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Harmony and Monarch renegotiate sale

Johannesburg. Tuesday 8 July 2008. We refer to our second quarter results released on SENS on 15 February 2008, wherein we advised that Harmony Gold Mining Company Limited (“Harmony”: JSE/HAR) signed a sales contract (“contract”) with Australian-based junior miner Monarch Gold Mining Company (“Monarch”: ASX/DIFX:MON) for the sale of Harmony’s Mount Magnet (“Mt Magnet”) operations for A$65 million.

The Mt Magnet asset package includes Hill 50, Great Fingall, St George, Star and Big Bell mines, which comprises a resource inventory of 2.7Moz of gold, tenements covering about 62,000 hectares and 166 exploration licence blocks, along with a 2.7Mt a year capacity plant.

One of the conditions precedent of the sale was the successful capital raising of A$35 million by Monarch to finance the cash component of the deal by 30 June 2008. The prevailing unfavourable financial market conditions worldwide have made it difficult for Monarch to raise the required funds. Consequently, Monarch has requested an extension of four months to satisfy all the conditions precedent.

Harmony and Monarch have renegotiated the terms of the sale. Previously consideration for the transaction, as specified in the contract, was structured as follows:

CashA$30 million
SharesA$20 million
Convertible NoteA$15 million
TotalA$65 million

The proposed restructured consideration and the revised terms which require the approval of Monarch shareholders are as follows:

Cash (paid to date)A$ 5 million
CashA$10 million
Deferred CashA$10 million
SharesA$25 million
Convertible NoteA$15 million
TotalA$65 million

Monarch shareholders will consider the proposed restructured consideration and the revised terms at the end of August 2008.

The immediate cash requirement has been reduced by A$15 million and a deferred payment of A$10 million (payable on the earlier of, production of 50,000oz or the third anniversary of the closing date) and an increase in the share allocation of A$5 million (equivalent).

Graham Briggs, chief executive officer of Harmony says, “We believe the restructured consideration will allow Monarch to complete the transaction and allow them to focus on the redevelopment of the Mt Magnet asset.”

For more details contact:

Graham Briggs
Chief Executive Officer
+27(0)11 411 2012

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

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