Company announcements

Harmony positioned to deliver

August 16, 2010

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Annual dividend declared

Johannesburg. Monday, 16 August 2010. Harmony Gold Mining Company Limited (Harmony) has declared a final dividend of 50 SA cents per share for the second successive year.

Announcing the company’s results for the quarter and year ended 30 June 2010, CEO Graham Briggs says the dividend indicates Harmony’s return to stability and continuing delivery on its strategy to attain sustainable profitability, funding dividends and growth.

The company recorded a 49% improvement in cash operating profit for the quarter, to R942 million. This is attributable mainly to an 11% increase in the Rand gold price received to R295 580/kg, and also to production improvements.

Gold production increased by 4% to 346 714 ounces, reflecting an 11% increase in tonnes milled to 4 699 tonnes. Recovered grade was fairly constant at 2.24g/t, but was influenced by an increase in lower-grade tonnage from surface operations and the inclusion of Hidden Valley’s operational results for the first time. The underground grade improved by 5.6% to 4.71g/t.

Total costs for the quarter in Rand terms increased by 8.6% to R168 million. The main contributor being the inclusion of Hidden Valley’s operating cost for the first time and the higher cost of electricity due to power utility Eskom’s 25% price hike and higher-winter tariffs.

Briggs says: “We achieved considerable savings following the closure of a number of operations during the past two quarters, notably a R100 million cost reduction at the Virginia operations in the fourth quarter. This also contributed to our unit costs in R/kg remaining flat, despite the higher electricity costs and the inclusion of Hidden Valley’s operating costs.”

Hidden Valley, Harmony’s 50/50 joint venture with Newcrest Mining Limited in Papua New Guinea (PNG), reached commercial production levels in May 2010. Production declared for the last two months of the June 2010 quarter resulted in an attributable cash operating profit of A$2.4 million.

Harmony continues to grow its exploration portfolio in PNG. In August 2010, the company announced a significant increase in the mineral resource at the Wafi-Golpu porphyry copper-gold project, which is part of the joint venture. This mineral resource for Wafi-Golpu now contains 16 million ounces (Moz) of gold and 4.8 million tonnes (Mt) of copper. Expressed as gold equivalents, this resource amounts to 38.5 Moz of gold*, a significant and world-class asset.

Briggs remains optimistic about Harmony’s future. “Our South African assets will generate sufficient cash to fund our growth ambitions. The Hidden Valley mine has been successfully commissioned, and we are currently busy with feasibility studies and concept studies at Wafi/Golpu and outside of the joint venture, Harmony acquired approximately 8 000 km² of exploration tenements, which promises significant upside potential.”

The company remains highly competitive, with the lowest Harmony’s underground R/t costs amongst South African gold operations.

“Our key actions in order to achieve our targets in the coming year include our continued focus on mining safely; improving productivity; increasing production; commissioning our projects and focusing on exploration,” Briggs says.

* Gold equivalent based on US$ 950 oz Au, $4,412 /t Cu at 100% recovery for both metals.

For more details contact:

Marian van der Walt
Executive: Corporate and Investor Relations
+27 (0)82 888 1242

Esha Brijmohan
Investor Relations Officer
+27(0)82 759 1775