/ 5 April 2005

Harmony falls to 3½ year low

World number six gold miner Harmony Gold on Tuesday fell to its lowest level since September 2001 because of the continued strike at most of the group’s Free State gold mines and the group’s continued quarterly losses.

By 11.15am, Harmony’s stock on the JSE Securities Exchange South Africa was quoted at R47,20, down 30c or 0,6% from its previous close.

Earlier, Harmony’s share price declined to R47, its lowest level since September 28 2001.

“Harmony’s share price continues to decline as it is making losses and I think it should fall lower as it is expensive at current levels. In addition, I think that Harmony had a bad March 2005 quarter and it is currently hit by a strike,” an analyst said. “I don’t see value for Harmony’s share above R40 a share.”

The strike by members of the National Union of Mineworkers (NUM) at Harmony’s Free State operations, excluding the Target gold mine, entered its seventh working day on Tuesday, Harmony Marketing Director Ferdi Dippenaar said.

By 6pm on Tuesday, Harmony would have lost about 35 000 troy ounces of gold production as a result of the strike.

Harmony has received a secondary strike notice from the NUM, which will see all of Harmony’s operations in South Africa hit by a NUM strike from April 12 2005, most probably starting from the night shift, Dippenaar said.

The ratio of Harmony’s share price to that of Gold Fields also widened on Tuesday to its broadest level since Harmony announced its bid for Gold Fields on October 18 2004.

At 11.15am, Gold Fields’ share price was 1,47 times Harmony’s share price.

Harmony is bidding to merge with Gold Fields and is offering Gold Fields shareholders 1,275 Harmony shares for every Gold Fields security held. — I-Net Bridge.