/ 10 March 2006

Harmony acquires stake in Western Areas

South Africa’s third-largest gold miner, Harmony Gold, on Friday announced that it has acquired 44,99-million shares in Western Areas, representing a 29,2% stake in the company.

The acquisition was made up by acquiring 37,37-million shares from fund manager Allan Gray and 7,62-million shares on the open market.

The acquisition of the stake in Western Areas provides Harmony with a strategic exposure to 14,6% of the South Deep gold mine, which is a 50:50 joint venture between Western Areas and Barrick Gold, Harmony said.

The South Deep gold mine contains a reserve of 29,2-million ounces of gold and a resource of 67-million oz, which represents one of the biggest high-quality gold-ore bodies globally, the company added.

The average price of each Western Areas shares purchased was at a 7,4% premium to the 30-day volume weighted average price (VWAP) of R41,07.

The transaction will be funded through utilising cash of R985-million and a loan facility of R1-billion provided by Rand Merchant Bank.

Harmony had cash and equivalents of R2,914-billion as stated at the end of the December 2005 quarter.

The only outstanding short-term debt is a bond repayment of R970-million, which is due in June this year.

“We see this as a strategic exposure to one of the best ore bodies in the world and we look forward to working with the board of Western Areas on realising this assets’ full potential.

“The similarities in ore bodies and mining methods between the South Deep mine and our own Target mine and the lessons we have learned at Target, gives us confidence in our valuation of Western Areas,” said Harmony Gold CEO Bernard Swanepoel. — I-Net Bridge