Company announcements

Harmony increases cash operating profits by 23% to R163 million

February 03, 2005

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Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today announced that its restructuring programme was delivering solid results. Cash operating profit improved by 23%, from R133 million in the September 2004 quarter to R163 million. In line with its restructuring plan, production decreased by 5% to 24 604 kg (Sept 2004 – 25 822 kg). The company’s focus on mining according to optimum cutoffs continued to deliver the anticipated returns, with the average grade of the South African underground operations increasing by 4% to 5,74 g/t.

Quarter on quarter, working costs decreased by R106,3 million or 5%. In R/kg terms, costs decreased by 1% to R77 415/kg.

“For the financial year ending June 2004, Harmony reported costs of R79 599/kg. Even after the inclusion of the 7% annual wage increases, and industry costs pressures, we have managed to decrease costs by 3% over the past six months, an excellent cost performance.” commented Chief Executive Bernard Swanepoel.

Although the company reported cash earnings of 47 cents per share, extraordinary expenses for mainly retrenchment and restructuring charges, resulted in a loss of 80 cents per share.

The company’s balance sheet remains strong, with the inclusion of its 11,5% shareholding in Gold Fields, which is valued at approximately R3,8 bn.

“This allows us to continue investing in our range of growth projects in South Africa and Australasia. These projects will deliver real production growth to the company in the near future, Elandsrand’s progress being a good example of the future quality of our asset profile,” continued Bernard.

Commenting on the progress of Harmony’s bid for Gold Fields, Bernard said: “Harmony today consists of a combination of assets, a grouping consisting of operating mines which, in terms of its low cash cost profile compares with the best in the South African Industry and some ore bodies which continue to offer optionality and leverage to a higher R/kg gold price scenario. The same applies to Gold Fields if the shafts are evaluated on a stand alone profitability basis. This supports our compelling logic for the merging of the two companies to create the world’s largest gold producer with a low cash cost profile, but with significant optionality that comes with its South African exposure. A true value proposition to all stakeholders, i.e. shareholders, employees and communities.”

Both Harmony, on 5 November 2004, and Gold Fields, on 15 December 2004, filed their notifications on the proposed merger to the Competition Authorities. In terms of the process, the Competition Commission is to submit its written recommendation to the Competition Tribunal by 11 February 2005.

For more details contact:

Bernard Swanepoel
Chief Executive
on +27(0)83 303 9922

or

Ferdi Dippenaar
Marketing Director
on +27(0)82 807 3684

Investor Relations Officer
Corné Bobbert
Office: +27 11 684 0146
Mobile: +27(0)83 380 6614