6-K 1 harmony_quarter.htm
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 7 February 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
429 506 618
at 31 December 2010
shares
Market capitalisation
At 31 December 2010 (ZARm)
35 649
At 31 December 2010 (US$m)
5 412
Harmony ordinary share
and ADR prices
12 month high (1 January 2010 to
31 December 2010) for ordinary shares R88.02
12 month low (1 January 2010 to
31 December 2010) for ordinary shares R68.65
12 month high (1 January 2010 to
31 December 2010) for ADRs
US$12.75
12 month low (1 January 2010 to
31 December 2010) for ADRs
US$8.79
Free float
Ordinary shares
100%
ADR ratio
1:1
JSE Limited
HAR
Range for quarter
(1 October 2010 to
R76.18 –
31 December 2010 – closing prices)
R88.02
Average volume for the
quarter (1 October 2010 to
1 178 082
31 December 2010)
shares per day
New York Stock
Exchange, Inc.
HMY
Range for quarter
(1 October 2010 to
US$10.75 –
31 December 2010 – closing prices)
US$12.75
Average volume for the
quarter (1 October 2010 to
1 961 517
31 December 2010)
shares per day
Key features
Closed non-profitable operations
Growth projects in South Africa
• increased production
• quality ounces
Majority of capital expenditure spent
Hidden Valley a great mine
• gold and silver recoveries improved
• commissioned and building-up
Wafi/Golpu growing quarter on quarter
Experienced and focused management team
Financial summary for the second quarter and six months ended
31 December 2010
Quarter
Quarter
6 months
6 months
Year-on-
December
September
Q-on-Q
December
December
year
2010
2010
variance
2010
2009
variance
%
%
Gold produced
(1)
– kg
10 055
10 471
(4)
20 526
23 283
(12)
– oz
323 275
336 650
(4)
659 925
748 555
(12)
Cash costs
– R/kg
216 595
228 658
5
222 787
190 172
(17)
–
US$/oz
979
974
(1)
965
775
(25)
Gold sold
– kg
10 046
10 869
(8)
20 915
23 111
(10)
– oz
322 986
349 447
(8)
672 433
743 034
(10)
Gold price
– R/kg
303 354
287 401
6
295 069
251 968
17
received
– US$/oz
1 371
1 224
12
1 294
1 028
26
Cash operating
– R million
867
652
33
1 519
1 351
12
profit
– US$ million
126
89
42
215
178
21
Basic
– SAc/s
69
24
>100
93
21
>100
earnings –
USc/s 10 3
>100 13 3
>100
per share*
Headline
– Rm
294
141
>100
435
158
>100
profit* –
US$m 43
19
>100
61
21
>100
Headline
– SAc/s
69
33
>100
101
37
>100
earnings –
USc/s 10 5
100 14 5
>100
per share*
Exchange rate
– R/US$
6.88
7.31
(6)
7.09
7.63
(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 Dec 2010 Steyn 2, 18
kg (September 2010 – 31 kg) and Target 3, 170 kg (September 2010 – 111 kg), 6 months ending Dec 2010 Steyn
2, 49 kg (December 2009 – Nil) and Target 3, 281 kg (December 2009 – 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).
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
(“Harmony” or “Company”)
Results for the second quarter and six months ended 31 December 2010
JSE Share code: HAR | NYSE Share code: HMY | ISIN: ZAE 000015228
2
Results for the second quarter and six months
ended 31 December 2010
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.
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:
overall economic and business conditions in
South Africa and elsewhere;
the ability to achieve anticipated efficiencies
and other cost savings in connection with past
and future acquisitions;
increases/decreases in the market price of
gold;
the occurrence of hazards associated with
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;
fluctuations in exchange rates;
currency devaluations and other macro-
economic monetary policies; and
socio-economic instability in South Africa and
regionally.
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
8
– Hidden Valley
8
– Other underground South African operations
8
– Bambanani
8
– Steyn 2
8
– Evander
8
– Joel
9
– Virginia operations
9
– Total South African surface operations
9
– Kalgold
9
– Phoenix
10
– Surface dumps
10
Development
11
Exploration
12
Operating results (Rand/Metric) (US$/Imperial)
14
Condensed consolidated income statement (Rand)
16
Condensed consolidated statement of other comprehensive income (Rand)
17
Condensed consolidated balance sheet (Rand)
18
Condensed consolidated statement of changes in equity (Rand)
19
Condensed consolidated cash flow statement (Rand)
20
Notes to the condensed consolidated financial statements
21
Segment report (Rand/Metric)
26
Operating results (US$/Imperial)
28
Condensed consolidated income statement (US$)
30
Condensed consolidated statement of other comprehensive income (US$)
31
Condensed consolidated balance sheet (US$)
32
Condensed consolidated statement of changes in equity (US$)
33
Condensed consolidated cash flow statement (US$)
34
Segment report (US$/Imperial)
35
Development results – metric and imperial
37
Contact details
40
3
Chief Executive’s Review
Overview
During the course of the second quarter of financial year 2011 we
continued to see the benefits of the numerous management initiatives
coming through, with higher production and lower costs evident from
our growth projects, namely Doornkop, Phakisa and Hidden Valley.
It was particularly pleasing to see good progress in our Papua New
Guinean operations with improved production at Hidden Valley and
positive developments at Wafi-Golpu. However, we also faced certain
operational challenges, such as the unplanned production stoppage
at Kusasalethu during the quarter. The necessary measures to rectify
this issue are implemented and we are confident the operation will
meet its targets next quarter. Throughout the company our operational
management teams remain focused and as such we are confident
about meeting our long term production targets.
Safety
It is with deep regret we report that four of our colleagues died in
mining-related incidents during the quarter. They were Jackson
Morena (a rigger at Kusasalethu), Msiphani Mashwama (member of
the stope team) and Lehlohonolo Nchaka (rock drill operator), both
from Bambanani, and Petrose Rapeane (tramming supervisor at
Tshepong). We extend our deepest condolences to their families,
friends and colleagues.
Safety is the primary priority for every manager at Harmony and we
share a common vision with the union leadership with regard to safety
in the workplace. Progress on this front can only be addressed through
a co-operative approach that ensures that the right environment from a
systems, planning, communication and training perspective is in place,
combined with an acceptance of joint responsibility by management
and employees for our actions. It is important too that such an
environment empowers people; management, supervisors, workers
and union representatives to stop work and withdraw when they feel
it is unsafe, or prevent others from acting in an unsafe way. During
the past quarter Harmony restructured its central safety function by
transferring more senior and experienced personnel to assist and
advise operational teams. Our continued focus on safety has resulted
in an improved underlying safety performance (see page 5).
Gold market
In Rand per kilogram terms, the received gold price increased by
6% from R287 401/kg in the previous quarter to R303 354/kg in the
current quarter. Over the course of calendar year 2010, the gold price
in dollar terms increased by 29%. The strength of the Rand continues
to place pressure on the R/kg price which, in turn, continues to place
further pressure on gold miners whose costs are in Rand. We feel
the continued investment demand for gold will be the critical factor
supporting the gold price in 2011 and believe that even higher gold
prices may be achieved this year.
Operating performance
Production at Doornkop, Phakisa and Hidden Valley improved
substantially, by 19%, 34% and 23%, respectively. However, overall
total gold production for the past quarter decreased by 4% quarter
on quarter from 10 471kg to 10 055kg, mainly as a result of safety
stoppages at Bambanani and Kusasalethu. While volumes were 8%
lower than the previous quarter at 4 675 000t, the average yield was
4% higher at 2.11g/t. Underground gold production was 5% lower at
8 273kg, as volumes were 4% lower at 1 759 000t and the underground
grade declined by 2% to 4.6g/t.
Both Tshepong and Masimong showed a steady production
performance, with Masimong still the lowest cost producer at
R168 907/kg. Target 3 is back on track, with a 57% improvement in
tonnes mined, and Joel is also back in production. Following the
closure of Merriespruit 1, the Virginia operations, now comprising
solely of Unisel, produced net free cash of R43 million (the Virginia
operations recorded a loss of R36 million in the previous quarter),
validating the decision to close the loss-making shafts.
The gold production at Hidden Valley increased by 23% to 53 169oz
and silver production increased by 44% to 382 655oz quarter on
quarter (50% attributable to Harmony). Hidden Valley is a high value
asset for Harmony and it is particularly pleasing to see the improving
results after some commissioning problems.
Countering these production improvements was Evander 8, which
experienced a drop in face grade causing gold production to decrease
by 6%. Kalgold’s grade and volume was lower quarter on quarter and
gold production decreased by 8%. Bambanani’s volume was down by
19%, with grade only increasing by 3%. The Steyn 2 production plan
was revised and the major focus will now be to get the shaft pillar into
production by August 2011.
The rock/ventilation shaft accident which occurred in October 2010 at
Kusasalethu restricted hoisting and was the main contributor to the
group’s overall lower production. The shaft is now back to hoisting
capacity and the underground accumulations of the December 2010
quarter will be rectified.
Financial performance
The Rand per kilogram unit cost for the December 2010
quarter decreased by 5% quarter on quarter to R216 595/kg from
R228 658/kg. This is mainly attributable to the decrease in cash
operating costs, which decreased by R225 million (10%) quarter on
quarter. The primary factors for the decrease were the lower electricity
(winter tariffs of R147 million) and labour costs.
In Rand per kilogram terms, the gold price received increased by 6%
from R287 401/kg in the September 2010 quarter to R303 354/kg in the
current quarter. A decrease in the gold sold for the December 2010
quarter of 823kg (8%) to 10 046 kilograms resulted in a drop in revenue
of 3% compared to the previous quarter.
Capital expenditure increased by R88 million (12%) to R835 million in the
quarter under review compared with R747 million in September 2010
quarter, in line with the company’s mine plans.
Operating profit for the quarter increased by R215 million (33%) to
R867 million, compared with R652 million in the September 2010 quarter.
Wafi/Golpu
The Golpu resource continues to expand to the north as drilling
continues to define further mineralisation. A significant intersection
of 595m @ 2.03% copper and 1.65g/t gold (5.0g/t gold equivalent)
4
Results for the second quarter and six months
ended 31 December 2010
has been reported in WR363. The drilling campaign this quarter
included holes to gain metallurgical samples of Wafi and geotechnical
information for the Watut decline. The pre-feasibility study technical
work packages have been allocated to various consultants and is
progressing well.
Due to the continuing robustness of the Golpu resource, the study group
is considering upgrading early works to accommodate likely operating
scenarios, including the construction of twin declines and purchase
of land for early infrastructure. This will be assessed by management
and, if considered appropriate, will be submitted for board approval.
Recent exploration has produced better than expected results and we
are very pleased with the progress here.
Looking ahead
We remain confident that we will reach our long term targets and our
focus is to increase production to 2Moz of gold by FY13, with costs
per tonne milled in the lowest quartile of South African producers.
The company has turned the corner, with the closure of unprofitable
operations, our longer-life lower cost operations are profitable
and sustainable. With the closure of some shafts and unplanned
production setbacks during the first six months of financial year 2011,
production for the financial year 2011 will most likely be between
1.45Moz and 1.5Moz.
Harmony is well positioned to reap the benefits of a number of the
initiatives we have implemented over the last three years aimed at
optimising the asset portfolio and increasing operational efficiency.
We will continue to strive for an improved safety performance and
as ever, our employees have the right to withdraw from unsafe
areas. Overall, we have seen improved safety figures and we hope to
continue this trend.
Given the expertise of our operational management teams, I feel
confident in our ability to clear any hurdles in reaching our goal of
being a sustainable low cost high quality producer.
Graham Briggs
Chief Executive Officer
5
Safety and health
Safety
Our approach to safety is comprehensive and includes training,
auditing, communication, specific management interventions and
programmes and on-going campaigns. There is not a safety-related
event or issue that is not considered or addressed in a co-operative
way on-mine between unions and management, from the introduction
of new standards, to training needs, to investigations into accidents –
and that is the way it should be. We are in this together and together
our safety target can be reached. Our number one safety rule – that
every employee has the right to withdraw from an unsafe area –
stands and is non-negotiable.
Tragically, four fatalities occurred in three incidents at the South African
operations during the December 2010 quarter.
Harmony achieved a single digit figure in respect of its Lost Time Injury
Frequency Rate (LTIFR) for the ninth quarter in a row. For the year
to date, the LTIFR (per million hours worked) improved by 3% when
compared to the actual figure for the previous year (from 7.73 to 7.47)
and by 15% quarter on quarter (from 8.06 to 6.88).
The Reportable Injury Frequency Rate (RIFR) (per million hours worked)
to date regressed by 6% when compared to the actual figure for the
previous year (from 4.19 to 4.43) but improved by 15% quarter on
quarter (from 4.78 to 4.08).
The Fatal Injury Frequency Rate (FIFR) to date rate rose by 5% when
compared to the actual figure for the previous year (from 0.21 to 0.22),
but improved by 33% quarter on quarter (from 0.27 to 0.18).
Safety achievements for the quarter included:
Total Harmony surface and
underground operations:
1 000 000 fatality free shifts
South African surface and
underground operations:
1 000 000 fatality free shifts
South African surface operations:
2 000 000 fatality free shifts
Kusasalethu, Doornkop,
Evander and Kalgold:
2 000 000 fatality free shifts
Masimong:
1 000 000 fatality free shifts
Evander 8:
500 000 fatality free shifts
Unisel and Merriespruit 1:
500 000 fatality free shifts
Doornkop:
500 000 fatality free shifts.
The following operations completed the December 2010 quarter
without an injury:
• Masimong 4
• Phoenix Plant
• Target Plant
• Harmony 1 Plant
• Free State Commercial Services and Transport
• Randfontein Commercial Services and Transport
• Evander Workshops
• Evander Services
• Randfontein Surface Operations
• Merriespruit 3
The following operations completed two consecutive quarters without
an injury:
• Phoenix Plant
• Target Plant
• Free State Commercial Services and Transport
• Randfontein Commercial Services and Transport
• Evander Workshops
• Evander Services
Health
During the quarter our pro-active approach to the health and wellness
of our employees continued. 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. These efforts have resulted in
improved health and a better quality of life for our employees.
See our Sustainable Development Report for more details on our
website www.harmony.co.za.
6
Results for the second quarter and six months
ended 31 December 2010
Financial overview
Cash operating profit increased by 33% to R867 million in the December
2010 quarter. This was mainly due to a decrease in production cost of
R225 million as a result of lower electricity tariffs and restructuring
efforts. This decrease was offset by a decrease in revenue, as a result
of a 4% lower gold production, which resulted in lower gold sales.
Earnings per share
Basic earnings per share increased from 24 SA cents to 69 SA cents.
Similarly headline earnings per share increased from 33 SA cents to
earnings of 69 SA cents.
Revenue
Revenue decreased from R3 083 million to R2 990 million as a result of
the lower gold production. This decrease was offset by an increase in
the Rand gold price received from R287 401/kg to R303 354/kg.
Cost of sales
Cost of sales decreased from R2 995 million to R2 506 million in the
December 2010 quarter. This was due to the decrease of R225 million
in production costs and insurance credits to the value of R179 million
following the unwinding of the previous insurance scheme.
Other income/expenses
Other income amounted to R6 million in the December 2010 quarter,
compared to an expense of R54 million in the September 2010 quarter,
which included R47 million foreign exchange losses from other
reserves on the liquidation of foreign subsidiaries.
Gain on financial instruments
The net gain on financial instruments amounted to R78 million in
the December 2010 quarter, which was an increase in fair value of
the Nedbank Equity Linked Deposits held by the Environmental
Trusts. In the September 2010 quarter this amount was R311 million,
which comprised mainly of the revaluation of the Freegold option by
R273 million following the conclusion of the sales agreement to sell the
option to Wits Gold.
Capital expenditure
Total capital expenditure increased by 12% to R835 million in the
December 2010 quarter with R750 million spent in South Africa and
R85 million in PNG.
Borrowings
During the quarter an additional R750 million funding facility was
arranged with Nedbank Limited on similar terms to the existing facility.
Of this, R500 million was drawn down while R90 million was repaid on
the existing facility. The undrawn facility at balance sheet date was
R550 million.
Operational overview
Group operational results
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
4 675
5 098
(8)
Grade (g/t) 2.11 2.03 4
Gold produced
(kg)
10 055
10 471
(4)
Gold sold
(kg)
10 046
10 869
(8)
Cash operating costs (R/kg)
216 595
228 658
5
Operating profit
(R’000) 867 489
651 902
33
Quarter on quarter cash operating profit increased by 33% to
R867 million, mainly as a result of production trends moving in the right
direction at our build-up operations and a higher gold price received.
Gold production declined by 4% to 10 055kg, with volumes 8% lower at
4 675 000 tonnes and steady grade at 2.11g/t.
The decline in total cash operating costs was pleasing at
R216 595/kg compared to R228 658/kg in the previous quarter, mainly
due to restructuring efforts and lower electricity tariffs.
Build-up and steady operations
Doornkop
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000) 171 140 22
Grade (g/t) 3.76 3.86 (3)
Gold produced
(kg) 643 541
19
Cash operating costs (R/kg)
229 894
249 294
8
Operating profit
(R’000)
44 938
20 502
>100
Tonnes milled improved by 22% quarter on quarter. This improvement
was driven by higher volumes mined at both the Kimberley Reef and the
South Reef. The improvement on the Kimberley Reef can be attributed
to the improved availability of trackless equipment and the arrival of a
new fleet of equipment. The South Reef improvement was driven by a
22% improvement in the square metres mined. On the South Reef all
12 additional stoping crews transferred from Merriespruit 1 assisted
with higher production.
7
Gold production increased by 19% to 643kg this quarter, mainly due to
the 12% increase in reef square metres mined and a very high mine
call factor (MCF). The MCF increased from 86% to 94% quarter on
quarter.
Cash cost increased by 10% to R148 million compared with the
previous quarter’s figure of R135 million, due to additional labour being
employed. Higher production has offset this cost resulting in unit cost
improving by 8% to R229 894/kg.
Kusasalethu
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
228
269
(15)
Grade (g/t)
4.59
5.62
(18)
Gold produced
(kg)
1 046
1 513
(31)
Cash operating costs
(R/kg)
274 201
225 164
(22)
Operating profit
(R’000)
40 192
88 758
(55)
Planned build-up at Kusasalethu was hampered by a fatal accident
that caused damage to the hoisting shaft and restricted hoisting of ore
to the surface. As a result, production and tonnes milled decreased
by 31% and 15% respectively and recovery grade decreased by
18% at 4.59g/t.
The R/kg unit cost increased by 22% quarter on quarter due to lower
kilograms produced when compared to the previous quarter.
The mechanical construction work on the refrigeration plants was
delayed due to the shaft accident and will be completed by the
end of March 2011. Sinking has progressed 38m down to 113 level
from 109 level although this was also delayed as a result of the shaft
accident. The turbine on 92 level’s mechanical installation will be
completed end of February 2011.
Phakisa
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
107
86
24
Grade (g/t)
4.72
4.38
8
Gold produced
(kg)
505
377
34
Cash operating costs
(R/kg)
221 491
296 520
25
Operating profit
(R’000)
43 769
320
>100
An improvement of 40% in development metres quarter on quarter,
resulted in higher tonnes mined at 107 000 tonnes, compared to
86 000 tonnes in the previous quarter. Gold production increased by
34% to 505kg and grade increased by 8% to 4.72.
Higher production resulted in operating profit increasing substantially
to R44 million for the quarter.
Phakisa’s ice plants achieved a new record of 1 763 tonnes of ice per
day during the quarter, resulting in lower water temperatures, which
improved ventilation as well as productivity at this operation.
Masimong
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
219
243
(10)
Grade (g/t)
5.26
5.20
1
Gold produced
(kg)
1 151
1 263
(9)
Cash operating costs
(R/kg)
168 907
161 372
(5)
Operating profit
(R’000)
160 961
172 532
(7)
Masimong remains the lowest R/kg producer in the company at
R168 907/kg. Tonnes mined decreased by 10%, despite an increase of
13% in square metres mined, due to an underground lock-up of tonnes.
A ventilation change over process and unwarranted stoppages by the
Department of Mineral Resources resulted in the lock-up. The whole
ventilation circuit had to be changed, as it was originally done through
a booster fan system. The process was completed within three days
and improved ventilation conditions are already evident.
A decrease in production of 9% to 1 151kg, resulted in slightly higher
cash operating costs at R168 907/kg. Recovery grades increased
to 5.26 g/t.
Target 1
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
196
205
(4)
Grade (g/t)
4.41
4.08
8
Gold produced
(kg)
865
836
4
Cash operating costs
(R/kg)
191 083
215 050
11
Operating profit
(R’000)
98 380
54 702
80
Gold production increased by 4%, a result of an 8% improvement in
grade to 4.41g/t from 4.08g/t the previous quarter, despite a 4% decline
in tonnage quarter on quarter. The improved grade was a result of the
higher grade ore mined in the 272 EA sub-level pillar and the reduced
incidence of development waste in the system.
Costs were 8% down on the previous quarter, mainly owing to reduced
electricity, labour and rehabilitation costs. Much of the rehabilitation
work on the infrastructure has now been done.
Target 3
December
September
%
Indicator Units
2010
2010
variance
Gold produced
(kg)
170
111
53
Build-up of the shaft was an impressive improvement of 57% to
55 000 tonnes and 170 kilograms during the quarter. This despite the
extensive infrastructure improvements in the shafts and one fridge
plant which is only due to be commissioned in the March 2011 quarter.
8
Results for the second quarter and six months
ended 31 December 2010
Tshepong
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
345
338
2
Grade (g/t)
4.72
4.99
(5)
Gold produced
(kg)
1 628
1 688
(4)
Cash operating costs
(R/kg)
176 052
175 322
–
Operating profit
(R’000)
212 948
206 436
3
Tshepong’s performance remains steady, with a 2% increase in tonnes
milled to 345 000 tonnes, whilst the grade and gold production declined
by 5% and 4% respectively. Tshepong’s grade remains sensitive to
stoping width, which is rigorously controlled by the under-cut mining
method used at this mine.
Total cash operating costs in R/kg terms are the second lowest in
the group at R176 052/kg and remained steady quarter on quarter.
Operating profit increased by 3% from the previous quarter mainly due
a higher gold price.
Hidden Valley (held in Morobe Mining Joint Venture – 50% of
attributable production reflected)
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
425
427
(1)
Grade (g/t)
1.95
1.57
24
Gold produced
(kg)
827
671
23
Cash operating costs
(R/kg)
195 605
244 720
20
Operating profit
(R’000)
99 265
18 946
>100
Hidden Valley had an excellent quarter, with an increase in gold
production of 23% to 827kg, due to higher gold feed grades
and improved recoveries. Silver production increased by 44% at
191 327 ounces quarter on quarter, as a result of higher recoveries.
The average plant head grade for the quarter was 2.21 g/t Au, while
the silver grade was 26.6 g/t Ag, with unit costs lower at R195 605/kg
(US$884/oz), in comparison to R244 720/kg ($1 042/oz) in the previous
quarter.
Plant throughput was maintained at 850 000 tonnes, mainly due to mill
constraints, which will be resolved once a higher proportion of primary
ore is delivered to the processing plant. Significant increases in gold
and silver recovery rates, reflect ongoing improvements in both the
flotation and CIL (carbon in leach) circuit.
Cash operating cost, decreased by 20% to R195 605/kg (US$/884/oz).
An operating profit of R99 million was reported for this quarter.
Other underground South African operations
Bambanani
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
104
129
(19)
Grade (g/t)
7.27
7.06
3
Gold produced
(kg)
756
911
(17)
Cash operating costs
(R/kg)
260 147
245 750
(6)
Operating profit
(R’000)
34 468
46 485
(26)
Bambanani’s tonnage and gold production declined by 19% and 17%
respectively, largely as a result of the seismic event that occurred
in October 2010. After the seismic event, a full risk assessment was
undertaken and it was decided to stop mining four pillars that posed a
safety risk, which will reduce Bambanani’s tonnage profile.
The grade improved by 3% to 7.27g/t from 7.06g/t in the previous
quarter. Better grades are expected in the next quarter, following the
implementation of a number of improvement initiatives.
Cash operating costs increased by 6% to R260 147/kg, mainly due to
the decline in gold production, offset by lower electricity tariffs. The
lower gold production had a negative effect on operating profit, which
declined by 26% to R34 million.
Steyn 2
December
September
%
Indicator Units
2010
2010
variance
Gold produced
(kg)
18
31
(42)
During the quarter it was decided to abandon the pillars in the main
shaft for safety reasons. In addition, given the deterioration in the rock
hoisting decline over time, it was decided to abandon the decline too
and create another route to Bambanani for rock hoisting. This was
completed towards the end of December 2010.
As a result of these decisions, the original plan for the build-up of
production at Steyn 2 will be amended. The major focus will now be on
bringing the shaft pillar into production in the 2011/12 financial year.
A small amount of mining will continue in the decline section during
this time.
Evander
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
139
140
(1)
Grade (g/t)
3.72
3.94
(6)
Gold produced
(kg)
517
552
(6)
Cash operating costs
(R/kg)
300 698
290 188
(4)
Operating profit/(loss)
(R’000)
1 330
(2 192)
>100
9
Tonnes milled and kilograms produced decreased quarter on quarter
by 1% and 6% respectively. Environmental conditions improved, with
the chilled water reducing the heat load in the decline section.
Grade decreased by 6% from 3.94g/t to 3.72g/t. The lower recovery
grade and tonnes locked up underground resulted in a decrease
in gold produced of 35kg quarter on quarter, while the face grade
remained steady.
Total cash cost decreased by 3% quarter on quarter mainly as a result
of lower summer electricity tariffs and reduced labour costs following
the restructuring. R/kg costs increased by 4%, due to lower gold
production.
Joel
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
128
40
>100
Grade (g/t)
3.19
3.70
(14)
Gold produced
(kg)
408
148
>100
Cash operating costs
(R/kg)
276 787
588 101
53
Operating (loss)/profit
(R’000)
2 127
(31 153)
>100
Joel resumed production in mid-September 2010, on completion of
the repairs to the North shaft bottom. As a result volumes produced
improved dramatically to 128 000 tonnes, with gold production higher
at 408kg.
Grade was down by 14% at 3.19g/t compared to 3.70g/t the previous
quarter. This was influenced by the lift shaft as the higher grades on
129 level cannot be mined until the lift shaft has been commissioned.
Equipping of the lift shaft is progressing well and will be completed
during the forthcoming quarter. A feasibility study on the possible
mining of 137 level and testing the upside potential of 145 level is well
underway and the final feasibility presentation is planned for the June
2011 quarter.
Unit costs improved significantly, up 53% to R276 787/kg compared to
R588 101/kg the previous quarter.
Virginia operations
December
September
%
Indicator Units
2010
2010
variance
Tonnes milled
(’000)
122
244
(50)
Grade (g/t)
4.64
3.11
49
Gold produced
(kg)
566
760
(26)
Cash operating costs
(R/kg)
197 512
300 593
34
Operating (loss)/profit
(R’000)
51 426
(2 136)
>100
The past quarter reflected Unisel’s production and a small portion of
Merriespruit 1 prior to its closure. Grade improved by 49% to 4.64g/t
from 3.11g/t in the previous quarter. This resulted in impressive
financial results. The Virginia operations milled 50% less tonnes and
produced 26% less gold during this quarter, following the closure of
Merriespruit 1, but recorded a cash operating profit of R51 million this
quarter, compared to a R2 million loss in the previous quarter. The R/kg
costs improved by 34% to R197 512/kg from R300 593/kg the previous
quarter.
Total South African surface operations
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
2 491
2 837
(12)
Grade (g/t) 0.38 0.38 –
Gold produced
(kg) 955
1
069
(11)
Gold sold
(kg) 898
1
103
(19)
Cash operating costs (R/kg)
215 422
216 260
–
Operating profit
(R’000)
77 685
78 702
(1)
Tonnes mined decreased by 12% and gold produced by 11%, while
grade remained stable at 0.38g/t. The cash operating cost in Rand per
kilogram remained steady.
Kalgold
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
413
433
(5)
Grade (g/t)
0.82
0.85
(4)
Gold produced
(kg)
339
368
(8)
Cash operating costs
(R/kg)
246 475
238 840
(3)
Operating profit
(R’000)
16 976
26 036
(35)
Production volumes milled and gold production declined by 5% and 8%
respectively. Milling was adversely affected by breakdowns on the mill
girth gears in November 2011, which have been repaired.
Cash cost decreased by 5% to R84 million, while unit cash costs in
Rand increased by 3%. The decrease in costs was mainly a result of a
reduction in plant costs
in lieu
of improved control over engineering
consumables and lower summer rates for electricity.
10
Results for the second quarter and six months
ended 31 December 2010
Phoenix (tailings)
December
September
%
Indicator Units
2010
2010
variance
Tonnes
(’000)
1 266
1 546
(18)
Grade (g/t)
0.11
0.11
–
Gold produced
(kg)
138
165
(16)
Cash operating costs
(R/kg)
241 659
231 606
(4)
Operating profit
(R’000)
8 728
9 133
(4)
Both tonnes and kilograms produced by the Phoenix tailings
decreased by 18% and 16% respectively. This decrease was
attributable to breakdowns in December 2010, due to excessive rain
and pump failures.
Total cash operating cost decreased by 13% from the previous quarter
and the operating profit is down by 4%.
Surface dumps
December
September
%
Indicator Units
2010
2010
variance
Tonnes (’000)
812
858
(5)
Grade (g/t)
0.59
0.62
(5)
Gold produced
(kg)
478
536
(11)
Gold sold
(kg)
478
536
(11)
Cash operating costs
(R/kg)
185 824
196 034
5
Operating profit
(R’000)
51 981
43 533
19
Tonnes milled and kilograms produced decreased by 5% and 11%
respectively, mainly due to mill failures at Joel plant in November and
December 2010. Plant capacity was well utilised and during the break
period, increased waste rock dump (WRD) material was delivered to
the plants.
Grade at 0.59g/t was 5% lower than in the previous quarter, due to
grades at the Joel and Freddies waste rock dumps being lower than
planned – influencing the overall grade from surface sources. The
Bambanani waste rock dump also had slightly lower grades. The
grade of material sourced from the plant clean-up remained high for
the quarter.
Costs were well controlled and in line with the lower tonnages
processed, assisted by the reduction in electricity tariffs.
11
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.
Bambanani
In the southern part of the mine, development grades are in line with
expected grades. In line with expectations, high grades averaging
3.855cmg/t were sampled in the wide raise development in the shaft
pillar area.
Doornkop
In general, South Reef development grades at Doornkop were better
than expected owing to the presence of carbon in some areas and
because of the intersection of thicker reef packages in certain areas.
No on-reef development was planned for the Kimberly Reef.
Evander
Almost all on-reef development is now concentrated on the Kinross
payshoot in the decline area. The development grade also improved
quarter on quarter, in line with expectations.
Joel
Development grades were in line with expectations and remain good
in the winzes being developed from 121 to 129 levels.
Kusasalethu
On-reef development returned better-than-expected grades in both
the old and new mine areas. In the new mine, some very good grades,
above 2.500cmg/t were encountered in areas where the Elsburg reef
sub-crops against the VCR.
Masimong
The Basal reef development values were maintained in the region of
the reserve grade while there was a drop in B reef grades since some
of the wide raises advanced into areas that are outside of the main
B reef channels.
Phakisa
While being lower than the ore reserve grade, the development
grades were as expected for the areas currently being developed. As
discussed previously, most of the development at Phakisa is still taking
place in the lower grade central block with its very erratic nature in
terms of grade. The major drive is still on the development of the area
to the north to access the higher grade Black Chert facies and move
closer to the average reserve grade. New raise lines towards the north
will be developed in the next quarter and an improved development
grade is expected.
Target (narrow reef mining)
At the Target 1 shaft, good values were sampled in the one raise that
is being developed for narrow reef stoping. 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, the focus remained on getting
development here up to planned levels.
Tshepong
Quarter on quarter, both the Basal and B reef development grades
increased more than satisfactorily as did the development metres.
In the Tshepong B reef project area, grades sampled averaged
3.339cmg/t.
Virginia (Unisel)
At Unisel, the development grades of all the reefs being developed
(Leader, Basal and Middle reefs) improved. The grades achieved were
mostly in line with expectations. Since development of the high-grade
Middle reef was completed during the December quarter, a decrease
in the average development grade is expected in the next quarter.
Ore reserve block grades v development grades
12
Results for the second quarter and six months
ended 31 December 2010
Exploration
International (Papua New Guinea)*
Morobe Mining Joint Venture
Wafi-Golpu
Drilling at the Wafi-Golpu project in Papua New Guinea (PNG) has
indicated further significant exploration drill 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
1
017 860
1.37
0.70
2.68
WR363 Golpu 914 595
2.03
1.65
4.58
* Based on gold price of US$950/oz and copper price of US$2/lb.
The results at Golpu indicate that the mineralised porphyry continues
to the north at grades higher than currently declared in the resource.
The intersection is deep and infill drilling will test the up-dip extent of
the porphyry.
The intersection in WR363, 595m @ 2.03% copper and 1.65g/t gold
(4.58g/t gold equivalent) extends the resource to the north and pushes
the metasediment halo significantly further to the west. This will have
the effect of increasing in tonnes as well as grade.
WR347 intersected the resource as predicted but at a higher average
grade than had been identified in the resource. The hole also indicates
that the resource is wider and pushes out further to the west.
At Wafi, where we have targeted infill drilling for the metallurgical test
work, we are also receiving significant intersections which confirm our
previous estimates.
Hidden Valley satellite deposit exploration
Work to establish satellite resources and capitalise on the infrastructure
around Hidden Valley has focused almost entirely on the Kulang
prospect. Activities peripheral to this have included:
• Apu Creek sterilisation drilling (2 holes/987m)
• Surface mapping, trenching and sampling at Avina/Yafo
(245 samples)
• ML structural interpretation and integration with geological
data sets.
Target area locations and prospect details are outlined below:
Waterfall Prospect – Hidden Valley ML151
Final assay results were received for the Waterfall prospect drilling
with only broad, low grade anomalism intersected near surface and
limited gold mineralisation associated with the Waterfall and Keru
faults. Results included:
• TCDH004:
53m @ 0.5 g/t Au from 0m
• TCDH005:
131m @ 0.3 g/t Au from 0m
Apart from some interpretative work to contextualise these results
geologically, no further work is planned at this stage.
Kulang prospect – EL497
Exploration activities for the quarter focused on developing the Kulang
prospect, located approximately 7km east of the Hamata processing
plant, and approximately 4km southwest of Wau.
Mapping to date has outlined a major zone of strong clay-pyrite
(argillic) alteration extending from Kerimenge in the south, to Kulang
in the north over 5km of strike. Within the alteration zone, areas of
mineralised quartz-carbonate-base metal sulphide veins are developed
which include the Kulang prospect area.
Channel sampling of mineralised outcrop at Kulang has returned
excellent first pass results including:
KUL CK TR3:
38m @ 1.74 g/t Au, 20.22 g/t Ag
38m @ 3.96 g/t Au, 11.48 g/t Ag
Drilling commenced late in the quarter and several zones of epithermal
style base metal carbonate veins have already been intersected in the
first hole.
PNG exploration (Harmony 100%)
Mount Hagen project (EL1611 and EL1596)
Exploration activities for the past quarter at the Mount Hagen project
included:
• Bakil prospect diamond drilling (two holes completed for 396.5m)
• Reconnaissance mapping and sampling at Bakil Prospect
• Mt Hagen detailed regional airborne magnetic survey
Kurunga prospect
Final assay results for drill hole KUDD007 were received. These
were disappointing as the zone of intense veining and alteration in
the hole failed to return any significant gold or copper intercepts.
The best intercept in KUDD007 was 9m grading 0.39g/t Au from
59m, including 1m grading 1.88 g/t Au from 65m. This mineralisation
corresponds with the fault-related mineralisation outcropping in
Borgopana Creek. Geological work to integrate drill hole data, geology,
and geochemistry, with recently obtained detailed magnetics is
underway.
Bakil prospect
Bakil phase 1 diamond drilling comprised two holes (396.5m) drilled
from the same pad. The initial hole collapsed, and had to be re-drilled
at a shallower dip.
The hole was designed to test anomalous copper rock-chip values
associated with a major zone of clay-pyrite (argillic) alteration. The
alteration coincides with the contact of metasediments and diorite
porphyry. Several zones of argillic altered porphyry were obtained in
the drill core.
13
Amanab projects (EL1708)
Ongoing work at the Amanab project has focused on grid-based
mapping and soil sampling of the Aiyule magnetic target at Yup West.
A total of 307 soil samples were collected during the quarter together
with 16 rock chip samples. Results are pending.
Programme planning to follow up on highly anomalous soil (13.8g/t)
and rock chip values (4.54g/t) received last quarter is underway.
* 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.
South Africa
Joel North
Following completion of a successful R20 million surface drilling
programme, the project advanced to the pre-feasibility stage to
determine whether the depth extension to 137 and 145 levels could
be mined profitably.
The pre-feasibility was completed during the quarter and a gate-
keeping session held at which it was decided to take the project
through to feasibility. It was decided, in line with the recommendation
in the pre-feasibility, to take the twin decline from 129 level down to
just below 145 level, which will mine out both the 137 and 145 levels.
The feasibility will investigate the possibility of re-equipping the shaft
for rock, men and equipment, as we believe that there may be a
significant reduction in operating cost if the use of the south shaft
could be minimised.
Poplar
The Poplar project is in the Evander region, immediately north of
Evander South. Exploration drilling was carried out by previous
owners over a fifty-year period, resulting in numerous feasibility
reports. A feasibility study was completed for Harmony in June 2003
which delineated resources of 25.5Mt @ 7.58g/t and reserves of
13.5Mt @ 7.45 g/t. The resource occurs between 500m and 1 300m
below surface and the relatively shallow depth allows the project to
produce first gold within five years.
Drilling during the quarter progressed exceedingly well and to such an
extent that the contractor was able to demobilise and leave site early,
prior to Christmas. Results from the majority of holes had been received
by the beginning of December when a decision was taken to drill only
those holes that could be expected to add significant resources to the
total. A total of 5 186 metres were drilled during the quarter out of a
final total of 17 835 metres. The programme was scheduled to cost
over R40 million but is likely to finally cost a little under R30 million
after re-opening of previously drilled pilot holes proved successful and
minimal adverse ground conditions were encountered.
Uranium Project Tshepong, Phakisa, Masimong (TPM)
Project TPM was established to evaluate the potential for the economic
recovery of uranium from the ore mined at the Tshepong, Phakisa and
Masimong operations in the Free State. The resource totals 169.6Mt
and contains 82Mlbs of uranium (to be used in the feasibility study
mining model). The project is expected to produce an average of
600 000 lbs of uranium per annum from 280 000 tonnes per month
of underground ore over an 18-year life. The uranium processing has
the added benefit of enhancing gold recovery by 0.1g/t resulting in
increased gold production from these operations increasing by
some 28kg per month. By treating the uranium as a by-product, it is
accounted for as a credit, resulting in a reduction in the operating costs
of the contributing shafts by approximately R20 000 per kg.
A recovered uranium grade of 100 ppm continues to be used and
will be updated in the feasibility study. Current head grade assay data
received is in the order of 122 ppm.
The feasibility study is progressing well and remains due for completion
in May 2011. NNR (National Nuclear Regulator) and Department of
Energy approval were received shortly before the end of December
2010 and the pilot plant has just been hot commissioned with further
test work in progress. The testing period is expected to last 45 days
and the results will be incorporated into the feasibility study.
14
Results for the second quarter and six months
ended 31 December 2010
15
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
Virginia
ground
Kalgold Phoenix Dumps Surface
Other
Total
Valley
Total
Ore milled
– t’000
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
Sep-10
129
140
140
40
269
243
86
–
205
–
338
244
1 834
433
1 546
858
2 837
–
4 671
427
5 098
Gold produced
– kg
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
Sep-10
911
541
552
148
1 513
1 263
377
31
836
111
1 688
760
8 731
368
165
536
1 069
–
9 800
671
10 471
Gold produced
– oz
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
Sep-10
29 289
17 394
17 747
4 758
48 644
40 606
12 121
997
26 878
3 569
54 270
24 435
280 708
11 831
5 305
17 233
34 369
–
315 077
21 573
336 650
Yield
–
g/tonne
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
Sep-10
7.06 3.86 3.94 3.70 5.62 5.20
4.38 – 4.08 – 4.99 3.11 4.68
0.85
0.11
0.62 0.38
– 2.07
1.57 2.03
Cash operating costs
– R/kg
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
Sep-10
245 750
249 294
290 188
588 101
225 164
161 372
296 520
–
215 050
–
175 322
300 593
228 946
238 840
231 606
196 034
216 260
–
227 542
244 720
228 658
Cash operating costs
– $/oz
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
Sep-10
1 046
1 061
1 236
2 504
959
687
1 263
–
916
–
746
1 280
975
1 017
986
835
921
–
969
1 042
974
Cash operating costs
– R/tonne
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
Sep-10
1 735
963
1 144
2 176
1 266
839
1 300
–
877
–
876
936
1 072
203
25
122
81
–
470
385
463
Gold sold
– Kg
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
Sep-10
939
585
608
152
1 661
1 302
388
31
847
111
1 739
776
9 139
402
165
536
1 103
–
10 242
627
10 869
Gold sold
– oz
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
Sep-10
30 190
18 808
19 548
4 887
53 402
41 860
12 474
997
27 232
3 569
55 910
24 949
293 826
12 925
5 305
17 233
35 463
–
329 289
20 158
349 447
Revenue
(R’000)
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
Sep-10
269 901
168 047
174 211
43 915
475 433
374 366
111 701
–
244 091
–
500 096
222 842
2 584 603
115 562
47 348
153 582
316 492
–
2 901 095
181 854
3 082 949
Cash operating
(R’000)
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
costs
Sep-10
223 878
134 868
160 184
87 039
340 673
203 813
111 788
–
179 782
–
295 944
228 451
1 966 420
87 893
38 215
105 074
231 182
–
2 197 602
164 207
2 361 809
Inventory
(R’000)
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)
movement
Sep-10
(462)
12 677
16 219
(11 971)
46 002
(1 979)
(407)
–
9 607
–
(2 284)
(3 473)
63 929
1 633
–
4 975
6 608
–
70 537
(1 299) 69 238
Operating costs
(R’000)
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
Sep-10
223 416
147 545
176 403
75 068
386 675
201 834
111 381
–
189 389
–
293 660
224 978
2 030 349
89 526
38 215
110 049
237 790
–
2 268 139
162 908
2 431 047
Operating profit
(R’000)
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
Sep-10
46 485
20 502
(2 192)
(31 153)
88 758
172 532
320
–
54 702
–
206 436
(2 136)
554 254
26 036
9 133
43 533
78 702
–
632 956
18 946
651 902
Operating profit
($’000)
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
Sep-10
6 362
2 807
(300)
(4 265)
12 150
23 618
44
–
7 487
–
28 260
(291)
75 872
3 564
1 249
5 959
10 772
–
86 644
2 593
89 237
Capital expenditure
(R’000)
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
Sep-10
38 917
69 496
59 207
18 337
104 357
40 463
91 716
44 290
62 112
56 067
60 650
30 173
675 785
4 645
–
–
4 645
7 626
688 056
59 218
747 274
Capital expenditure
($’000)
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
Sep-10
5 327
9 513
8 105
2 510
14 285
5 539
12 555
6 063
8 502
7 675
8 302
4 130
92 506
636
–
–
636
1 044
94 186
8 105
102 291
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.
16
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED INCOME STATEMENT (Rand)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
Note
R million
R million
R million
R million
R million
R million
Continuing operations
Revenue
2 990
3 083
2 971
6 073
5 718
11 284
Cost of sales
2
(2 506)
(2 995)
(2 656)
(5 501)
(5 256)
(10 484)
Production costs
(2 093)
(2 408)
(2 172)
(4 501)
(4 367)
(8 325)
Royalty
expense
(30)
(23) – (53) –
(33)
Amortisation and depreciation
(442)
(426)
(320)
(868)
(670)
(1 375)
Impairment of assets
–
–
(104)
–
(104)
(331)
Employment termination and
restructuring
costs
(54)
(78) (3) (132) (3)
(205)
Other items
113
(60)
(57)
53
(112)
(215)
Gross proﬁ
t
484 88 315 572 462 800
Corporate, administration and other
expenditure
(96) (94) (95) (190)
(174)
(382)
Social
investment
expenditure
(23) (16) (20) (39) (29) (81)
Exploration
expenditure
3
(76) (99) (45) (175) (93)
(219)
Profit on sale of property, plant
and
equipment
1
16 1 17 1
104
Other income/(expenses) – net
6
(54)
(20)
(48)
(94)
(58)
Operating proﬁ
t/(loss)
296 (159) 136
137 73 164
(Loss)/profit from associates
(19)
(8)
25
(27)
56
56
Profit/(loss) on sale of investment
in
subsidiary
– – – – 5
(24)
Net gain/(loss) on financial instruments
4
78
311
3
389
(2)
38
Investment
income
38 14 54 52
125
187
Finance
cost
(69) (59) (37) (128) (91)
(246)
Proﬁ t before taxation
324
99
181
423
166
175
Taxation
(28)
6
(59)
(22)
(77)
(335)
Normal
taxation
– (9) (14)
(9) (43) (84)
Deferred
taxation
(28) 15 (45) (13) (34)
(251)
Net proﬁ t/(loss) from continuing
operations
296 105 122 401 89
(160)
Discontinued operations
Profit/(loss) from discontinued operations
5
23
(3)
(4)
20
–
(32)
Net
profit/(loss)
319 102 118 421 89
(192)
Attributable to:
Owners of the parent
319
102
118
421
89
(192)
Non-controlling
interest
– – – – – –
Earnings/(loss) per ordinary share (cents)
6
– Earnings/(loss) from continuing operations
69
24
29
93
21
(38)
– Earnings/(loss) from discontinued operations
5
(1)
(1)
5
–
(8)
Total earnings/(loss) per ordinary
share
(cents)
74 23 28 98 21
(46)
Diluted earnings/(loss) per ordinary
share (cents)
6
– Earnings/(loss) from continuing operations
69
24
29
93
21
(38)
– Earnings/(loss) from discontinued operations
5
(1)
(1)
5
–
(8)
Total diluted earnings/(loss) per
ordinary
share
(cents)
74 23 28 98 21
(46)
¹ The comparative ﬁ gures are re-presented due to Mount Magnet being reclassiﬁ ed as a discontinued operation. See note 5 in this regard.
The accompanying notes are an integral part of these condensed consolidated financial statements.
17
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (Rand)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December
31 December 31 December
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Net proﬁ t/(loss) for the period
319
102
118
421
89
(192)
Other comprehensive (loss)/income for
the period, net of income tax
(161)
106
(51)
(55)
(36)
(131)
Foreign exchange translation
(131)
106
(57)
(25)
(38)
(127)
Fair value movement of available-for-sale
investments (30)
–
6
(30)
2
(4)
Total comprehensive income/(loss)
for the period
158
208
67
366
53
(323)
Attributable to:
Owners of the parent
158
208
67
366
53
(323)
Non-controlling
interest
– – – – – –
18
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED BALANCE SHEET (Rand)
At At
At At
31 December
30 September
30 June
31 December
2010 2010
2010 2009
(Unaudited)
(Audited)
Note
R million
R million
R million
R million
ASSETS
Non-current assets
Property, plant and equipment
30 218
29 873
29 556
28 862
Intangible assets
2 199
2 199
2 210
2 217
Restricted
cash
26 116
146 167
Restricted investments
1 864
1 787
1 742
1 697
Investments in financial assets
264
296
12
20
Investments in associates
358
377
385
385
Inventories
232
237
214
77
Trade and other receivables
69
67
75
74
35 230
34 952
34 340
33 499
Current assets
Inventories
943
902
987
1
103
Trade and other receivables
962
649
932
1 108
Income and mining taxes
102
73
74
55
Restricted cash
–
–
–
280
Cash and cash equivalents
837
772
770
808
2 844
2 396
2 763
3 354
Assets of disposal groups classified as held for sale
5
–
–
245
–
2 844
2 396
3 008
3 354
Total assets
38 074
37 348
37 348
36 853
EQUITY AND LIABILITIES
Share capital and reserves
Share capital
28 277
28 269
28 261
28 096
Other
reserves
266 395
258 375
Retained
earnings
897 578
690 971
29 440
29 242
29 209
29 442
Non-current liabilities
Deferred tax
3 613
3 572
3 534
3 317
Provision for environmental rehabilitation
1 752
1 723
1 692
1 612
Retirement benefit obligation and other provisions
179
169
169
167
Borrowings
7 1 243 970
981 565
6 787
6 434
6 376
5 661
Current liabilities
Borrowings
7 344 207
209 460
Income and mining taxes
10
13
9
11
Trade and other payables
1 493
1 452
1 410
1 279
1 847
1 672
1 628
1 750
Liabilities of disposal groups classified as held for sale
5
–
–
135
–
1 847
1 672
1 763
1 750
Total equity and liabilities
38 074
37 348
37 348
36 853
Number of ordinary shares in issue
429 506 618
428 850 854
428 654 779
426 079 492
Net asset value per share (cents)
6 854
6 819
6 814
6 910
The accompanying notes are an integral part of these condensed consolidated financial statements.
19
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Rand)
for the six months ended 31 December 2010
Share
Other
Retained
capital
reserves
earnings
Total
Note
R million
R million
R million
R million
Balance – 30 June 2010
28 261
258
690
29 209
Issue of shares
16
–
–
16
Share-based payments
–
63
–
63
Total comprehensive income for the period
–
(55)
421
366
Dividends paid
9
–
–
(214)
(214)
Balance as at 31 December 2010
28 277
266
897
29 440
Balance – 30 June 2009
28 091
339
1 095
29 525
Issue of shares
5
–
–
5
Share-based payments
–
72
–
72
Total comprehensive income for the period
–
(36)
89
53
Dividends paid
–
–
(213)
(213)
Balance as at 31 December 2009
28 096
375
971
29 442
20
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Rand)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December
31 December 31 December
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Cash ﬂ ow from operating activities
Cash generated by operations
450
703
183
1 153
408
1 611
Interest and dividends received
38
14
52
52
120
187
Interest
paid
(35) (30) (11) (65) (20) (90)
Income and mining taxes paid
(30)
(4)
(34)
(34)
(59)
(125)
Cash generated by operating activities
423
683
190
1 106
449
1 583
Cash ﬂ ow from investing activities
Decrease/(increase) in restricted cash
90
30
(283)
120
(286)
15
Proceeds on disposal of investment in subsidiary
–
229
–
229
–
24
Proceeds on disposal of available-for-sale
financial
assets
2 – 29
2 44 50
Other investing activities
(6)
10
(3)
4
5
(12)
Net additions to property, plant and equipment
(846)
(748)
(890)
(1 594)
(1 797)
(3 493)
Cash utilised by investing activities
(760)
(479)
(1 147)
(1 239)
(2 034)
(3 416)
Cash ﬂ ow from ﬁ nancing activities
Borrowings
raised
525
– 686 525 686
1
236
Borrowings
repaid
(107) (7) (18) (114) (25)
(391)
Ordinary shares issued – net of expenses
8
8
3
16
5
18
Dividends paid
–
(214)
–
(214)
(213)
(213)
Cash generated/(utilised) by financing activities
426
(213)
671
213
453
650
Foreign currency translation adjustments
(24)
11
–
(13)
(10)
3
Net increase/(decrease) in cash and
cash equivalents
65
2
(286)
67
(1 142)
(1 180)
Cash and cash equivalents – beginning of period
772
770
1 094
770
1 950
1 950
Cash and cash equivalents – end of period
837
772
808
837
808
770
21
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SECOND QUARTER AND SIX MONTHS ENDED 31 DECEMBER 2010
1. Accounting policies
Basis of accounting
The condensed consolidated financial statements for the six months ended 31 December 2010 have been prepared in accordance with
IAS 34, Interim Financial Reporting, JSE Listing 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
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Production costs
2 093
2 408
2 172
4 501
4 367
8 325
Royalty
expense
30
23 – 53 –
33
Amortisation
and
depreciation
442 426 320 868 670
1
375
Impairment of assets
(2)
–
– 104
– 104 331
Rehabilitation
expenditure
5 4 4 9 8
29
Care and maintenance cost of
restructured
shafts
28 25 14 53 31 57
Employment termination and
restructuring
costs
54
78 3 132 3
205
Share
based
payments
32 31 38 63 72
148
Insurance credits
(3)
(179) – – (179) – –
Provision for post-retirement benefits
1
–
1
1
1
(19)
Total cost of sales
2 506
2 995
2 656
5 501
5 256
10 484
(1)
The comparative figures are re-presented due to Mount Magnet being reclassified as part of discontinued operations. See note 5 in this regard.
(2)
The impairment for the quarter ended 31 December 2009 and year ended 30 June 2010 relates mainly to Virginia and Evander, which was recorded as a result of shaft
closures.
(3)
Proceeds on unwinding of previous insurance agreement.
3. Exploration expenditure
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Total exploration expenditure
102
101
45
203
93
219
Less:
Expenditure
capitalised
(26) (2) – (28) – –
Exploration expenditure
per
income
statement
76 99 45 175 93
219
4.
Net gain/(loss) on financial instruments
On 3 September 2010, Harmony Gold Mining Company Limited (Harmony) entered 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. The option is to acquire a beneficial interest of up to 40% in any future mines established by Wits Gold on certain properties in the Southern Free State (Freegold option). Harmony will abandon a portion of its mining right in respect of the Merriespruit South area to enable Wits Gold to include this area in its prospecting right, which is located immediately south of the Merriespruit South area.
22
Results for the second quarter and six months
ended 31 December 2010
The total consideration of the transactions is R336 million of which R275 million was received for the cancellation of the option agreement by the issue of 4 376 194 shares in Wits Gold, following approval by Wits Gold shareholders on 5 November 2010. This represents a 13% investment in Wits Gold. The remaining R61 million for the prospecting area will be settled in cash or a combination of cash and shares in Wits Gold, when all remaining conditions precedent have been fulfilled. The Group classifies the investment in Wits Gold as an available-for-sale financial asset. During the September 2010 quarter, a gain of R273 million was recognised on the Freegold option which was then classified as a financial asset at fair value through profit or loss.
5.
Disposal groups classified as held for sale and discontinued operations
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.
6.
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 December 2010: 429.1 million (30 September 2010: 428.7 million, 31 December 2009: 425.9 million), and six months ended 31 December 2010: 428.9 million (31 December 2009: 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 December 2010: 429.9 million (30 September 2010: 429.9 million, 31 December 2009: 427.5 million), and the six months ended
31 December 2010: 429.7 million (31 December 2009: 427.4 million), and the year ended 30 June 2010: 427.8 million.
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
Total earnings/(loss) per ordinary
share (cents):
Basic
earnings/(loss)
74 23 28 98 21
(46)
Diluted
earnings/(loss)
74 23 28 98 21
(46)
Headline
earnings/(loss)
69 33 49 101 37 (7)
– from continuing operations
69
33
50
101
37
1
– from discontinued operations
–
–
(1)
–
–
(8)
Diluted
headline
earnings/(loss)
69 33 49 101 37 (7)
– from continuing operations
69
33
50
101
37
1
– from discontinued operations
–
–
(1)
–
–
(8)
R million
R million
R million
R million
R million
R million
Reconciliation of headline
earnings/(loss):
Continuing operations
Net
profit/(loss)
296 105 122 401 89
(160)
Adjusted for:
Profit on sale of property, plant
and equipment
(1)
(16)
–
(17)
(1)
(104)
Taxation effect of profit on sale of
property, plant and equipment
–
5
–
5
–
22
Net gain on financial instruments
(1)
–
(3)
(1)
(5)
(7)
Taxation effect of net gain on financial
instruments
– – 1 – 2 2
Foreign exchange loss/(gain) reclassified
from other comprehensive income
–
47
–
47
(22)
(22)
Taxation effect of foreign exchange
loss/(gain) reclassified from other
comprehensive
income
– – – – – –
Loss on sale of investment in subsidiary
–
–
–
–
–
24
Taxation effect of loss on sale of
investment
in
subsidiary
– – – – –
(7)
Impairment of other investments
–
–
–
–
2
–
Taxation effect of impairment of other
investments
– – – – – –
Impairment of assets
–
–
104
–
104
331
Taxation effect of impairment of assets
–
–
(11)
–
(11)
(75)
Headline
earnings
294 141 213 435 158 4
23
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited)
(Audited)
R million
R million
R million
R million
R million
R million
Discontinued operations
Net profit/(loss)
23
(3)
(4)
20
–
(32)
Adjusted for:
Profit on sale of property, plant
and
equipment
– – (2) – (3) –
Taxation effect of profit on sale of
property, plant and equipment
–
–
–
–
1
–
Profit on sale of investment in subsidiary
–
(138)
–
(138)
–
(1)
Taxation effect of profit on sale of
investment in subsidiary
–
34
–
34
–
–
Foreign exchange (profit)/loss reclassified from
other comprehensive income
(23)
107
–
84
–
–
Taxation effect of foreign exchange loss
reclassified from other comprehensive income
–
–
–
–
–
–
Headline
loss
– – (6) – (2)
(33)
Total
headline
earnings/(loss)
294 141 207 435 156 (29)
(1)
The comparative figures are re-presented due to Mount Magnet being reclassified as discontinued operation. See note 5 in this regard.
7. Borrowings
31 December
30 September
30 June 31 December
2010 2010
2010
2009
(Unaudited) (Audited)
R million
R million
R million
R million
Total long-term borrowings
1 243
970
981
565
Total current portion of borrowings
344
207
209
460
Total borrowings
(
¹
) (
²
)
1 587
1 177
1 190
1 025
(
¹
)
In December 2009, the company entered into a loan facility with Nedbank Limited, comprising of 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 five 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 of 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 three years from December 2010.
At 31 December 2010, R550 million of these facilities had not been drawn down.
(
²
)
Included in the borrowings is R63 million (September 2010: R74 million; June 2010: R91 million; December 2009: R102 million) owed to Westpac Bank Limited in terms of a finance lease agreement. The future minimum lease payments are as follows:
31 December
30 September
30 June 31 December
2010 2010
2010
2009
(Unaudited) (Audited)
R million
R million
R million
R million
Due within one year
28
30
33
32
Due between one and five years
36
46
60
73
64 76
93
105
Future finance charges
(1)
(2)
(2)
(3)
Total future minimum lease payments
63
74
91
102
24
Results for the second quarter and six months
ended 31 December 2010
8.
Commitments and contingencies
31 December
30 September
30 June 31 December
2010 2010
2010
2009
(Unaudited) Audited)
R million
R million
R million
R million
Capital expenditure commitments:
Contracts for capital expenditure
166
188
117
244
Authorised by the directors but not contracted for
2 669
3 406
1 006
2 507
2 835
3 594
1 123
2 751
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.
9. Dividends paid
On 13 August 2010, the Board of Directors approved a final dividend for the 2010 financial year of 50 SA cents per share. The total dividend amounting to R214 million was paid on 20 September 2010.
10. Subsequent events
No subsequent events occurred between close of the current quarter and date of this report.
11. Segment report
The segment report follows on page 26.
12. Reconciliation of segment information to consolidated income statements and balance sheets
Six months ended Six months ended
31 December
31 December¹
2010 2009
R million
R million
The “reconciliation of segment data to consolidated financials” 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
– –
Production costs from:
Discontinued operations
– –
Reconciliation of production profit to gross profit:
Total segment revenue
6 073
5 718
Total segment production costs and royalty expense
(4 554)
(4 367)
Production profit as per segment report
1 519
1 351
Less:
Discontinued operations
– –
1 519
1 351
Cost of sales items other than production costs and royalty expense
(947)
(889)
Amortisation and depreciation
(868) (670)
Impairment of assets
– (104)
Employment termination and restructuring costs
(132)
(3)
Share-based payments
(63) (72)
Insurance credits
179 –
Rehabilitation costs
(9) (8)
Care and maintenance costs of restructured shafts
(53)
(31)
Provision for post-retirement benefits
(1) (1)
Gross profit as per income statements *
572
462
25
Six months ended Six months ended
31 December
31 December¹
2010 2009
R million
R million
Reconciliation of total segment mining assets to consolidated property, plant and equipment:
Property, plant and equipment not allocated to a segment
Mining assets
862 746
Undeveloped property
5 139
5 139
Other non-mining assets
72 66
6 073
5 951
(1) The comparative figures are re-presented due to Mount Magnet being reclassified as discontinued operation. See note 5 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.
13. Review report
The condensed consolidated financial statements for the six months ended 31 December 2010 on pages 16 to 27 have been reviewed
in accordance with International Standards on Review Engagements 2410 – “Review of interim financial information performed by
the Independent Auditors of the entity” by PricewaterhouseCoopers Inc. Their unqualified review report is available for inspection at
the Company’s registered office.
26
Results for the second quarter and six months
ended 31 December 2010
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 (Rand/Metric)
Production
Production
Mining
Capital
Kilograms
Tonnes
Revenue
costs
(1)
profit/(loss)
assets expenditure
produced
milled
R million
R million
R million
R million
R million
kg*
t’000*
Continuing operations
South Africa
Underground
Bambanani
(2)
502
421
81
1 034
156
1 716
233
Doornkop
360
295
65
2 973
154
1 184
311
Evander 315
316
(1)
946
116
1
069
279
Joel 169
198
(29)
187
40
556
168
Kusasalethu
772
643
129
3 098
189
2 559
497
Masimong
730
397 333 821
89 2 414 462
Phakisa 267
223
44
4
207
194
882
193
Target
(2)
511
358
153
2 670
252
1 982
401
Tshepong
1 000
581
419
3 624
133
3 316
683
Virginia 398
349
49
696
49
1
326
366
Surface
All other surface operations
(3)
589
431 158 148
66 2 024
5
328
Total South Africa
5 613
4 212
1 401
20 404
1 438
19 028
8 921
International
Papua New Guinea
460
342
118
3 741
144
1 498
852
Total international
460
342
118
3 741
144
1 498
852
Total continuing operations
6 073
4 554
1 519
24 145
1 582
20 526
9 773
Discontinued operations
Mount
Magnet
–
– – – – – –
Total discontinued operations
–
–
–
–
–
–
–
Total operations
6 073
4 554
1 519
24 145
1 582
20 526
9 773
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 12)
–
–
6 073
6 073
4 554
30 218
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 extraction of gold in lock-up at the President Steyn plant.
*
Production statistics are not reviewed.
27
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2009 (Rand/Metric)
Production
Production
Mining
Capital
Kilograms
Tonnes
Revenue
costs
profit
assets
expenditure
produced
milled
R million
R million
R million
R million
R million
kg*
t’000*
Continuing operations
South Africa
Underground
Bambanani
490
369 121 680
51 1 878 270
Doornkop 259
209
50
2
699
151
990
278
Evander 599
559
40
906
106
2
296
504
Joel 291
209
82
135
50
1
106
248
Kusasalethu
741
571
170
2 894
236
3 012
495
Masimong
648
360 288 711
85 2 601 469
Phakisa 161
139
22
3
898
266
610
158
Target
414
308
106
2 301
161
1 700
384
Tshepong
886
583
303
3 627
129
3 395
814
Virginia
813
789
24
841
99
3 253
1 015
Surface
All other surface operations
(1)
416
271 145 141
44 1 674
4
384
Total South Africa
5 718
4 367
1 351
18 833
1 378
22 515
9 019
International
Papua New Guinea
(2)
–
–
–
3
805
429
768
–
Total international
–
–
–
3 805
429
768
–
Total continuing operations
5 718
4 367
1 351
22 638
1 807
23 283
9 019
Discontinued operations
Mount Magnet
–
–
–
273
–
–
–
Total discontinued operations
–
–
–
273
–
–
–
Total operations
5 718
4 367
1 351
22 911
1 807
23 283
9 019
Reconciliation of the segment
information to the consolidated
income statement and
balance sheet (refer to note 12)
–
–
5 951
5 718
4 367
28 862
Notes:
(1) Includes Kalgold, Phoenix and Dumps.
(2) At 31 December 2009, production statistics for Hidden Valley was shown for information purposes. This mine was in build-up phase and revenue and costs were capitalised until
commercial levels of production were reached.
*
Production statistics are not reviewed.
28
Results for the second quarter and six months
ended 31 December 2010
29
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
Virginia
ground
Kalgold Phoenix Dumps Surface
Other
Total
Valley
Total
Ore milled
– t’000
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
Sep-10
142
154
154
44
297
268
95
–
226
–
373
269
2 022
477
1 705
946
3 128
–
5 150
471
5 621
Gold produced
– oz
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
Sep-10
29 289
17 394
17 747
4 758
48 644
40 606
12 121
997
26 878
3 569
54 270
24 435
280 708
11 831
5 305
17 233
34 369
–
315 077
21 573
336 650
Yield
–
oz/t
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
Sep-10
0.206 0.113 0.115 0.108 0.164 0.152
0.128
– 0.119
– 0.145 0.091 0.137
0.025
0.003
0.018 0.011
– 0.060
0.046 0.059
Cash operating costs
– $/oz
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
Sep-10
1 046
1 061
1 236
2 504
959
687
1 263
–
916
–
746
1 280
975
1 017
986
835
921
–
969
1 042
974
Cash operating costs
– $/t
Dec-10
248
114
148
116
166
117
138
–
111
–
110
120
133
27
3
14
11
–
61
50
60
Sep-10
216 120 142 271 157 104 161 – 109 – 109 116 133 25 3 15 10 – 58 48 58
Gold sold
– oz
Dec-10
24 595
20 384
14 918
13 278
31 540
37 809
16 429
579
28 325
5 466
52 984
18 583
264 890
9 066
4 437
15 368
28 871
–
293 761
29 225
322 986
Sep-10
30 190
18 808
19 548
4 887
53 402
41 860
12 474
997
27 232
3 569
55 910
24 949
293 826
12 925
5 305
17 233
35 463
–
329 289
20 158
349 447
Revenue
($’000)
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
Sep-10
36 946
23 004
23 848
6 011
65 081
51 247
15 291
–
33 413
–
68 458
30 505
353 804
15 819
6 481
21 024
43 324
–
397 128
24 894
422 022
Cash operating
($’000)
Dec-10
28 577
21 479
22 589
16 408
41 674
28 249
16 252
–
24 016
–
41 645
16 243
257 132
12 140
4 846
12 906
29 892
–
287 024
23 505
310 529
costs
Sep-10
30 647
18 462
21 928
11 915
46 634
27 900
15 303
–
24 611
–
40 511
31 271
269 182
12 031
5 232
14 384
31 647
–
300 829
22 479
323 308
Inventory
($’000)
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)
movement
Sep-10
(63)
1 735
2 220
(1 639)
6 297
(271)
(56)
–
1 315
–
(313)
(475)
8 750
224
–
681
905
–
9 655
(178)
9 477
Operating costs
($’000)
Dec-10
28 697
21 389
20 235
17 858
37 201
28 349
16 177
–
24 501
–
41 720
17 984
254 111
9 921
4 846
13 608
28 375
–
282 486
25 984
308 470
Sep-10
30 584
20 197
24 148
10 276
52 931
27 629
15 247
–
25 926
–
40 198
30 796
277 932
12 255
5 232
15 065
32 552
–
310 484
22 301
332 785
Operating profit
($’000)
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
Sep-10
6 362
2 807
(300)
(4 265)
12 150
23 618
44
–
7 487
–
28 260
(291)
75 872
3 564
1 249
5 959
10 772
–
86 644
2 593
89 237
Capital expenditure
($’000)
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
Sep-10
5 327
9 513
8 105
2 510
14 285
5 539
12 555
6 063
8 502
7 675
8 302
4 130
92 506
636
–
–
636
1 044
94 186
8 105
102 291
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.

30
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED INCOME STATEMENT (US$)
(Convenience translation)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December¹
31 December 31 December¹
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Continuing operations
Revenue
434 422 397 856 750
1
489
Cost
of
sales
(364) (411) (355) (775) (689)
(1
383)
Production
costs
(304) (330) (290) (635) (572)
(1
099)
Royalty
expense
(4) (3) – (7) – (4)
Amortisation
and
depreciation
(64) (58) (43) (122) (88)
(181)
Impairment of assets
–
–
(14)
–
(14)
(43)
Employment termination and restructuring
costs
(8)
(11) – (19) –
(27)
Other items
16
(9)
(8)
8
(15)
(29)
Gross
profit
70 11 42 81 61
106
Corporate, administration and other expenditure
(14)
(13)
(13)
(27)
(23)
(50)
Social
investment
expenditure
(3) (2) (3) (5) (4)
(11)
Exploration
expenditure
(11) (14) (6) (25) (12) (29)
Profit on sale of property, plant and equipment
–
2
–
2
–
14
Other income/(expenses) – net
1
(7)
(2)
(7)
(12)
(8)
Operating
profit/(loss)
43 (23) 18
19 10 22
(Loss)/profit from associates
(3)
(1)
3
(4)
7
7
Profit/(loss) on sale of investment in subsidiary
–
–
–
–
1
(3)
Net gain on financial instruments
11
43
–
55
–
5
Investment
income
6 2 8 7
16
25
Finance
cost
(10) (8) (5) (18)
(12)
(32)
Profit
before
taxation
47 13 24 59 22 24
Taxation
(4) 1 (8) (3)
(10)
(44)
Normal
taxation
– (1) (2) (1) (6)
(11)
Deferred
taxation
(4) 2 (6) (2) (4)
(33)
Net profit/(loss) from continuing operations
43
14
16
56
12
(20)
Discontinued operations
Profit/(loss) from discontinued operations
3
–
(1)
3
–
(4)
Net
profit/(loss)
46 14 15 59 12
(24)
Attributable to:
Owners of the parent
46
14
15
59
12
(24)
Non-controlling
interest
– – – – – –
Earnings/(loss) per ordinary share (cents)
– Earnings/(loss) from continuing operations
10
3
4
13
3
(5)
– Earnings/(loss) from discontinued operations
1
–
–
1
–
(1)
Total earnings/(loss) per ordinary share (cents)
11
3
4
14
3
(6)
Diluted earnings/(loss) per ordinary share (cents)
– Earnings/(loss) from continuing operations
10
3
4
13
3
(5)
– Earnings/(loss) from discontinued operations
1
–
–
1
–
(1)
Total diluted earnings/(loss) per ordinary
share
(cents)
11 3 4 14 3
(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: December 2010: US$1 = R6.88 (September 2010: US$1 = R7.31, December 2009: US$1 = R7.49).
The currency conversion average rates for the six months ended: December 2010: US$1 = R7.09 (December 2009: US$1 = R7.63).
The income statement for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
Note on convenience translations
Except where specific statements have been extracted from the 2010 Annual Report, the requirements of IAS 21, The Effects of the Changes in Foreign Exchange Rates, have not necessarily been applied in the translation of the US Dollar financial statements presented on pages 30 to 36.
31
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME (US$)
(Convenience translation)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December
31 December 31 December
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Net proﬁ t/(loss) for the period
46
14
15
59
12
(24)
Other comprehensive (loss)/income for
the period, net of income tax
(23)
15
(7)
(8)
(5)
25
Foreign exchange translation
(19)
15
(8)
(4)
(5)
25
Fair value movement of available-for-sale
investments
(4) – 1 (4) – –
Total comprehensive income for the period
23
29
8
51
7
1
Attributable to:
Owners of the parent
23
29
8
51
7
1
Non-controlling
interest
– – – – – –
The currency conversion average rates for the quarter ended: December 2010: US$1 = R6.88 (September 2010: US$1 = R7.31, December 2009: US$1 = R7.49).
The currency conversion average rates for the six months ended: December 2010: US$1 = R7.09 (December 2009: US$1 = R7.63).
The statement of other comprehensive income for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
32
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED BALANCE SHEET (US$)
(Convenience translation)
At At
At At
31 December
30 September
30 June
31 December
2010 2010
2010 2009
(Unaudited) (Unaudited) (Audited) (Unaudited)
US$ million
US$ million
US$ million
US$ million
ASSETS
Non-current assets
Property, plant and equipment
4 568
4 289
3 874
3 916
Intangible
assets
332 316
290 301
Restricted
cash
4 17
19 23
Restricted
investments
282 257
228 230
Investments in financial assets
40
43
2
3
Investments in associates
54
54
50
52
Inventories
35 34
28 10
Trade and other receivables
10
10
10
10
5 325
5 020
4 501
4 545
Current assets
Inventories
143 130
129 150
Trade and other receivables
145
93
122
150
Income and mining taxes
15
10
10
7
Restricted cash
–
–
–
38
Cash and cash equivalents
127
111
101
110
430 344
362 455
Assets of disposal groups classified as held for sale
–
–
32
–
430 344
394 455
Total assets
5 755
5 364
4 895
5 000
EQUITY AND LIABILITIES
Share capital and reserves
Share capital
4 275
4 059
4 027
3 812
Other reserves
40
57
(40)
51
Retained earnings/(accumulated loss)
136
83
(159)
132
4 451
4 199
3 828
3 995
Non-current liabilities
Deferred
tax
546 513
463 450
Provisions for other liabilities and charges
265
247
222
219
Retirement benefit obligation and other provisions
27
24
22
23
Borrowings 188
139
129
77
1
026 923
836 769
Current liabilities
Borrowings
52 30
27 62
Income and mining taxes
1
2
1
1
Trade and other payables
225
210
185
173
278 242
213 236
Liabilities of disposal groups classified as held for sale
–
–
18
–
278 242
231 236
Total equity and liabilities
5 755
5 364
4 895
5 000
Number of ordinary shares in issue
429 506 618
428 850 584
428 654 779
426 079 492
Net asset value per share (cents)
1 036
979
893
937
The balance sheet for December 2010 converted at a conversion rate of US$1 = R6.62 (September 2010: US$1 = R6.96, December 2009: US$1: R7.37).
The balance sheet as at 30 June 2010 has been extracted from the 2010 Annual Report.
33
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (US$) (Unaudited)
for the six months ended 31 December 2010 (Convenience translation)
Retained
earnings/
Share Other
(accumulated
capital reserves
loss)
Total
US$ million
US$ million
US$ million
US$ million
Balance – 30 June 2010
4 272
39
104
4 415
Issue of shares
3
–
–
3
Share-based payments
–
9
–
9
Total comprehensive income for the period
–
(8)
64
56
Dividends paid
–
–
(32)
(32)
Balance as at 31 December 2010
4 275
40
136
4 451
Balance – 30 June 2009
3 811
46
149
4 006
Issue of shares
1
–
–
1
Share-based payments
–
10
–
10
Total comprehensive income for the period
–
(5)
12
7
Dividends paid
–
–
(29)
(29)
Balance as at 31 December 2009
3 812
51
132
3 995
The currency conversion closing rates for the year ended: December 2010: US$1 = R6.62 (December 2009: US$1 = R7.37).
34
Results for the second quarter and six months
ended 31 December 2010
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (US$)
(Convenience translation)
Quarter ended
Six months ended
Year ended
31 December 30 September 31 December
31 December 31 December
30 June
2010 2010 2009 2010 2009 2010
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
US$ million
US$ million
US$ million
US$ million
US$ million
US$ million
Cash ﬂ ow from operating activities
Cash generated by operations
65
96
24
163
53
214
Interest and dividends received
6
2
7
7
16
25
Interest
paid
(5) (4) (1) (9) (3)
(12)
Income and mining taxes paid
(4)
(1)
(5)
(5)
(8)
(17)
Cash generated by operating activities
62
93
25
156
58
210
Cash ﬂ ow from investing activities
Decrease/(increase) in restricted cash
13
4
(38)
17
(37)
2
Proceeds on disposal of investment in subsidiary
–
31
–
32
–
3
Proceeds on disposal of available-for-sale
financial
assets
– – 4 – 6 7
Other investing activities
(1)
1
–
1
1
(2)
Net additions to property, plant and equipment
(123)
(102)
(117)
(225)
(236)
(463)
Cash utilised by investing activities
(111)
(66)
(151)
(175)
(266)
(453)
Cash ﬂ ow from ﬁ nancing activities
Borrowings
raised
76 – 93 74 90
168
Borrowings
repaid
(16) (1) (2) (16) (3)
(57)
Ordinary shares issued – net of expenses
1
1
–
2
1
3
Dividends paid
–
(29)
–
(30)
(29)
(29)
Cash generated/(utilised) by financing activities
61
(29)
91
30
59
85
Foreign currency translation adjustments
4 12 – 15 6 6
Net increase/(decrease) in cash and
cash equivalents
16
10
(35)
26
(143)
(152)
Cash and cash equivalents – beginning of period
111
101
145
101
253
253
Cash and cash equivalents – end of period
127
111
110
127
110
101
Operating activities translated at average rates for the quarter ended: December 2010: US$1 = R6.88 (September 2010: US$1 = R7.31,
December 2009: US$1 = R7.49. Six months ended: December 2010: US$1 = R7.09 (December 2009: US$1 = R7.63).
Closing balance translated at closing rates of: December 2010: US$1 = R6.62 (September 2010: US$1 = R6.96, December 2009: US$1: R7.37).
The cash ﬂ ow statement for the year ended 30 June 2010 has been extracted from the 2010 Annual Report.
35
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 (US$/Imperial) (Unaudited)
(Convenience translation)
Production
Production
Mining
Capital
Ounces
Tons
Revenue
costs
(1)
proﬁt/(loss)
assets expenditure
produced
milled
US$ million
US$ million
US$ million
US$ million
US$ million
oz
t’000
Continuing operations
South Africa
Underground
Bambanani
(2)
71
59
12
156
22
55
171
257
Doornkop 51
42
9
449
22
38
067
343
Evander 44
45
(1)
143
16
34
369
307
Joel 24
28
(4)
28
6
17
875
185
Kusasalethu 109
91
18
468
27
82
274
548
Masimong 103
56
47
124
13
77
611
509
Phakisa 38
31
7
636
27
28
357
213
Target
(2)
72
50
22
404
36
63
723
442
Tshepong 141
82
59
548
19
106
611
753
Virginia 56
49
7
105
7
42
632
404
Surface
All other surface operations
(3)
83 61 22 22
9
65
073
5
874
Total South Africa
792
594
198
3 083
204
611 763
9 835
International
Papua New Guinea
65
48
17
565
20
48 162
940
Total international
65
48
17
565
20
48 162
940
Total continuing operations
857
642
215
3 648
224
659 925
10 775
Discontinued operations
Mount
Magnet
– – – – – – –
Total discontinued operations
–
–
–
–
–
–
–
Total operations
857
642
215
3 648
224
659 925
10 775
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 extraction of gold in lock-up at the President Steyn plant.
All income statement items, including capital expenditure, are converted at the currency convertion rate of US$1 = R7.09.
Mining assets are converted at the currency convertion rate of US$1 = R6.62.
36
Results for the second quarter and six months
ended 31 December 2010
SEGMENT REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2009 (US$/Imperial) (Unaudited)
(Convenience translation)
Production
Production
Mining
Capital
Ounces
Tons
Revenue
costs
proﬁ
t
assets
expenditure
produced
milled
US$ million
US$ million
US$ million
US$ million
US$ million
oz
t’000
Continuing operations
South Africa
Underground
Bambanani
64 48 16 92
7
60
379
298
Doornkop 34
27
7
366
20
31
829
306
Evander 78
73
5
123
14
73
818
556
Joel
38 27 11 18
7
35
559
274
Kusasalethu 97
75
22
393
31
96
838
546
Masimong
85 47 38 96 11
83
624
517
Phakisa 21
18
3
529
35
19
612
174
Target 54
40
14
312
21
54
656
424
Tshepong 116
76
40
492
17
109
152
898
Virginia
107
104
3
114
13
104 586
1 119
Surface
All other surface operations
(1)
56 37 19 19
5
53
820
4
834
Total South Africa
750
572
178
2 554
181
723 873
9 946
International
Papua New Guinea
(2)
–
–
–
516
56
24
682
–
Total international
–
–
–
516
56
24 682
–
Total continuing operations
750
572
178
3 070
237
748 555
9 946
Discontinued operations
Mount Magnet
–
–
–
37
–
–
–
Total discontinued operations
–
–
–
37
–
–
–
Total operations
750
572
178
3 107
237
748 555
9 946
Notes:
(1) Includes Kalgold, Phoenix and Dumps.
(2) At 31 December 2009, production statistics for Hidden Valley was shown for information purposes. This mine was in build-up phase and revenue and costs were capitalised until
commercial levels of production were reached.
All income statement items, including capital expenditure, are converted at the currency convertion rate of US$1 = R7.63.
Mining assets are converted at the currency convertion rate of US$1 = R7.37.
37
DEVELOPMENT RESULTS (Metric)
Quarter ended 31 December 2010
Channel
Channel
Reef
Sampled
Width
Value
Gold
(metres)
(metres)
(cm’s)
(g/t)
(cmg/t)
Tshepong
Basal 602
592
10.21
111.10
1
134
B Reef
103
72
104.00
14.79
1 538
All Reefs
705 664 20.38
57.80
1
178
Phakisa & Nyala
Basal 270
287
36.66
22.39
821
All Reefs
270 287 36.66
22.39 821
Total Bambanani
(incl. Bambanani, Steyn 1 & Steyn 2)
Basal 74
68
126.65
18.96
2
402
All Reefs
74 68
126.65
18.96
2
402
Bambanani
Basal 74
68
126.65
18.96
2
402
All Reefs
74 68
126.65
18.96
2
402
Doornkop
Kimberley Reef
120
93
348.22
2.01
701
South Reef
374
369
59.21
16.20
959
All Reefs
494 462
117.39 7.73 908
Kusasalethu
Vcr Reef
773
742
71.12
18.62
1 324
All Reefs
773 742 71.12
18.62
1
324
Target
Elsburg 283
151
171.95
14.05
2
416
A Reef
30
24
127.38
13.96
1 779
B Reef
17
9
27.20
41.51
1 129
All Reefs
330 183
159.49
14.26
2
274
Target 1
Elsburg 182
99
186.74
17.28
3
227
All Reefs
182 99
186.74
17.28
3
227
Target 3
Elsburg 101
52
144.07
6.15
886
A Reef
30
24
127.38
13.96
1 779
B Reef
17
9
27.20
41.51
1 129
All Reefs
148 84
127.63
9.09
1
160
Masimong
Basal 449
325
63.68
16.99
1
082
B Reef
104
93
86.31
13.94
1 204
All Reefs
552 417 68.72
16.14
1
109
Evander
Kimberley 364
347
33.71
55.83
1
882
All Reefs
364 347 33.71
55.83
1
882
Virginia
(Incl. Unisel & Brand 3)
Basal 726.4
603
112.44
9.23
1
038
Leader 402.3
360
151.42
8.11
1
228
A Reef
76.0
74
44.90
14.71
660
Middle 82.0
64
123.35
9.10
1
123
B Reef
47.0
46
64.66
7.51
486
All Reefs
1 334
1 147
119.01
8.87
1 056
Joel
Beatrix 442
455
130.85
11.17
1
462
All Reefs
442 455
130.85
11.17
1
462
Total Harmony
Basal
2 122
1 874
60.61
18.01
1 092
Beatrix 442
455
130.85
11.17
1
462
Leader 402
360
151.42
8.11
1
228
B Reef
270
219
85.29
13.60
1 160
A Reef
105.8
97.5
64.78
14.35
929.95
Middle 82.0
64
123.35
9.10
1
122.59
Elsburg 282.7
150.75
171.95
14.05
2
415.93
Kimberley 483.9
439.5
100.26
16.27
1
632.06
South Ree f
374
369
59.21
16.20
959.48
Vcr 773
742
71.12
18.62
1
324.31
All Reefs
5 338
4 771
84.91
14.78
1 255
DEVELOPMENT RESULTS Imperial)
Quarter ended 31 December 2010
Channel
Channel
Reef
Sampled
Width
Value
Gold
(feet)
(feet)
(inches)
(oz/t)
(in.oz/t)
Tshepong
Basal
1 975
1 942
4
3.26
13
B Reef
337
236
41
0.43
18
All Reefs
2 312
2 178
8
1.69
14
Phakisa & Nyala
Basal 885
942
14
0.67
9
All Reefs
885 942
14 0.67
9
Total Bambanani
(incl. Bambanani, Steyn 1 & Steyn 2)
Basal 244
222
50
0.55
28
All Reefs
244 222
50 0.55 28
Bambanani
Basal 244
222
50
0.55
28
All Reefs
244 222
50 0.55 28
Doornkop
Kimberley Reef
394
305
137
0.06
8
South Reef
1 226
1 211
23
0.48
11
All Reefs
1 620
1 516
46
0.23
10
Kusasalethu
Vcr Reef
2 537
2 434
28
0.54
15
All Reefs
2 537
2 434
28
0.54
15
Target
Elsburg 927
495
68
0.41
28
A Reef
98
77
50
0.41
20
B Reef
56
28
11
1.18
13
All Reefs
1 081
600
63
0.41
26
Target 1
Elsburg 597
323
74
0.50
37
All Reefs
597 323
74 0.50 37
Target 3
Elsburg 330
171
57
0.18
10
A Reef
98
77
50
0.41
20
B Reef
56
28
11
1.18
13
All Reefs
484 276
50 0.27 13
Masimong
Basal
1 473
1 065
25
0.50
12
B Reef
340
305
34
0.41
14
All Reefs
1 812
1 369
27
0.47
13
Evander
Kimberley
1 194
1 137
13
1.66
22
All Reefs
1 194
1 137
13
1.66
22
Virginia
(Incl. Unisel & Brand 3)
Basal
2 383
1 978
44
0.27
12
Leader
1 320
1 181
60
0.24
14
A Reef
249
243
18
0.42
8
Middle 269
210
49
0.26
13
B Reef
154
151
25
0.22
6
All Reefs
4 376
3 763
47
0.26
12
Joel
Beatrix
1 451
1 491
52
0.32
17
All Reefs
1 451
1 491
52
0.32
17
Total Harmony
Basal 6 960
6149
24.00
0.52
12.54
Beatrix 1 451
1491
52.00
0.32
16.78
Leader 1 320
1181
60.00
0.24
14.10
B Reef
887
720
34.00
0.39
13.32
A Reef
347
320
26.00
0.41
10.68
Middle 269
210
49.00
0.26
12.89
Elsburg 927
495
68.00
0.41
27.74
Kimberley 1 588
1442
39.00
0.48
18.74
South Reef
1 226
1211
23.00
0.48
11.02
Vcr 2 537
2434
28.00
0.54
15.21
All Reefs
17 512
15 652
33.00
0.44
14

38
Results for the second quarter and six months
ended 31 December 2010
NOTES
39
NOTES
40
Results for the second quarter and six months
ended 31 December 2010
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
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*
^
, C M L Savage*
^
, A J Wilkens*
* Non-executive
1
Mozambican
†
US/Mali Citizen
^
Independent
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
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
Company Secretary
Khanya Maluleke
Telephone: +27 11 411 2019
Fax: +27 11 411 2070
Mobile: 27 82 767 1082
E-mail: Khanya.maluleke@harmony.co.za
South African Share Transfer Secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
16th Floor, 11 Diagonal Street
Johannesburg, 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
ADR Depositary
BNY Mellon
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
Trading Symbols
JSE Limited: HAR
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
ISIN: ZAE 000015228
PRINTED BY INCE (PTY) LTD
W2CF10173

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: February 7, 2011
Harmony Gold Mining Company Limited
By:
/s/
Hannes Meyer
Name: Hannes Meyer
Title: Financial Director