Company announcements

Harmony positions for rising gold price

May 05, 2006

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Harmony Gold Mining Company Limited (NASDAQ/NYSE: HMY JSE: HAR) today announced its results for the March 2006 Quarter. As a result of the typical December break problems and a reduction in grades, gold production decreased by 14% to 17 464 kg, whilst working cost in R/Kg terms increased by 12% to R92 914. The gold price increased by 8% to R110 399, resulting in an operating profit for the quarter of R305.6 million (a decrease of R83.8million).

The company had a net loss for the quarter of R182 million compared with a net profit of R22 million for the December 2005 quarter. It should however be noted that the previous quarter’s net profit included the R306 million profit on the disposal of the remaining investment in Gold Fields. A further negative impact on the results was an increased mark-to-market of the Australian hedge book. Cash earnings per share came to 78 cents from 99 cents in the previous quarter. The headline loss per share improved from 75 cents to 50 cents.

Mainly due to the acquisition of a 29% stake in Western Areas, Harmony’s cash balance decreased from R2 914 million to R1 781 million. A R1 000 million loan raised from RMB partially financed the deal at a total cost of R2 012.2 million.

Quality Operations

Underground tons decreased by 3.3% to 1 522 million tons during the quarter, whilst recovery grades decreased by 6.7% to 5.69 g/t. The combined effect of this was a 9.8% decrease in gold production to 8 661kg. Although real cost went down by 1.2% or R8.4 million, unit working costs in R/kg terms increased by 9.6% bringing the cost of production to R81 886/kg. The operating profit dropped by 6.8% to R245.7 million compared with a profit of R263.7 million in the previous quarter. This gave the Quality Operations a profit margin of 25.7% taking an average gold price received of R110 253.

Leveraged Operations

Volumes decreased by 15.7% to 1 055 tons and the recovery grade decreased by 3% to 4.74g/t. This led to gold production being down by 18.3% to 4 996 kg. Although real cost went down by 6.7% or R36,7 million, unit cost in R/kg terms increased by 14.2% to R102 857, which led to a profit margin of 6.6%.

Australian Operations

The Australian operations generated an operating profit of A$7 million in the current quarter compared to A$8.5 million in the previous quarter. During the quarter 25,000 ounces of hedged forward positions were closed out at a cost of A$14 million. The Mt Magnet mine lost 38 days of production during the quarter as a result of a significant seismic event.

Surface Operations

Our surface operations had an operating profit of R13 million compared with R10.9 million in the December quarter, an improvement of 19.2%. Taking an average gold price received of R109 516, the surface operations had a profit margin of 15.5%.

Focus on growth projects remain

Despite the harsh financial and operating conditions encountered in the past year the company has remained focused on rebuilding its growth strategy. Accordingly expenditure on all of the local and international growth projects continued as planned. During the past quarter a total of R391 million was spent on capital. Of this, R134 million was spent on our growth projects.

For more details contact:

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

or

Philip Kotze
Executive, Investor Relations
on +27(0)83 453 0544

Investor Relations Officer
Vusi Magadana
Office: +27 11 684 0149
Mobile: +27(0)72 157 5986

The directors of Harmony accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of Harmony (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.