dec-10
0.211
0.109
0.109
0.093
0.134
0.154
0.138
–
0.129
–
0.138
0.135
0.134
0.024
0.003
0.017
0.011
–
0.062
0.057
0.062
Cash operating costs
– $/oz
Mar-11
1 484
1 022
1 327
1 061
893
781
1 277
–
906
–
760
1 012
965
1 029
1 157
957
1 012
–
970
966
970
Dec-10
1 176
1 039
1 359
1 251
1 239
763
1 001
–
864
–
796
893
989
1 114
1 092
840
974
–
988
884
979
Cash operating costs
– $/t
Mar-11
300
98
144
117
128
110
173
–
128
–
112
132
131
22
4
14
10
–
59
55
58
Dec-10
248
114
148
116
166
117
138
–
111
–
110
120
133
27
3
14
11
–
61
50
60
Gold sold
– oz
Mar-11
17 394
17 458
16 815
13 021
49 673
32 311
12 667
450
22 731
8 038
52 213
14 532
257 303
8 456
4 726
15 111
28 293
–
285 596
26 782
312 378
Dec-10
24 595
20 384
14 918
13 278
31 540
37 809
16 429
579
28 325
5 466
52 984
18 583
264 890
9 066
4 437
15 368
28 871
–
293 761
29 225
322 986
Revenue
($’000)
Mar-11
24 229
24 277
23 239
18 083
68 794
44 979
17 678
–
31 662
–
72 649
20 220
345 810
11 722
6 565
21 098
39 385
–
385 195
36 978
422 173
Dec-10
33 705
27 919
20 428
18 168
43 041
51 735
22 537
–
38 796
–
72 661
25 456
354 446
12 388
6 114
21 161
39 663
–
394 109
40 407
434 516
Cash operating
($’000)
Mar-11
26 667
18 754
20 613
15 177
42 033
26 101
16 747
–
22 862
–
41 017
15 192
245 163
9 134
5 544
14 577
29 255
–
274 418
24 661
299 079
costs
Dec-10
28 577
21 479
22 589
16 408
41 674
28 249
16 252
–
24 016
–
41 645
16 243
257 132
12 140
4 846
12 906
29 892
–
287 024
23 505
310 529
Inventory
($’000)
Mar-11
(582)
(1 106)
1 579
(1 530)
5 721
(1 244)
(454)
–
354
–
(2 156)
(528)
54
(238)
(770)
1 242
234
–
288
407
695
movement
Dec-10
120
(90)
(2 354)
1 450
(4 473)
100
(75)
–
485
–
75
1 741
(3 021)
(2 219)
–
702
(1 517)
–
(4 538)
2 479
(2 059)
Operating costs
($’000)
Mar-11
26 085
17 648
22 192
13 647
47 754
24 857
16 293
–
23 216
–
38 861
14 664
245 217
8 896
4 774
15 819
29 489
–
274 706
25 068
299 774
Dec-10
28 697
21 389
20 235
17 858
37 201
28 349
16 177
–
24 501
–
41 720
17 984
254 111
9 921
4 846
13 608
28 375
–
282 486
25 984
308 470
Operating profit
($’000)
Mar-11
(1 856)
6 629
1 047
4 436
21 040
20 122
1 385
–
8 446
–
33 788
5 556
100 593
2 826
1 791
5 279
9 896
–
110 489
11 910
122 399
Dec-10
5 008
6 530
193
310
5 840
23 386
6 360
–
14 295
–
30 941
7 472
100 335
2 467
1 268
7 553
11 288
–
111 623
14 423
126 046
Capital expenditure
($’000)
Mar-11
5 342
9 598
4 292
2 109
12 298
5 810
11 700
5 298
10 660
3 153
9 628
2 036
81 924
178
837
1 768
2 783
1 018
85 725
9 731
95 456
Dec-10
4 275
12 288
8 240
3 151
12 231
7 022
14 919
6 377
11 786
7 643
10 566
2 708
101 206
977
1 504
2 217
4 698
3 031
108 935
12 346
121 281
Production statistics for Steyn 2 and Target 3 have been included. These mines are in a build-up phase and revenue and costs are currently
capitalised, until commercial production levels are reached.
32
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED INCOME STATEMENT
(US$)
(Convenience translation)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March¹
31 March
31 March¹
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Continuing operations
Revenue
422
434
336
1 278
1 085
1 489
Cost of sales
(375)
(364)
(344)
(1 150)
(1 032)
(1 383)
Production
costs
(295)
(304)
(251)
(930)
(823)
(1
099)
Royalty
expense
(4)
(4)
(1)
(12)
(1)
(4)
Amortisation and depreciation
(62)
(64)
(43)
(184)
(131)
(181)
Impairment of assets
–
–
(26)
–
(40)
(43)
Employment termination and restructuring costs
(4)
(8)
(16)
(22)
(16)
(27)
Other items
(10)
16
(7)
(2)
(21)
(29)
Gross profit/(loss)
47
70
(8)
128
53
106
Corporate, administration and other expenditure
(13)
(14)
(12)
(40)
(34)
(50)
Social investment expenditure
(4)
(3)
(3)
(9)
(7)
(11)
Exploration expenditure
(11)
(11)
(9)
(36)
(20)
(29)
Profit on sale of property, plant and equipment
1
–
–
3
–
14
Other (expenses)/income – net
(1)
1
–
(8)
(13)
(8)
Operating profit/(loss)
19
43
(32)
38
(21)
22
(Loss)/profit from associates
(3)
(3)
1
(7)
8
7
Impairment of investment in associate
(23)
–
–
(23)
–
–
Loss on sale of investment in subsidiary
–
–
(3)
–
(3)
(3)
Net gain on financial instruments
–
11
–
55
–
5
Investment income
9
6
8
16
25
25
Finance cost
(10)
(10)
(8)
(28)
(20)
(32)
(Loss)/profit before taxation
(8)
47
(34)
51
(11)
24
Taxation
42
(4)
(3)
39
(14)
(44)
Normal taxation
(2)
–
(3)
(3)
(8)
(11)
Deferred taxation
44
(4)
–
42
(6)
(33)
Net profit/(loss) from continuing operations
34
43
(37)
90
(25)
(20)
Discontinued operations
Profit/(loss) from discontinued operations
Profit/(loss) from discontinued operations
–
3
(2)
3
(2)
(4)
Net profit/(loss)
34
46
(39)
93
(27)
(24)
Attributable to:
Owners of the parent
Owners of the parent
34
46
(39)
93
(27)
(24)
Non-controlling interest
–
–
–
–
–
–
Earnings/(loss) per ordinary share (cents)
– Earnings/(loss) from continuing operations
– Earnings/(loss) from continuing operations
8
10
(9)
21
(6)
(5)
– Earnings/(loss) from discontinued operations
–
1
–
1
–
(1)
Total earnings/(loss) per ordinary share (cents)
8
11
(9)
22
(6)
(6)
Diluted earnings/(loss) per ordinary share (cents)
– Earnings/(loss) from continuing operations
– Earnings/(loss) from continuing operations
8
10
(9)
21
(6)
(5)
– Earnings/(loss) from discontinued operations
–
1
–
1
–
(1)
Total diluted earnings/(loss) per
ordinary share (cents)
ordinary share (cents)
8
11
(9)
22
(6)
(6)
¹ The comparative figures are re-presented due to Mount Magnet being reclassified as a discontinued operation.
The currency conversion average rates for the quarter ended: March 2011: US$1 = R6.99 (December 2010: US$1 = R6.88, March 2010: US$1 = R7.50).
The currency conversion average rates for the nine months ended: March 2011: US$1 = R7.06 (March 2010: US$1 = R7.59).
The income statement for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
The currency conversion average rates for the nine months ended: March 2011: US$1 = R7.06 (March 2010: US$1 = R7.59).
The income statement for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
Note on convenience translation
Except where specific statements have been extracted from the 2010 Annual Report, the requirements of IAS 21, The Effects of the Changes in
Foreign Exchange Rates, have not necessarily been applied in the translation of the US Dollar financial statements presented on page 32 to 38.
Foreign Exchange Rates, have not necessarily been applied in the translation of the US Dollar financial statements presented on page 32 to 38.
33
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
(US$)
(Convenience translation)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March
31 March
31 March
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Net profit/(loss) for the period
34
46
(39)
93
(27)
(24)
Other comprehensive income/(loss) for
the period, net of income tax
the period, net of income tax
1
(23)
9
(7)
4
25
Foreign exchange translation
3
(19)
9
–
4
25
Fair value movement of available-for-sale
investments (2)
investments (2)
(4)
–
(7)
–
–
Total comprehensive income/(loss)
for the period
for the period
35
23
(30)
86
(23)
1
Attributable to:
Owners of the parent
Owners of the parent
35
23
(30)
86
(23)
1
Non-controlling interest
–
–
–
–
–
–
The currency conversion average rates for the quarter ended: March 2011: US$1 = R6.99 (December 2010: US$1 = R6.88, March 2010: US$1 = R7.50).
The currency conversion average rates for the nine months ended: March 2011: US$1 = R7.06 (March 2010: US$1 = R7.59).
The statement of other comprehensive income for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
34
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED BALANCE SHEET
(US$)
(Convenience translation)
At
At
At
At
31 March
31 December
30 June
31 March
2011
2010
2010
2010
(Unaudited)
(Unaudited)
(Audited)
(Unaudited)
US$ million
US$ million
US$ million
US$ million
ASSETS
Non-current assets
Property, plant and equipment
4 509
4 568
3 874
4 020
Intangible assets
323
332
290
302
Restricted cash
4
4
19
20
Restricted investments
275
282
228
236
Investments in financial assets
35
40
2
2
Investments in associates
–
54
50
53
Inventories
33
35
28
11
Deferred tax asset
341
291
246
259
Trade and other receivables
10
10
10
10
5 530
5 616
4 747
4 913
Current assets
Inventories
141
143
129
158
Trade and other receivables
164
145
122
166
Income and mining taxes
18
15
10
6
Cash and cash equivalents
97
127
101
66
420
430
362
396
Assets of disposal groups classified as held for sale
26
–
32
–
446
430
394
396
Total assets
5 976
6 046
5 141
5 309
EQUITY AND LIABILITIES
Share capital and reserves
Share capital
4 175
4 275
4 027
3 842
Other reserves
44
40
(40)
73
Retained earnings/(accumulated loss)
167
136
(159)
92
4 386
4 451
3 828
4 007
Non-current liabilities
Deferred tax
830
837
709
714
Provisions for other liabilities and charges
263
265
222
233
Retirement benefit obligation and other provisions
26
27
22
23
Borrowings
219
188
129
107
1 338
1 317
1 082
1 077
Current liabilities
Borrowings
50
52
27
30
Income and mining taxes
3
1
1
2
Trade and other payables
199
225
185
193
252
278
213
225
Liabilities of disposal groups classified as held for sale
–
–
18
–
252
278
231
225
Total equity and liabilities
5 976
6 046
5 141
5 309
Number of ordinary shares in issue
429 807 371
429 506 618
428 654 779
426 191 965
Net asset value per share (cents)
1 023
1 036
893
941
The balance sheet for March 2011 converted at a conversion rate of US$1 = R6.78 (December 2010: US$1 = R6.62, March 2010: US$1: R7.31).
The balance sheet as at 30 June 2010 has been extracted from the 2010 Annual Report.
35
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(US$) (Unaudited)
for the nine months ended 31 March 2011 (Convenience translation)
Share
Other
Retained
capital
reserves
earnings
Total
US$ million
US$ million
US$ million
US$ million
Balance – 30 June 2010
4 171
38
102
4 311
Issue of shares
4
–
–
4
Share-based payments
–
13
–
13
Total comprehensive income for the period
–
(7)
97
90
Dividends paid
–
–
(32)
(32)
Balance as at 31 March 2011
4 175
44
167
4 386
Balance – 30 June 2009
3 840
46
149
4 035
Issue of shares
2
–
–
2
Share-based payments
–
15
–
15
AVRD share issue reserve*
–
21
–
21
Repurchase of equity interest
–
(13)
–
(13)
Total comprehensive loss for the period
–
4
(28)
(24)
Dividends paid
–
–
(29)
(29)
Balance as at 31 March 2010
3 842
73
92
4 007
* This relates to the transaction with Africa Vanguard Resources (Doornkop) (Proprietary) Limited (AVRD).
The currency conversion closing rates for the nine months ended: March 2011: US$1 = R6.78 (March 2010: US$1 = R7.31).
36
Results for the third quarter and nine months
ended 31 March 2011
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(US$)
(Convenience translation)
Quarter ended
Nine months ended
Year ended
31 March
31 December
31 March
31 March
31 March
30 June
2011
2010
2010
2011
2010
2010
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Cash flow from operating activities
Cash generated by operations
Cash generated by operations
30
65
39
194
93
214
Interest and dividends received
9
6
9
16
25
25
Interest paid
(5)
(5)
(4)
(14)
(7)
(12)
Income and mining taxes refund/(paid)
1
(4)
(1)
(4)
(9)
(17)
Cash generated by operating activities
35
62
43
192
102
210
Cash flow from investing activities
Decrease in restricted cash
Decrease in restricted cash
–
13
40
17
2
2
Proceeds on disposal of investment in subsidiary
–
–
3
32
3
3
Proceeds on disposal of available-for-sale
financial assets
financial assets
–
–
–
–
6
7
Other investing activities
2
(1)
(1)
3
–
(2)
Net additions to property, plant and equipment
(98)
(123)
(131)
(323)
(367)
(463)
Cash utilised by investing activities
(96)
(111)
(89)
(271)
(356)
(453)
Cash flow from financing activities
Borrowings raised
Borrowings raised
36
76
33
110
123
168
Borrowings repaid
(2)
(16)
(35)
(18)
(37)
(57)
Ordinary shares issued – net of expenses
2
1
1
4
2
3
Dividends paid
–
–
–
(30)
(29)
(29)
Cash generated/(utilised) by financing activities
36
61
(1)
66
59
85
Foreign currency translation adjustments
(5)
4
3
9
8
6
Net (decrease)/increase in cash and cash equivalents
(30)
16
(44)
(4)
(187)
(152)
Cash and cash equivalents – beginning of period
127
111
110
101
253
253
Cash and cash equivalents – end of period
97
127
66
97
66
101
Operating activities translated at average rates for the quarter ended: March 2011: US$1 = R6.99 (December 2010: US$1 = R6.88, March 2010:
US$1 = R7.50). Nine months ended: March 2011: US$1 = R7.06 (March 2010: US$1 = R7.59).
US$1 = R7.50). Nine months ended: March 2011: US$1 = R7.06 (March 2010: US$1 = R7.59).
Closing balance translated at closing rates of: March 2011: US$1 = R6.78 (December 2010: US$1 = R6.62, March 2010: US$1: R7.31).
The cash ow statement for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
37
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2011
(US$/Imperial) (Unaudited)
(Convenience translation)
Production
Production
Mining
Capital
Ounces
Tons
Revenue
cost
(1)
profit
assets
expenditure
produced
milled
US$ million
US$ million
US$ million
US$ million
US$ million
oz
t’000
Continuing operations
South Africa
Underground
Bambanani
(2)
95
85
10
160
33
73
593
346
Doornkop
75
59
16
447
31
56
425
534
Evander
68
67
1
138
21
49
898
450
Joel
42
42
–
27
8
32
182
315
Kusasalethu
177
138
39
465
39
129
343
876
Masimong
148
81
67
123
18
111
016
747
Phakisa
56
48
8
629
39
41
474
310
Target
(2)
104
74
30
400
49
96
999
620
Tshepong
214
121
93
536
29
160 592
1 120
Virginia
76
63
13
103
9
57
646
519
Surface
All other surface operations
(3)
121
91
30
21
13
93
976
8
673
Total South Africa
1 176
869
307
3 049
289
903 144
14 510
International
Papua New Guinea
102
73
28
562
30
73 690
1 389
Total international
102
73
28
562
30
73 690
1 389
Total continuing operations
1 278
942
336
3 611
319
976 834
15 899
Discontinued operations
Mount Magnet
–
–
–
–
–
–
–
Total discontinued operations
–
–
–
–
–
–
–
Total operations
1 278
942
336
3 611
319
976 834
15 899
Notes:
(1)
Production costs includes royalty expense.
(2)
Production statistics for Steyn 2 and Target 3 are shown for information purposes. These mines are in build-up phase and revenue and costs are currently capitalised until
commercial levels of production are reached.
(3)
Includes Kalgold, Phoenix, Dumps and President Steyn plant clean-up.
All income statement items, including capital expenditure, are converted at the currency conversion rate of US$1 = R7.06.
Mining assets are converted at the currency conversion rate of US$1 = R6.78.
38
Results for the third quarter and nine months
ended 31 March 2011
SEGMENT REPORT FOR THE NINE MONTHS ENDED 31 MARCH 2010 (US$/Imperial) (Unaudited)
(Convenience translation)
Production
Production
Mining
Capital
Ounces
Tons
Revenue
cost
(1)
profit
assets
expenditure
produced
milled
US$ million
US$ million
US$ million
US$ million
US$ million
oz
t’000
Continuing Operations
South Africa
Underground
Bambanani
100
70
30
129
15
94
459
440
Doornkop
49
39
10
338
31
46
361
442
Evander
97
91
6
124
18
93
173
708
Joel
56
38
18
19
9
52
342
384
Kusasalethu
135
112
23
402
45
130
018
795
Masimong
121
69
52
102
18
116
996
751
Phakisa
33
30
3
545
49
30
704
269
Target
83
63
20
342
35
82
885
638
Tshepong
172
110
62
498
25
161 751
1 295
Virginia
150
144
6
90
19
144 517
1 560
Surface
All other surface operations
(2)
89
58
31
18
7
86
260
7
344
Total South Africa
1 085
824
261
2 607
271
1 039 466
14 626
International
Papua New Guinea
(3)
–
–
–
529
62
42
365
–
Total international
–
–
–
529
62
42
365
–
Discontinued operations
Mount Magnet
–
–
–
2
–
–
–
Total discontinued operations
–
–
–
2
–
–
–
Total operations
1 085
824
261
3 138
333
1 081 831
14 626
Notes:
(1)
Production costs include royalty expenses.
(2)
Includes Kalgold, Phoenix, Dumps and President Steyn plant clean-up.
(3)
Production statistics for Hidden Valley, President Steyn and Target 3 are shown for information purposes. The mine is in a build-up phase and revenue and costs are currently
capitalised until commercial levels of production are reached.
All income statement items, including capital expenditure, are converted at the currency conversion rate of US$1 = R7.59.
Mining assets are converted at the currency conversion rate of US$1 = R7.31.
39
DEVELOPMENT RESULTS
(Metric)
Quarter ended 31 March 2011
Channel
Channel
Reef
Sampled
Width
Value
Gold
(metres)
(metres)
(cm’s)
(g/t)
(cmg/t)
Tshepong
Basal
608
588
10.35
102.36
1 060
B Reef
113
75
98.86
17.42
1 722
All Reefs
720
663
20.37
55.72
1 135
Phakisa & Nyala
Basal
249
270
44.74
19.02
851
All Reefs
249
270
44.74
19.02
851
Total Bambanani
(incl. Bambanani, Steyn 1 & Steyn 2)
Basal
75
78
145.46
17.14
2 493
All Reefs
75
78
145.46
17.14
2 493
Bambanani
Basa
l 75
78
145.46
17.14
2 493
All Reefs
75
78
145.46
17.14
2 493
Doornkop
Kimberley Reef
63
54
341.80
2.44
835
South Reef
387
398
64.71
15.93
1 031
All Reefs
450
452
97.85
10.29
1 007
Kusasalethu
VCR Reef
780
746
71.79
18.02
1 294
All Reefs
780
746
71.79
18.02
1 294
Total Target
(incl. Target 1 & Target 3)
Elsburg
324
178
152.87
14.11
2 157
A Reef
37
37
122.26
12.86
1 572
B Reef
29
18
38.41
22.39
860
All Reefs
390
232
139.39
14.11
1 967
Target 1
Elsburg
151
73
195.96
19.76
3 872
All Reefs
151
73
195.96
19.76
3 872
Target 3
Elsburg
173
104
122.59
7.76
952
A Reef
37
37
122.26
12.86
1 572
B Reef
29
18
38.41
22.39
860
All Reefs
239
158
113.20
9.58
1 085
Masimong
Basal
424
327
61.61
17.41
1 073
B Reef
117
109
80.28
13.66
1 097
All Reefs
541
435
66.27
16.28
1 079
Evander
Kimberley
367
362
37.45
53.68
2 010
All Reefs
367
362
37.45
53.68
2 010
Virginia
(incl. Unisel & Merriespruit)
Basal
601.0
482
126.59
8.84
1 119
Leader
320.6
303
159.58
7.82
1 248
A Reef
12.1
11
48.27
17.08
824
Middle
37.8
38
118.79
13.16
1 564
B Reef
25.9
17
68.12
5.27
359
All Reefs
997
850
135.81
8.58
1 166
Joel
Beatrix
388
396
149.84
10.80
1 619
All Reefs
388
396
149.84
10.80
1 619
Total Harmony
Basal
1 957
1 745
63.44
17.51
1 111
Beatrix
388
396
149.84
10.80
1 619
Leader
321
303
159.58
7.82
1 248
B Reef
285
218
82.36
15.00
1 235
A Reef
49.3
47.5
105.12
13.31
1 399
Middle
37.8
37.5
118.79
13.16
1 564
Elsburg
323.9
177.5
152.87
14.11
2 157
Kimberley
429.9
415.5
77.00
24.12
1 858
South Reef
387
397.5
64.71
15.93
1 031
VCR
780
746
71.79
18.02
1 294
All Reefs
4 958
4 483
85.69
15.31
1 312
DEVELOPMENT RESULTS
(Imperial)
Quarter ended 31 March 2011
Channel
Channel
Reef
Sampled
Width
Value
Gold
(feet)
(feet)
(inches)
(oz/t)
(in.oz/t)
Tshepong
Basal
1 993
1 929
4
3.04
12
B Reef
370
246
39
0.51
20
All Reefs
2 363
2 175
8
1.63
13
Phakisa & Nyala
Basal
817
886
18
0.54
10
All Reefs
817
886
18
0.54
10
Total Bambanani
(incl. Bambanani, Steyn 1 & Steyn 2)
Basal
247
257
57
0.50
29
All Reefs
247
257
57
0.50
29
Bambanani
Basal
247
257
57
0.50
29
All Reefs
247
257
57
0.50
29
Doornkop
Kimberley Reef
206
177
135
0.07
10
South Reef
1 269
1 304
25
0.47
12
All Reefs
1 475
1 481
39
0.30
12
Kusasalethu
VCR Reef
2 560
2 448
28
0.53
15
All Reefs
2 560
2 448
28
0.53
15
Total Target
(incl. Target 1 & Target 3)
Elsburg
1 063
582
60
0.41
25
A Reef
122
120
48
0.38
18
B Reef
95
57
15
0.66
10
All Reefs
1 279
760
55
0.41
23
Target 1
Elsburg
495
240
77
0.58
44
All Reefs
495
240
77
0.58 44
Target 3
Elsburg
567
342
48
0.23
11
A Reef
122
120
48
0.38
18
B Reef
95
57
15
0.66
10
All Reefs
784
519
45
0.28
12
Masimong
Basal
1 391
1 071
24
0.51
12
B Reef
385
356
32
0.39
13
All Reefs
1 776
1 428
26
0.48
12
Evander
Kimberley
1 204
1 186
15
1.54
23
All Reefs
1 204
1 186
15
1.54
23
Virginia
(incl. Unisel & Merriespruit)
Basal
1 972
1 581
50
0.26
13
Leader
1 052
992
63
0.23
14
A Reef
40
36
19
0.50
9
Middle
124
123
47
0.38
18
B Reef
85
56
27
0.15
4
All Reefs
3 272
2 789
53
0.25
13
Joel
Beatrix
1 273
1 299
59
0.32
19
All Reefs
1 273
1 299
59
0.32
19
Total Harmony
Basal
6 419
5 724
25.00
0.51
12.75
Beatrix
1 273
1 299
59.00
0.32
18.59
Leader
1 052
992
63.00
0.23
14.33
B Reef
935
716
32.00
0.44
14.19
A Reef
162
156
41.00
0.39
16.06
Middle
124
123
47.00
0.38
17.96
Elsburg
1063
582
60.00
0.41
24.77
Kimberley
1 410
1 363
30.00
0.71
21.33
South Reef
1 269
1 304
25.00
0.47
11.83
VCR
2 560
2 448
28.00
0.53
14.86
All Reefs
16 267
14 708
34.00
0.44
15
40
Results for the third quarter and nine months
ended 31 March 2011
CONTACT DETAILS
HARMONY GOLD MINING COMPANY LIMITED
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: http://www.harmony.co.za
PO Box 2
Randfontein, 1760
South Africa
Corner Main Reef Road and Ward Avenue
Randfontein, 1759
South Africa
Telephone: +27 11 411 2000
Website: http://www.harmony.co.za
Directors
P T Motsepe (Chairman)*
G P Briggs (Chief Executive Officer)
H O Meyer (Financial Director)
H E Mashego (Executive Director)
F F T De Buck*^ (Lead independent director)
F Abbott*, J A Chissano*1 , Dr C Diarra*†^
K V Dicks*^ , Dr D S Lushaba* ^, C Markus*^,
M Motloba* ^, M Msimang*^ , D Noko*^,
C M L Savage*^ , A J Wilkens*
G P Briggs (Chief Executive Officer)
H O Meyer (Financial Director)
H E Mashego (Executive Director)
F F T De Buck*^ (Lead independent director)
F Abbott*, J A Chissano*1 , Dr C Diarra*†^
K V Dicks*^ , Dr D S Lushaba* ^, C Markus*^,
M Motloba* ^, M Msimang*^ , D Noko*^,
C M L Savage*^ , A J Wilkens*
* Non-executive
^
Independent
1
Mozambican
†
US/Mali Citizen
Investor Relations Team
Marian van der Walt
Executive: Corporate and Investor Relations
Telephone: +27 11 411 2037
Fax: +27 86 614 0999
Mobile: +27 82 888 1242
E-mail: marian@harmony.co.za
Executive: Corporate and Investor Relations
Telephone: +27 11 411 2037
Fax: +27 86 614 0999
Mobile: +27 82 888 1242
E-mail: marian@harmony.co.za
Henrika Basterfield
Investor Relations Officer
Telephone: +27 11 411 2314
Fax: +27 11 692 3879
Mobile: +27 82 759 1775
E-mail: henrika@harmony.co.za
Investor Relations Officer
Telephone: +27 11 411 2314
Fax: +27 11 692 3879
Mobile: +27 82 759 1775
E-mail: henrika@harmony.co.za
Company Secretary
iThemba Governance and Statutory Solutions (Pty) Ltd
Annamarie van der Merwe
Telephone: +27 86 111 1010
Fax: +27 86 504 1315
Mobile: +27 83 264 0328
E-mail: avdm@ithemba.co.za
Annamarie van der Merwe
Telephone: +27 86 111 1010
Fax: +27 86 504 1315
Mobile: +27 83 264 0328
E-mail: avdm@ithemba.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
PO Box 4844
Johannesburg, 2000
South Africa
Telephone: +27 86 154 6572
Fax: +27 86 674 4381
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
PO Box 4844
Johannesburg, 2000
South Africa
Telephone: +27 86 154 6572
Fax: +27 86 674 4381
United Kingdom Registrars
Capita Registrars
The Registry
34 Beckenham Road
Bechenham
Kent BR3 4TU
United Kingdom
Telephone: 0871 664 0300 (UK)
(calls cost 10p a minute plus network extras, lines are open
8:30 am to 5:30 pm (Monday to Friday)
or +44 (0) 20 8639 3399 (calls from overseas)
Fax: +44 (0) 20 8639 2220
The Registry
34 Beckenham Road
Bechenham
Kent BR3 4TU
United Kingdom
Telephone: 0871 664 0300 (UK)
(calls cost 10p a minute plus network extras, lines are open
8:30 am to 5:30 pm (Monday to Friday)
or +44 (0) 20 8639 3399 (calls from overseas)
Fax: +44 (0) 20 8639 2220
ADR Depositary
BNY Mellon
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1888-BNY-ADRS
Fax: +1 212 571 3050
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1888-BNY-ADRS
Fax: +1 212 571 3050
Sponsor
JP Morgan Equities Limited
1 Fricker Road, corner Hurlingham Road
Illovo, Johannesburg, 2196
Private Bag X9936, Sandton, 2146
Telephone: +27 11 507 0300
Fax: +27 11 507 0503
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
London Stock Exchange Plc: HRM
Euronext, Brussels: HMY
Berlin Stock Exchange: HAM1
New York Stock Exchange, Inc: HMY
London Stock Exchange Plc: HRM
Euronext, Brussels: HMY
Berlin Stock Exchange: HAM1
Registration number 1950/038232/06
Incorporated in the Republic of South Africa
Incorporated in the Republic of South Africa
ISIN: ZAE 000015228
PRINTED BY INCE (PTY) LTD
W2CF11932
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 5, 2011
Harmony Gold Mining Company Limited
By:
/s/ Hannes Meyer
Name: Hannes Meyer
Title: Financial Director
Title: Financial Director