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Unaudited pro forma financial effects on harmony and withdrawal of cautionary announcement

  1. Introduction

    Further to the announcement released on SENS on 22 April 2008 wherein it was stated that Harmony and Newcrest Mining Limited (“Newcrest”) had signed an agreement which will allow Newcrest to earn 50% interest in Harmony’s Papua New Guinea gold assets (“the joint venture”), shareholders are advised of the pro forma financial effects of the transaction.

    Newcrest will earn its 50% interest in the joint venture by contributing a maximum of US$525 million(1). The commitment will be in two stages, namely, an initial US$180 million payment to acquire a 30.01% interest by 30 June 2008, together with a reimbursement to Harmony of US$45 million(1) in project expenditure (“Stage 1 completion”); and a farm-in commitment for the remaining 19.99% of approximately US$300 million to fund project expenditure up to the commencement of mining operations at Hidden Valley.

    (1)Based on the current estimate of Harmony’s project expenditure of US$150 million from 1 January 2008 to the expected Stage 1 completion date of 30 June 2008.

  2. Pro forma financial effects

    The unaudited pro forma financial effects of the transaction have been prepared for illustrative purposes only and because of its nature may not fairly present Harmony’s financial position, changes in equity, results of operations or cash flows. The pro forma financial effects are the responsibility of the directors of Harmony.

    Before the transaction (cents)After the transaction (cents)Change (%)
    (Loss)/Earnings per share(44)48209
    Fully diluted (loss)/earnings per share(44)47207
    Headline earnings per share35363
    Fully diluted headline earnings per share35363
    Net asset value per share616162642
    Tangible net asset value per share554656492

    Notes:

    1. The pro forma financial effect was only calculated on Stage 1 of the transaction whereby Newcrest acquires a 30.01% interest.
    2. The pro forma financial effects are based on the unaudited results of Harmony for the nine months ended 31 March 2008.
    3. The financial impact on the earnings of Harmony is illustrated as if the joint venture had been completed at 1 July 2007 while the impact on the net assets of Harmony is shown as if the joint venture had been implemented on 31 March 2008.
    4. The pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards. The accounting policies are consistent with those applied in the previous financial year.

  3. Withdrawal of cautionary announcement

    Shareholders are advised that caution is no longer required when dealing in Harmony securities.

For more details contact:

Graham Briggs
Chief Executive Officer
+27 (0)83 265 0274

Amelia Soares
General Manager, Investor Relations
+27 (0)11 411 2314
+27 (0)82 654 9241

Johannesburg 15 May 2008

Sponsor
Merrill Lynch

Global Market & Investment Banking Group
Merrill Lynch South Africa (Pty) Ltd

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