##### Table of Contents



As filed with the Securities and Exchange Commission on October 30 2006
   SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 ANNUAL REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
 for the fiscal year ended June 30, 2006
 Commission file number: 001-31545
 HARMONY GOLD MINING COMPANY LIMITED
 (Exact name of registrant as specified in its charter)
 REPUBLIC OF SOUTH AFRICA  (Jurisdiction of incorporation or organization)
 
 SUITE NO. 1 PRIVATE BAG X1 MELROSE ARCH, 2076 SOUTH AFRICA  (Address of principal executive offices)
 
  (Title of Class)
 (Title of Class)
  (Title of Class)
 (Title of Class)
 *
    
    Not for trading, but only in connection with the registration of American Depositary
Shares, pursuant to the requirements of the Securities and Exchange Commission.     þ o
  o þ
  þ o
  þ o o
  o þ
  o þ
  þ o




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##### 



Table of Contents
 Part IItem 1.
    
    Identity of Directors, Senior Management and Advisers
5Item 2.
    
    Offer Statistics and Expected Timetable
5Item 3.
    
    Key Information
5Item 4.
    
    Information on the Company
19Item 4A
    
    Unresolved Staff Comments
133Item 5.
    
    Operating and Financial Review and Prospects
133Item 6.
    
    Directors, Senior Management and Employees
165Item 7.
    
    Major Shareholders and Related Party Transactions
181Item 8.
    
    Financial Information
183Item 9.
    
    The Offer and Listing
185Item 10.
    
    Additional Information
189Item 11.
    
    Quantitative and Qualitative Disclosures About Market Risk
202Item 12.
    
    Description of Securities Other than Equity Securities
207Part IIItem 13.
    
    Defaults, Dividend Arrearages and Delinquencies
213Item 14.
    
    Material Modifications to the
Rights of Security Holders and Use of Proceeds
213Item 15.
    
    Controls and Procedures
214Item 16
    
    [Reserved]Item 16A.
    
    Audit Committee Financial Expert
214Item 16B.
    
    Code of Ethics
215Item 16C.
    
    Principal Accountant Fees and Services
215Item 16D.
    
    Exemptions from Listing Standards for Audit Committees
216Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliates
216Item 17.
    
    Financial Statements
216Item 18.
    
    Financial Statements
216Item 19.
    
    Exhibits
216SIGNATURE
221INDEX TO FINANCIAL STATEMENTS
222EX-4.20EX-4.21EX-12.1EX-12.2EX-13.1EX-13.2
  2




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USE OF TERMS AND CONVENTIONS IN THIS ANNUAL REPORT
   Item
3. Key Information  Risk Factors  Harmonys gold reserve figures are estimated based on a number
of assumptions, including assumptions as to mining and recovery factors, future cash costs or
production and the price of gold and may yield less gold under actual production conditions than
currently estimated.
  PRESENTATION OF FINANCIAL INFORMATION
 Item
5. Operating and Financial Review and Prospects  Costs  Reconciliation of Non-GAAP Measures.
  FORWARD-LOOKING STATEMENTS
 Item 4. Information on
the Company, Item 5. Operating and Financial Review and Prospects and Item 11. Quantitative and
Qualitative Disclosures About Market Risk
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
    
    overall economic and business conditions in South Africa and elsewhere;
    
    the ability to achieve anticipated efficiencies and other cost savings in connection with
past and future acquisitions;
    
    fluctuations in the market price of gold;
    
    the occurrence of hazards associated with underground and surface gold mining;
    
    the occurrence of labor disruptions;
    
    availability, terms and deployment of capital;
    
    changes in government regulation, particularly mining rights and environmental
regulation;
    
    fluctuations in exchange rates;
    
    currency devaluations/appreciations and other macroeconomic monetary policies; and
    
    socio-economic instability in South Africa and other countries in which Harmony operates.
  4




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PART I
 
 Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
  
 Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  
 Item 3. KEY INFORMATION
 SELECTED FINANCIAL DATA
 The selected consolidated financial data below should be read in conjunction with, and are
qualified in their entirety by reference to, our consolidated financial statements and the notes
thereto and with Item 5. Operating and Financial Review and Prospects, both included elsewhere in
this annual report. Historical results are not necessarily indicative of results to be expected for
any future period.
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
   Item 5. Operating and Financial Review and Prospects  Costs  Reconciliation of
Non-GAAP Measures.
 Fiscal Year Ended June 30,2006
    
    2005
    
    2004
    
    2003
    
    2002(adjusted)
    
    (adjusted)
    
    (adjusted)
    
    (adjusted)(in $ thousands, except per share amounts)Income Statement DataRevenues
    
    
    1,263,333
    
    
    
    1,265,200
    
    
    
    1,240,339
    
    
    
    781,792
    
    
    
    675,287Operating (loss)/income
    
    
    (36,551
    )
    
    
    (422,316
    )
    
    
    (59,689
    )
    
    
    466
    
    
    
    104,386Equity income of joint venture
    
    
    445
    
    
    
    
    
    
    
    9,503
    
    
    
    52,843
    
    
    
    13,176Equity (loss)/income of associate
companies
    
    
    (16,444
    )
    
    
    
    
    
    
    2,020
    
    
    
    (1,233
    )
    
    
    (473
    )(Loss)/Income before taxes and
minority interests
    
    
    (160,572
    )
    
    
    (641,360
    )
    
    
    (33,956
    )
    
    
    119,560
    
    
    
    133,027Minority interests
    
    
    
    
    
    
    
    
    
    
    1,281
    
    
    
    (468
    )
    
    
    (1,575
    )(Loss)/income before cumulative
effect of change in accounting
principles
    
    
    (157,783
    )
    
    
    (552,549
    )
    
    
    184
    
    
    
    89,597
    
    
    
    113,983Cumulative effect of change in
accounting principles, net of
tax
    
    
    2,058
    
    
    
    
    
    
    
    
    
    
    
    14,770
    
    
    
    Net (loss)/income
    
    
    (155,725
    )
    
    
    (552,549
    )
    
    
    184
    
    
    
    104,367
    
    
    
    113,983Basic (loss)/earnings per
share($) before cumulative
effect of change in accounting
principles
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00
    
    
    
    0.50
    
    
    
    0.74Basic (loss)/earnings per
share($)
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00
    
    
    
    0.59
    
    
    
    0.74Diluted (loss)/earnings per share
before cumulative effect of
change in accounting
principles
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00
    
    
    
    0.49
    
    
    
    0.69
 6




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Fiscal Year Ended June 30,2006
    
    2005
    
    2004
    
    2003
    
    2002(adjusted)
    
    (adjusted)
    
    (adjusted)
    
    (adjusted)(in $ thousands, except per share amounts)Diluted (loss)/earnings per
share
    
    
    (0.40
    )
    
    
    (1.52
    )
    
    
    0.00
    
    
    
    0.57
    
    
    
    0.69Weighted average number of shares
used in the computation of
basic earnings per share
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    254,240,500
    
    
    
    177,954,245
    
    
    
    153,509,862Weighted average number of shares
used in the computation of
diluted earnings per share
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    255,570,834
    
    
    
    182,721,629
    
    
    
    165,217,088Cash dividends per share
($)(1)
    
    
    
    
    
    
    0.05
    
    
    
    0.26
    
    
    
    0.57
    
    
    
    0.07Cash dividends per share
(R)(1)
    
    
    
    
    
    
    0.30
    
    
    
    1.90
    
    
    
    5.50
    
    
    
    0.75Other Financial DataCash cost per ounce of gold
($/oz)(2)
    
    
    436
    
    
    
    378
    
    
    
    338
    
    
    
    239
    
    
    
    185
 At June 30,2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(adjusted)
    
    
    (adjusted)
    
    
    (adjusted)
    
    
    (adjusted)(in $ thousands)Balance Sheet DataCash and cash equivalents
    
    
    89,189
    
    
    
    266,746
    
    
    
    217,022
    
    
    
    189,040
    
    
    
    90,223Other current assets
    
    
    339,156
    
    
    
    324,611
    
    
    
    294,502
    
    
    
    162,487
    
    
    
    109,397Property, plant and
equipment  net
    
    
    3,306,555
    
    
    
    3,451,963
    
    
    
    3,769,971
    
    
    
    1,188,910
    
    
    
    835,014Goodwill
    
    
    28,256
    
    
    
    30,367
    
    
    
    32,480
    
    
    
    
    
    
    
    Restricted cash
    
    
    35,599
    
    
    
    7,798
    
    
    
    9,922
    
    
    
    
    
    
    
    Investments in associates
    
    
    266,331
    
    
    
    
    
    
    
    19,908
    
    
    
    63,782
    
    
    
    42,791Investment in joint ventures
    
    
    2,065
    
    
    
    
    
    
    
    
    
    
    
    272,754
    
    
    
    102,578Other long-term assets
    
    
    395,048
    
    
    
    655,333
    
    
    
    435,058
    
    
    
    79,562
    
    
    
    137,399Total assets
    
    
    4,462,199
    
    
    
    4,736,818
    
    
    
    4,778,863
    
    
    
    1,956,535
    
    
    
    1,317,402Current liabilities
    
    
    343,802
    
    
    
    428,756
    
    
    
    393,764
    
    
    
    189,668
    
    
    
    138,677Provision for environmental
rehabilitation
    
    
    110,164
    
    
    
    120,450
    
    
    
    125,917
    
    
    
    62,977
    
    
    
    63,125Provision of social plan
    
    
    2,259
    
    
    
    2,109
    
    
    
    1,958
    
    
    
    
    
    
    
    Deferred income and mining taxes
    
    
    521,000
    
    
    
    541,188
    
    
    
    580,086
    
    
    
    218,995
    
    
    
    102,833Provision for post-retirement
benefits
    
    
    14,964
    
    
    
    13,276
    
    
    
    1,584
    
    
    
    1,017
    
    
    
    737Deferred financial liability
    
    
    150,038
    
    
    
    76,720
    
    
    
    91,513
    
    
    
    37,228
    
    
    
    87,226Long-term loans
    
    
    394,608
    
    
    
    409,486
    
    
    
    509,195
    
    
    
    301,572
    
    
    
    152,461Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,408Shareholders equity
    
    
    2,925,364
    
    
    
    3,144,833
    
    
    
    3,074,846
    
    
    
    1,126,670
    
    
    
    772,343Total liabilities and shareholders
equity
    
    
    4,462,199
    
    
    
    4,736,818
    
    
    
    4,778,863
    
    
    
    1,956,535
    
    
    
    1,317,402
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(1)
    
    Reflects dividends related to fiscal 2004, 2003 and 2002 that were declared on July 30, 2004,
August 1, 2003 and August 2, 2002 respectively.(2)
    
    Total cash costs and total cash costs per ounce are non-GAAP measures. Harmony has calculated
cash costs per ounce by dividing total cash costs, as determined using the guidance provided
by the Gold Institute, by gold ounces sold for all periods presented. The Gold Institute was a
non-profit industry association comprised of leading gold producers, refiners, bullion
suppliers and manufacturers. This institute has now been incorporated into the National Mining
Association. The guidance was first issued in 1996 and was revised in November 1999. Total
cash costs, as defined in the guidance provided by the Gold Institute, include mine production
costs, transport and refinery costs, applicable general and administrative costs, costs
associated with movements in production inventories and ore stockpiles, ongoing environmental
rehabilitation costs as well as transfers to and from deferred stripping and costs associated
with royalties. Ongoing employee termination costs are included, however, employee termination
costs associated with major restructuring and shaft closures are excluded. Total cash costs
have been calculated on a consistent basis for all periods presented and have been adjusted
for the accounting changes associated with underground development costs and stripping costs
incurred during the production phase of the mine. Changes in cash costs per ounce are affected
by operational performance, as well as changes in the currency exchange rate between the Rand
and the US dollar. Because total cash costs and total cash costs per ounce are non GAAP
measures, they should therefore not be considered by investors in isolation or as an
alternative to operating income/(loss) or net income/(loss) or any other U.S. GAAP measure or
an indicator of our performance. In particular depreciation and amortization would be included
in a measure of total costs of producing gold under U.S. GAAP, but it is not included in total
cash costs under the guidance provided by the Gold Institute. While the Gold Institute has
provided a definition for the calculation of total cash costs and total cash costs per ounce,
the calculation of cash costs per ounce may vary from company to company and may not be
comparable to other similarly titled measures of other companies. However, Harmony believes
that cash costs per ounce is a useful indicator to investors and management of a mining
companys performance as it provides (1) an indication of the cash generating capacities of
the mining operations, (2) the trends in cash costs as the companys operations mature, (3) a
measure of a companys performance, by comparison of cash costs per ounce to the spot price of
gold and (4) an internal benchmark of performance to allow for comparison against other
companies. For further information, see Item 5. Operating and Financial Review and Prospects
 Costs  Reconciliation of non-GAAP measures. EXCHANGE RATES
    Fiscal Year EndedJune 30,
    
    Average(1)
    
    Period End2002
    
    
    10.20
    
    
    
    10.392003
    
    
    9.13
    
    
    
    7.512004
    
    
    6.89
    
    
    
    6.232005
    
    
    6.18
    
    
    
    6.672006
    
    
    6.36
    
    
    
    7.17
 8




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Month of
    
    High
    
    LowApril 2006
    
    
    6.17
    
    
    
    5.99May 2006
    
    
    6.71
    
    
    
    6.00June 2006
    
    
    7.43
    
    
    
    6.63July 2006
    
    
    7.29
    
    
    
    6.81August 2006
    
    
    7.20
    
    
    
    6.72September 2006
    
    
    7.79
    
    
    
    7.05October 2006 (through October 24th)
    
    
    7.74
    
    
    
    7.59
 
 (1)
    
    The average of the noon buying rates provided by the Federal Reserve Bank of New York on the
last day of each full month during the relevant period.  CAPITALIZATION AND INDEBTEDNESS
  REASONS FOR THE OFFER AND USE OF PROCEEDS
  9




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RISK FACTORS
 In addition to the other information included in this annual report and the exhibits, you
should carefully consider the following factors related to an investment in Harmonys ordinary
shares and ADSs. There may be additional risks that Harmony does not currently know of or that
Harmony currently deems immaterial based on information currently available to it. Any of these
risks could have a materially adverse affect on Harmonys business, financial condition or results
of operations, resulting in a decline in the trading price of Harmonys ordinary shares or its
ADSs.
 The profitability of Harmonys operations, and the cash flows generated by those operations, are
affected by changes in the market price of gold, such that a fall in the price of gold below
Harmonys cash operating cost of production for any sustained period may lead Harmony to experience
losses and curtail or suspend certain operations.
  
    
    the demand for gold for industrial uses and for use in jewelry;
    
    international or regional political and economic trends;
    
    the strength of the US dollar (the currency in which gold prices generally are quoted)
and of other currencies;
    
    financial market expectations regarding the rate of inflation;
    
    interest rates;
    
    speculative activities;
    
    actual or expected purchases and sales of gold bullion held by central banks or other
large gold bullion holders or dealers;
    
    forward sales by other gold producers (because Harmony does not normally enter into
forward sales, derivatives or other hedging arrangements to establish a price in advance for
the sale of its future gold production, Harmony is not protected against decreases in the
gold price and if the gold price decreases significantly, Harmony runs the risk of reduced
revenues in respect of any gold production that is not hedged); and
    
    the production and cost levels for gold in major gold-producing nations, such as South
Africa, the rest of Africa and Australia.
  10




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Price per OunceYear
    
    High
    
    Low
    
    Average($)
    
    ($)
    
    ($)1996
    
    
    415
    
    
    
    367
    
    
    
    3881997
    
    
    367
    
    
    
    283
    
    
    
    3311998
    
    
    313
    
    
    
    273
    
    
    
    2941999
    
    
    326
    
    
    
    253
    
    
    
    2792000
    
    
    313
    
    
    
    264
    
    
    
    2822001
    
    
    293
    
    
    
    256
    
    
    
    2712002
    
    
    332
    
    
    
    278
    
    
    
    3092003
    
    
    412
    
    
    
    322
    
    
    
    3612004
    
    
    427
    
    
    
    343
    
    
    
    3892005
    
    
    476
    
    
    
    411
    
    
    
    4342006 (through October 24).
    
    
    606
    
    
    
    593
    
    
    
    599
   Due to the fact that the majority of Harmonys production costs are incurred in Rand and that gold
is sold in US dollars, Harmonys financial condition could be materially harmed by an appreciation
in the value of the Rand against the US dollar.
   Part of Harmonys strategy depends on its ability to make additional acquisitions.
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
    
    it will be able to identify appropriate acquisition candidates or negotiate
acquisitions on favorable terms;
    
    it will be able to obtain the financing necessary to complete future acquisitions; or
    
    the issuance of Harmonys ordinary shares or other securities in connection with any
future acquisition will not result in a substantial dilution in ownership interests of
holders of Harmonys securities.
  Harmonys gold reserve figures are estimated based on a number of assumptions, including
assumptions as to mining and recovery factors, future cash costs of production and the price of
gold and may yield less gold under actual production conditions than currently estimated.
   To maintain gold production beyond the expected lives of Harmonys existing mines or to increase
production materially above projected levels, Harmony will need to access additional reserves
through exploration or discovery.
  
    
    locating orebodies;
    
    identifying the metallurgical properties of orebodies;
    
    estimating the economic feasibility of mining orebodies;
    
    developing appropriate metallurgical processes;
    
    obtaining necessary governmental permits; and
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
    
    constructing mining and processing facilities at any site chosen for mining.
  
    
    future gold and other metal prices;
    
    anticipated tonnage, grades and metallurgical characteristics of ore to be mined and
processed;
    
    anticipated recovery rates of gold and other metals from the ore, and
    
    anticipated total costs of the project, including capital expenditure and cash
operating costs.
 Actual cash costs of production, production and economic returns may differ significantly from
those anticipated by Harmonys feasibility studies for new development projects.
  
    
    the availability and timing of necessary environmental and governmental permits;
    
    the timing and cost necessary to construct mining and processing facilities, which can
be considerable;
    
    the availability and cost of skilled labor, power, water and other materials;
    
    the accessibility of transportation and other infrastructure, particularly in remote
locations;
    
    the availability and cost of smelting and refining arrangements; and
    
    the availability of funds to finance construction and development activities.
  Harmony may experience problems in managing new acquisitions and integrating them with its existing
operations.
  
    
    difficulties in assimilating the operations of the acquired business;
    
    difficulties in maintaining the financial and strategic focus of Harmony while
integrating the acquired business;
    
    problems in implementing uniform standards, controls, procedures and policies;
    
    increasing pressures on existing management to oversee a rapidly expanding company; and
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
    
    to the extent Harmony acquires mining operations outside South Africa or Australia
encountering difficulties relating to operating in countries in which Harmony has not
previously operated.
  Due to the nature of mining and the type of gold mines it operates, Harmony faces a material risk
of liability, delays and increased cash costs of production from environmental and industrial
accidents and pollution.
  
    
    rockbursts;
    
    seismic events;
    
    underground fires;
    
    cave-ins or falls of ground;
    
    discharges of gases and toxic chemicals;
    
    release of radioactive hazards;
    
    flooding;
    
    accidents; and
    
    other conditions resulting from drilling, blasting and the removal and processing of
material from a deep-level mine.
  
    
    flooding of the open pit;
    
    collapse of the open pit walls;
    
    accidents associated with the operation of large open pit mining and rock
transportation equipment; and
    
    accidents associated with the preparation and ignition of large scale open pit blasting
operations.
  
    
    accidents associated with operating a waste dump and rock transportation; and
    
    production disruptions due to weather.
  Harmonys insurance coverage may prove inadequate to satisfy future claims against it.
  14




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The results of Harmonys South African and Australian operations may be negatively impacted by
inflation.
  The socio-economic framework in the regions in which we operate may have an adverse effect on
Harmonys operations and profits.
  Harmonys financial flexibility could be materially constrained by exchange control regulations as
imposed by the South African Reserve Bank.
  
    
    is generally not permitted to export capital from South Africa or to hold foreign
currency without the approval of the South African exchange control authorities;
    
    is generally required to repatriate to South Africa profits of foreign operations; and
    
    is limited in its ability to utilize profits of one foreign business to finance
operations of a different foreign business.
  Since Harmonys South African labor force has substantial trade union participation, Harmony faces
the risk of disruption from labor disputes and new South African labor laws.
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HIV/AIDS poses risks to Harmony in terms of productivity and costs.
  The cost of occupational healthcare services may increase in the future.
  Laws governing mineral rights ownership have changed in South Africa.
  
    
    to recognize the internationally accepted right of the state of South Africa to
exercise full and permanent sovereignty over all the mineral and petroleum resources within
South Africa;
    
    to give effect to the principle of the States custodianship of the nations mineral
and petroleum resources;
    
    to promote equitable access to South Africas mineral and petroleum resources to all
the people of South Africa and redress the impact of past discrimination;
    
    to substantially and meaningfully expand opportunities for historically disadvantaged
persons, including women, to enter the mineral and petroleum industry and to benefit from
the exploitation of South Africas mineral and petroleum resources;
    
    to promote economic growth and mineral and petroleum resources development in South
Africa;
    
    to promote employment and advance the social and economic welfare of all South
Africans;
    
    to provide security of tenure in respect of prospecting, exploration, mining and
production operations;
    
    to give effect to Section 24 of the South African Constitution by ensuring that South
Africas mineral and petroleum resources are developed in an orderly and ecologically
sustainable manner while promoting justifiable social and economic development;
    
    to follow the principle that mining companies keep and use their mineral rights, with
no expropriation and with guaranteed compensation for mineral rights; and
    
    to ensure that holders of mining and production rights contribute towards the
socio-economic development of areas in which they are operating.
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Harmony is subject to extensive environmental regulations.
     17




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Harmony may not pay cash dividends to its shareholders in the near future.
  Non-South African shareholders of Harmony face additional investment risk from currency exchange
rate fluctuations since any dividends will be paid in Rand.
  Because Harmony has a significant number of outstanding share options and convertible debt
instruments, Harmonys ordinary shares are subject to dilution.
  Investors in the United States may have difficulty bringing actions, and enforcing judgments,
against Harmony, its directors and its executive officers based on the civil liabilities provisions
of the federal securities laws or other laws of the United States or any state thereof.
  
    
    the court that pronounced the judgment had jurisdiction to entertain the case according
to the principles recognized by South African law with reference to the jurisdiction of
foreign courts;
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##### Table of Contents




    
    the judgment is final and conclusive;
    
    the judgment has not lapsed;
    
    the recognition and enforcement of the judgment by South African courts would not be
contrary to public policy, including observance of the rules of natural justice which
require that the documents initiating the United States proceeding were properly served on
the defendant and that the defendant was given the right to be heard and represented by
counsel in a free and fair trial before an impartial tribunal;
    
    the judgment does not involve the enforcement of a penal or revenue law; and
    
    the enforcement of the judgment is not otherwise precluded by the provisions of the
Protection of Business Act 99 of 1978, as amended, of the Republic of South Africa.
 Compliance with new and changing corporate governance and public disclosure requirements adds
uncertainty to our compliance policies and increases our costs of compliance.
    
 Item 4. INFORMATION ON THE COMPANY
 BUSINESS
 History and Development
    19




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##### Table of Contents



See Item 8. Financial Information  Recent Developments for further information.
 Item 4. Information on the Company  Business  Harmonys Mining
Operations Geographical and Segment Information
  Item 4. Information on the
Company  Regulation Item 10. Additional Information  Memorandum and Articles of
Association.
 South African Operations
     
    
    the Quality Assets, which typically have a larger reserve base and hence a longer life.
These form the core of our operations;
    
    the Leveraged Assetsare those that provide significant upside in the event of a rising
gold price (as has been evident in the latter part of fiscal 2006); and
    
    the Growth Assets, which comprise the expansion projects/new mines currently being
constructed in South
Africa.
 20




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##### Table of Contents



Leveraged
    
    
    
    SurfaceQuality Assets
    
    Assets
    
    Growth Assets
    
    OperationsTarget
    
    Bambanani
    
    Elandsrand mine and
project
    
    KalgoldTshepong
    
    Joel
    
    Doornkop mine and project
    
    FreegoldMasimong shaft complex
    
    West Shaft
    
    Phakisa project
    
    Free StateEvander 2, 3 & 5
    
    St. Helena
    
    
    
    RandfonteinEvander 7
    
    Harmony 2
    
    
    
    TargetEvander 8
    
    Merriespruit 1Cooke 1
    
    Merriespruit 3Cooke 2
    
    UniselCooke 3
    
    Brand 3Orkney 2Orkney 4Orkney 7
 Australasian Operations
   Principal Investments
    21




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##### Table of Contents



Item 7.
Major Shareholders and Related Party Transactions .
        22




---



##### Table of Contents



Related Party
Transactions.
 Related Party
Transactions.
 Disposals
  See Item 7. Major Shareholders and Related Party Transactions
      23




---



##### Table of Contents



Strategy
      Continuing to implement Harmonys unique management structure and philosophy.
  
    
    Empowered management teams.At each mining site Harmony has established small,
multi-disciplinary, focused management teams responsible for planning and implementing the
mining operations at the site. Each of these teams is accountable for the results at its
particular site and reports directly to Harmonys Board.
    
    Active strategic management by the Board.Annual operational goals and targets,
including cost, volume and grade targets are established in consultation with Harmonys
executive committee for each mining site. Each
 24




---



##### Table of Contents



management team develops an operational plan to implement the goals and targets for its mine
site. Members of Harmonys executive committee reviews and measures the results at each mining
site on a regular basis throughout the year.
    
    Increased productivity.Gold mining in South Africa is very labor intensive with labor
accounting for approximately 50% of Harmonys costs. To control these costs, Harmony
structures its operations to achieve maximum productivity with the goal of having 60% of
Harmonys workforce directly engaged in stoping, or underground excavation, and development
rock breaking activities. In addition, Harmony has implemented productivity-based bonuses
designed to maximize productivity.
    
    A no-frills, low cost ethic.Harmony has an obsession about lowering its cost base
and, to this end, Harmony extensively benchmarks its costing parameters both internally
between operations within Harmony and externally against other gold producers.
    
    Ongoing maintenance.The company applies a principle of appropriate maintenance
which allows it to spend capital commensurate with the life of a specified operation. This
principle ensures safe operation on the one hand and minimizes capital that may be used
ineffectively on mines that have a limited life.
    
    Systems.Harmony has implemented cost accounting systems and strict ore accounting and
ore reserve management systems to measure and track costs and ore reserve depletion
accurately, so as to enable it to be proactive in its decision making.
  Growing through acquisitions in South Africa and internationally
  
    
    to make acquisitions in addition to pursuing greenfield and brownfield developments
when it is economical to do so;
    
    to acquire mature assets with turnaround potential;
    
    to utilize the synergy that exists within the various regions that the company mines in
order to reduce overhead costs;
    
    to acquire assets that fit Harmonys management model; and
    
    to acquire assets that enhance Harmonys overall resource base.
   25




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##### Table of Contents



Hedge Policy
        Description of Mining Business
 Exploration
  
    
    on-mine exploration, which looks for resources within the economic radius of existing
mines, and
    
    new mine exploration, which is the global search for early to advanced stage projects.
  26




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##### Table of Contents



Australia
 South Kal:
   Mt. Magnet:
   27




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##### Table of Contents



Papua New Guinea
     Wafi Golpu:
  Bawaga Prospect:
 Kesiago and Biamena Prospects:
 Heking:
 Morobe  Hidden Valley:
 Moa Creek:
 Kerimenge:
 28




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##### Table of Contents



Morobe Coast:
  South Africa:
 Free State: Target North:
      29




---



##### Table of Contents



Other Geological Projects:
 Basal Reef:
 Leader Reef:
 Middle Reef:
 B Reef:
  30




---



##### Table of Contents



A Reef:
   Evander: The Evander 2 shaft-deepening project:
  Evander 7 target:
 Poplar:
    31




---



##### Table of Contents



Rolspruit:
 Other Evander projects:
 Randfontein:
 Elandsrand:
  Latin America
   32




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##### Table of Contents



Other Parts of Africa:
  Mining
  
    
    Access to the orebody.In Harmonys South African underground mines, access to the
orebody is by means of shafts sunk from the surface to the lowest economically and
practically mineable level. Horizontal development at various intervals of a shaft (known as
levels) extends access to the horizon of the reef to be mined. On-reef development then
provides specific mining access. In Harmonys Australian underground mines access to the
orebody is by means of declines. Horizontal development at various intervals of the decline
extends access to the horizon of the ore to be mined. The declines are advanced on a
continuous basis to keep ahead of the mining taking place on the levels above. In Harmonys
open pit mines, access to the orebody is provided by overburden stripping, which removes the
covering layers of topsoil or rock, through a combination of drilling, blasting, loading and
hauling, as required.
    
    Mining the orebody.The process of ore removal starts with drilling and blasting the
accessible ore. The blasted faces are then cleaned and the ore is transferred to the
transport system. In open pit mines, gold-bearing material may require drilling and blasting
and is usually collected by bulldozers or shovels to transfer it onto trucks which transport
it to the mill.
  Processing
   
    
    Comminution.Comminution is the process of breaking up the ore to expose and liberate
the gold and make it available for treatment. Conventionally, this process occurs in
multi-stage crushing and milling circuits, which include the use of jaw and gyratory
crushers and rod and tube and ball mills. Our more modern milling circuits include semi or
fully autogenous milling where the ore itself is used as the grinding medium. Typically, ore
must be ground to a minimum size before proceeding to the next stage of treatment.
    
    Treatment.In most of our metallurgical plants, gold is extracted into a leach solution
from the host ore by leaching in agitated tanks. Gold is then extracted onto activated
carbon from the solution using the CIL or CIP processes.
 33




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##### Table of Contents



See Item 8. Financial Information  Recent Developments
 Item 4. Information on the Company  Regulation-Mineral Rights.
 Services and Supplies
   Item 4. Information on the Company  Regulation  Mineral
Rights
 34




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##### Table of Contents



Harmonys Management Structure
   
    -
    
    The role of the Ore Reserve Manager is to optimize the extraction of
ore reserves, and they are also responsible for geology and ore
reserve declarations.-
    
    The role of the Business Analyst, is to ensure business optimization,
cost reductions and financial discipline within the operations.-
    
    The Human Resources Leader is responsible for employee mobilization
and for creating a business culture within the operation.
   Capital Expenditures
  35




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##### Table of Contents



Item 5: Operating and Financial
Review and Prospects  Critical Accounting Policies and Estimates . Item 4. Information on the
Company  Business  Harmonys Mining Operations  Evander Operations.
 Description of Property
  Hectares
    
    AcresCooke
    
    
    8,696
    
    
    
    21,488Lindum
    
    
    3,143
    
    
    
    7,766Doornkop
    
    
    2,941
    
    
    
    7,267Elandskraal
    
    
    5,113
    
    
    
    12,634Freestate
    
    
    22,583
    
    
    
    55,802Freegold
    
    
    21,173
    
    
    
    52,318Kalgold
    
    
    615
    
    
    
    1,520Evander
    
    
    36,898
    
    
    
    91,174Target
    
    
    7,952
    
    
    
    19,649
      36




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##### Table of Contents



WORLDWIDE OPERATIONS
 
 Geology
        37




---



##### Table of Contents



Reserves
   Year-on-year reconciliation of Harmonys ore reserves
 Gold(million ounces)Balance at June 30, 2005
    
    
    54.1Mined during fiscal 2006
    
    
    (2.4
    )*Added ounces from associate  Western Areas
    
    
    4.2
    **Other adjustments
    
    
    0.1Balance at June 30, 2006
    
    
    56.0
 
 *
    
    Ounces based on mill delivered grades**
    
    Based on the Western Areas Annual Report dated December 2005 taking account of depletion for the
period January 2006 to end June 2006.   38




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##### Table of Contents




    
    the database of measured and indicated resource blocks (per shaft section);
    
    an assumed gold price which, for this ore reserve statement, was taken as R105,000 per
kilogram;
    
    planned production rates;
    
    the mine recovery factor (MRF) which is equivalent to the mine call factor multiplied
by the plant recovery factor; and
    
    planned cash operating costs (Rand per tonne).
    39




---



##### Table of Contents



For the reporting of Ore Reserves at our South African and Australian operations Harmony uses a
gold price of US$500 per ounce. An exchange rate of R6.53 per US dollar is used for South Africa
and for Australia an exchange rate of US$0.74 per Australian dollar is used giving a gold price of
R105,000/kilogram or A$680/ounce, respectively.
 Ore reserve statement (Imperial) as at June 30, 2006
 Ore reserve statement  Imperial
 Operations
    
    Proven Reserves
    
    Probable Reserves
    
    Total ReservesTons
    
    Grade
    
    1 Gold oz
    
    Tons
    
    Grade
    
    1 Gold oz
    
    Tons
    
    Grade
    
    1 Gold oz(million)
    
    (oz/ton)
    
    (million)
    
    (million)
    
    (oz/ton)
    
    (million)
    
    (million)
    
    (oz/ton)
    
    (million)S.A. UndergroundElandskraal
    
    
    5.16
    
    
    
    0.242
    
    
    
    1.25
    
    
    
    27.28
    
    
    
    0.217
    
    
    
    5.91
    
    
    
    32.44
    
    
    
    0.221
    
    
    
    7.16Free State
    
    
    12.61
    
    
    
    0.153
    
    
    
    1.93
    
    
    
    14.37
    
    
    
    0.140
    
    
    
    2.01
    
    
    
    26.98
    
    
    
    0.146
    
    
    
    3.94Randfontein
    
    
    4.73
    
    
    
    0.210
    
    
    
    0.99
    
    
    
    7.21
    
    
    
    0.175
    
    
    
    1.26
    
    
    
    11.94
    
    
    
    0.189
    
    
    
    2.25Evander
    
    
    5.57
    
    
    
    0.210
    
    
    
    1.17
    
    
    
    17.54
    
    
    
    0.199
    
    
    
    3.48
    
    
    
    23.11
    
    
    
    0.201
    
    
    
    4.65Evander (below infrastructure)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41.80
    
    
    
    0.236
    
    
    
    9.87
    
    
    
    41.80
    
    
    
    0.236
    
    
    
    9.87Target
    
    
    8.14
    
    
    
    0.232
    
    
    
    1.89
    
    
    
    13.11
    
    
    
    0.185
    
    
    
    2.43
    
    
    
    21.25
    
    
    
    0.203
    
    
    
    4.31Free Gold
    
    
    17.51
    
    
    
    0.211
    
    
    
    3.69
    
    
    
    45.01
    
    
    
    0.220
    
    
    
    9.91
    
    
    
    62.51
    
    
    
    0.218
    
    
    
    13.60Orkney
    
    
    4.29
    
    
    
    0.196
    
    
    
    0.84
    
    
    
    3.13
    
    
    
    0.146
    
    
    
    0.46
    
    
    
    7.42
    
    
    
    0.175
    
    
    
    1.30Total S.A. Underground
    
    
    58.01
    
    
    
    0.203
    
    
    
    11.76
    
    
    
    169.45
    
    
    
    0.209
    
    
    
    35.33
    
    
    
    227.46
    
    
    
    0.207
    
    
    
    47.09S.A. SurfaceRandfontein
    
    
    0.00
    
    
    
    
    
    
    
    0.00
    
    
    
    2.10
    
    
    
    0.022
    
    
    
    0.05
    
    
    
    2.10
    
    
    
    0.022
    
    
    
    0.05Kalgold
    
    
    4.07
    
    
    
    0.022
    
    
    
    0.09
    
    
    
    5.35
    
    
    
    0.047
    
    
    
    0.25
    
    
    
    9.42
    
    
    
    0.036
    
    
    
    0.34Free Gold
    
    
    74.56
    
    
    
    0.011
    
    
    
    0.82
    
    
    
    10.88
    
    
    
    0.017
    
    
    
    0.19
    
    
    
    85.44
    
    
    
    0.012
    
    
    
    1.01Total S.A. Surface
    
    
    78.63
    
    
    
    0.011
    
    
    
    0.90
    
    
    
    18.33
    
    
    
    0.027
    
    
    
    0.49
    
    
    
    96.96
    
    
    
    0.014
    
    
    
    1.39Australian Operations 2Mt. Magnet
    
    
    1.77
    
    
    
    0.068
    
    
    
    0.12
    
    
    
    1.76
    
    
    
    0.107
    
    
    
    0.19
    
    
    
    3.54
    
    
    
    0.087
    
    
    
    0.31South Kalgoorlie
    
    
    0.85
    
    
    
    0.053
    
    
    
    0.05
    
    
    
    3.56
    
    
    
    0.062
    
    
    
    0.22
    
    
    
    4.41
    
    
    
    0.060
    
    
    
    0.27Total Australian Operations
    
    
    2.62
    
    
    
    0.063
    
    
    
    0.17
    
    
    
    5.32
    
    
    
    0.077
    
    
    
    0.41
    
    
    
    7.95
    
    
    
    0.072
    
    
    
    0.57Papua New Guinea 3Hidden Valley
    
    
    5.62
    
    
    
    0.064
    
    
    
    0.36
    
    
    
    36.38
    
    
    
    0.055
    
    
    
    2.01
    
    
    
    42.00
    
    
    
    0.056
    
    
    
    2.37Kaveroi and Hamata
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.40
    
    
    
    0.064
    
    
    
    0.35
    
    
    
    5.40
    
    
    
    0.064
    
    
    
    0.35Total Papua New Guinea
    
    
    5.62
    
    
    
    0.064
    
    
    
    0.36
    
    
    
    41.78
    
    
    
    0.056
    
    
    
    2.35
    
    
    
    47.40
    
    
    
    0.057
    
    
    
    2.71Western Areas 4South Deep (29.2% Equity)
    
    
    1.96
    
    
    
    0.213
    
    
    
    0.42
    
    
    
    21.58
    
    
    
    0.177
    
    
    
    3.83
    
    
    
    23.54
    
    
    
    0.180
    
    
    
    4.25GRAND TOTAL
    
    
    146.84
    
    
    
    0.093
    
    
    
    13.61
    
    
    
    256.46
    
    
    
    0.165
    
    
    
    42.41
    
    
    
    403.30
    
    
    
    0.139
    
    
    
    56.02
      40




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##### Table of Contents



R94,500/kilogram (1)
    
    R105,000/kilogram
    
    R115,500/kilogram51.1 million
    
    56.0 million
    
    57.7 million
 
 (1)
    
    Harmony calculated the 3 year average Rand gold price to be approximately
R93,500/kilogram ($448/ounce).   Harmonys Mining Operations  Overview
  
    
    Elandskraal
    
    the Free State
    
    Randfontein
    
    Evander
    
    Free Gold
    
    ARMgold and
    
    Avgold
  
    
    the Free State
    
    Randfontein
    
    Free Gold
    
    Kalgold and
    
    Target
 41




---



##### Table of Contents



South African Mining Operations  General
 Elandskraal Operations
 Introduction.
 History.
 Geology.
  42




---



##### Table of Contents



Mining Operations.
       43




---



##### Table of Contents



See Item 6. Directors
and Senior Management  Board Practices.
 Plants.
  Average Milled for theProcessing
    
    Fiscal YearPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Elandsrand Plant
    
    
    140,000
    *
    
    
    73,739
 
 *
    
    Processing capacity assumes optimal capacity upon completion of the Elandsrand New Mine
Project.  Randfontein Operations
 Introduction.
 History.
 See Item 8. Financial Information  Recent Developments
 Geology.
   44




---



##### Table of Contents



Mining Operations.
      See Item 6. Directors, Senior Management and Employees  Directors and Senior Management  Board
Practices.
 Plants.
 45




---



##### Table of Contents



Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Cooke
    
    
    280,000
    
    
    
    208,000Doornkop
    
    
    220,000
    
    
    
    181,000
  Free State Operations
 Introduction.
 History.
 Geology.
 Mining Operations.
  46




---



##### Table of Contents



See Item 6.
Directors, Senior Management and Employees  Directors and Senior Management  Board Practices.
 Plants.
  Average Milledfor the Fiscal YearProcessing
    
    EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Central
    
    
    220,000
    
    
    
    152,833Saaiplaas
    
    
    220,000
    
    
    
    96,167
  47




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##### Table of Contents



Evander Operations
 Introduction.
 History.
 Geology.
 Mining Operations. see Item 6. Directors, Senior Management and
Employees  Unionized Labor.
   See Item 6.
Directors, Senior Management and Employees  Directors and Senior Management  Board Practices.
 Plants.
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Kinross-Winkelhaak
    
    
    148,000
    
    
    
    134,000
 48




---



##### Table of Contents



Kalgold Operations
 Introduction.
 History.
  Geology.
   Mining Operations.
  See Item 6. Directors, Senior Management and
Employees  Directors and Senior Management  Board Practices.
 Plants.
 49




---



##### Table of Contents



Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)CIL
    
    
    130,000
    
    
    
    151,745Heap Leach
    
    
    
    
    
    
    6,825
    *
 
 *
    
    Active use of heap leaching was discontinued in July 2001; however, the Heap Leach is
treated through the current circuit on a monthly basis.  Free Gold Operations
 Introduction.
    50




---



##### Table of Contents



History.
 Geology.
 Mining Operations.
   Item 6. Employees-Unionized Labor.
 51




---



##### Table of Contents



Item 6. Employees-Unionized Labor.
   Directors, Senior Management and Employees  Directors and Senior
Management  Board Practices.
 Plants.
  Average Milled forProcessing
    
    the Fiscal YearPlant
    
    Capacity
    
    Ended June 30, 2006(tons/month)
    
    (tons/month)FS 1
    
    
    420,000
    
    
    
    380,333
  52




---



##### Table of Contents



ARMgold Operations
 Introduction.
 History.
 Geology.
  Mining operations.
     See
Item 6. Directors and Senior Management  Board Practices.
 53




---



##### Table of Contents



Plants.
 Avgold operations  Target
 Introduction.
  History.
 Geology.
     Mining operations.
 54




---



##### Table of Contents



See Item 6. Directors, Senior Management and Employees  Directors and Senior
Management  Board Practices.
Plants.
  Average Milled For theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Target Plant
    
    
    105,000
    
    
    
    67,750
  South African Operations  Production Analysis
  Quality assets
 Leveraged assets
 55




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##### Table of Contents



Growth assets
 Surface operations
 Quality assets
  Fiscal Year Ended June 30,2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    6,814
    
    
    
    7,464
    
    
    
    7,756Recovered grade (ounces/ton).
    
    
    0.167
    
    
    
    0.185
    
    
    
    0.173Gold sold (ounces)
    
    
    1,141,166
    
    
    
    1,378,167
    
    
    
    1,343,713Results of operations($)Product sales (000)
    
    
    606,435
    
    
    
    588,360
    
    
    
    523,305Cash cost (000)
    
    
    437,193
    
    
    
    436,018
    
    
    
    381,384Cash profit (000)
    
    
    169,242
    
    
    
    152,342
    
    
    
    141,921Cash costsPer ounce of gold($)
    
    
    383
    
    
    
    316
    
    
    
    284Capex(000)($)
    
    
    89,587
    
    
    
    81,615
    
    
    
    73,790
 
 (1)
    
    - During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item 5
Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates for further information on the effects of this
change on Harmony. (See Item 6. Directors, Senior Management and Employees  Unionized Labor"
  56




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##### Table of Contents



Fiscal Year Ended June 30,Target
    
    2006
    
    2005(1)
    2004*(1)ProductionTons (000)
    
    
    813
    
    
    
    1,178
    
    
    
    228Recovered grade (ounces/ton)
    
    
    0.185
    
    
    
    0.178
    
    
    
    0.234Gold sold (ounces)
    
    
    150,196
    
    
    
    209,847
    
    
    
    53,434Results of operations($)Product sales (000)
    
    
    81,178
    
    
    
    89,233
    
    
    
    19,772Cash cost (000)
    
    
    51,904
    
    
    
    54,391
    
    
    
    11,514Cash profit (000)
    
    
    29,274
    
    
    
    34,842
    
    
    
    8,258Cash costsPer ounce of gold($)
    
    
    346
    
    
    
    259
    
    
    
    215Capex(000)($)
    
    
    9,644
    
    
    
    10,818
    
    
    
    1,175
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item 5
Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. For further information on the effects of this
change on Harmony.*
    
    The fiscal 2004 operating and production results for Target comprise of the two months ended
June 30, 2004.  See Item 5 Operating and Financial Review and
Prospects  Exchange Rates.
  57




---



##### Table of Contents



See Item 3. Key Information  Risk Factors  Harmonys gold
reserve figures may yield less gold under actual production conditions than Harmony currently
estimates.
 Capital expenditure.
 Fiscal Year Ended June 30,Tshepong
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons(000)
    
    
    1,786
    
    
    
    1,700
    
    
    
    1,814Recovered grade (ounces/ton)
    
    
    0.188
    
    
    
    0.224
    
    
    
    0.215Gold sold (ounces)
    
    
    335,289
    
    
    
    380,695
    
    
    
    390,747Results of operations($)Product sales (000)
    
    
    179,626
    
    
    
    162,958
    
    
    
    158,161Cash cost (000)
    
    
    111,462
    
    
    
    101,091
    
    
    
    90,186Cash profit (000)
    
    
    68,164
    
    
    
    61,867
    
    
    
    67,975Cash costsPer ounce of gold($)
    
    
    332
    
    
    
    266
    
    
    
    231Capex(000)($)
    
    
    23,529
    
    
    
    23,346
    
    
    
    21,866
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectivlely, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. For further information on the effects of this
change on Harmony.  58




---



##### Table of Contents



See Item 5 Operating and Financial Review and Prospects -
Exchange Rates.
  See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors  Harmonys gold
reserve figures may yield less gold under actual production conditions than Harmony currently
estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Masimong Shaft Complex
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    1,020
    
    
    
    1,046
    
    
    
    1,378Recovered grade (ounces/ton)
    
    
    0.133
    
    
    
    0.153
    
    
    
    0.170Gold sold (ounces)
    
    
    136,153
    
    
    
    159,981
    
    
    
    234,307Results of operations($)Product sales (000)
    
    
    72,854
    
    
    
    68,342
    
    
    
    90,164
 59




---



##### Table of Contents



Fiscal Year Ended June 30,Masimong Shaft Complex
    
    2006
    
    2005(1)
    
    2004(1)Cash cost (000)
    
    
    66,563
    
    
    
    65,388
    
    
    
    69,774Cash profit (000)
    
    
    6,291
    
    
    
    2,954
    
    
    
    20,390Cash costsPer ounce of gold($)
    
    
    489
    
    
    
    409
    
    
    
    298Capex(000)($)
    
    
    14,520
    
    
    
    10,630
    
    
    
    10,615
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and Prospects  Exchange
Rates.
  See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
   60




---



##### Table of Contents



See Item 3. Key Information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Evander 2
    
    2006*
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    357
    
    
    
    491Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.137
    
    
    
    0.176Gold sold (ounces)
    
    
    
    
    
    
    48,764
    
    
    
    86,172Results of operations($)Product sales (000)
    
    
    
    
    
    
    20,695
    
    
    
    33,216Cash cost (000)
    
    
    
    
    
    
    27,404
    
    
    
    29,018Cash profit (000)
    
    
    
    
    
    
    (6,709
    )
    
    
    4,198Cash costsPer ounce of gold($)
    
    
    
    
    
    
    562
    
    
    
    337Capex(000)($)
    
    
    
    
    
    
    15
    
    
    
    619
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.*
    
    Due to the recent economic climate, mining operations at Evander 2 shaft were combined with
those at Evander 5 shaft and downscaled during fiscal 2005.   See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
   61




---



##### Table of Contents



See Item 3. Key Information  Risk Factors  Harmonys gold reserve figures may yield
less gold under actual production conditions than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Evander 5
    
    2006
    
    
    2005(1)
    
    
    2004(1)ProductionTons (000)
    
    
    450
    
    
    
    245
    
    
    
    223Recovered grade (ounces/ton)
    
    
    0.139
    
    
    
    0.192
    
    
    
    0.216Gold sold (ounces)
    
    
    62,388
    
    
    
    47,093
    
    
    
    48,103Results of operations($)Product sales (000)
    
    
    32,183
    
    
    
    20,078
    
    
    
    18,559Cash cost (000)
    
    
    33,068
    
    
    
    15,912
    
    
    
    14,192Cash (loss)/profit (000)
    
    
    (885
    )
    
    
    4,166
    
    
    
    4,367Cash costsPer ounce of gold($)
    
    
    530
    
    
    
    338
    
    
    
    295Capex(000)($)
    
    
    6,453
    
    
    
    7,006
    
    
    
    5,811
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
   62




---



##### Table of Contents



See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors  Harmonys gold reserve
figures may yield less gold under actual production conditions than Harmony currently estimates.
Capital Expenditure.
 Fiscal Year Ended June 30,Evander 7
    
    2006
    

2005(1)
    

2004(1)ProductionTons (000)
    
    
    435
    
    
    
    541
    
    
    
    577Recovered grade (ounces/ton)
    
    
    0.191
    
    
    
    0.240
    
    
    
    0.160Gold sold (ounces)
    
    
    83,202
    
    
    
    130,009
    
    
    
    92,505Results of operations($)Product sales (000)
    
    
    42,365
    
    
    
    55,502
    
    
    
    35,566Cash cost (000)
    
    
    32,648
    
    
    
    32,795
    
    
    
    29,297Cash profit (000)
    
    
    9,717
    
    
    
    22,707
    
    
    
    6,269Cash costsPer ounce of gold($)
    
    
    392
    
    
    
    252
    
    
    
    317Capex(000)($)
    
    
    10,021
    
    
    
    7,948
    
    
    
    8,705
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  63




---



##### Table of Contents



See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
    See
Item 3. Key Information  Risk Factors  Harmonys gold reserve figures may yield less gold under
actual production conditions than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Evander 8
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    815
    
    
    
    734
    
    
    
    692Recovered grade (ounces/ton)
    
    
    0.158
    
    
    
    0.207
    
    
    
    0.158Gold sold (ounces)
    
    
    128,849
    
    
    
    151,936
    
    
    
    109,513Results of operations($)Product sales (000)
    
    
    67,325
    
    
    
    64,912
    
    
    
    41,945Cash cost (000)
    
    
    44,863
    
    
    
    41,500
    
    
    
    35,280Cash profit (000)
    
    
    22,462
    
    
    
    23,412
    
    
    
    6,665Cash costsPer ounce of gold($)
    
    
    348
    
    
    
    273
    
    
    
    322Capex(000)($)
    
    
    9,726
    
    
    
    8,216
    
    
    
    9,519
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 64




---



##### Table of Contents



See Item 5.
Operating and Financial Review and Prospects  Exchange Rates.
    See Item 3. Key Information  Risk Factors  Harmonys gold reserve
figures may yield less gold under actual production conditions than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Cooke 1
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    490
    
    
    
    520
    
    
    
    605Recovered grade (ounces/ton)
    
    
    0.164
    
    
    
    0.152
    
    
    
    0.172Gold sold (ounces)
    
    
    80,495
    
    
    
    79,101
    
    
    
    104,168Results of operations($)Product sales (000)
    
    
    42,978
    
    
    
    33,888
    
    
    
    39,891
 65




---



##### Table of Contents



Fiscal Year Ended June 30,Cooke 1
    
    2006
    
    2005(1)
    
    2004(1)Cash cost (000)
    
    
    32,274
    
    
    
    31,115
    
    
    
    29,472Cash profit (000)
    
    
    10,704
    
    
    
    2,773
    
    
    
    10,419Cash costsPer ounce of gold($)
    
    
    401
    
    
    
    393
    
    
    
    283Capex(000)($)
    
    
    3,759
    
    
    
    2,811
    
    
    
    2,985
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5.
Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 66




---



##### Table of Contents



Capital Expenditure.
 Fiscal Year Ended June 30,Cooke 2
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    353
    
    
    
    403
    
    
    
    749Recovered grade (ounces/ton)
    
    
    0.170
    
    
    
    0.135
    
    
    
    0.121Gold sold (ounces)
    
    
    59,836
    
    
    
    54,441
    
    
    
    90,761Results of operations($)Product sales (000)
    
    
    32,025
    
    
    
    23,274
    
    
    
    34,748Cash cost (000)
    
    
    23,082
    
    
    
    24,144
    
    
    
    30,615Cash profit (000)
    
    
    8,943
    
    
    
    (870
    )
    
    
    4,133Cash costsPer ounce of gold($)
    
    
    386
    
    
    
    443
    
    
    
    337Capex(000)($)
    
    
    3,738
    
    
    
    2,538
    
    
    
    4,411
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  67




---



##### Table of Contents



See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Cooke 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    652
    
    
    
    740
    
    
    
    999Recovered grade (ounces/ton)
    
    
    0.161
    
    
    
    0.157
    
    
    
    0.134Gold sold (ounces)
    
    
    104,758
    
    
    
    116,300
    
    
    
    134,003Results of operations($)Product sales (000)
    
    
    55,901
    
    
    
    49,478
    
    
    
    51,283Cash cost (000)
    
    
    41,329
    
    
    
    42,278
    
    
    
    42,036Cash profit (000)
    
    
    14,572
    
    
    
    7,200
    
    
    
    9,247Cash costsPer ounce of gold($)
    
    
    395
    
    
    
    364
    
    
    
    314Capex(000)($)
    
    
    8,197
    
    
    
    8,287
    
    
    
    8,084
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See
Item 5. Operating and Financial Review and Prospects
 Critical Accounting Policies and Estimates. For further
information on the effects of this change on Harmony.  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
 68




---



##### Table of Contents



See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Leveraged assets
  Fiscal Year Ended June 30,2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    5,122
    
    
    
    5,990
    
    
    
    9,238Recovered grade (ounces/ton)
    
    
    0,133
    
    
    
    0.140
    
    
    
    0.140Gold sold (ounces)
    
    
    683,450
    
    
    
    841,280
    
    
    
    1,295,315Results of operations($)Product sales (000)
    
    
    361,178
    
    
    
    358,139
    
    
    
    491,690Cash cost (000)
    
    
    336,695
    
    
    
    402,695
    
    
    
    490,421Cash profit (000)
    
    
    24,483
    
    
    
    (44,556
    )
    
    
    1,269Cash costsPer ounce of gold($)
    
    
    493
    
    
    
    479
    
    
    
    379Capex(000)($)
    
    
    40,072
    
    
    
    33,068
    
    
    
    46,795
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   69




---



##### Table of Contents



Fiscal Year Ended June 30,Bambanani
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    1,196
    
    
    
    1,090
    
    
    
    1,606Recovered grade (ounces/ton)
    
    
    0.147
    
    
    
    0.181
    
    
    
    0.181Gold sold (ounces)
    
    
    175,214
    
    
    
    197,535
    
    
    
    290,210Results of operations($)Product sales (000)
    
    
    93,111
    
    
    
    84,165
    
    
    
    110,244Cash cost (000)
    
    
    87,064
    
    
    
    83,289
    
    
    
    95,447Cash profit (000)
    
    
    6,047
    
    
    
    876
    
    
    
    14,797Cash costsPer ounce of gold($)
    
    
    497
    
    
    
    422
    
    
    
    329Capex(000)($)
    
    
    14,870
    
    
    
    12,178
    
    
    
    14,756
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
   70




---



##### Table of Contents



See Item 5. Operating and Financial
Review and Prospects  Exchange Rates.
   See Item 3. Key Information  Risk Factors  Harmonys gold
reserve figures may yield less gold under actual production conditions than Harmony currently
estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Evander 9
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    31
    
    
    
    202Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.083
    
    
    
    0.116Gold sold (ounces)
    
    
    
    
    
    
    2,573
    
    
    
    23,440Results of operations($)Product sales (000)
    
    
    
    
    
    
    1,078
    
    
    
    9,079Cash cost (000)
    
    
    (21
    )
    
    
    3,005
    
    
    
    9,042Cash profit (000)
    
    
    (21
    )
    
    
    (1,927
    )
    
    
    37Cash costsPer ounce of gold($)
    
    
    
    
    
    
    1,168
    
    
    
    386Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.    71




---



##### Table of Contents



Capital Expenditure.
 Fiscal Year Ended June 30,Joel
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    436
    
    
    
    498
    
    
    
    565Recovered grade (ounces/ton)
    
    
    0.134
    
    
    
    0.129
    
    
    
    0.122Gold sold (ounces)
    
    
    58,595
    
    
    
    64,464
    
    
    
    68,694Results of operations($)Product sales (000)
    
    
    31,346
    
    
    
    27,282
    
    
    
    25,526Cash cost (000)
    
    
    29,170
    
    
    
    28,990
    
    
    
    24,240Cash profit (000)
    
    
    2,176
    
    
    
    (1,708
    )
    
    
    1,286Cash costsPer ounce of gold($)
    
    
    498
    
    
    
    450
    
    
    
    353Capex(000)($)
    
    
    3,644
    
    
    
    2,582
    
    
    
    1,922
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and Prospects 
Exchange Rates.
   72




---



##### Table of Contents



See Item 5. Operating and Financial Review and Prospects  Exchange
Rates.
   See Item 3. Key Information  Risk Factors  Harmonys gold reserve figures
may yield less gold under actual production conditions than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Kudu/Sable
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    13
    
    
    
    194
    
    
    
    275Recovered grade (ounces/ton)
    
    
    0.156
    
    
    
    0.130
    
    
    
    0.145Gold sold (ounces)
    
    
    2,024
    
    
    
    25,175
    
    
    
    39,848Results of operations($)Product sales (000)
    
    
    890
    
    
    
    10,764
    
    
    
    14,612Cash cost (000)
    
    
    895
    
    
    
    18,885
    
    
    
    16,073Cash profit (000)
    
    
    (5
    )
    
    
    (8,121
    )
    
    
    (1,461
    )Cash costsPer ounce of gold($)
    
    
    442
    
    
    
    750
    
    
    
    403Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   73




---



##### Table of Contents



See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
  See Item 5.
Operating and Financial Review and Prospects  Exchange Rates.
   Capital Expenditure.
 Fiscal Year Ended June 30,West Shaft
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    206
    
    
    
    176
    
    
    
    200Recovered grade (ounces/ton)
    
    
    0.124
    
    
    
    0.160
    
    
    
    0.180Gold sold (ounces)
    
    
    25,525
    
    
    
    28,165
    
    
    
    36,071Results of operations($)Product sales (000)
    
    
    13,117
    
    
    
    12,049
    
    
    
    14,039Cash cost (000)
    
    
    13,650
    
    
    
    12,907
    
    
    
    10,995Cash profit (000)
    
    
    (533
    )
    
    
    (858
    )
    
    
    3,044Cash costsPer ounce of gold($)
    
    
    535
    
    
    
    458
    
    
    
    305Capex(000)($)
    
    
    887
    
    
    
    107
    
    
    
    622
 
 (1)
    
    During 2006, the Company changed its accounting policy for
the capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated See Item
5. Operating and Financial Review and Prospects 
Critical Accounting Policies and Estimates. For further
information on the experts of this change on Harmony.  See Item 5. Operating and
 74




---



##### Table of Contents



Financial Review and Prospects  Exchange Rates.
     See Item 3. Key Information  Risk Factors  Harmonys gold
reserve figures may yield less gold under actual production conditions than Harmony currently
estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Nyala
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    2
    
    
    
    198
    
    
    
    112Recovered grade (ounces/ton)
    
    
    0.092
    
    
    
    0.119
    
    
    
    0.108Gold sold (ounces)
    
    
    184
    
    
    
    23,503
    
    
    
    12,073Results of operations($)Product sales (000)
    
    
    81
    
    
    
    9,897
    
    
    
    4,645Cash cost (000)
    
    
    226
    
    
    
    17,587
    
    
    
    4,063Cash profit (000)
    
    
    (145
    )
    
    
    (7,690
    )
    
    
    582Cash costsPer ounce of gold($)
    
    
    1,228
    
    
    
    748
    
    
    
    337Capex(000)($)
    
    
    3
    
    
    
    1,440
    
    
    
    7,276
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 75




---



##### Table of Contents



Capital Expenditure.
 Fiscal Year Ended June 30,Eland
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    21
    
    
    
    175
    
    
    
    347Recovered grade (ounces/ton)
    
    
    0.193
    
    
    
    0.153
    
    
    
    0.146Gold sold (ounces)
    
    
    4,058
    
    
    
    26,782
    
    
    
    50,697Results of operations($)Product sales (000)
    
    
    2,026
    
    
    
    11,436
    
    
    
    17,447Cash cost (000)
    
    
    1,066
    
    
    
    13,404
    
    
    
    24,501Cash profit (000)
    
    
    960
    
    
    
    (1,968
    )
    
    
    (7,054
    )Cash costsPer ounce of gold($)
    
    
    263
    
    
    
    500
    
    
    
    483Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    274
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  76




---



##### Table of Contents



See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
    Capital Expenditure.
 Fiscal Year Ended June 30,Deelkraal
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    1
    
    
    
    522Recovered grade (ounces/ton)
    
    
    
    
    
    
    2.284
    
    
    
    0.131Gold sold (ounces)
    
    
    
    
    
    
    2,284
    
    
    
    68,127Results of operations($)Product sales (000)
    
    
    
    
    
    
    958
    
    
    
    26,206Cash cost (000)
    
    
    
    
    
    
    714
    
    
    
    37,796Cash profit (000)
    
    
    
    
    
    
    244
    
    
    
    (11,590
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    313
    
    
    
    555Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    1,305
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   77




---



##### Table of Contents



Capital Expenditure.
 Fiscal Year Ended June 30,St. Helena
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    127
    
    
    
    245
    
    
    
    507Recovered grade (ounces/ton)
    
    
    0.101
    
    
    
    0.122
    
    
    
    0.140Gold sold (ounces)
    
    
    12,791
    
    
    
    29,965
    
    
    
    71,027Results of operations($)Product sales (000)
    
    
    6,867
    
    
    
    12,660
    
    
    
    25,124Cash cost (000)
    
    
    10,802
    
    
    
    24,191
    
    
    
    29,864Cash profit (000)
    
    
    (3,935
    )
    
    
    (11,531
    )
    
    
    (4,740
    )Cash costsPer ounce of gold($)
    
    
    845
    
    
    
    807
    
    
    
    420Capex(000)($)
    
    
    443
    
    
    
    901
    
    
    
    1,538
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
 78




---



##### Table of Contents



See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Harmony 2
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    598
    
    
    
    559
    
    
    
    643Recovered grade (ounces/ton)
    
    
    0.116
    
    
    
    0.123
    
    
    
    0.136Gold sold (ounces)
    
    
    69,446
    
    
    
    68,547
    
    
    
    87,472Results of operations($)Product sales (000)
    
    
    36,716
    
    
    
    29,295
    
    
    
    33,541Cash cost (000)
    
    
    33,527
    
    
    
    30,021
    
    
    
    29,690Cash profit (000)
    
    
    3,189
    
    
    
    (726
    )
    
    
    3,851Cash costsPer ounce of gold($)
    
    
    483
    
    
    
    438
    
    
    
    339Capex(000)($)
    
    
    3,964
    
    
    
    3,555
    
    
    
    2,526
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
 79




---



##### Table of Contents



See Item 5. Operating and Financial Review and Prospects 
Exchange Rates.
  See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Merriespruit 1
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    410
    
    
    
    414
    
    
    
    477Recovered grade (ounces/ton)
    
    
    0.117
    
    
    
    0.110
    
    
    
    0.124Gold sold (ounces)
    
    
    48,069
    
    
    
    45,559
    
    
    
    59,062Results of operations($)Product sales (000)
    
    
    25,685
    
    
    
    19,428
    
    
    
    22,681Cash cost (000)
    
    
    24,061
    
    
    
    21,719
    
    
    
    21,222Cash profit (000)
    
    
    1,624
    
    
    
    (2,291
    )
    
    
    1,459Cash costsPer ounce of gold($)
    
    
    501
    
    
    
    477
    
    
    
    359Capex(000)($)
    
    
    2,445
    
    
    
    2,833
    
    
    
    3,328
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  80




---



##### Table of Contents



See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Merriespruit 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    452
    
    
    
    548
    
    
    
    743Recovered grade (ounces/ton)
    
    
    0.097
    
    
    
    0.100
    
    
    
    0.104Gold sold (ounces)
    
    
    43,691
    
    
    
    54,690
    
    
    
    76,956Results of operations($)Product sales (000)
    
    
    23,078
    
    
    
    23,325
    
    
    
    29,570Cash cost (000)
    
    
    24,188
    
    
    
    24,379
    
    
    
    30,220Cash profit (000)
    
    
    (1,110
    )
    
    
    (1,054
    )
    
    
    (650
    )Cash costsPer ounce of gold($)
    
    
    554
    
    
    
    446
    
    
    
    393Capex(000)($)
    
    
    1,783
    
    
    
    1,696
    
    
    
    2,287
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 81




---



##### Table of Contents



See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
  See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Unisel
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    500
    
    
    
    494
    
    
    
    677Recovered grade (ounces/ton)
    
    
    0.146
    
    
    
    0.132
    
    
    
    0.134Gold sold (ounces)
    
    
    72,963
    
    
    
    65,011
    
    
    
    91,020Results of operations($)Product sales (000)
    
    
    38,172
    
    
    
    27,798
    
    
    
    35,014
 82




---



##### Table of Contents



Fiscal Year Ended June 30,Unisel
    
    2006
    
    2005(1)
    
    2004(1)Cash cost (000)
    
    
    28,789
    
    
    
    31,055
    
    
    
    32,253Cash profit (000)
    
    
    9,383
    
    
    
    (3,257
    )
    
    
    2,761Cash costsPer ounce of gold($)
    
    
    395
    
    
    
    478
    
    
    
    354Capex(000)($)
    
    
    3,907
    
    
    
    4,147
    
    
    
    6,181
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and Prospects 
Exchange Rates.
  See item 5. Operating
and Financial Review and Prospects  Exchange Rates.
   See Item 3. Key Information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Capital Expenditure.
 83




---



##### Table of Contents



Fiscal Year Ended June 30,Brand 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    405
    
    
    
    448
    
    
    
    531Recovered grade (ounces/ton)
    
    
    0.103
    
    
    
    0.103
    
    
    
    0.112Gold sold (ounces)
    
    
    41,647
    
    
    
    46,299
    
    
    
    59,558Results of operations($)Product sales (000)
    
    
    22,147
    
    
    
    19,807
    
    
    
    22,985Cash cost (000)
    
    
    23,272
    
    
    
    22,883
    
    
    
    22,625Cash profit (000)
    
    
    (1,125
    )
    
    
    (3,076
    )
    
    
    360Cash costsPer ounce of gold($)
    
    
    559
    
    
    
    494
    
    
    
    380Capex(000)($)
    
    
    987
    
    
    
    1,267
    
    
    
    1,390
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  84




---



##### Table of Contents



See Item 3. Key Information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Brand 5
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    3
    
    
    
    
    
    
    
    153Recovered grade (ounces/ton)
    
    
    0.156
    
    
    
    0
    
    
    
    0.126Gold sold (ounces)
    
    
    469
    
    
    
    33
    
    
    
    19,262Results of operations($)Product sales (000)
    
    
    236
    
    
    
    8
    
    
    
    7,442Cash cost (000)
    
    
    975
    
    
    
    2,120
    
    
    
    13,331Cash profit (000)
    
    
    (739
    )
    
    
    (2,112
    )
    
    
    (5,889
    )Cash costsPer ounce of gold($)
    
    
    2,079
    
    
    
    64,242
    
    
    
    692Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   Capital Expenditure.
 Fiscal Year EndedJune 30,Orkney 1
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    3Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.107Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    322Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    123Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    194Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (71
    )
 85




---



##### Table of Contents



Fiscal Year EndedJune 30,Orkney 1
    
    2006
    
    2005(1)
    
    2004(1)Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    602Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for
the capitalization of mine development costs. This change was
made retrospectively, and comparative numbers have been restated.
See Item 5. Operating and Financial Review and Prospects 
Critical Accounting Policies and Estimates. for further
information on the effects of this change on Harmony.  Fiscal Year Ended June 30,Orkney 2
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    347
    
    
    
    413
    
    
    
    387Recovered grade (ounces/ton)
    
    
    0.201
    
    
    
    0.190
    
    
    
    0.210Gold sold (ounces)
    
    
    69,877
    
    
    
    78,449
    
    
    
    81,434Results of operations($)Product sales (000)
    
    
    36,589
    
    
    
    33,279
    
    
    
    31,435Cash cost (000)
    
    
    29,716
    
    
    
    31,495
    
    
    
    25,026Cash profit (000)
    
    
    6,873
    
    
    
    1,784
    
    
    
    6,409Cash costsPer ounce of gold($)
    
    
    425
    
    
    
    401
    
    
    
    307Capex(000)($)
    
    
    2,380
    
    
    
    1,443
    
    
    
    1,866
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   See Item 5. Operating and Financial Review and Prospects 
Exchange Rates.
  86




---



##### Table of Contents



See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 3. Key information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Orkney 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    137Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.083Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    11,413Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    4,425Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    6,440Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (2,015
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    564Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    464
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  87




---



##### Table of Contents



Fiscal Year Ended June 30,Orkney 4
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    406
    
    
    
    455
    
    
    
    401Recovered grade (ounces/ton)
    
    
    0.145
    
    
    
    0.169
    
    
    
    0.169Gold sold (ounces)
    
    
    58,897
    
    
    
    76,971
    
    
    
    67,931Results of operations($)Product sales (000)
    
    
    31,117
    
    
    
    32,720
    
    
    
    26,269Cash cost (000)
    
    
    29,273
    
    
    
    29,616
    
    
    
    19,543Cash profit (000)
    
    
    1,844
    
    
    
    3,104
    
    
    
    6,726Cash costsPer ounce of gold($)
    
    
    497
    
    
    
    385
    
    
    
    288Capex(000)($)
    
    
    4,759
    
    
    
    915
    
    
    
    860
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
   See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
   88




---



##### Table of Contents



See Item 3. Key information  Risk Factors  Harmonys
gold reserve figures may yield less gold under actual production conditions than Harmony currently
estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Orkney 6
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    157Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.070Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    11,060Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    4,304Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    5,378Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (1,074
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    486Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  Fiscal Year Ended June 30,Orkney 7
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    28Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.162Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    4,533Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    1,760Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    1,970Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (210
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    435Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 89




---



##### Table of Contents



(1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  Fiscal Year Ended June 30,Saaiplaas 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    30
    
    
    
    254Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.085
    
    
    
    0.105Gold sold (ounces)
    
    
    
    
    
    
    2,541
    
    
    
    26,783Results of operations($)Product sales (000)
    
    
    
    
    
    
    1,026
    
    
    
    10,331Cash cost (000)
    
    
    
    
    
    
    4,831
    
    
    
    13,485Cash profit (000)
    
    
    
    
    
    
    (3,805
    )
    
    
    (3,154
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    1,901
    
    
    
    503Capex(000)($)
    
    
    
    
    
    
    4
    
    
    
    200
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.    Capital Expenditure.
 90




---



##### Table of Contents



Fiscal Year Ended June 30,Welkom 1
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    21
    
    
    
    159Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.130
    
    
    
    0.121Gold sold (ounces)
    
    
    
    
    
    
    2,734
    
    
    
    19,226Results of operations($)Product sales (000)
    
    
    
    
    
    
    1,164
    
    
    
    7,415Cash cost (000)
    
    
    
    
    
    
    1,604
    
    
    
    9,939Cash profit (000)
    
    
    
    
    
    
    (440
    )
    
    
    (2,524
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    587
    
    
    
    517Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.     Capital Expenditure.
 Fiscal Year Ended June 30,Welkom 2
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    12Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.113Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    1,350Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    525Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    547Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (22
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    405Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the
effects of this change on Harmony. 91




---



##### Table of Contents



Fiscal Year Ended June 30,Welkom 3
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    15Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.101Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    1,511Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    592Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    581Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    11Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    385Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated.
See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  Fiscal Year Ended June 30,Welkom 4
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    13Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.302Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    3,922Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    1,531Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    1,496Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    35Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    381Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated.
See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 92




---



##### Table of Contents



Fiscal Year Ended June 30,Welkom 6
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    24Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.100Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    2,411Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    935Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    894Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    41Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    371Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  Fiscal Year Ended June 30,Welkom 7
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    88Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.113Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    9,902Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    3,890Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    3,566Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    324Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    360Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 93




---



##### Table of Contents



Growth assets
  Fiscal Year Ended June 30,2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    1,502
    
    
    
    1,545
    
    
    
    2,004Recovered grade (ounces/ton)
    
    
    0.143
    
    
    
    0.168
    
    
    
    0.158Gold sold (ounces)
    
    
    214,460
    
    
    
    260,066
    
    
    
    315,815Results of operations($)Product sales (000)
    
    
    113,391
    
    
    
    111,055
    
    
    
    121,744Cash cost (000)
    
    
    113,671
    
    
    
    112,172
    
    
    
    111,173Cash profit (000)
    
    
    (280
    )
    
    
    (1,117
    )
    
    
    10,571Cash costsPer ounce of gold($)
    
    
    530
    
    
    
    431
    
    
    
    352Capex(000)($)
    
    
    78,076
    
    
    
    73,458
    
    
    
    59,751
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  94




---



##### Table of Contents



Fiscal Year Ended June 30,Elandsrand
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    987
    
    
    
    1,019
    
    
    
    1,437Recovered grade (ounces/ton)
    
    
    0.173
    
    
    
    0.204
    
    
    
    0.174Gold sold (ounces)
    
    
    170,867
    
    
    
    207,371
    
    
    
    250,581Results of operations($)Product sales (000)
    
    
    90,097
    
    
    
    88,577
    
    
    
    96,831Cash cost (000)
    
    
    89,349
    
    
    
    88,599
    
    
    
    90,627Cash profit (000)
    
    
    748
    
    
    
    (22
    )
    
    
    (6,204
    )Cash costsPer ounce of gold($)
    
    
    523
    
    
    
    427
    
    
    
    362Capex(000)($)
    
    
    30,523
    
    
    
    26,081
    
    
    
    26,087
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and Prospects
Exchange Rates
 95




---



##### Table of Contents



See Item 3. Key Information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Elandsrand New Mine Project.
 Capital Expenditure. South African Operations  General 
Elandskraal Operations.
 Fiscal Year Ended June 30,Doornkop
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    515
    
    
    
    526
    
    
    
    567Recovered grade (ounces/ton)
    
    
    0.085
    
    
    
    0.100
    
    
    
    0.115Gold sold (ounces)
    
    
    43,593
    
    
    
    52,695
    
    
    
    65,234Results of operations($)Product sales (000)
    
    
    23,294
    
    
    
    22,478
    
    
    
    24,913Cash cost (000)
    
    
    24,322
    
    
    
    23,573
    
    
    
    20,546Cash profit (000)
    
    
    (1,028
    )
    
    
    (1,095
    )
    
    
    4,367Cash costsPer ounce of gold($)
    
    
    558
    
    
    
    447
    
    
    
    315Capex(000)($)
    
    
    26,031
    
    
    
    28,621
    
    
    
    16,819
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  96




---



##### Table of Contents



See
Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Doornkop South Reef Project
 Capital Expenditure. South African Operations  General  Randfontein Operations 
 97




---



##### Table of Contents



Fiscal Year Ended June 30,Phakisa
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    Capex(000)($)
    
    
    21,522
    
    
    
    18,756
    
    
    
    16,845
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 3. Key Information 
Risk Factors  Harmonys gold reserve figures may yield less gold under actual production
conditions than Harmony currently estimates.
 Phakisa Shaft Project
 Capital Expenditure. South African
Operations  General  Free Gold Operations 
 Surface Operations
  98




---



##### Table of Contents



Fiscal Year Ended June 30,2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    3,984
    
    
    
    6,528
    
    
    
    11,026Recovered grade (ounces/ton)
    
    
    0.029
    
    
    
    0.029
    
    
    
    0.019Gold sold (ounces)
    
    
    116,388
    
    
    
    188,904
    
    
    
    208,744Results of operations($)Product sales (000)
    
    
    59,833
    
    
    
    80,222
    
    
    
    80,321Cash cost (000)
    
    
    49,543
    
    
    
    73,679
    
    
    
    71,498Cash profit (000)
    
    
    10,290
    
    
    
    (6,543
    )
    
    
    8,823Cash costsPer ounce of gold($)
    
    
    426
    
    
    
    390
    
    
    
    343Capex(000)($)
    
    
    13,259
    
    
    
    5,675
    
    
    
    14,099
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.        Fiscal Year Ended June 30,Kalgold
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    2,008
    
    
    
    1,855
    
    
    
    1,530Recovered grade (ounces/ton)
    
    
    0.038
    
    
    
    0.058
    
    
    
    0.054Gold sold (ounces)
    
    
    77,071
    
    
    
    108,195
    
    
    
    82,756Results of operations($)Product sales (000)
    
    
    39,341
    
    
    
    46,331
    
    
    
    31,532Cash cost (000)
    
    
    31,740
    
    
    
    40,341
    
    
    
    28,511Cash profit (000)
    
    
    7,601
    
    
    
    (5,990
    )
    
    
    3,021Cash costsPer ounce of gold($)
    
    
    412
    
    
    
    373
    
    
    
    345Capex(000)($)
    
    
    389
    
    
    
    (4,145
    )
    
    
    4,405
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony. 99




---



##### Table of Contents



See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and Financial Review and Prospects 
Exchange Rates.
   See Item 3. Key Information  Risk Factors 
Harmonys gold reserve figures may yield less gold under actual production conditions than Harmony
currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Elandsrand
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    451Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.012Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    5,301
 100




---



##### Table of Contents



Fiscal Year Ended June 30,Elandsrand
    
    2006
    
    2005(1)
    
    2004(1)Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    2,047Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    2,640Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (593
    )Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    498Capex(000)($)
    
    
    
    
    
    
    7
    
    
    
    294
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  Fiscal Year Ended June 30,Evander
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    101Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.019Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    1,961Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    756Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    496Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    260Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    253Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    2,367
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  101




---



##### Table of Contents



Fiscal Year Ended June 30,Freegold
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    336
    
    
    
    1,361
    
    
    
    4,148Recovered grade (ounces/ton)
    
    
    0.033
    
    
    
    0.027
    
    
    
    0.018Gold sold (ounces)
    
    
    11,019
    
    
    
    36,420
    
    
    
    73,122Results of operations($)Product sales (000)
    
    
    5,366
    
    
    
    15,407
    
    
    
    28,507Cash cost (000)
    
    
    5,386
    
    
    
    15,436
    
    
    
    23,972Cash profit (000)
    
    
    (20
    )
    
    
    (29
    )
    
    
    4,535Cash costs
Per ounce of gold($)
    
    
    489
    
    
    
    424
    
    
    
    328Capex (000)($)
    
    
    340
    
    
    
    314
    
    
    
    21
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  Capital Expenditure.
 Fiscal Year Ended June 30,Free State
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    897
    
    
    
    467
    
    
    
    2,368Recovered grade (ounces/ton)
    
    
    0.018
    
    
    
    0.020
    
    
    
    0.011Gold sold (ounces)
    
    
    15,902
    
    
    
    9,542
    
    
    
    26,732
 102




---



##### Table of Contents



Fiscal Year Ended June 30,Free State
    
    2006
    
    2005(1)
    
    2004(1)Results of operations($)Product sales (000)
    
    
    8,614
    
    
    
    3,720
    
    
    
    10,215Cash cost (000)
    
    
    6,427
    
    
    
    3,318
    
    
    
    9,289Cash profit (000)
    
    
    2,187
    
    
    
    402
    
    
    
    926Cash costsPer ounce of gold($)
    
    
    404
    
    
    
    348
    
    
    
    347Capex(000)($)
    
    
    3,818
    
    
    
    1,589
    
    
    
    2,501
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
   Capital Expenditure.
 Fiscal Year Ended June 30,Randfontein
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    539
    
    
    
    2,757
    
    
    
    2,428Recovered grade (ounces/ton)
    
    
    0.022
    
    
    
    0.012
    
    
    
    0.008Gold sold (ounces)
    
    
    11,650
    
    
    
    33,397
    
    
    
    18,872Results of operations($)Product sales (000)
    
    
    6,108
    
    
    
    14,185
    
    
    
    7,264Cash cost (000)
    
    
    5,022
    
    
    
    14,117
    
    
    
    6,590Cash profit (000)
    
    
    1,086
    
    
    
    68
    
    
    
    674Cash costsPer ounce of gold($)
    
    
    431
    
    
    
    423
    
    
    
    349Capex(000)($)
    
    
    8,712
    
    
    
    6,120
    
    
    
    4,511
 103




---



##### Table of Contents



(1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
  See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
 See Item 3. Key Information  Risk
Factors  Harmonys gold reserve figures may yield less gold under actual production conditions
than Harmony currently estimates.
 Capital Expenditure.
 Fiscal Year Ended June 30,Target
    
    2006
    
    2005(1)
    
    2004(1)ProductionTons (000)
    
    
    204
    
    
    
    88
    
    
    
    Recovered grade (ounces/ton)
    
    
    0.004
    
    
    
    0.015
    
    
    
    Gold sold (ounces)
    
    
    746
    
    
    
    1,350
    
    
    
    
 104




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##### Table of Contents



Fiscal Year Ended June 30,Target
    
    2006
    
    2005(1)
    
    2004(1)Results of operations($)Product sales (000)
    
    
    404
    
    
    
    579
    
    
    
    Cash cost (000)
    
    
    968
    
    
    
    467
    
    
    
    Cash profit (000)
    
    
    (564
    )
    
    
    112
    
    
    
    Cash costsPer ounce of gold($)
    
    
    1,298
    
    
    
    346
    
    
    
    Capex(000)($)
    
    
    
    
    
    
    1,790
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.   Capital Expenditure.
 Australian Operations
 Overview
   105




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##### Table of Contents



Fiscal Year Ended June 30,2006
    
    2005
    

2004(1)(2)ProductionTons (000)
    
    
    3,398
    
    
    
    4,148
    
    
    
    5,227Recovered grade (ounces/ton)
    
    
    0.068
    
    
    
    0.072
    
    
    
    0.065Gold sold (ounces)
    
    
    231,461
    
    
    
    296,848
    
    
    
    338,288Results of operations($)Product sales (000)
    
    
    122,496
    
    
    
    125,669
    
    
    
    131,435Cash cost (000)
    
    
    96,950
    
    
    
    100,178
    
    
    
    110,475Cash profit (000)
    
    
    25,546
    
    
    
    25,491
    
    
    
    21,960Cash costsPer ounce of gold($)
    
    
    419
    
    
    
    337
    
    
    
    327Capex(000)($)
    
    
    43,296
    
    
    
    40,042
    
    
    
    30,502
 106




---



##### Table of Contents



(1)
    
    During 2006, the Company changed its accounting policy for
the capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See
Item 5. Operating and Financial Review and
Prospects  Critical Accounting Policy and Estimates. for
further information on the effects of this change on Harmony.(2)
    
    Includes gold sales from Abelles Gidgee Operations for 5 months until November 2003.   Capital expenditure:
 Big Bell Operations
 History.
   Geology.
 Mining Operations.
 107




---



##### Table of Contents



Item 3. Key Information  Risk Factors  To maintain gold production beyond the
expected lives of Harmonys existing mines or increase production materially above projected
levels, Harmony will need to access additional reserves through development or discovery.
  Fiscal Year Ended June 30,2006
    
    2005
    

2004(1)(2)ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    120Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.096Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    11,574Results of operations($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    4,079Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    3,713Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    366Cash costsPer ounce of gold($)
    
    
    
    
    
    
    
    
    
    
    321Capex(000)($)
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    During 2006, the Company changed its accounting policy for the
capitalization of mine development costs. This change was made
retrospectively, and comparative numbers have been restated. See Item
5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this
change on Harmony.(2)
    
    Production consists of plant clean up tons and ounces during July 2003. Big Bell ceased
operations for the remainder of fiscal 2004 and was subject to cleanup and rehabilitation
work.  Plant.
  Capital Expenditure.
 108




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##### Table of Contents



Rehabilitation Expenditure.
 Mt. Magnet Operations
 History.
 Geology.
 Mining Operations.
   Item 3.
 109




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##### Table of Contents



Key Information  Risk Factors  To maintain gold production beyond the expected lives of
Harmonys existing mines or increase productivity materially above projected levels, Harmony will
need to access additional reserves through development or discovery.
  Fiscal Year Ended June 30,2006
    
    2005
    
    2004ProductionTons (000)
    
    
    1,918
    
    
    
    2,743
    
    
    
    3,058Recovered grade (ounces/ton)
    
    
    0.078
    
    
    
    0.066
    
    
    
    0.057Gold sold (ounces)
    
    
    148,822
    
    
    
    181,233
    
    
    
    173,228Results of operations($)Product sales (000)
    
    
    80,090
    
    
    
    77,242
    
    
    
    67,714Cash cost (000)
    
    
    59,427
    
    
    
    60,915
    
    
    
    58,202Cash profit (000)
    
    
    20,663
    
    
    
    16,327
    
    
    
    9,512Cash costsPer ounce of gold($)
    
    
    399
    
    
    
    336
    
    
    
    336Capex(000)($)
    
    
    22,651
    
    
    
    15,652
    
    
    
    13,596
   Item 3. Key
Information  Risk Factors  Harmonys gold reserve figures may yield less gold under actual
production conditions than Harmony currently estimates.
 Plant.
 110




---



##### Table of Contents



Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Mt. Magnet
    
    
    243,000
    
    
    
    159,932
  Capital Expenditure.
 South Kalgoorlie Operations
 History.
  Geology.
 Mining Operations.
  111




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##### Table of Contents



Item 3. Key Information
 Risk Factors  To maintain or increase productivity materially above projected levels, Harmony
will need to access additional reserves through development or discovery.
    Fiscal Year Ended June 30,2006
    
    2005
    
    2004ProductionTons (000)
    
    
    1,480
    
    
    
    1,405
    
    
    
    1,843Recovered grade (ounces/ton)
    
    
    0,056
    
    
    
    0.082
    
    
    
    0.065Gold sold (ounces)
    
    
    82,639
    
    
    
    115,615
    
    
    
    120,532Results of operations($)Product sales (000)
    
    
    42,406
    
    
    
    48,427
    
    
    
    46,651Cash cost (000)
    
    
    37,523
    
    
    
    39,263
    
    
    
    38,848Cash profit (000)
    
    
    4,883
    
    
    
    9,164
    
    
    
    7,803Cash costsPer ounce of gold($)
    
    
    454
    
    
    
    340
    
    
    
    322Capex(000)($)
    
    
    2,320
    
    
    
    10,161
    
    
    
    5,435
    112




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##### Table of Contents



Item 3. Key Information  Risk Factors  Harmonys gold reserve figures may yield less gold under
actual production conditions than Harmony currently estimates.
 Plants.
   Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2006(tons/month)
    
    (tons/month)Jubilee
    
    
    122,000
    
    
    
    123,353New Celebration
    
    
    138,000
    
    
    
    *
  
 *
    
    The New Celebration plant was sold in fiscal 2006. Capital Expenditure.
 Burnside Joint Venture  Northern Territory Operations
 History.
 113




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##### Table of Contents



Burnside Joint Venture.
  Geology.
     114




---



##### Table of Contents



Abelle
 History.
 Introduction.
  Gidgee Gold Mine
 History.
 Geology.
 115




---



##### Table of Contents



Operations Summary.
   Five Months EndedNovember 30,2003(1)ProductionTons (000)
    
    
    206Recovered grade (ounces/ton)
    
    
    0.160Gold sold (ounces)
    
    
    32,954Results of operations($)Product sales (000)
    
    
    12,991Cash cost (000)
    
    
    9,712Cash profit (000)
    
    
    3,279Cash costsPer ounce of gold($)
    
    
    295Capex(000)($)
    
    
    9,614
 
 (1)
    
    Consists of 5 months of production up to November 2003 included in Harmony Australias
results. Mining Operations.
 Papua New Guinea Operations
 Introduction.
  116




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Geology.
       Hidden Valley Project
 Background.
    117




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##### Table of Contents



Project Status:
  
    
    A 36% increase in recoverable ounces and a 50% increase in life-of-mine.
    
    A 37% reduction in the average annual bulk cubic metres (bcm) mined, and
    
    Throughput rising by 20% to 4.6 Million tons per annum as a result of the new plant
design.
  Site Access.
  Engineering Procurement and Construction Management (EPCM) Contract
 Power supply
 118




---



##### Table of Contents



Mining Fleet.
 Geological update.
 Environment.
 Community affairs/landowner discussions
 Project Overview.
    119




---



##### Table of Contents



Location and access.
 Government royalty and other rights.
  Third Party Royalties.
 Gold Production (oz)
    
    Royalty (%)200,000
    
    
    0.0200,001  1,000,000
    
    
    2.01,000,001  5,000,000
    
    
    3.5> 5,000,000
    
    
    2.0
 Additional Prospects and Exploration Potential.
    Capital Expenditure.
 120




---



##### Table of Contents



Wafi Project
 Background.
 Project Overview.
 Geography.
   Mining Reserves.
 Government Royalty and Other Rights.
  Third Party Royalties.
 Additional Prospects and Exploration Potential.
  121




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Capital Expenditure.
 Wafi Gold Projects
  
        122




---



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Golpu Copper-Gold Project
    123




---



##### Table of Contents



1.
    
    Supergene domain;2.
    
    Advanced Argillic alteration domain;3.
    
    Phyllic alteration domain; and4.
    
    Potassic alteration domain.
          
    
    Geotechnical and resource definition drilling
    
    Mining optimisation studies
    
    Metallurgical test work and process route selection
 124




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##### Table of Contents




    
    Infrastructure studies (on and off site requirements)
    
    Environment data collection and studies
    
    External Relation data collection and studies
    
    Concentrate marketing development
  Mt. Muro Project Indonesia
    Canadian Operations
 Bissett
 Introduction.
 REGULATION
 Mineral Rights  South Africa
  125




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##### Table of Contents




    
    to recognize the internationally accepted right of the state of South Africa to
exercise full and permanent sovereignty over all the mineral and petroleum resources within
South Africa;
    
    to give effect to the principle of South Africas custodianship of its mineral and
petroleum resources;
    
    to promote equitable access to South Africas mineral and petroleum resources to all
the people of South Africa and redress the impact of past discrimination;
    
    to substantially and meaningfully expand opportunities for historically disadvantaged
persons including women, to enter the mineral and petroleum industry and to benefit from the
exploitation of South Africas mineral and petroleum resources;
    
    to promote economic growth and mineral and petroleum resources development in South
Africa;
    
    to promote employment and advance the social and economic welfare of all South
Africans;
    
    to provide security of tenure in respect of prospecting, exploration, mining and
production operations;
    
    to give effect to Section 24 of the South African Constitution by ensuring that South
Africas mineral and petroleum resources are developed in an orderly and ecologically
sustainable manner while promoting justifiable social and economic development;
    
    to follow the principle that mining companies keep and use their mineral rights, with
no expropriation and with guaranteed compensation for mineral rights; and
    
    to ensure that holders of mining and production rights contribute towards socio-economic
development of the areas in which they are operating.
    126




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Mineral Rights  Australia
    Environmental Matters
 127




---



##### Table of Contents



South Africa
   
    
    clean up the surface environment after mining and ensure certificates of closure;
    
    promote clean mining and minerals processing;
    
    support the companys social plan requirements (such as the Mineral and Petroleum
Resources Development Act (MPRDA) and Mining Charter), BEE and local community involvement;
    
    reduce environmental liabilities by 10% per annum; and
    
    self-fund environmental rehabilitation through economic activities/savings, thus
contributing to the bottom line.
  
    
    all relevant environmental risks should be identified and prioritized;
    
    environmental issues should be dealt with promptly;
    
    environmental issues, particularly relating to continuous non-compliance or potentially
serious environmental impacts, should be dealt with at the board level; and
    
    we will adopt the best practicable environmental option; that is, the option that has
most benefit, or causes the least damage to the environment, at a cost acceptable to society
and affordable to us.
  
    
    that environmental management is a corporate priority;
    
    that environmental policies, programs and practices will be integrated into the
activities of the company;
    
    that we will strive for continued improvement and efficiency;
    
    that we will work with government departments and the public to come up with the best
sustainable solutions;
    
    that contractors and suppliers will be required to comply with the Harmony policy; and
    
    that employees will be informed and educated regarding their environmental
responsibilities.
  128




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##### Table of Contents




    
    environmental inspection:general inspections are performed routinely and
systematically with collected data entered into the system to enable follow up actions.
    
    risk assessment:detailed and specific risk assessments are conduced to help identify
deviations that may not have been otherwise anticipated.
 129




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
    
    stakeholder communication:all communication is managed and may result in action items
for the organization for which the stakeholder will require follow up feedback. All such
communication is logged.
    
    monitoring:impact monitoring is focused on collecting and analyzing environmental
data that may well result in follow up actions.
    
    licenses/permits:all details relating to licenses or permits can be registered in the
system.
    
    major loss, incident and accident notification:when an incident occurs, initial
information about the incident is recorded to trigger a notification process.
       130




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Australia
        Papua New Guinea
    131




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##### Table of Contents




    
    Development and implementation of environmental management procedures.
 
    
    Monitoring of environmental impacts and performance.
    
    Review of procedures to ensure continual improvement.
 Health and Safety Matters
 The Mine Health and Safety Act.
 
    
    to protect the health and safety of persons at mines;
    
    to require employers and employees to identify hazards and eliminate, control and
minimize the risks relating to health and safety at mines;
    
    to give effect to the public international law obligations of South Africa that concern
health and safety at mines;
    
    to provide for employee participation in matters of health and safety through health and
safety representatives and the health and safety committees at mines;
    
    to provide for effective monitoring of health and safety conditions at mines;
    
    to provide for enforcement of health and safety measures at mines;
    
    to provide for investigations and inquiries to improve health and safety at mines; and
    
    to promote:
    
    a culture of health and safety in the mining industry;
    
    training in health and safety in the mining industry; and
    
    co-operation and consultation on health and safety between the State, employers,
employees and their
 132




---



##### Table of Contents



representatives.
   HIV/AIDS Policy. Item
3. Key Information  Risk Factors  HIV/AIDS poses risks to Harmony in terms of productivity and
costs and Key Information  Risk Factors  The cost of occupational healthcare services may
increase in the future.
     
 Item 4A. UNRESOLVED STAFF COMMENTS
  
 Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 133




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##### Table of Contents



You should read the following discussion and analysis together with the consolidated financial
statements, including the related notes, appearing elsewhere in this annual report.
 OVERVIEW
    
    
    the Quality Assets, which typically have a larger reserve base and hence a longer life.
These form the core of our operations;
    
    the Leveraged Assetsare those that provide significant upside in the event of a rising
gold price (as has been evident in the latter part of fiscal 2006); and
    
    the Growth Assets, which comprise the expansion projects/new mines currently being
constructed in South Africa.
   Leveraged
    
    
    
    SurfaceQuality Assets
    
    Assets
    
    Growth Assets
    
    OperationsTarget
    
    Bambanani
    
    Elandsrand mine and
project
    
    KalgoldTshepong
    
    Joel
    
    Doornkop mine and project
    
    FreegoldMasimong shaft complex
    
    West Shaft
    
    Phakisa project
    
    Free StateEvander 2, 3 & 5
    
    St. Helena
    
    
    
    RandfonteinEvander 7
    
    Harmony 2
    
    
    
    TargetEvander 8
    
    Merriespruit 1Cooke 1
    
    Merriespruit 3Cooke 2
    
    UniselCooke 3
    
    Brand 3Orkney 2Orkney 4
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  134




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Accounting Changes:
 See note 3 of Item 18 : Financial Statements, Accounting Policies
 Underground development costs
   Stripping costs incurred during the production phase of a mine
   Share Based Payments
  135




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##### Table of Contents



Effect of accounting changes
    Depreciation and Amortization of Mining Assets
  Item 3. Key Information  Risk Factors  Harmonys gold reserve figures are
estimated based on a number of assumptions, including assumptions as to mining and recovery
factors, future cash costs of production and the price of gold and may yield less gold under actual
production conditions than currently estimated.
 Business Combinations
  136




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Carrying Value of Goodwill
  Impairment of Long-Lived Assets
    Hedging and Financial Derivatives
  137




---



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Item 11. Quantitative and Qualitative Disclosures About
Market Risk  General.
 Remediation Obligations (Asset Retirement Obligations)
    Item 3. Key Information  Risk Factors  Harmonys operations are subject to
extensive government regulations, Item 3. Key Information  Regulation  Environmental
Matters.
 Deferred Tax Asset
  REVENUE
 Item 3. Key Information  Risk Factors  The profitability of Harmonys
operations, and the cash flows generated by those operations, are affected by changes in the market
price for gold, which in the past has fluctuated widely.
   138




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##### Table of Contents



Item 11. Quantitative and Qualitative
Disclosures About Market Risk.
    Harmonys Realized Gold Price
 Item 3. Key Information  Risk Factors 
The profitability of Harmonys operations, and the cash flows generated by those operations, are
affected by changes in the market price for gold, which in the past has fluctuated widely.
  Fiscal Year EndedJune 302006
    
    2005
    
    2004($/oz)Average
    
    
    527
    
    
    
    422
    
    
    
    389High
    
    
    726
    
    
    
    454
    
    
    
    427Low
    
    
    418
    
    
    
    387
    
    
    
    343Harmonys average sales price(1)
    
    
    529
    
    
    
    427
    
    
    
    385
 
 (1)
    
    Harmonys average sales price differs from the average gold price due to the timing of its
sales of gold within each year and due to the effect of delivering under the commodity hedge
contracts acquired in the New Hampton and Hill 50 transactions. 139




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##### Table of Contents



COSTS
  Item 5. Operating and
Financial Review and Prospects  Exchange Rates. Item 3. Key Information  Risk Factors  Because most of Harmonys production
costs are in Rand, while gold is generally sold in US dollars, Harmonys financial condition could
be materially harmed by an appreciation in the value of the Rand.
  Reconciliation of Non-GAAP Measures
    - Critical Accounting Policies
 140




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##### Table of Contents



2005
    
    
    20042006
    
    
    (adjusted)
    
    
    (adjusted)$'000
    
    
    $'000
    
    
    $'000Total production costs per ounce calculation  under U.S. GAAP
    
    
    1,234,999
    
    
    
    1,298,437
    
    
    
    1,233,771Depreciation and amortization expense (excluding depreciation on
non-mining assets)
    
    
    (159,433
    )
    
    
    (145,325
    )
    
    
    (136,729
    )Other items to be excluded from GAAP measure (1)
    
    
    (18,735
    )
    
    
    (16,155
    )
    
    
    3,646Production costs exclusive of depreciation and amortization per financial
statements
    
    
    1,056,831
    
    
    
    1,136,957
    
    
    
    1,100,688Less: share-based compensation
    
    
    (17,055
    )
    
    
    (15,618
    )
    
    
    (9,446
    )Total cash costs per ounce calculation  using Gold Institute guidance
    
    
    1,039,776
    
    
    
    1,121,339
    
    
    
    1,091,242Per ounce calculation:Ounces sold
    
    
    2,386,925
    
    
    
    2,965,265
    
    
    
    3,225,188Total cash cost per ounce  using Gold Institute guidance
    
    
    436
    
    
    
    378
    
    
    
    338Total production cost per ounce  under U.S. GAAP
    
    
    517
    
    
    
    438
    
    
    
    383
 
 (1)
    
    Includes corporate costs and decrease in rehabilitation cost.  Item 4. Information on the Company  Business  Strategy.
 EXCHANGE RATES
   141




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Item 3. Key Information  Risk Factors  Because most of Harmonys
production costs are in Rand, while gold is generally sold in US dollars, Harmonys financial
condition could be materially harmed by an appreciation in the value of the Rand.
 INFLATION
  SOUTH AFRICAN SOCIO-ECONOMIC ENVIRONMENT
 Item 3. Key Information  Risk Factors
 socio-economic instability in South Africa or regionally may have an adverse effect on Harmonys
operations and profits.
 Item 10. Additional Information  Exchange Controls.
 RESULTS OF OPERATIONS
 Years Ended June 30, 2006 and 2005
 Revenues
   142




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##### Table of Contents



Costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2006
    

2005
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)(1)
    
    CostsAdjustedSOUTH AFRICAFree State operationsQuality
assetsMasimong
    
    
    136,153
    
    
    
    489
    
    
    
    159,981
    
    
    
    409
    
    
    
    20Leveraged
assetsHarmony 2
    
    
    69,446
    
    
    
    483
    
    
    
    68,547
    
    
    
    438
    
    
    
    10Merriespruit 1
    
    
    48,069
    
    
    
    501
    
    
    
    45,559
    
    
    
    477
    
    
    
    5Merriespruit 3
    
    
    43,691
    
    
    
    554
    
    
    
    54,690
    
    
    
    446
    
    
    
    24Unisel
    
    
    72,963
    
    
    
    395
    
    
    
    65,011
    
    
    
    478
    
    
    
    (17
    )Brand 3
    
    
    41,647
    
    
    
    559
    
    
    
    46,299
    
    
    
    494
    
    
    
    13Brand 5
    
    
    469
    
    
    
    2,079
    
    
    
    33
    
    
    
    64,242
    
    
    
    (97
    )Saaiplaas 3
    
    
    
    
    
    
    
    
    
    
    2,541
    
    
    
    1,901
    
    
    
    Surface
operations
    
    
    15,902
    
    
    
    404
    
    
    
    9,542
    
    
    
    348
    
    
    
    16Evander operations
 143




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##### Table of Contents



PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2006
    

2005
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)(1)
    
    CostsAdjustedQuality
assetsEvander 2
    
    
    
    
    
    
    
    
    
    
    48,764
    
    
    
    562
    
    
    
    Evander 5
    
    
    62,388
    
    
    
    530
    
    
    
    47,093
    
    
    
    338
    
    
    
    57Evander 7
    
    
    83,202
    
    
    
    392
    
    
    
    130,009
    
    
    
    252
    
    
    
    56Evander 8
    
    
    128,849
    
    
    
    348
    
    
    
    151,936
    
    
    
    273
    
    
    
    27Leveraged
assetsEvander 9
    
    
    
    
    
    
    
    
    
    
    2,573
    
    
    
    1,168
    
    
    
    Randfontein
operationsQuality
assetsCooke 1
    
    
    80,495
    
    
    
    401
    
    
    
    79,101
    
    
    
    393
    
    
    
    2Cooke 2
    
    
    59,836
    
    
    
    386
    
    
    
    54,441
    
    
    
    443
    
    
    
    (13
    )Cooke 3
    
    
    104,758
    
    
    
    395
    
    
    
    116,300
    
    
    
    364
    
    
    
    9Growth
assetsDoornkop
    
    
    43,593
    
    
    
    558
    
    
    
    52,695
    
    
    
    447
    
    
    
    25Surface
operations
    
    
    11,650
    
    
    
    431
    
    
    
    33,397
    
    
    
    423
    
    
    
    2Elandskraal
operationsGrowth
assetsElandsrand
    
    
    170,867
    
    
    
    523
    
    
    
    207,371
    
    
    
    427
    
    
    
    22Leveraged assetsDeelkraal
    
    
    
    
    
    
    
    
    
    
    2,284
    
    
    
    313
    
    
    
    Freegold operationsQuality assetsTshepong
    
    
    335,289
    
    
    
    332
    
    
    
    380,695
    
    
    
    266
    
    
    
    25Growth
assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    175,214
    
    
    
    497
    
    
    
    197,535
    
    
    
    422
    
    
    
    18Joel
    
    
    58,595
    
    
    
    498
    
    
    
    64,464
    
    
    
    450
    
    
    
    11Eland
    
    
    4,058
    
    
    
    263
    
    
    
    26,782
    
    
    
    500
    
    
    
    (48
    )Kudu/Sable
    
    
    2,024
    
    
    
    442
    
    
    
    25,175
    
    
    
    750
    
    
    
    (41
    )West Shaft
    
    
    25,525
    
    
    
    535
    
    
    
    28,165
    
    
    
    458
    
    
    
    17Nyala
    
    
    184
    
    
    
    1,228
    
    
    
    23,503
    
    
    
    748
    
    
    
    64St. Helena
    
    
    12,791
    
    
    
    845
    
    
    
    29,965
    
    
    
    807
    
    
    
    5Surface
operations
    
    
    11,019
    
    
    
    489
    
    
    
    36,420
    
    
    
    424
    
    
    
    15ARMgold operationsLeveraged assetsOrkney 2
    
    
    69,877
    
    
    
    425
    
    
    
    78,449
    
    
    
    401
    
    
    
    6Orkney 4
    
    
    58,897
    
    
    
    497
    
    
    
    76,971
    
    
    
    385
    
    
    
    29Welkom 1
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    587
    
    
    
    Avgold operationsQuality assetsTarget
    
    
    150,196
    
    
    
    346
    
    
    
    209,847
    
    
    
    259
    
    
    
    34Surface
operations
    
    
    746
    
    
    
    1,298
    
    
    
    1,350
    
    
    
    346
    
    
    
    275Kalgold operationsSurface
operations
    
    
    77,071
    
    
    
    412
    
    
    
    108,195
    
    
    
    373
    
    
    
    (10
    )AUSTRALASIAMt. Magnet
    
    
    148,822
    
    
    
    399
    
    
    
    181,233
    
    
    
    336
    
    
    
    19South Kal
    
    
    82,639
    
    
    
    454
    
    
    
    115,615
    
    
    
    340
    
    
    
    34Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,386,925
    
    
    
    
    
    
    
    2,965,265Weighted average
    
    
    
    
    
    
    436
    
    
    
    
    
    
    
    378
    
    
    
    15
 
 (1)
    
    During 2006, the Company changed its accounting policy for the capitalization of mine
development costs. This change was made retrospectively, and comparative numbers have been restated.
See Item 5. Operating and Financial Review and Prospects  Critical Accounting Policies and
Estimates. for further information on the effects of this change on Harmony. 144




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Item 5. Operating and Financial Review and Prospects  Exchange Rates.
              145




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##### Table of Contents



Depreciation and Amortization
   Impairment of Assets
  Employment Termination Costs
    Care and Maintenance Cost of Restructured Shafts
  Corporate Expenditure, Exploration Expenditure and Marketing and New Business Expenditure
  146




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##### Table of Contents



Item 4. Information on the Company  Business  Exploration.
 Share-Based Compensation
    Decrease in Rehabilitation Costs
  Provision for Former Employees Post-Retirement Benefits
  Dividends Received
  Loss on Derivative Financial Instruments
  147




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##### Table of Contents



(Loss)/Profit on Sale of Other Assets and Listed Investments
   Impairment of Listed Investments
 Item 7. Related Party Transactions
 (Loss)/Profit on Sale of Subsidiary
   Interest Income
  Interest Expense
  148




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##### Table of Contents



Other (Expenses)/Income
   Income and Mining Taxes
 South Africa.
  Income and Mining Tax
    
    2006
    
    2005Effective tax rate benefit
    
    
    2
    %
    
    
    14
    %
  Australia.
    149




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##### Table of Contents



Papua New Guinea.
     Equity Loss of Associate Companies
  (Loss)/Income Before Cumulative Effect of Change in Accounting Principle
  Cumulative Effect of Change in Accounting Principle, Net of Tax
  Net(Loss) Income
  Years Ended June 30, 2005 and 2004
 Revenues
  150




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##### Table of Contents



Costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2005(1)
    
    2004(1)(2)
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    CostsAdjusted
    
    
    
    AdjustedSOUTH AFRICAFree
State operationsQuality
assetsMasimong
    
    
    159,981
    
    
    
    409
    
    
    
    234,307
    
    
    
    323
    
    
    
    27Leveraged
assetsHarmony 2
    
    
    68,547
    
    
    
    438
    
    
    
    87,472
    
    
    
    365
    
    
    
    20Merriespruit 1
    
    
    45,559
    
    
    
    477
    
    
    
    59,062
    
    
    
    405
    
    
    
    18Merriespruit 3
    
    
    54,690
    
    
    
    446
    
    
    
    76,956
    
    
    
    419
    
    
    
    6Unisel
    
    
    65,011
    
    
    
    478
    
    
    
    91,020
    
    
    
    403
    
    
    
    19Brand 3
    
    
    46,299
    
    
    
    494
    
    
    
    59,558
    
    
    
    401
    
    
    
    23
 151




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##### Table of Contents



PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2005(1)
    
    2004(1)(2)
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    CostsAdjusted
    
    
    
    AdjustedBrand 5
    
    
    33
    
    
    
    64,242
    
    
    
    19,262
    
    
    
    692
    
    
    
    9,184Saaiplaas 3
    
    
    2,541
    
    
    
    1,901
    
    
    
    26,783
    
    
    
    503
    
    
    
    278Surface
operations
    
    
    9,542
    
    
    
    348
    
    
    
    26,732
    
    
    
    347
    
    
    
    0.29Evander operationsQuality
assetsEvander 2
    
    
    48,764
    
    
    
    562
    
    
    
    86,172
    
    
    
    337
    
    
    
    67Evander 5
    
    
    47,093
    
    
    
    338
    
    
    
    48,103
    
    
    
    295
    
    
    
    15Evander 7
    
    
    130,009
    
    
    
    252
    
    
    
    92,505
    
    
    
    317
    
    
    
    (21
    )Evander 8
    
    
    151,936
    
    
    
    273
    
    
    
    109,513
    
    
    
    322
    
    
    
    (15
    )Leveraged
assetsEvander 9
    
    
    2,573
    
    
    
    1,168
    
    
    
    23,440
    
    
    
    386
    
    
    
    203Surface
operations
    
    
    
    
    
    
    
    
    
    
    1,961
    
    
    
    253
    
    
    
    (100
    )Randfontein
operationsQuality
assetsCooke 1
    
    
    79,101
    
    
    
    393
    
    
    
    104,168
    
    
    
    283
    
    
    
    39Cooke 2
    
    
    54,441
    
    
    
    443
    
    
    
    90,761
    
    
    
    337
    
    
    
    32Cooke 3
    
    
    116,300
    
    
    
    364
    
    
    
    134,003
    
    
    
    314
    
    
    
    13Growth
assetsDoornkop
    
    
    52,695
    
    
    
    447
    
    
    
    65,234
    
    
    
    315
    
    
    
    42Surface
operations
    
    
    33,397
    
    
    
    423
    
    
    
    18,872
    
    
    
    349
    
    
    
    21Elandskraal
operationsGrowth
assetsElandsrand
    
    
    207,371
    
    
    
    427
    
    
    
    250,581
    
    
    
    362
    
    
    
    18Leveraged
assetsDeelkraal
    
    
    2,284
    
    
    
    313
    
    
    
    68,127
    
    
    
    555
    
    
    
    (44
    )Surface
operations
    
    
    
    
    
    
    
    
    
    
    5,301
    
    
    
    498
    
    
    
    (100
    )Freegold operationsQuality
assetsTshepong
    
    
    380,695
    
    
    
    266
    
    
    
    287,771
    
    
    
    354
    
    
    
    25Growth
assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leveraged
assetsBambanani
    
    
    197,535
    
    
    
    422
    
    
    
    213,730
    
    
    
    478
    
    
    
    (12
    )Joel
    
    
    64,464
    
    
    
    450
    
    
    
    50,590
    
    
    
    5,175
    
    
    
    (91
    )Eland
    
    
    26,782
    
    
    
    500
    
    
    
    37,337
    
    
    
    656
    
    
    
    (24
    )Kudu/Sable
    
    
    25,175
    
    
    
    750
    
    
    
    29,347
    
    
    
    548
    
    
    
    37West Shaft
    
    
    28,165
    
    
    
    458
    
    
    
    26,565
    
    
    
    435
    
    
    
    5Nyala
    
    
    23,503
    
    
    
    748
    
    
    
    8,891
    
    
    
    457
    
    
    
    64St. Helena
    
    
    29,965
    
    
    
    807
    
    
    
    52,309
    
    
    
    597
    
    
    
    35Surface
operations
    
    
    36,420
    
    
    
    424
    
    
    
    49,262
    
    
    
    487
    
    
    
    (13
    )ARMgold operationsLeveraged
assetsOrkney 1
    
    
    
    
    
    
    
    
    
    
    322
    
    
    
    602
    
    
    
    (100
    )Orkney 2
    
    
    78,449
    
    
    
    401
    
    
    
    81,434
    
    
    
    307
    
    
    
    31Orkney 3
    
    
    
    
    
    
    
    
    
    
    11,413
    
    
    
    564
    
    
    
    (100
    )Orkney 4
    
    
    76,971
    
    
    
    385
    
    
    
    67,931
    
    
    
    288
    
    
    
    34Orkney 6
    
    
    
    
    
    
    
    
    
    
    11,060
    
    
    
    486
    
    
    
    (100
    )Orkney 7
    
    
    
    
    
    
    
    
    
    
    4,533
    
    
    
    435
    
    
    
    (100
    )Welkom 1
    
    
    2,734
    
    
    
    587
    
    
    
    19,226
    
    
    
    517
    
    
    
    14Welkom 2
    
    
    
    
    
    
    
    
    
    
    1,350
    
    
    
    405
    
    
    
    (100
    )Welkom 3
    
    
    
    
    
    
    
    
    
    
    1,511
    
    
    
    385
    
    
    
    (100
    )Welkom 4
    
    
    
    
    
    
    
    
    
    
    3,922
    
    
    
    381
    
    
    
    (100
    )Welkom 6
    
    
    
    
    
    
    
    
    
    
    2,411
    
    
    
    371
    
    
    
    (100
    )Welkom 7
    
    
    
    
    
    
    
    
    
    
    9,902
    
    
    
    360
    
    
    
    (100
    )Avgold operationsQuality
assetsTarget
    
    
    209,847
    
    
    
    259
    
    
    
    53,434
    
    
    
    215
    
    
    
    20Surface
operations
    
    
    1,350
    
    
    
    346
    
    
    
    
    
    
    
    
    
    
    
    
 152




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PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2005(1)
    
    2004(1)(2)
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    CostsAdjusted
    
    
    
    AdjustedKalgold operationsSurface
operations
    
    
    108,195
    
    
    
    373
    
    
    
    82,756
    
    
    
    345
    
    
    
    8AUSTRALASIAMt. Magnet
    
    
    181,233
    
    
    
    336
    
    
    
    173,228
    
    
    
    336
    
    
    
    0South Kal
    
    
    115,615
    
    
    
    340
    
    
    
    120,532
    
    
    
    322
    
    
    
    6Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other entities
    
    
    
    
    
    
    
    
    
    
    44,528
    
    
    
    302
    
    
    
    (100
    )Total
    
    
    2,965,265
    
    
    
    
    
    
    
    3,225,188Weighted average
    
    
    
    
    
    
    378
    
    
    
    
    
    
    
    338
    
    
    
    12
 
 (1)
    
    During 2006, the Company changed its accounting policy for the capitalization of mine
development costs. This change was made retrospectively, and comparative numbers have been
restated. See Item 5. Operating and Financial Review and Prospects  Critical Accounting
Policies and Estimates. for further information on the effects of this change on Harmony.(2)
    
    Includes nine months of production from Free Gold and ARMgold and two months from production
from Avgolds Target operations Item 5. Operating and Financial Review and
Prospects  Exchange Rates.
         153




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##### Table of Contents



Depreciation and Amortization
 See note 3 of Item 18: Financial Statements, Accounting Policies
 Impairment of Assets
  154




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##### Table of Contents



Employment Termination Costs
  Care and Maintenance Cost of Restructured Shafts
  Corporate Expenditure, Exploration Expenditure and Marketing and New Business Expenditure
 Item 4. Information on the Company  Business  Exploration.
 Share-Based Compensation
   Decrease in Rehabilitation Costs
  Provision for Former Employees Post-Retirement Benefits
 155




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##### Table of Contents



Dividends Received
  Loss on Derivative Financial Instruments
  (Loss)/Profit on Sale of Other Assets and Listed Investments
  Impairment of Listed Investments
 Item 7. Related Party Transactions
 Profit on Sale and Loss on Dilution of Investment in Associates
   (Loss)/Profit on Sale of Subsidiary
  156




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##### Table of Contents



Interest Income
  Interest Expense
  Other (Expenses)/Income
  Income and Mining Taxes
 South Africa.
  Income and Mining Tax
    
    2005
    
    2004Effective tax rate benefit
    
    
    14
    %
    
    
    75
    %
 157




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##### Table of Contents



Australia.
   Equity Income of Joint Venture
  Equity Profit/(Loss) of Associate Companies
  Impairment of Investment in Associate
  (Loss)/Income Before Cumulative Effect of Change in Accounting Principle
  158




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##### Table of Contents



Cumulative Effect of Change in Accounting Principle, Net of Tax
  Net(Loss) Income
  RECENT ACCOUNTING PRONOUNCEMENTS.
     159




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  Cash Resources
 Operations
   Item 5.
Operating and Financial Review and Prospects  Exchange Rate.
 Investing
   Financing
   160




---



##### Table of Contents



Outstanding Credit Facilities and Other Borrowings
        Recently Retired Credit Facilities and Other Borrowings
  161




---



##### Table of Contents



Contractual Obligations and Commercial Commitments
  Contractual Obligations on the Balance Sheet
 162




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##### Table of Contents



Payments Due by PeriodLess Than
    
    12-36
    
    36-60
    
    After 6012 Months
    
    Months
    
    Months
    
    MonthsJuly 1, 2006
    
    July 1, 2007
    
    July 1, 2009
    
    Subsequentto June 30,
    
    to June 30,
    
    to June 30,
    
    June 30,Total
    
    2007
    
    2009
    
    2011
    
    2011($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Convertible uncollaterized
bonds(1)
    
    
    271,643
    
    
    
    11,567
    
    
    
    11,567
    
    
    
    248,509
    
    
    
    Africa Vanguard Resources(1)
    
    
    4,466
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,466Nedbank  AVR(1)
    
    
    26,659
    
    
    
    
    
    
    
    26,659
    
    
    
    
    
    
    
    Gold Fields(1)
    
    
    705
    
    
    
    705
    
    
    
    
    
    
    
    
    
    
    
    Nedbank  ARM 1(1)
    
    
    86,264
    
    
    
    
    
    
    
    
    
    
    
    86,264
    
    
    
    Nedbank  ARM 2(1)
    
    
    113,511
    
    
    
    
    
    
    
    
    
    
    
    113,511
    
    
    
    RMB loan facility (1)
    
    
    142,436
    
    
    
    142,436
    
    
    
    
    
    
    
    
    
    
    
    Auriel Alloys (1)
    
    
    202
    
    
    
    84
    
    
    
    118Post retirement health care(2)
    
    
    14,964
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,964Environmental obligations(3)
    
    
    236,541
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    236,541Total contractual
obligations
    
    
    897,391
    
    
    
    154,792
    
    
    
    38,344
    
    
    
    448,284
    
    
    
    255,971
 
 (1)
    
    See Item 5. Operating and Financial Review and Prospects  Liquidity and Capital Resources 
Credit Facilities and Other Borrowings  Outstanding Credit Facilities and Other Borrowings.(2)
    
    This liability relates to post-retirement medical benefits of former employees who retired
prior to December 31, 1996 and is based on actuarial valuations conducted during fiscal 2002.(3)
    
    Harmony makes provision for environmental rehabilitation costs and related liabilities based
on managements interpretations of current environmental and regulatory requirements. See Item
5. Operating and Financial Review and Prospects  Critical Accounting Policies. Contractual Obligations off the Balance Sheet
  Payment Due by PeriodLessThan 12
    
    12-36
    
    36-60Months
    
    Months
    
    Months
    
    After 60July 1,
    
    July 1,
    
    July 1,
    
    Months2006
    
    2007
    
    2009
    
    Subsequentto June
    
    to June
    
    to June
    
    to June30,
    
    30,
    
    30,
    
    30,Total
    
    2007
    
    2009
    
    2011
    
    2011($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Melrose Arch, South Africa
    
    
    48
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    Musuku
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    Perth Office, Australia
    
    
    214
    
    
    
    107
    
    
    
    107
    
    
    
    
    
    
    
    Brisbane Office, Australia
    
    
    307
    
    
    
    205
    
    
    
    102
    
    
    
    
    
    
    
    PNG Offices (1)Total Contractual
Obligations Off Balance
Sheet
    
    
    572
    
    
    
    353
    
    
    
    209
    
    
    
    
    
    
    
    
 
 (1)
    
    The PNG offices are rented on a monthly basis and the agreement may be cancelled within
a months notice. 163




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##### Table of Contents



As the obligation has no fixed expiry date it has been excluded from the
above table.  Capital Expenditure
 $000Authorized and contracted for
    
    
    21,398Authorized but not yet contracted for
    
    
    373,794Total
    
    
    395,192
 Commercial Commitments
  Amount of Commitments Expiring by PeriodLessThan 12
    
    12-36
    
    36-60Months
    
    Months
    
    Months
    
    After 60July 1,
    
    July 1,
    
    July 1,
    
    Months2006 to
    
    2007 to
    
    2009 to
    
    SubsequentJune 30,
    
    June 30,
    
    June 30,
    
    to June 30,Total
    
    2007
    
    2009
    
    2011
    
    2011($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Guarantees(1)
    
    
    20,535
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,535Capital commitments(2)
    
    
    21,398
    
    
    
    21,398
    
    
    
    
    
    
    
    Total commitments
expiring by period
    
    
    41,933
    
    
    
    21,398
    
    
    
    
    
    
    
    
    
    
    
    20,535
 
 (1)
    
    Reflects guarantees for environmental rehabilitation expenses, principally environmental
performance bonds required for Harmonys Australian operations. See Item 4. Information on
the Company  Regulation  Environmental Matters.(2)
    
    Capital commitments consist only of amounts committed to external suppliers, although a total
of $683.3 million has been approved by the Board for capital expenditures. Trend Information
  Working Capital and Anticipated Financing Needs
   Capital Expenditures Item 4. Information on the Company 
Business  Harmonys Mining Operations. Item 3.
Key Information  Risk Factors  Harmonys strategy depends on its ability to make additional
acquisitions.
 164




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##### Table of Contents



Item 5. Operating and Financial Review and Prospects
 Liquidity and Capital Resources  Credit Facilities and Other Borrowings  Outstanding Credit
Facilities and Other Borrowings. Item 10. Description of Ordinary Shares  Memorandum
and Articles of Association  Directors  Borrowing Powers. Item
10. Additional Information  Exchange Controls and Other Limitations Affecting Security Holders.
 OTHER FINANCIAL INFORMATION
 Export Sales
  
 Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 DIRECTORS AND SENIOR MANAGEMENT
  Executive Directors
 Bernard Swanepoel
 Nomfundo Qangule
 Non-executive directors
 Patrice Motsepe (Chairman) (44), BA (Legal), LLB.
 165




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##### Table of Contents



Frank Abbott (51), BCom, CA(SA), MBL.
 Joaquim Chissano (66) independent non-executive Director.
 Fikile De Buck (46), (BA Economics), FCCA (UK)  non-executive Director.
 Dr. Simo Lushaba 39), BSc (Advanced Biochemistry), MBA, DBA, independent non-executive director
 Modise Motloba (40) (BSc), Diploma in Strategic Management, Baruch College, New York, independent
non-executive Director
 166




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##### Table of Contents



Cedric Savage (67) BSc (Eng), MBA, ISMP (Harvard)  independent non-executive Director.
 Management
  Bob Atkinson (54), NHD (Metalliferous Mining).
 Jaco Boshoff (36), BSc (Hons), MSc (Geology), Pr.Sci.Nat.
 Graham Briggs (51), BSc (Hons) (Geology), Pr.Sci.Nat.
 Tracey Jonkheid (35), B.A. Communication (Hons) (cum laude), MBA.
 Philip Kotze (45), GDE (Mining Economics) (Wits), NHD (Metalliferous Mining) (Wits), DPLR
(UNISA), MDP (Wits Business School).
 167




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##### Table of Contents



Jackie Mathebula (35), B.Admin (Hons), MBA.
 De Wet Schutte (35), BComm (Acc), BCompt (Hons), CA(SA) and Executive Program University of
Virginia (USA).
 Peter Steenkamp (44), BSc (Eng), Mine Managers Certificate.
 Boetie Swanepoel (46), BCompt (Hons), CA(SA).
 Marian van der Walt (33), BCom (Law), LLB, Higher Diploma in Tax, Diploma in Corporate
Governance, Diploma in Insolvency Law, Certificate in Business Leadership.
 Johannes van Heerden (34), BCompt (Hons), CA(SA).
 Abre van Vuuren (46) BComm, MDP, DPLR.
 BOARD PRACTICES
   168




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##### Table of Contents



Executive Committee
   Bob Atkinson
    
    Operations Director (Projects)Jaco Boshoff
    
    Ore ReservesGraham Briggs
    
    Country Manager, Australia and PNGPhilip Kotze*
    
    Investor Relations, Harmony of TomorrowJackie Mathebula
    
    Corporate AffairsNomfundo Qangule
    
    Group FinanceDe Wet Schutte
    
    Exploration and New BusinessPeter Steenkamp
    
    Chief Operating OfficerBernard Swanepoel
    
    Chief ExecutiveBoetie Swanepoel
    
    Operational Finance and ServicesJohannes van Heerden
    
    Finance (Australasia)Marian van der Walt
    
    Company Secretary; Legal and ComplianceAbre van Vuuren
    
    Human Resources Processes and Strategy
  Audit Committee
    www.harmony.co.za
 169




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##### Table of Contents



Nomination Committee
 www.harmony.co.za
  Remuneration Committee
    Investment Committee
  170




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##### Table of Contents



Sustainable Development Committee
   §
    
    Health§
    
    HIV/AIDS§
    
    Safety§
    
    Social investment§
    
    Environmental management
   Empowerment Committee
   §
    
    Ensuring that a sustainable organisational culture, structures and processes are in
place that will support the development of empowerment in the company in line with the
Companys needs and requirements.§
    
    Auditing and monitoring the development and progress of empowerment within the Company.§
    
    Addressing inequalities that may exist in staff profiles and organisational practices.§
    
    Reviewing and monitoring whether appropriate support is given to previously
disadvantaged staff in order to equip them for successful careers in the Company.§
    
    Meeting at least once a year or more often, should the need arise. One meeting was
held during the 2006 financial year, and it is planned that in future, this committee
should meet on a quarterly basis.
  171




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##### Table of Contents



COMPENSATION OF DIRECTORS AND SENIOR MANAGEMENT  FISCAL 2006
 RetirementContributionsSalaries and
    
    During the
    
    
    
    
    
    
    
    
    
    TotalDirectors Fees
    
    Benefits (1)
    
    Year
    
    Bonuses Paid
    
    CompensationName
    
    ($000)
    
    (R000)
    
    ($000)
    
    (R000)
    
    ($000)
    
    (R000)
    
    ($000)
    
    (R000)
    
    ($000)
    
    (R000)Patrice Motsepe
    
    
    18
    
    
    
    115
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18
    
    
    
    115Frank Abbott (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joaquim Chissano
    
    
    9
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    60Fikile De Buck
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Nolitha Fakude
    
    
    22
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    140Dr. Simo Lushaba
    
    
    21
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    130Modise Motloba
    
    
    16
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    100Cedric Savage
    
    
    22
    
    
    
    140
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    140Executive (3)Bernard Swanepoel(6)
    
    
    
    
    
    
    
    
    
    
    325
    
    
    
    2,066
    
    
    
    51
    
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    376
    
    
    
    2,392Ferdi Dippenaar (4)
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    644
    
    
    
    16
    
    
    
    103
    
    
    
    
    
    
    
    
    
    
    
    117
    
    
    
    747Ted Grobicki (5)
    
    
    
    
    
    
    
    
    
    
    443
    
    
    
    2,818
    
    
    
    41
    
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    484
    
    
    
    3,075Nomfundo Qangule (6)
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    1,317
    
    
    
    19
    
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    226
    
    
    
    1,441TOTAL (7)
    
    
    131
    
    
    
    830
    
    
    
    1,076
    
    
    
    6,845
    
    
    
    127
    
    
    
    810
    
    
    
    
    
    
    
    
    
    
    
    1,334
    
    
    
    8,485
 
 (1)
    
    Increase granted to executive directors in March 2006.(2)
    
    Frank Abbott has waived his non-executive Directors fee.(3)
    
    Our executive directors have waived their directors fees in terms of our Articles of
Association.(4)
    
    Ferdi Dippenaar resigned on December 6, 2005 and his remuneration is only reflected up to
December 31, 2005.(5)
    
    Ted Grobickis salary is paid in A$. The conversion rate from A$ to R is based on the
average exchange rate of R4.80/A$.(6)
    
    Includes increases awarded as from March 1, 2006.(7)
    
    The total Directors fee in FY06 also includes R120,000 (US$19,000) paid to Rick Menell and
R25,000 (US$4,000) paid to Dr Morley Nkosi. Directors Terms of Employment
   172




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##### Table of Contents



Current fee
    
    New feeBoard
    
    R80,000 annually
    
    R110,000 annuallyAudit Committee
    
    R20,000 annually
    
    R45,000 annuallyEmpowerment Committee
    
    R20,000 annually
    
    R30,000 annuallyInvestment Committee
    
    R20,000 annually
    
    R30,000 annuallyNomination Committee
    
    R20,000 annually
    
    R30,000 annuallyRemuneration Committee
    
    R20,000 annually
    
    R30,000 annuallySustainable Development
Committee
    
    R20,000 annually
    
    R40,000Special fee for additional
work performed
    
    R4,000 per day
    
    R5,000 per day
 173




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##### Table of Contents



Current fee
    
    New fee (per annum)Chairman of Board
    
    No additional payment to act as chairman
    
    R495,000 (4,5 times the individual
directors fee) annuallyChairman of Board committees
    
    No additional payment to act as chairman
    
    Double the amount that the individual
Board committee member receives annually
   Share Options
  AverageNumber of
    
    StrikeDirectors and
    
    Share
    
    Price
    
    ExpirationSenior Management
    
    Options
    
    (R)
    
    DatesBernard Swanepoel
    
    
    340,967
    
    
    
    52.58
    
    
    
    2015Nomfundo Qangule
    
    
    160,124
    
    
    
    52.58
    
    
    
    2015Patrice Motsepe
    
    
    
    
    
    
    
    
    
    
    Frank Abbott
    
    
    
    
    
    
    Joaquim Chissano
    
    
    
    
    
    
    
    
    
    
    Fikile De Buck
    
    
    
    
    
    
    
    
    
    
    Dr. Simo Lushaba
    
    
    
    
    
    
    
    
    
    
    Modise Motloba
    
    
    
    
    
    
    
    
    
    
    Cedric Savage
    
    
    
    
    
    
    
    
    
    
    Senior Management (12 persons)
    
    
    1,151,206
    
    
    
    53.26
    
    
    
    2015
 Share Ownership
  174




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##### Table of Contents



OrdinaryOrdinary
    
    
    
    
    
    SharesShares Number
    
    
    
    
    
    Number as atas at
    
    
    
    
    
    October 24,Holder
    
    June 30, 2006
    
    Percentage
    
    2006
    
    PercentageDirectors Non-executiveP. Motsepe*
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F. Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    J. Chissano
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F De Buck
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. S. Lushaba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    M. Motloba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Savage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Executive Directors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    B. Swanepoel
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    N. Qangule
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Directors (9 persons)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Senior Management (12
persons)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 *
    
    The 14% indirect shareholding held by P. Motsepe was transferred to ARM Limited in
accordance with the ARM transaction in April 2004. See Item 7. Related Party
Transactions.  EMPLOYEES
 General
  Harmony Employees at
    
    Outside Contractors atJune 30,
    
    June 30,2006
    
    2005
    
    2004
    
    2006
    
    2005
    
    2004South Africa
    
    
    43,283
    
    
    
    46,669
    
    
    
    55,397
    
    
    
    5,287
    
    
    
    359
    
    
    
    359Australia
    
    
    204
    
    
    
    198
    
    
    
    516
    
    
    
    416
    
    
    
    512
    
    
    
    512Papua New Guinea
    
    
    237
    
    
    
    200
    
    
    
    269
    
    
    
    73
    
    
    
    5
    
    
    
    5Grand total
    
    
    43,724
    
    
    
    47,067
    
    
    
    56,182
    
    
    
    5,776
    
    
    
    876
    
    
    
    876
 175




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##### Table of Contents



(1)
    
    This represents Harmonys 50% interest in the Free Gold Joint Venture for 2003 and 2004.(2)
    
    This includes St. Helenas employees.  Summary of Employment Reduction FY06Voluntary separations
    
    
    1,477Compulsory separations
    
    
    1,779Total employment opportunity reduction
    
    
    3,256
  Unionized Labor
 South Africa
  
    
    prescribed minimum levels of compensation and benefits;
    
    trade union access and membership;
    
    the right to strike;
    
    mandatory compensation in the event of termination for operational reasons;
    
    affirmative action policies and programs;
    
    compensation in the event of occupational illness or injury; and
    
    financing of training programs.
    
    
    NUM 76%
    
    UASA 8%
 176




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##### Table of Contents




    
    Solidarity 2%
    
    Collective bargaining fund 7%
    
    Balance (not unionized) 7%.
   
    
    reskilling, retraining and redeployment of surplus employees for alternative vacant
positions that may exist at a particular operation or other Harmony operations;
    
    implementation of CONOPS (described below) to create additional job opportunities;
    
    transferring surplus or redundant employees to other Harmony operations that have
placement opportunities;
    
    opening up voluntary retrenchment to minimize the impact of restructuring and/or closure
of shafts/mines; and
    
    replacing contractors, who are involved in non-specialized work, with Harmony employees.
      177




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##### Table of Contents




    
    First, we aim to eliminate a backlog of disputes relating to issues which are sources of
grievance and unhappiness for our employees and their representatives. These include such
concerns as labor differential and inconsistent rates of payment across the group, the
housing policy being unevenly applied and perceptions of poor medical care at the hospital.
This lengthy process involves many hours of discussion and negotiation to arrive at mutually
acceptable solutions. It also involves the implementation of agreements that were entered
into over the past couple of years but not implemented for a variety of reasons, for
example, job grading and the appointmen ot HIV/Aids co-ordinators.
    
    Secondly, we aim to structure our relations with the unions so that issues are dealt with
as quickly and efficiently as possible and at the appropriate level in the organization.
This has involved appointing regional employee relations managers and educating both
management and the unions in making use of the correct structure in their dealings with each
other. The objective is to reduce corporate-level involvement in employee relations at the
operational level, but also to ensure that where an issue has group-wide ramifications it is
dealt with at group level. To this end we have resurrected the Harmony Leadership Council
which involves the chairpersons and secretaries of all the branch ommittees of our major
unions which meets every month. Every six months we hold a bosberaad (meeting) with the
general secretary of the NUM present.
    
    Third, through these deliberations we are attempting to create a co-operative atmosphere
and positive work ethic, with the aim of having management and unions jointly tackling the
problem, rather than having a them/us approach with management defending itself against
perceived union attacks. For example, the training and development working party has looked
at the way in which we deliver Adult Basic Education and Training (ABET) and come up with an
agreement to improve it. The working party on the housing policy has engaged in discussions
on accommodation arrangements and policies have been jointly developed and solutions
proposed.
 Work Stoppages
    Australia
  178




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##### Table of Contents



Share Option Schemes
  Existing Share Option Scheme
   Introduction of the Harmony 2006 Share Plan
    179




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##### Table of Contents



Broad-Based Employee Scheme
  Bonus scheme and long term incentive plan
   
    
    guaranteed remuneration of executives to be pitched at close to median (50
percentile level) of comparable South African executive remuneration; and
    
    through performance-related annual bonuses, capped at a maximum of 50% and long-term
incentive plans, executives will be able to earn up to the top quartile (75 percentile
level), based on superior company and individual performance.
  180




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##### Table of Contents



Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 MAJOR SHAREHOLDERS
   Related Party Transactions.
  Number ofHolder
    
    Shares
    
    Percentage1. The Bank of New York(1)
    
    126,326,506
    
    31.8%2. ARM Ltd.(2)
    
    63,632,922
    
    16.0%3.
Allan Gray  Asset Management Ltd.
    
    49,949,710
    
    12.6%4. JP Morgan Chase Bank(3)
    
    37,626,426
    
    9.5%
 
 (1)
    
    Depository with respect to the ADRs held on the U.S. register.(2)
    
    Patrice Motsepe, the Chairman of Harmony, has an indirect holding in ARM Limited.(3)
    
    Depository with respect to Harmonys International Depository Shares.   RELATED PARTY TRANSACTIONS
    181




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##### Table of Contents



182




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##### Table of Contents



INTERESTS OF EXPERTS AND COUNSEL
  
 Item 8. FINANCIAL INFORMATION
 CONSOLIDATED STATEMENTS
  Legal Proceedings
    183




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##### Table of Contents



Gold Fields Proceedings
  Dividends and Dividend Policy
   Total NetDividends perOrdinary Share(in ZAR)Final Dividend June 30, 2003
    
    
    1.50Interim Dividend December 31, 2003
    
    
    0.40Final Dividend June 30, 2004
    
    
    0.30Interim Dividend December 31, 2004
    
    
    0Final Dividend June 30, 2005
    
    
    0Interim Dividend December 31, 2005
    
    
    0Final Dividend June 30, 2006
    
    
    0
  184




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##### Table of Contents



Recent Developments
   
 Item 9. THE OFFER AND LISTING
 MARKETS
 Stock Exchange Listings and Ticker Codes
   JSE Limited
    
    HARNew York Stock Exchange
    
    HMYNASDAQ
    
    HMYLondon Stock Exchange
    
    HRMEuronext Brussels
    
    HGEuronext Paris
    
    HMYBerlin Stock Exchange
    
    HAM1
 OFFERING AND LISTING DETAILS
  185




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##### Table of Contents



Harmony OrdinaryShares(Rand per OrdinaryShare)High
    
    LowFiscal year ended June 30, 2004First Quarter
    
    
    117.20
    
    
    
    84.00Second Quarter
    
    
    108.50
    
    
    
    92.48Third Quarter
    
    
    122.51
    
    
    
    95.76Fourth Quarter
    
    
    97.25
    
    
    
    61.00Full Year
    
    
    122.51
    
    
    
    61.00Fiscal year ended June 30, 2005 Month ofFirst Quarter
    
    
    88.55
    
    
    
    58.00Second Quarter
    
    
    93.30
    
    
    
    51.00Third Quarter
    
    
    58.50
    
    
    
    47.50Fourth Quarter
    
    
    58.80
    
    
    
    36.40Full Year
    
    
    93.30
    
    
    
    36.40Fiscal year ended June 30, 2006 Month ofFirst Quarter
    
    
    71.99
    
    
    
    46.62Second Quarter
    
    
    88.35
    
    
    
    65.50Third Quarter
    
    
    117.05
    
    
    
    76.00Fourth Quarter
    
    
    114.21
    
    
    
    80.51Full Year
    
    
    117.05
    
    
    
    46.62Month ofJune 2006
    
    
    114.21
    
    
    
    80.51July 2006
    
    
    121.54
    
    
    
    93.47August 2006
    
    
    104.00
    
    
    
    88.76September 2006
    
    
    105.32
    
    
    
    86.10
   186




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##### Table of Contents



NYSE
    
    NASDAQHarmony ADRs
    
    Harmony ADRs($ per ADR)
    
    ($ per ADR)High
    
    Low
    
    High
    
    LowFiscal year ended June 30, 2004First Quarter
    
    
    15.95
    
    
    
    10.90
    
    
    
    
    
    
    
    Second Quarter
    
    
    16.75
    
    
    
    13.10
    
    
    
    
    
    
    
    Third Quarter
    
    
    17.80
    
    
    
    13.90
    
    
    
    
    
    
    
    Fourth Quarter
    
    
    15.62
    
    
    
    9.25
    
    
    
    
    
    
    
    Full Year
    
    
    17.80
    
    
    
    9.25
    
    
    
    
    
    
    
    Fiscal year ended June 30, 2005First Quarter
    
    
    13.74
    
    
    
    9.75
    
    
    
    
    
    
    
    Second Quarter
    
    
    14.29
    
    
    
    9.05
    
    
    
    
    
    
    
    Third Quarter
    
    
    9.58
    
    
    
    7.51
    
    
    
    
    
    
    
    Fourth Quarter
    
    
    8.80
    
    
    
    5.96
    
    
    
    
    
    
    
    Full Year
    
    
    14.29
    
    
    
    5.96
    
    
    
    
    
    
    
    Fiscal year ended June 30, 2006First Quarter
    
    
    11.23
    
    
    
    7.21
    
    
    
    11.06
    
    
    
    7.20Second Quarter
    
    
    13.64
    
    
    
    9.71
    
    
    
    13.64
    
    
    
    9.71Third Quarter
    
    
    18.84
    
    
    
    12.25
    
    
    
    18.84
    
    
    
    12.25Fourth Quarter
    
    
    17.76
    
    
    
    11.90
    
    
    
    17.76
    
    
    
    11.90Full Year
    
    
    18.84
    
    
    
    7.21
    
    
    
    18.84
    
    
    
    7.21Month ofJune 2006
    
    
    16.38
    
    
    
    11.90
    
    
    
    16.38
    
    
    
    15.70July 2006
    
    
    17.10
    
    
    
    13.38
    
    
    
    14.55
    
    
    
    14.20August 2006
    
    
    14.75
    
    
    
    13.13
    
    
    
    14.75
    
    
    
    13.59September 2006
    
    
    14.56
    
    
    
    11.91
    
    
    
    13.18
    
    
    
    12.92
   THE SECURITIES EXCHANGE IN SOUTH AFRICA
  187




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History
   STRATE Settlement
  PLAN OF DISTRIBUTION
  SELLING SHAREHOLDERS
  DILUTION
  188




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##### Table of Contents



EXPENSES OF THE ISSUE
  
 Item 10. ADDITIONAL INFORMATION
 SHARE CAPITAL
  MEMORANDUM AND ARTICLES OF ASSOCIATION
 This section summarizes certain material provisions of Harmonys Memorandum and Articles of
Association, the Companies Act and the JSE listings requirements, each as currently in effect.
These descriptions do not purport to be complete and are qualified in their entirety by reference
to all of the provisions of those sources. Directions on how to obtain a complete copy of Harmonys
Articles of Association are provided under  Documents on Display below.
 General
  Objects and Purposes
  
    
    to acquire by purchase, cession, grant, lease, exchange or otherwise any movable or
immovable property, mines, mineral property, claims, mineral rights, mining rights, mining
leases, mining titles, mynpachts, lands, farms, buildings, water rights, concessions,
grants, rights, powers, privileges, surface rights of every description, servitudes or other
limited rights or interests in land and mineral contracts of every description; and any
interest therein and rights over the same; and to enter into any contract, option or
prospecting contract in respect thereof, and generally to enter into any arrangement that
may seem conducive to Harmonys objects or any of them;
    
    to carry out all forms of exploration work and in particular to search for, prospect,
examine, explore and obtain information in regard to mines, mineral properties, claims,
mineral rights, mining rights, mining leases, mining titles, mynpachts, mining districts or
locations and ground and soil supposed to contain or containing precious stones, minerals or
metals of every description;
    
    to open, work, develop and maintain gold, silver, diamond, copper, coal, iron and other
mines, mineral and other rights, properties and works, and to carry on and conduct the
business of raising, crushing, washing, smelting, reducing and amalgamating ores, metals,
minerals and precious stones, and to render the same merchantable and fit for use and to
carry on all or any of the businesses of miners, mineralogists, metallurgists, amalgamators,
geophysicists, smelters, quarry owners, quarrymen and brickmakers;
    
    to buy, sell, refine and deal in bullion, specie, coin and precious and base metals,
and also precious stones and other products of mining; and
    
    to employ and pay mining experts, agents and other persons, partnerships, companies or
corporations, and to organize, equip and dispatch expeditions for prospecting, exploring,
reporting on, surveying, working and developing lands, farms, districts, territories and
properties in any part of the world, whether the same are the property of Harmony or
otherwise.
 189




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##### Table of Contents



Directors
 Disclosure of Interests
  
    
    any arrangement for giving the director a security or indemnity in respect of money
lent, or an obligation undertaken, by such director for the benefit of Harmony;
    
    any arrangement by which Harmony gives any security to a third party in respect of a
debt or obligation of Harmony for which the director himself or herself has assumed
responsibility, in whole or in part, whether under a guarantee or indemnity or by the
deposit of a security;
    
    any contract by the director to subscribe for or underwrite shares or debentures of
Harmony;
    
    any contract or arrangement with a company other than Harmony, in which the director
holds or controls, directly or indirectly, no more than one percent of shares representing
either (i) any class of the equity share capital of that company or (ii) the overall voting
rights of that company; or
    
    any retirement scheme or fund which relates to both directors and to employees (or a
class of employees) and does not accord to any director, as such, any privilege or advantage
not generally accorded to the employees to which such scheme or fund relates.
    Compensation
  Borrowing Powers
  190




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Rotation
   Qualifications
  Share Capital
  Description of Ordinary Shares
 This section summarizes the material provisions of Harmonys ordinary shares as set out in
Harmonys Memorandum and Articles of Association, the Companies Act and the JSE listings
requirements, each as currently in effect. It does not purport to be complete and is qualified in
its entirety by reference to all of the provisions of those sources.
 Dividends
   191




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Voting Rights
  Distribution of Assets on Liquidation
  Redemption/Purchase of Shares
   192




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Issue of Additional Shares and Pre-emptive Rights
   
    
    pursuant to an employee share incentive scheme the terms of which have been approved by
the holders of the relevant class of shares in a general meeting;
    
    for the acquisition of an asset, provided that if the issue is more than 30% of the
companys issued share capital, a simple majority of holders of ordinary shares present and
voting, must vote in favor of the acquisition;
    
    to raise cash by way of a general issue in the discretion of the directors (but not to
related parties) of up to 15% of the issued share capital in any one fiscal year at an issue
price with a discount not exceeding 10% of the 30-day weighted average trading price prior
to the determination date, provided that the holders of ordinary shares, present and voting
at a general meeting, must approve the granting of such authority to the directors by a 75%
vote; or
    
    to raise cash by way of a specific issue of a specified number or a maximum number of
            shares for cash provided that the holders of ordinary shares, other than controlling
shareholders, present and voting, vote in favor of the resolution to issue the shares at a
general meeting by a 75% vote. In terms of JSE listings requirements, the circular to be
sent to all shareholders informing them of the general meeting must include, inter alia:
    
    details of the persons to whom the shares are to be issued if such persons fall into
the following categories or other categories identified by the JSE: directors of the company
or its subsidiaries or their associates; trustees of employee or directors share scheme or
pension funds; any person having the right to nominate directors of the company; and certain
shareholders holding more than 10% of the issued share capital;
    
    if the persons to whom the shares are to be issued are related parties, an independent
experts opinion that the issue price is fair and reasonable; and
    
    should the maximum size of the issue equal or exceed 30% of the companys issued share
capital, full listing particulars, which include, inter alia, a reporting accountants
report and, in the case of a mining company, a competent persons report setting out
technical details of the companys operations and assets.
 Transfer of Shares
  193




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Rights of Minority Shareholders and Fiduciary Duties
   Variation of Rights
  Changes in Capital or Objects and Powers of Harmony
  
    
    increase its authorized or paid-up share capital;
    
    consolidate and divide all or any part of its shares into shares of a larger amount;
    
    increase the number of its no par value shares without an increase of its stated
capital;
    
    sub-divide all or any part of its shares having a par value;
    
    convert all of its ordinary or preference share capital consisting of shares having a
par value into stated capital constituted by shares of no par value and vice versa;
    
    convert its stated capital constituted by ordinary or preference shares of no par value
into share capital consisting of shares having a par value;
    
    vary the rights attached to any shares whether issued or not yet issued;
 194




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
    
    convert any of its issued or unissued shares into shares of another class;
    
    convert any of its paid-up shares into stock, and reconvert any stock into any number
of paid-up shares of any denomination;
    
    convert any of its issued shares into preference shares which can be redeemed;
    
    cancel shares which, at the date of passing of the resolution, have not been taken or
agreed to be taken by any person, and diminish the amount of the authorized share capital by
the amount of the shares so cancelled; or
    
    reduce the authorized share capital.
  
    
    reduce its issued share capital;
    
    reduce its stated capital; or
    
    reduce its capital redemption reserve fund and share premium account.
 Meetings of Shareholders
   
    
    to every member of Harmony except any member who has not supplied to Harmony a
registered address for the giving of notices;
    
    to every person entitled to a share in consequence of the death or insolvency of a
member;
    
    to the directors and auditor for the time being of Harmony; and
    
    by advertisement to the holders of share warrants to bearer.
    
    
    the consideration of the annual financial statements and report of the auditors;
 195




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##### Table of Contents




    
    the election of directors;
    
    the appointment of auditors; and
    
    any business arising from the annual financial statements considered at the meeting.
  Title to Shares
  
    
    that the registered holder or holders hold such shares upon trust for, or as the
nominee of, any other person; or
    
    that any person, other than the registered holder or holders, holds any contingent,
future or partial interest in such shares or any interest in any fractional part of any of
such shares.
   Non-South African Shareholders
  Disclosure of Interest in Shares
  196




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Changes in Control
  Register of Members
   
    
    the names and address of the members;
    
    the shares held by each member, distinguishing each share by its denoting number, if
any, by its class or kind, and by the amount paid or deemed to be paid thereon;
    
    the date on which the name of any person was entered in the register as a member; and
    
    the date on which any person ceased to be a member.
 Annual Report and Accounts
    MATERIAL CONTRACTS
  EXCHANGE CONTROLS
 Introduction
  197




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Government Regulatory Considerations
 Shares
   Loans
  198




---



##### Table of Contents



Investments
  Dividends
    CERTAIN SOUTH AFRICAN TAX CONSIDERATIONS
  Dividends
  Capital Gains Tax
  Stamp Duty on the Shares
  199




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##### Table of Contents



Capitalization Shares
  Voting Rights
  CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
  200




---



##### Table of Contents



ADSs
  Taxation of Dividends
   Capital Gains
    Non-U.S. Holders
  201




---



##### Table of Contents



U.S. Information Reporting and Backup Withholding Rules
  The preceding discussion of certain United States federal income tax consequences is intended
for general information only and does not constitute tax advice. Accordingly, each investor should
consult its own tax adviser as to particular tax consequences to it of purchasing, holding and
disposing of the ordinary shares and warrants, including the applicability and effect of any state,
local or foreign laws, and proposed changes in applicable laws.
 DIVIDENDS AND PAYING AGENTS
  STATEMENTS BY EXPERTS
  DOCUMENTS ON DISPLAY
  
 www.sec.gov.
 SUBSIDIARY INFORMATION
  
 Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 General
  202




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
    
    both the hedged item and the hedging instrument are specifically identified and
documented;
    
    management documents the nature of the hedging risk and identifies how the
effectiveness of the hedge will be assessed;
    
    the effectiveness of the hedge is tested regularly throughout the life of the hedge,
and a hedging instrument is identified as highly effective if it is able to offset changes
in the fair value of cash flows from the hedged item by between 80% and 125% of the price at
which it was fixed;
    
    any ineffectiveness of hedged instruments is recognized immediately in the income
statement; and
    
    in the case of a hedge of an anticipated future transaction, there is a high
probability that the transaction will occur.
 Foreign Currency Sensitivity
  Item 5. Operating and Financial Review and Prospects  Credit Facilities and Other
Borrowings  Outstanding Credit Facilities and Other Borrowings. Item 3. Key Information  Exchange
Rates and Item 3. Key Information  Risk Factors  Because most of Harmonys production costs are
in Rand, while gold is generally sold in US dollars, Harmonys financial condition could be
materially harmed by an appreciation in the value of the Rand.
 Commodity Price Sensitivity
 General
  Item 3. Key Information  Risk Factors  The
profitability of Harmonys operations, and the cash flows generated by those operations, are
affected by changes in the market price for gold, which in the past has fluctuated widely.
 203




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##### Table of Contents



Harmonys Hedge Policy
 Item 4. Information on the Company  Business  Hedge
Policy.
  Commodity Sales Agreements
  204




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##### Table of Contents



Maturity - Scheduled for Delivery
    
    Mark-to-in Fiscal Year
    
    Market2007
    
    2008
    
    2009
    
    Total
    
    $ 000FORWARD SALES AGREEMENTSOunces
    
    
    
    
    
    
    147,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    347,000
    
    
    
    (86,277
    )A$/ounce
    
    
    
    
    
    
    515
    
    
    
    518
    
    
    
    518
    
    
    
    516CALL OPTIONS SOLDOunces
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    (1,842
    )A$/ounce
    
    
    
    
    
    
    562
    
    
    
    
    
    
    
    
    
    
    
    562Total
    
    
    
    
    
    
    157,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    495,000
    
    
    
    (88,119
    )
  Sensitivity Analysis
  Gold Spot Price at June 30, 2006Sensitivity to $ gold spot
price
    
    $
    30
    
    
    $
    20
    
    
    $
    10
    
    
    $
    600
    
    
    $
    (10
    )
    
    $
    (20
    )
    
    $
    (30
    )Mark-to-market ($ million)
    
    
    (102.5
    )
    
    
    (97.7
    )
    
    
    (92.9
    )
    
    
    (88.1
    )
    
    
    (83.3
    )
    
    
    (78.5
    )
    
    
    (73.7
    )
 Weighted Average Interest Rate at June 30, 2006Sensitivity to Australian dollar
interest rates
    
    
    1.5
    %
    
    
    1.0
    %
    
    
    0.5
    %
    
    
    6.26
    %
    
    
    (0.5
    )%
    
    
    (1.0
    )%
    
    
    (1.5
    )%Mark-to-market ($ million)
    
    
    (91.4
    )
    
    
    (90.3
    )
    
    
    (89.2
    )
    
    
    (88.1
    )
    
    
    (87.0
    )
    
    
    (85.9
    )
    
    
    (84.7
    )
 US$/A$ Exchange Rates at June 30, 2006
$1.00 =Sensitivity to $/A$ exchange
rates
    
    
    A$0.15
    
    
    
    A$0.10
    
    
    
    A$0.05
    
    
    
    A$1.35
    
    
    
    (A$0.05
    )
    
    
    (A$0.10
    )
    
    
    (A$0.15
    )Mark-to-market ($ millions)
    
    
    (127.8
    )
    
    
    (113.4
    )
    
    
    (100.2
    )
    
    
    (88.1
    )
    
    
    (76.9
    )
    
    
    (66.6
    )
    
    
    (57.0
    )
 205




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##### Table of Contents



Commodity Hedging Experience
     Foreign Currency Sensitivity
    Maturity -Scheduled for
    
    Mark-to-Fiscal Year
    
    Market2006
    
    Total
    
    $ 000Forward Exchange ContractsUS$ millionAverage strike ZAR/US
    
    
    39.5
    
    
    
    39.5
    
    
    
    16,467(Buy US$, sell ZAR, at the agreed exchange rate)
    
    $
    9.54
    
    
    
    9.54Forward Exchange Call Contracts SoldUS$ millionAverage strike ZAR/US
    
    
    39.5
    
    
    
    39.5
    
    
    
    0.4(Sell US$, buy ZAR, at the agreed exchange rate)
    
    $
    9.54
    
    
    
    9.54Total
    
    
    
    
    
    
    
    
    
    
    16,467
 206




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##### Table of Contents



Sensitivity Analysis
  Interest Rate Sensitivity
 Gold lease rate swaps.
 Interest rate swaps.
   
 Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
  GLOSSARY OF MINING TERMS
 The following explanations are not intended as technical definitions, but rather are intended to
assist the general reader in understanding certain terms as used in this annual report.
 Alluvial:
 Arenaceous:
 Auriferous:
 Beneficiation:
 Call option:
 Carbon In Pulp (CIP):
 207




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##### Table of Contents



Carbon In Solution (CIS):
 Cash cost:
 Conglomerate:
 Crosscut:
 Cut and fill:
 Cut-off grade:
 Cyanide leaching:
 Decline:
 Deferred Stripping:
 Depletion:
 Development:
 Electro-winning:
 Elution:
 Exploration:
 Fabricated gold:
 Fluvial:
 Footwall:
 Forward purchase:
 Forward sale:
 Gold reserves:
 208




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##### Table of Contents



Gold lease rate swap:
 Grade:
 Greenfield:
 Greenstone:
 Grinding:
 Head grade:
 Heap leaching:
 Leaching:
 Level:
 Littoral:
 Longhole sub-level caving:
 Mark-to-market:
 Measures:
 Metric unit
    
    
    
    U.S. equivalent1 tonne
    
    = 1 t
    
    = 1.10231 short tons1 gram
    
    = 1 g
    
    = 0.03215 ounces1 gram per tonne
    
    = 1 g/t
    
    = 0.02917 ounces per short ton1 kilogram per tonne
    
    = 1 kg/t
    
    = 29.16642 ounces per short ton1 kilometer
    
    = 1 km
    
    = 0.621371 miles1 meter
    
    = 1 m
    
    = 3.28084 feet1 centimeter
    
    = 1 cm
    
    = 0.3937 inches1 millimeter
    
    = 1 mm
    
    = 0.03937 inches1 hectare
    
    = 1 ha
    
    = 2.47105 acres
 Metallurgical plant:
 Mill delivered tons:
 Milling/mill:
 209




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##### Table of Contents



Mineable:
 Mineralization:
 Mineralized material:
 Morphology:
 Open pit/Open cast/Open cut:
 Ore:
 Ore grade:
 Ore reserves:
 
    
    development of additional reserves;
    
    depletion of existing reserves through production;
    
    actual mining experience; and
    
    price forecasts.
  Orebody:
 Ounce:
 Overburden:
 Overburden tons:
 Palaeotopography:
 Pay limit:
 Placer:
 Precipitate:
 210




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##### Table of Contents



Probable reserves:
 Prospect:
 Prospecting license:
 Proven reserves:
 Put option:
 Pyrite:
 Quartz:
 Recovery grade:
 Reef:
 Refining:
 Rehabilitation:
 Sampling:
 Shaft:
 Slimes:
 Slurry:
 Smelting:
 Spot price:
 Stockpile:
 Stockwork:
 Stope:
 211




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##### Table of Contents



Stripping:
 Sulfide:
 Syncline:
 Tailings:
 Ton:
 Tonnage:
 Tonne:
 Trend:
 Unconformity:
 Waste:
 Waste rock:
 Yield:
 Zinc precipitation:
 212




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##### Table of Contents



PART II
 
 Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
       213




---



##### Table of Contents



USE OF PROCEEDS
  
 Item 15. DISCLOSURE CONTROLS AND PROCEDURES
      
 Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  214




---



##### Table of Contents



Item 7.
Directors and Management  Board Practices  Audit Committee.
 
 Item 16B. CODE OF ETHICS
 www.harmony.co.za
 
 Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 AUDIT FEES
  Fiscal year ended June 30, 2005
    
    $1.211 millionFiscal year ended June 30, 2006
    
    $1.634 million
 AUDIT-RELATED FEES
  Fiscal year ended June 30, 2005
    
    $0.915 millionFiscal year ended June 30, 2006
    
    $0.688 million
  TAX FEES
  Fiscal year ended June 30, 2005
    
    $0.20 millionFiscal year ended June 30, 2006
    
    $0.24 million
 215




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##### Table of Contents



ALL OTHER FEES
  Fiscal year ended June 30, 2005
    
    $0.123 millionFiscal year ended June 30, 2006
    
    $0.0 million
  AUDIT COMMITTEE APPROVAL
  
 Item 16D. EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES
  
 Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER
  
 Item 17. FINANCIAL STATEMENTS
  
 Item 18. FINANCIAL STATEMENTS
 
 Item 19. EXHIBITS
 1.1
    
    Memorandum of Association of Harmony, as amended
(incorporated by reference to Harmonys Registration
Statement (file no. 333-13516) on Form F-3 filed on June 21,
2001).1.2
    
    Articles of Association of Harmony, as amended (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).2.1
    
    Notice to shareholders dated September 3, 2004 in respect of
the Annual General Meeting held on November 12, 2004 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).2.2
    
    Notice to Shareholders dated September 2, 2005 in respect of
the Annual General Meeting to be held on November 4, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).2.3
    
    Share Exchange Agreement between Avmin and Harmony to
acquire the shareholding in Avgold dated February 16, 2004
(incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).
 216




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##### Table of Contents



2.4
    
    Deposit Agreement among Harmony, The Bank of New York, as
Depositary, and owners and holders of American Depositary
Receipts, dated as of August 12, 1996, as amended and
restated as of October 2, 1996, as further amended and
restated as of September 15, 1998 (incorporated by reference
to Post-Effective Amendment No. 1 to Harmonys Registration
Statement (file no. 333-5410) on Form F-6 filed on May 17,
2001).2.5
    
    Form of ADR (included in Exhibit 2.4).2.6
    
    Form of Harmonys senior unsecured 13% bonds due June 14,
2006 (incorporated by reference to Harmonys Annual Report
on Form 20-F for the fiscal year ended June 30, 2001 filed
on September 26, 2001).2.9
    
    Shareholder Circular to Avgold shareholders dated April 8,
2004 (incorporated by reference to Harmonys Annual Report
on Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).2.10
    
    Shareholder Circular to Anglovaal Mining Limiteds (ARM)
shareholders dated March 23, 2004 (incorporated by reference
to Harmonys Annual Report on Form 20-F for the fiscal year
ended June 30, 2004, as amended, filed on October 14, 2004).2.11
    
    Trust Deed entered into between Harmony and JPMorgan
Corporate Trustee Services Limited dated May 21, 2004
(incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).2.12
    
    Agency Agreement between Harmony, JPMorgan Corporate Trustee
Services Limited, JPMorgan Chase Bank and JPMorgan
Luxembourg SA dated May 21, 2004 (incorporated by reference
to Harmonys Annual Report on Form 20-F for the fiscal year
ended June 30, 2004, as amended, filed on October 14, 2004).2.13
    
    Form of Global Bond (incorporated by reference to Harmonys
 217




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##### Table of Contents



Annual Report on Form 20-F for the fiscal year ended June
30, 2004, as amended, filed on October 14, 2004).2.14
    
    Bond Offering Circular dated October 14, 2004 (incorporated
by reference to Harmonys Annual Report on Form 20-F for the
fiscal year ended June 30, 2004, as amended, filed on
October 14, 2004).3
    
    Voting Agreement between ARMI and Clidet 454 (Pty) Ltd
signed on February 16, 2004 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year
ended June 30, 2004, as amended, filed on October 14, 2004).4.1
    
    Acquisition and Disposal Agreement between ARMI and
Anglovaal Mining Limiteds (ARM) holding in Harmony, ARM
Platinum (Pty) Ltd (ARMPlats) and the African Rainbow
Minerals Consortium Limiteds debt, signed on February 16,
2004 (incorporated by reference to Harmonys Annual Report
on Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).4.2
    
    Addendum to Acquisition and Disposal Agreement between ARMI
and Anglovaal Mining Limited signed on March 15, 2004
(incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).4.3
    
    Voting Agreement between ARMI and Clidet 454 (Pty) Ltd
signed on February 16, 2004 (see Exhibit 3).4.4
    
    Harmony (2003) Share Option Scheme, as amended (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.5
    
    Form of Harmonys senior unsecured 13% bonds due June 14,
2006 (see Exhibit 2.6).4.6
    
    Joint Venture Agreement between ARMgold Limited, Harmony and
Clidet 383 (Proprietary) Limited, dated April 5, 2002
(incorporated by reference to Harmonys Annual Report on
Form 20-F for the fiscal year ended June 30, 2004, as
amended, filed on October 14, 2004).4.7
    
    Merger Agreement between ARMgold Limited and Harmony dated
September 22, 2003 (incorporated by reference to Harmonys
Registration Statement on Form 20-F filed on December 17,
2003).4.8
    
    Sale of Business Agreement between Anglogold Limited, Clidet
383 (Pty) Ltd and Harmony Gold Mining Company Limited and
ARM (Pty) Ltd in respect of the Free Gold assets entered
into on December 24, 2001 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year
 218




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##### Table of Contents



ended June 30, 2004, as amended, filed on October 14, 2004).4.9
    
    Sale of Shares Agreement amongst Harmony, ARMgold Harmony
Joint Investment Company (Proprietary) Limited, and The ARM
Broad-Based Empowerment Trust signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.10
    
    Subordination Agreement amongst Harmony, Nedbank Limited and
The ARM Broad-Based Empowerment Trust signed on April 15,
2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.11
    
    First Loan Agreement between Nedbank Limited and The ARM
Broad-Based Empowerment Trust signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.12
    
    First Ranking Cessation and Pledge between The ARM
Broad-Based Empowerment Trust and Nedbank Limited signed on
April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.13
    
    Second Loan Agreement between Nedbank Limited and The ARM
Broad-Based Empowerment Trust signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.14
    
    Second Ranking Cessation and Pledge between The ARM
Broad-Based Empowerment Trust and Nedbank Limited signed on
April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.15
    
    Flow of Funds Agreement amongst Nedbank Limited, ARMgold
Harmony Joint Investment Company (Proprietary) Limited,
Harmony and The ARM Broad-Based Empowerment Trust signed on
April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.16
    
    Right of Pre-emption and Deed of Adherence between Nedbank
Limited, Harmony, African Rainbow Minerals & Exploration
Investments (Proprietary) Limited and ARMgold Harmony Joint
Investment Company (Proprietary) Limited signed on April 15,
2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.17
    
    Agreement of Assignment between African Rainbow Minerals &
Exploration Investments (Proprietary) Limited, Harmony,
ARMgold Harmony Joint Investment Company (Proprietary)
Limited and The Trustees of The ARM Broad-Based Empowerment
Trust signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.18
    
    Harmony Option Agreement between Harmony and Nedbank Limited
signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.19
    
    Harmony Undertaking amongst Harmony, ARMgold Harmony Joint
Investment Company (Proprietary) Limited and Nedbank Limited
signed on April 15, 2005 (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).4.20
    
    Term Loan Agreement with Rand Merchant Bank dated
March 9, 2006.4.21
    
    Pledge Agreement in favor of FirstRand Bank Limited (acting
through its Rand Merchant Bank division) dated March 9, 2006.8.1
    
    Significant subsidiaries of Harmony Gold Mining Company
Limited (incorporated by reference to Harmonys Annual
Report on Form 20-F for the fiscal year ended June 30,
2005, filed on November 3, 2005).
 219




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##### Table of Contents



12.1
    
    Certification of the principal executive officer required by
Rule 13a-14(a) or Rule 15(d)-14(a), pursuant to Section 302
of the Sarbanes Oxley Act of 2002.12.2
    
    Certification of the principal financial officer required by
Rule 13a-14(a) or Rule 15(d)-14(a), pursuant to Section 302
of the Sarbanes Oxley Act of 2002.13.1
    
    Certification of the chief executive officer, pursuant to
Section 906 of the Sarbanes Oxley Act of 2002.13.2
    
    Certification of the chief financial officer, pursuant to
Section 906 of the Sarbanes Oxley Act of 2002.
 220




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##### Table of Contents



SIGNATURE
  HARMONY GOLD MINING COMPANY LIMITED
 By:
    
    /s/ Zacharias Bernardus SwanepoelZ. B. SwanepoelChief Executive OfficerDate: October 30, 2006
 221




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##### Table of Contents



INDEX TO FINANCIAL STATEMENTS
 PageHarmony Gold Mining Company LimitedReport of the Independent Registered Public Accounting FirmConsolidated Income Statements for the years ended June 30,
2006, 2005 and 2004Consolidated Balance Sheets at June 30, 2005 and 2004Consolidated Statements of Cash Flows for the years ended
June 30, 2006, 2005 and 2004Consolidated Statements of Changes in Shareholders Equity
for the years ended June 30, 2006, 2005 and 2004Notes to the Consolidated Financial Statements
 222




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      PricewaterhouseCoopers Inc.
  F-1




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##### Table of Contents



Harmony Gold Mining Company Limited
 
 Consolidated Statements of Income
For the years ended June 30
 2006
    
    
    2005
    
    
    2004A s adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000REVENUESProduct sales
    
    
    1,263,333
    
    
    
    1,265,200
    
    
    
    1,240,339COSTS AND EXPENSESProduction costs exclusive of depreciation and amortization
    
    
    1,056,831
    
    
    
    1,136,957
    
    
    
    1,100,688Depreciation and amortization
    
    
    166,120
    
    
    
    151,967
    
    
    
    139,829Impairment of assets
    
    
    15,951
    
    
    
    243,124
    
    
    
    3,145Employment termination and restructuring costs
    
    
    (12,289
    )
    
    
    73,215
    
    
    
    31,668Care and maintenance cost of restructured shafts
    
    
    27,387
    
    
    
    29,975
    
    
    
    Corporate expenditure
    
    
    19,971
    
    
    
    17,969
    
    
    
    14,193Exploration expenditure
    
    
    16,803
    
    
    
    11,676
    
    
    
    15,810Marketing and new business expenditure
    
    
    9,171
    
    
    
    15,310
    
    
    
    12,533Decrease in rehabilitation costs
    
    
    (1,236
    )
    
    
    (1,814
    )
    
    
    (17,839
    )Post retirement benefits expense
    
    
    1,175
    
    
    
    9,137
    
    
    
    1,299,884
    
    
    
    1,687,516
    
    
    
    1,300,027OPERATING LOSS
    
    
    (36,551
    )
    
    
    (422,316
    )
    
    
    (59,688
    )OTHER (EXPENSES)/INCOMEDividends received
    
    
    3,321
    
    
    
    2,785
    
    
    
    533Loss on derivative financial instruments
    
    
    (131,444
    )
    
    
    (17,672
    )
    
    
    (32,385
    )Profit/(loss) on sale of listed investments
    
    
    45,345
    
    
    
    (93,470
    )
    
    
    4,910Impairment of listed investment
    
    
    
    
    
    
    (63,234
    )
    
    
    Profit on sale and loss on dilution of investment in associates  net
    
    
    
    
    
    
    
    
    
    
    65,097Profit/(loss) on sale of subsidiaries
    
    
    3,035
    
    
    
    (114
    )
    
    
    115Interest income
    
    
    32,505
    
    
    
    21,396
    
    
    
    28,029Interest expense  net of amounts capitalized of $2.3 million,
$1.9 million and $1.7 in 2006, 2005 and 2004, respectively
    
    
    (56,537
    )
    
    
    (65,074
    )
    
    
    (64,289
    )Other (expenses)/income
    
    
    (3,802
    )
    
    
    (3,661
    )
    
    
    14,155(107,577
    )
    
    
    (219,044
    )
    
    
    16,165LOSS BEFORE TAX, MINORITY INTERESTS, EQUITY
INCOME OF JOINT VENTURE, EQUITY (LOSS)/INCOME
OF ASSOCIATED COMPANIES, IMPAIRMENT OF
INVESTMENT IN ASSOCIATE AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    (144,128
    )
    
    
    (641,360
    )
    
    
    (43,523
    )Income and mining tax benefit
    
    
    2,344
    
    
    
    88,811
    
    
    
    32,859LOSS BEFORE MINORITY INTERESTS, EQUITY INCOME
OF JOINT VENTURE, EQUITY (LOSS)/INCOME OF
ASSOCIATED COMPANIES, IMPAIRMENT OF
INVESTMENT IN ASSOCIATE AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE
    
    
    (141,784
    )
    
    
    (552,549
    )
    
    
    (10,664
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    1,281LOSS BEFORE EQUITY INCOME OF JOINT VENTURE,
EQUITY (LOSS)/INCOME OF ASSOCIATED COMPANIES,
IMPAIRMENT OF INVESTMENT IN ASSOCIATE AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE
    
    
    (141,784
    )
    
    
    (552,549
    )
    
    
    (9,383
    )Equity income of joint venture
    
    
    445
    
    
    
    
    
    
    
    9,503Equity (loss)/income of associated companies
    
    
    (16,444
    )
    
    
    
    
    
    
    2,020Impairment of investment in associate
    
    
    
    
    
    
    
    
    
    
    (1,956
    )(LOSS)/INCOME BEFORE CUMULATIVE EFFECT OF
CHANGES IN ACCOUNTING PRINCIPLE
    
    
    (157,783
    )
    
    
    (552,549
    )
    
    
    184Cumulative effect of change in accounting principle, net of tax
    
    
    2,058
    
    
    
    
    
    
    
    NET (LOSS)/INCOME
    
    
    (155,725
    )
    
    
    (552,549
    )
    
    
    184BASIC (LOSS)/EARNINGS PER SHARE ($) BEFORE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00FULLY DILUTED (LOSS)/EARNINGS PER SHARE ($)
BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00BASIC (LOSS)/EARNINGS PER SHARE ($)
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00FULLY DILUTED (LOSS)/EARNINGS PER SHARE ($)
    
    
    (0.39
    )
    
    
    (1.52
    )
    
    
    0.00WEIGHTED AVERAGE NUMBER OF SHARES USED IN
THE COMPUTATION OF BASIC EARNINGS PER SHARE
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    254,240,500WEIGHTED AVERAGE NUMBER OF SHARES USED IN
THE COMPUTATION OF FULLY DILUTED EARNINGS PER
SHARE
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    255,570,834DIVIDEND PER SHARE ($)
    
    
    
    
    
    
    0.05
    
    
    
    0.26
 The accompanying notes are an integral part of these consolidated financial statements
 F-2




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Harmony Gold Mining Company Limited
Consolidated Statements of Comprehensive Income
For the years ended June 30
 2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000(Loss)/income  before cumulative effect of change in
accounting principle
    
    
    (157,783
    )
    
    
    (552,549
    )
    
    
    184Cumulative effect of change in accounting principle, net of tax
    
    
    2,058
    
    
    
    
    
    
    
    Net (loss)/income
    
    
    (155,725
    )
    
    
    (552,549
    )
    
    
    184Other comprehensive (loss)/incomeMark-to-market of listed and other investments  unrealized
    
    
    119,713
    
    
    
    (44,674
    )
    
    
    (52,338
    )Mark-to-market of listed and other investments  realized
    
    
    (38,253
    )
    
    
    105,892
    
    
    
    (6,006
    )Foreign currency translation adjustment
    
    
    (191,651
    )
    
    
    (197,665
    )
    
    
    388,397Other comprehensive (loss)/income
    
    
    (110,191
    )
    
    
    (136,447
    )
    
    
    330,053Comprehensive (loss)/income
    
    
    (265,916
    )
    
    
    (688,996
    )
    
    
    330,237
 The accompanying notes are an integral part of these consolidated financial statements
 F-3




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##### Table of Contents



Harmony Gold Mining Company Limited
 
 Consolidated Balance Sheets
 At June 30
 2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000ASSETSCURRENT ASSETSCash and cash equivalents
    
    
    89,189
    
    
    
    266,746Receivables
    
    
    100,175
    
    
    
    94,730Inventories
    
    
    91,998
    
    
    
    86,829Materials contained in heap leach pads
    
    
    515
    
    
    
    553Income and mining taxes
    
    
    4,359
    
    
    
    3,980Deferred income and mining taxes
    
    
    142,109
    
    
    
    138,519Total current assets
    
    
    428,345
    
    
    
    591,357Property, plant and equipment
    
    
    3,306,555
    
    
    
    3,451,963Other assets
    
    
    3,605
    
    
    
    12,817Goodwill
    
    
    28,256
    
    
    
    30,367Restricted cash
    
    
    35,599
    
    
    
    7,798Receivables
    
    
    4,047
    
    
    
    Listed and other investments
    
    
    387,396
    
    
    
    642,516Investments in associates
    
    
    266,331
    
    
    
    Investments in joint ventures
    
    
    2,065
    
    
    
    TOTAL ASSETS
    
    
    4,462,199
    
    
    
    4,736,818LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and other liabilities
    
    
    78,391
    
    
    
    119,224Short term portion of long term loans
    
    
    140,344
    
    
    
    200,451Payroll and leave liabilities
    
    
    87,909
    
    
    
    62,814Accrued liabilities
    
    
    36,182
    
    
    
    45,056Dividends payable
    
    
    976
    
    
    
    1,211Total current liabilities
    
    
    343,802
    
    
    
    428,756Long-term loans
    
    
    394,608
    
    
    
    409,486Deferred income and mining taxes
    
    
    521,000
    
    
    
    541,188Derivative financial liabilities
    
    
    150,038
    
    
    
    76,720Provision for environmental rehabilitation
    
    
    110,164
    
    
    
    120,450Provision for social plan
    
    
    2,259
    
    
    
    2,109Provision for post retirement benefits
    
    
    14,964
    
    
    
    13,276Commitments and contingencies (Note 31)
    
    
    
    
    
    
    SHAREHOLDERS EQUITYShare capital - 1,200,000,000 (2005: 1,200,000,000)
authorized ordinary shares of 50 South African cents each.
Shares issued 397,616,950 (2005: 394,023,694)
    
    
    31,730
    
    
    
    31,448Additional paid-in capital
    
    
    3,429,775
    
    
    
    3,383,610Accumulated loss
    
    
    (540,587
    )
    
    
    (384,862
    )Accumulated other comprehensive income
    
    
    4,446
    
    
    
    114,637Total shareholders equity
    
    
    2,925,364
    
    
    
    3,144,833TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    4,462,199
    
    
    
    4,736,818
 The accompanying notes are an integral part of these consolidated financial statements
 F-4




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##### Table of Contents



Harmony Gold Mining Company Limited
Consolidated Statements of Changes in Shareholders Equity
For the years ended June 30
 (Accumulatedloss)/retained
    
    
    AccumulatedNumber of
    
    
    Number of
    
    
    
    
    
    
    
    
    
    
    earnings
    
    
    other
    
    
    Totalordinary shares
    
    
    warrants
    
    
    
    
    
    
    Additional
    
    
    As adjusted
    
    
    comprehensive
    
    
    As adjustedissued
    
    
    issued
    
    
    Share capital
    
    
    paid-in capital
    
    
    (note 3)
    
    
    income/(loss)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000BALANCE  JUNE 30, 2003
    
    
    185,536,615
    
    
    
    2,368,030
    
    
    
    15,712
    
    
    
    952,967
    
    
    
    236,961
    
    
    
    (78,969
    )
    
    
    1,126,671Issue of shares- Acquisition of 11.5% interest in Avgold
    
    
    6,960,964
    
    
    
    
    
    
    
    455
    
    
    
    83,941
    
    
    
    
    
    
    
    
    
    
    
    84,396- Acquisition of ARMgold
    
    
    63,666,672
    
    
    
    
    
    
    
    4,308
    
    
    
    678,089
    
    
    
    
    
    
    
    
    
    
    
    682,397- Acquisition of 42.2% interest in Avgold
    
    
    28,630,526
    
    
    
    
    
    
    
    2,048
    
    
    
    411,927
    
    
    
    
    
    
    
    
    
    
    
    413,975- Acquisition of Avgold minorities
    
    
    33,574,367
    
    
    
    
    
    
    
    2,474
    
    
    
    482,986
    
    
    
    
    
    
    
    
    
    
    
    485,460Exercise of employee share options
    
    
    703,800
    
    
    
    
    
    
    
    51
    
    
    
    12,493
    
    
    
    
    
    
    
    
    
    
    
    12,544Share issue expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,781
    )
    
    
    
    
    
    
    
    
    
    
    (11,781
    )Conversion of warrants
    
    
    2,351,133
    
    
    
    (2,351,133
    )
    
    
    156
    
    
    
    13,222
    
    
    
    
    
    
    
    
    
    
    
    13,378Warrants expired
    
    
    
    
    
    
    (16,897
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consolidation of share trusts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,425
    )
    
    
    
    
    
    
    
    
    
    
    (7,425
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184
    
    
    
    
    
    
    
    184Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (55,005
    )
    
    
    
    
    
    
    (55,005
    )Mark-to-market of listed and other
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58,344
    )
    
    
    (58,344
    )Foreign exchange translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    388,397
    
    
    
    388,397BALANCE  JUNE 30, 2004
    
    
    321,424,077
    
    
    
    
    
    
    
    25,204
    
    
    
    2,616,419
    
    
    
    182,140
    
    
    
    251,084
    
    
    
    3,074,847Issue of shares- Acquisition of 11.5% interest in Gold
Fields
    
    
    72,173,265
    
    
    
    
    
    
    
    6,210
    
    
    
    760,980
    
    
    
    
    
    
    
    
    
    
    
    767,190Exercise of employee share options
    
    
    426,352
    
    
    
    
    
    
    
    34
    
    
    
    18,844
    
    
    
    
    
    
    
    
    
    
    
    18,878Share issue expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,957
    )
    
    
    
    
    
    
    
    
    
    
    (12,957
    )Consolidation of share trusts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    324
    
    
    
    
    
    
    
    
    
    
    
    324Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (552,549
    )
    
    
    
    
    
    
    (552,549
    )Dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,453
    )
    
    
    
    
    
    
    (14,453
    )Mark-to-market of listed and other
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,218
    
    
    
    61,218Foreign exchange translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (197,665
    )
    
    
    (197,665
    )BALANCE  JUNE 30, 2005
    
    
    394,023,694
    
    
    
    
    
    
    
    31,448
    
    
    
    3,383,610
    
    
    
    (384,862
    )
    
    
    114,637
    
    
    
    3,144,833Issue of sharesExercise of employee share options
    
    
    3,593,256
    
    
    
    
    
    
    
    282
    
    
    
    43,399
    
    
    
    
    
    
    
    
    
    
    
    43,681Consolidation of share trusts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,766
    
    
    
    
    
    
    
    
    
    
    
    2,766Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155,725
    )
    
    
    
    
    
    
    (155,725
    )Mark-to-market of listed and other
investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,460
    
    
    
    81,460Foreign exchange translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (191,651
    )
    
    
    (191,651
    )BALANCE  JUNE 30, 2006
    
    
    397,616,950
    
    
    
    
    
    
    
    31,730
    
    
    
    3,429,775
    
    
    
    (540,587
    )
    
    
    4,446
    
    
    
    2,925,364
 The accompanying notes are an integral part of these consolidated financial statements
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##### Table of Contents



Harmony Gold Mining Company Limited
 
 Consolidated Statements of Cash Flows
 For the years ended June 30
 2006
    
    
    2005
    
    
    2004A s adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000CASH FLOW FROM OPERATIONSSources of cashCash received from customers
    
    
    1,263,333
    
    
    
    1,265,200
    
    
    
    1,240,339Interest and dividends received
    
    
    35,826
    
    
    
    24,181
    
    
    
    28,562Cash provided by operating activities
    
    
    1,299,159
    
    
    
    1,289,381
    
    
    
    1,268,901Uses of cashCash paid to suppliers and employees
    
    
    1,213,910
    
    
    
    1,353,887
    
    
    
    1,150,471Interest paid
    
    
    31,609
    
    
    
    42,156
    
    
    
    44,189Income and mining taxes paid
    
    
    1,829
    
    
    
    8,952
    
    
    
    83,881Cash used in operating activities
    
    
    1,247,348
    
    
    
    1,404,995
    
    
    
    1,278,541NET CASH GENERATED/(UTILIZED) BY OPERATIONS
    
    
    51,811
    
    
    
    (115,614
    )
    
    
    (9,640
    )CASH FLOW FROM INVESTING ACTIVITIESAmounts invested in environmental trusts
    
    
    (4,318
    )
    
    
    (251
    )
    
    
    (5,529
    )Restricted cash
    
    
    (31,913
    )
    
    
    1,585
    
    
    
    (8,973
    )Cash held by subsidiaries on acquisition
    
    
    
    
    
    
    723
    
    
    
    100,872Cash held by subsidiaries at disposal
    
    
    
    
    
    
    (1,830
    )
    
    
    (69
    )Cash paid for Abelle Mines
    
    
    
    
    
    
    
    
    
    
    (85,168
    )Other direct costs of acquisition of ARMgold
    
    
    
    
    
    
    
    
    
    
    (195
    )Other direct costs of acquisition of Avgold
    
    
    
    
    
    
    
    
    
    
    (256
    )Cash received for Bissett
    
    
    
    
    
    
    
    
    
    
    2,598Other direct costs of investment in Gold Fields
    
    
    
    
    
    
    (13,802
    )
    
    
    Cash paid for Villiage
    
    
    (64
    )
    
    
    
    
    
    
    Cash paid for Western Areas
    
    
    (321,477
    )
    
    
    
    
    
    
    Cash received for Buffalo Creek
    
    
    3,058
    
    
    
    
    
    
    
    Cash paid for Orpheo
    
    
    (733
    )
    
    
    
    
    
    
    Proceeds on disposal of listed investments
    
    
    364,974
    
    
    
    380,363
    
    
    
    146,350Decrease/(increase) in other non-current investments
    
    
    2,824
    
    
    
    (1,204
    )
    
    
    (7,677
    )Proceeds on disposal of mining assets
    
    
    12,509
    
    
    
    20,892
    
    
    
    28,981Additions to property, plant and equipment
    
    
    (271,755
    )
    
    
    (228,524
    )
    
    
    (193,457
    )NET CASH (UTILIZED)/GENERATED BY INVESTING ACTIVITIES
    
    
    (246,895
    )
    
    
    157,952
    
    
    
    (22,523
    )CASH FLOWS FROM FINANCING ACTIVITIESLong-term borrowings raised
    
    
    160,149
    
    
    
    231,554
    
    
    
    271,012Long-term borrowings paid
    
    
    (204,414
    )
    
    
    (199,655
    )
    
    
    (228,245
    )Ordinary shares issued  net of expenses
    
    
    28,684
    
    
    
    (9,695
    )
    
    
    7,729Dividends paid
    
    
    (1,034
    )
    
    
    (14,495
    )
    
    
    (54,943
    )NET CASH (UTILIZED)/GENERATED BY FINANCING ACTIVITIES
    
    
    (16,615
    )
    
    
    7,709
    
    
    
    (4,447
    )EFFECTS OF EXCHANGE RATES ON CASH AND CASHEQUIVALENTS
    
    
    34,142
    
    
    
    (323
    )
    
    
    64,592NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    (177,557
    )
    
    
    49,724
    
    
    
    27,982CASH AND CASH EQUIVALENTS  JULY 1
    
    
    266,746
    
    
    
    217,022
    
    
    
    189,040CASH AND CASH EQUIVALENTS  JUNE 30
    
    
    89,189
    
    
    
    266,746
    
    
    
    217,022
 The accompanying notes are an integral part of these consolidated financial statements
  F-6




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##### Table of Contents



Harmony Gold Mining Company Limited
 
 Notes to the Consolidated Financial Statements
 For the years ended June 30
 1 NATURE OF OPERATIONS
  2 ACCOUNTING POLICIES
 (a)
    
    USE OF ESTIMATES:The Companys consolidated financial statements
have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation
of the Companys consolidated financial statements requires the
Companys management to make estimates and assumptions about current
and future events that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Future events and
their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of
judgement based on various assumptions and other factors such as
historical experience, current and expected economic conditions, and
in some cases actuarial techniques. Actual results ultimately may
differ from those estimates.The more significant areas requiring the use of management estimates
and assumptions relate to mineral reserves that are the basis for
future cash flow estimates and units-of-production depreciation,
depletion and amortization calculations; environmental, reclamation
and closure obligations; estimates of recoverable gold and other
materials in heap leach pads; asset impairments (including
impairments of goodwill, long-lived assets, and investments);
write-downs of inventory to net realizable value; post employment,
post retirement and other employee benefit liabilities (including
valuation of share options); valuation allowances for deferred tax
assets; reserves for contingencies and litigation; and the fair
value and accounting treatment of financial instruments.The following are the accounting policies used by the Company which,
except as described in note 3, have been consistently applied:(b)
    
    CONSOLIDATION:(i)
    
    Consolidated entities: The Companys consolidated financial
statements include the financial statements of the Company, its
subsidiaries, and its investments in joint ventures and associates. A
company in which the Group has, directly or indirectly, through
subsidiary undertakings, a controlling interest is classified as a
subsidiary undertaking. The Company also reviews its relationships
with other entities to assess if the Company is the primary
beneficiary of a variable interest entity. If the determination is
made that the Company is the primary beneficiary, then that entity is
consolidated.
See note 5. The results of any subsidiary acquired or disposed of
during the year are consolidated from the effective date of
acquisition and up to the effective date of disposal.Any excess between the purchase price and the fair value of the
identifiable net assets of subsidiaries, joint ventures and
associates at the date of acquisition is capitalized as goodwill.Intercompany profits, transactions and balances have been eliminated.(ii)
    
    Investments in associates: An associate is an entity, other than a
subsidiary, in which the Company has a material long-term interest
and in respect of which the Company exercises significant influence
over operational and financial policies, normally owning between 20%
and 50% of the voting equity.Investments in associates are accounted for by using the equity
method of accounting based on the most recent audited financial
statements of those entities. Equity accounting involves
recognizing in the income statement the Groups share of the
associates profit or loss for the period. The Groups interest in
the associate is carried in the balance sheet at an amount that
reflects the cost of the investment, the Groups share of post
acquisition earnings and other movement in reserves. The carrying
value of an associate is reviewed on a regular basis and, if an
impairment in the carrying value has occurred, it is written off in
the period in which such permanent impairment is identified.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (iii)
    
    Investment in joint ventures: A joint venture is an entity in
which the Company holds a long-term interest and which is jointly
controlled by the Company and one or more venturers under a contractual
arrangement. The Companys interest in jointly controlled entities is
accounted for under the equity method as described in note 2(b)(ii)
above.(c)
    
    FOREIGN CURRENCIES:(i)
    
    Foreign entities: For self-sustaining foreign entities, assets
and liabilities are translated using the closing rates at year-end,
and income statements are translated at average rates. Differences
arising on translation are taken directly to shareholders equity,
until the foreign entity is sold or disposed of when the translation
differences are recognized in the income statement as part of the
gain or loss on sale.Fair value adjustments arising on the acquisition of the foreign
entities are treated as assets and liabilities of the foreign
entity are translated at the closing rate.(ii)
    
    Foreign currency transactions: Transactions in foreign
currencies are converted at the rates of exchange ruling at the date
of these transactions. Monetary assets and liabilities denominated in
foreign currencies are translated at rates of exchange ruling at
balance sheet date. Gains, losses and costs associated with foreign
currency transactions are recognized in the income statement in the
period to which they relate. These transactions are included in the
determination of other (expenses)/income.(iii)
    
    Functional currency: The functional currency of the majority of
the Companys operations is the South African Rand. The
translation differences arising as a result of converting to US
dollars using the current exchange rate method are included as a
separate component of shareholders equity.References to A$ refers to Australian currency, R to South
African currency, and $ or US$ to United States currency.(d)
    
    FINANCIAL INSTRUMENTSare initially measured at cost. Subsequent to
initial recognition these instruments are measured as set out below in
terms of the applicable accounting policy. Financial instruments
carried on the consolidated balance sheets include cash and cash
equivalents, money market instruments, investments, receivables,
accounts payable, long term loans, interest free loans, forward sales
contracts, option contracts, interest rate swaps and gold leases.(e)
    
    CASH AND CASH EQUIVALENTSare defined as cash on hand, deposits
held at call with banks and short term highly liquid investments with
insignificant interest rate risk and original maturities of three
months or less. Cash and cash equivalents are measured at fair value.(f)
    
    NON-CURRENT INVESTMENTS:Management determines the appropriate classification of its
investments in equity securities at the time of purchase and re-evaluates such determinations at
each reporting date. Non-current investments comprise of the following :(i)
    
    Listed investments:
Investments in listed companies, other than investments in subsidiaries, joint ventures and
associates, are carried at fair value. These investments are considered to be available-for-sale
investments. Changes in the carrying amount of available-for-sale investments, are excluded from
earnings and included as a separate component of shareholders equity. On disposal of
available-for-sale investments, amounts previously included as a separate component of
shareholders equity, are transferred to income/(loss) and included in the determination of the
gain/(loss) on disposal of available-for-sale securities. The amount transferred out of equity is
determined by reference to the amounts previously included as a seperate component of shareholders
equity relating to the specific investment. Unrealized losses are recognized in the determination
of net income/(loss) when the market value decreases below the carrying value of the investment and
this decrease is determined by management to be other than temporary in nature.
 F-8




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (ii)
    
    Unlisted investments are reflected at cost. If the directors are of
the opinion that there has been an impairment in the value of these
investments they are written down, with the write down recognized as
an expense in the period in which the impairment is determined to
have taken place.(g)
    
    INVENTORIESare valued at the lower of cost and net realizable
value. The Companys inventories comprise of consumable stores,
gold-in-process and ore stockpiles and are accounted for as
follows: Consumable storesare valued at average cost, after
appropriate provision for redundant and slow moving items.Gold-in-processinventories represent materials that are currently
in the process of being converted to a saleable product. Conversion
processes vary depending on the nature of the ore and the specific
mining operation, but include mill in-circuit, leach in-circuit,
flotation and column cells, and carbon in-pulp inventories.
In-process material is measured based on assays of the material fed
to process and the projected recoveries of the respective plants.
In-process inventories are valued at the average cost of the
material fed to process attributable to the source material coming
from the mine, stockpile or leach pad plus the in-process
conversion costs, including applicable depreciation relating to the
process facility, incurred to that point in the process. Where
mechanized mining is used in underground operations,
gold-in-process is accounted for at the earliest stage of
production when reliable estimates of quantities and costs are
capable of being made, normally from when ore is broken
underground.Stockpilesrepresents coarse ore that has been extracted from the
mine and is available for further
processing. Stockpiles are measured by estimating the number of tons
(via truck counts and/or in-put surveys of the ore before
stockpiling) added and removed from the stockpile, the number of
contained ounces (based on assay data) and the recovery percentage
(based on the process for which the ore is destined). Stockpile
tonnages are verified by periodic surveys. Stockpiles are valued
based on mining costs incurred up to the point of stockpiling the
ore, including applicable depreciation and amortization relating to
mining operations. Value is added to a stockpile based on the
current mining cost per ton plus applicable depreciation and
amortization and removed at the average cost per recoverable ounce
of gold in the stockpile.(h)
    
    MATERIALS CONTAINED IN HEAP LEACH PADS:The recovery of gold from
certain oxide ores is best achieved through the heap leaching process.
Under this method, ore is placed on leach pads where it is permeated
with a chemical solution, which dissolves the gold contained in the ore.
The resulting pregnant solution is further processed in a leach plant
where the gold in solution is recovered. For accounting purposes, value
is added to leach pads based on current mining costs, including
applicable depreciation and amortization relating to mining operations.
Value is removed from the leach pad as ounces are recovered in circuit
at the leach plant based on the average cost per recoverable ounce of
gold on the leach pad.The engineering estimates of recoverable gold on the heap leach pads
are calculated from quantities of ore placed on the pads (measured
tons added to the leach pads), the grade of ore placed on the leach
pads (based on assay data) and a recovery percentage (based on the
leach process and the ore type). In general, the leach pad
production cycles project recoveries of approximately 50% to 70% of
the placed recoverable ounces during the leaching process, declining
at the end of the leaching process.Although the quantities of recoverable gold placed on the leach pads
are reconciled by comparing the grades of ore placed on the pads to
the quantities of gold actually recovered (metallurgical balancing),
the nature of the leaching process inherently limits the ability to
precisely monitor inventory levels. As a result, the metallurgical
balancing process is constantly monitored and engineering estimates
are refined based on actual results over time. Variations between
actual and estimated quantities resulting from changes in
assumptions and estimates that do not result in write-downs to net
realizable value are accounted for on a prospective basis. The
ultimate recovery of gold from the pad will not be known until the
leaching process is terminated.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 The current portion of leach pad inventories is determined based on
engineering estimates of the quantities of gold at the balance
sheet date that are expected to be recovered during the next twelve
months.(i)
    
    RECEIVABLES:Accounts receivable are stated at the gross invoice
value adjusted for payments received and an allowance for doubtful
debt, where appropriate, to reflect the fair value of the anticipated
realizable value. Bad debts are written off during the period in which
they are identified.(j)
    
    ACCOUNTS PAYABLEare stated at cost adjusted for payments made
to reflect the value of the anticipated economic outflow of
resources.(k)
    
    HEDGING:The Company accounts for its hedging activities in
accordance with Statement of Financial Accounting Standards (SFAS)
No. 133 (SFAS No. 133), Accounting for Derivative instruments and
Hedging Activities, as amended by Statements of Financial Accounting
Standards Nos. 137, 138 and 149.Under SFAS No. 133, all derivatives are recognized on the balance
sheet at their fair value, unless they meet the criteria for the
normal purchases normal sale exemption. On the date a derivative
contract is entered into, the Company designates the derivative as
(1) a hedge of the fair value of a recognized asset or liability
(fair value hedge), (2) a hedge of a forecasted transaction (cash
flow hedge), or (3) a hedge of a net investment in a foreign
entity. Certain derivative transactions, while providing effective
economic hedges under the Companys risk management policies, do
not qualify for hedge accounting. The Company does not currently
hold or issue derivative financial instruments for trading or
speculative purposes.Changes in the fair value of a derivative that is highly effective,
and that is designated and qualifies as a fair value hedge, are
recorded in the income statement, along with the change in fair
value of the hedged asset or liability that is attributable to the
hedged risk.Changes in the fair value of a derivative that is highly effective,
and that is designated and qualifies as a cash flow hedge, are
recognized directly as a separate component of shareholders equity.
Amounts deferred as a component of shareholders equity are included
in the income statement in the same periods during which the hedged
firm commitment or forecasted transaction affects net profit or
loss.Hedges of net investment in foreign entities are accounted for similarly to cash flow hedges.Recognition of derivatives which meet the criteria for the normal
purchases, normal sales exemption under SFAS No. 133 are deferred
until settlement. Under these contracts the group must physically
deliver a specified quantity of gold at a future date at a
specified price to the contracted counter party.Gains and losses arising from a change in the fair value of a
contract before the contracts designated delivery date are
therefore not recorded, but the contract price recognized in Product
sales following settlement of the contract by physical delivery of
production to the counterparty at contract maturity.Changes in the fair value of derivatives which are not designated
as hedges and do not qualify for hedge accounting and the
ineffective portion of the derivatives are recognized in the
income statement.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 The Group formally documents all relationships between hedging
instruments and hedged items, as well as its risk management
objective and strategy for undertaking various hedge transactions.
This process includes linking derivatives designed as hedges to
specific assets and liabilities or to specific firm commitments or
forecasted transactions. The Group also formally assesses, both at
the hedge inception date and on an ongoing basis, whether the
derivatives that are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of
hedged items.(l)
    
    EXPLORATION COSTSare expensed as incurred prior to the completion
of a final feasibility study to establish proved and probable reserves.(m)
    
    PROPERTY, PLANT AND EQUIPMENT(i)
    
    Mining assets including mine development costs and mine plant facilities are recorded at
cost.At the Companys surface mines, when it has been determined that a
mineral property can be economically developed as a result of
establishing proven and probable reserves, costs incurred to develop
the property are capitalized as incurred until saleable minerals are
extracted from the mine and are amortized using the
units-of-production method over the estimated life of the ore body
based on estimated recoverable ounces or pounds mined from proven
and probable reserves. These costs include costs to further
delineate the ore body and remove overburden to initially expose the
ore body. Subsequent mine development costs at the Companys surface
mines are treated as variable production costs. See note 3.At the Companys underground mines, all costs incurred to develop
the property, including costs to access specific ore blocks or
other areas of the underground mine, are capitalized to the extent
that such costs will provide future economic benefits as a result
of establishing proven and probable reserves associated with
specific ore blocks or areas of operations. These costs include
the cost of shaft sinking and access, the costs of building access
ways, lateral development, drift development, ramps, box cuts and
other infrastructure development. The Company previously
capitalized underground development costs only until the reef
horizons were intersected. See note 3.Interest on borrowings incurred in respect of assets requiring a
substantial period of time to prepare for their intended use are
capitalized to the date on which the assets are substantially
completed and ready for their intended use.(ii)
    
    Mining operations placed on care and maintenance: The net assets
of operations placed on care and maintenance are written down to net
realizable value. Expenditure on the care and maintenance of these
operations is charged against income, as incurred.(iii)
    
    Non mining fixed assets: Land is shown at cost and not
depreciated. Other non-mining fixed assets are shown at cost less
accumulated depreciation.(iv)
    
    Mineral and surface use rightsrepresent mineral and surface use
rights for parcels of land both owned and not owned by the Company.
Mineral and surface rights include acquired mineral use rights in
production, development and exploration stage properties. The amount
capitalized related to a mineral and surface rights represents its
fair value at the time it was acquired, either as an individual
asset purchase or as part of a business combination and are recorded
at cost of acquisition.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Production stage mineral interests represent interests in operating
properties that contain proven and probable reserves. Development
stage mineral interests represent interests in properties under
development that contain proven and probable reserves. Exploration
stage mineral interests represent interests in properties that are
believed to potentially contain (i) other mineralized material such
as inferred material within pits; measured, indicated and inferred
material with insufficient drill spacing to qualify as proven and
probable reserves; and inferred material in close proximity to
proven and probable reserves; (ii) around-mine exploration potential
such as inferred material not immediately adjacent to existing
reserves and mineralization but located within the immediate mine
infrastructure; (iii) other mine-related exploration potential that
is not part of measured, indicated or inferred material and is
comprised mainly of material outside of the immediate mine area; or
(iv) greenfield exploration potential that is not associated with
any other production, development or exploration stage property as
described above.The Companys mineral use rights are enforceable regardless of
whether proven or probable reserves have been established. In
certain limited situations, the nature of a use changes from an
exploration right to a mining right upon the establishment of proven
and probable reserves. The Company has the ability and intent to
renew mineral use rights where the existing term is not sufficient
to recover all identified and valued proven and probable reserves
and/or undeveloped mineral interests.(v)
    
    Depreciation and amortization of mineral property interests, mine
development costs and mine plant facilitiesare computed principally by
the units of production method based on estimated proven and probable
reserves. Costs incurred and capitalized to enable access to specific
ore blocks or areas of the mine, and which only provide an economic
benefit over the period of mining that ore block or area, are
attributed to earnings using the units-of-production method where the
denominator is estimated recoverable ounces of gold contained in proven
and probable reserves within that ore block or area. If capitalized
underground development costs provide an economic benefit over the
entire mine life, the costs are attributed to earnings using the
units-of-production method, where the denominator is the estimated
recoverable ounces of gold contained in total accessible proven and
probable reserves. Other non-mining fixed assets are depreciated by
straight line over estimated useful lives of two to five years.(vi)
    
    Amortization of mineral and surface use rights: Mineral rights
associated with production stage mineral interests are amortized over
the life of mine using the units-of-production method in order to
match the amortization with the expected underlying future cash
flows. Mineral interests associated with development and exploration
stage mineral interests are not amortized until such time as the
underlying property is converted to the production stage.(vii)
    
    Impairment: The Company reviews and evaluates its long-lived
assets for impairment when events or changes in circumstances indicate
that the related carrying amounts may not be recoverable. An impairment
is considered to exist if the total estimated future cash flows on an
undiscounted basis are less than the carrying amount of the assets,
including goodwill, if any. An impairment loss is measured and recorded
based on discounted estimated future cash flows. Future cash flows are
estimated based on quantities of recoverable minerals, expected gold
prices (considering current and historical prices, price trends and
related factors), production levels and cash costs of production and
capital, all based on life-of-mine plans.The term recoverable minerals refers to the estimated amount of
gold that will be obtained from proven and probable reserves and
all related exploration stage mineral interests (except for other
mine-related exploration potential and greenfields exploration
potential discussed separately below) after taking into account
losses during ore processing and treatment. Estimates of
recoverable minerals from such related exploration stage mineral
interests will be risk adjusted based on managements relative
confidence in such materials. In estimating future cash flows,
assets are grouped at the lowest level for which there are
identifiable cash flows that are largely independent of cash flows
from other asset groups. With the exception of other mine-related
exploration potential and greenfields exploration potential,
estimates of future undiscounted cash flows are included on an area
of interest basis, which generally represents an individual
operating
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 mine, even if the mines are included in a larger mine complex. In
the case of mineral interests associated with other mine-related
exploration potential and greenfields exploration potential, cash
flows and fair values are individually evaluated based primarily
on recent exploration results and recent transactions involving
sales of similar properties, if any. Assumptions underlying future
cash flow estimates are subject to significant risks and
uncertainties.(n)
    
    GOODWILL:Goodwill represents the excess of the cost of an
acquisition over the fair value of the Companys share of the net assets
of the acquired subsidiary, associate, joint venture or business at the
date of acquisition. Goodwill on acquisition of subsidiaries and
businesses is presented seperately within non-current assets. Goodwill
on acquisition of associates and joint ventures are included in the
carrying value of investments in associates and joint ventures.Goodwill is not subject to amortization. Instead, the Company
evaluates, on at least an annual basis, the carrying amount of
goodwill to determine whether current events and circumstances
indicate that such carrying amount may no longer be recoverable. To
accomplish this, the Company compares the fair value of its
reporting units to their carrying amounts. If the carrying value of
a reporting unit were to exceed its fair value, the Company would
perform the second step of the impairment test. In the second step,
the Company would compare the implied fair value of the reporting
units goodwill to its carrying amount and any excess of the
carrying value over the implied fair value would be charged to
operations.The gain or loss on disposal of an entity includes the carrying
amount of goodwill relating to the entity sold.(o)
    
    ENVIRONMENTAL OBLIGATIONS:SFAS No. 143, Accounting for Asset
Retirement Obligations (SFAS No. 143) applies to legal obligations
associated with the retirement of a long-lived asset that result from
the acquisition, construction, development and/or the normal operation
of a long-lived asset.SFAS No. 143 applies to legal obligations associated with the
retirement of a long-lived asset that result from the acquisition,
construction, development and/or the normal operation of a long-lived
asset. Under SFAS No. 143 the Company records the fair value of a
liability for an asset retirement obligation in the period in which it
is incurred. When the liability is initially recorded, the Company
capitalizes the cost by increasing the carrying value of the related
long-lived asset. Changes resulting from revisions in the amount of
estimated cash flows are recognized as an increase or decrease in the
carrying amount of the rehabilitation liability and the associated
capitalized retirement cost. Decreases in the rehabilitation liability
in excess of capitalized retirement costs (net of accumulated
depreciation) are recognized in the income statement as Decrease in
rehabilitation costs. Over time, the liability is increased to
reflect an interest element (accretion)  considered in its initial
measurement at fair value, and the capitalized cost is amortized over
the useful life of the related asset. Upon settlement of the liab
will record a gain or loss if the actual cost incurred is different
than the liability recorded.Environmental liabilities, other than rehabilitation costs which
relate to liabilities from specific events, are expensed as
incurred.(p)
    
    ENVIRONMENTAL TRUST FUNDS:Contributions are made to the Companys
trust funds, created in accordance with statutory requirements, to fund
the estimated cost of pollution control, rehabilitation and mine closure
at the end of the life of the Companys South African mines.
Contributions are determined on the basis of the estimated environmental
obligation over the life of the mine. Income earned on monies paid to
environmental trust funds is accounted for as investment income. The
funds contributed to the trusts plus growth in the trust funds are
included under investments on the balance sheet.(q)
    
    PROVISIONSare recognized when information is available prior to
the issuance of financial statements which indicates that it is
probable that an asset has been impaired or a liability has been
incurred as at the date of the financial statements and can be
reasonably estimated.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (r)
    
    DEFERRED TAXATION:The Company follows the comprehensive liability
method of accounting for deferred tax using the balance sheet approach.
Under this method deferred income and mining taxes are recognized for
the tax consequences of temporary differences by applying expected
future mining tax rates to the differences between the tax base of
certain assets or liabilities and their balance sheet carrying amount.
The effect on deferred tax of any changes in tax rates is recognized in
the income statement during the period in which the change in tax rate
occurs.The principal temporary differences arise from amortization and
depreciation on property, plant and equipment, provisions,
deferred financial liability and unredeemed capital expenditure. A
valuation allowance is recorded to reduce the carrying value of
deferred tax assets if it is more likely than not that such assets
will not be realized.(s)
    
    PENSION PLANS AND OTHER EMPLOYEE BENEFITS:(i)
    
    Pension plans are funded through annual contributions. The
Companys contributions to the defined contribution pension plans are
charged to the income statement in the year to which they relate. The
Companys liability is limited to its annually determined
contributions.(ii)
    
    Medical plans: The Company provides medical cover to current
employees and certain retirees through certain funds. The medical
accounting costs for the defined benefit plan are assessed using the
projected unit credit method. The health care obligation is measured
as the present value of the estimated future cash outflows using
market yields consistent with the term and risks of the obligation.
Actuarial gains and losses as a result of these valuations are
recognised in the income statement at re-valuation date. A
liability for retirees and their dependents is accrued in full
based on actuarial valuations every year.(iii)
    
    Share-based compensation: Effective July 1, 2005, the Company
adopted the fair value recognition provisions of SFAS No. 123(R),
Share-Based Payments (SFAS No. 123(R)). Prior to that date, the
Company applied SFAS No. 123, Accounting for Stock-Based
Compensation (SFAS No. 123) in accounting for options granted after
July 1, 2001 and Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25) together with its
related interpretations in accounting for options granted prior to
July 1, 2001.The Company adopted SFAS No. 123(R) using the modified retrospective
transition method. Under this method, share-based payment expense
for the year ended June 30, 2006 includes: (a) compensation cost for
all share-based payments granted prior to, but not yet vested as of
July 1, 2005, based on the grant-date fair value estimated in
accordance with the original provisions of SFAS No. 123, and (b)
compensation cost for all share-based payments granted subsequent to
July 1, 2005, based on the grant-date fair value estimated in
accordance with the provisions of SFAS No. 123(R). Results for all
prior periods presented have been adjusted based on the amounts
previously recognized under SFAS No. 123 for purposes of pro forma
disclosures. See note 3(c). In both cases, the Company has
recognised the share-based payment expense associated with options
with graded-vesting features over the requisite service period for
each separately vesting tranche of the award as though the award
were, in substance, multiple awards.(t)
    
    REVENUE RECOGNITION:Revenue arising from gold sales is recognized
when the price is determinable, the product has been delivered in
accordance with the terms of the contract, including title being passed,
the significant risks and rewards of ownership have been transferred to
the customer and collection of the sales price is reasonably assured.
These criteria are met when the gold leaves the Companys smelt-houses.Revenue further excludes value-added tax but includes the net
profit and losses arising from hedging transactions from matched
gold sales contracts, which are designated as normal sales
contracts. Revenues from silver and other by-products sales are
credited to production costs as a by-product credit.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (u)
    
    INTEREST INCOME:Interest is recognized on a time proportion basis,
taking into account the principal outstanding and the effective rate
over the period to maturity, when it is determined that such income will
accrue to the Group.(v)
    
    DIVIDEND INCOMEis recognized when the shareholders right to
receive payment is established, recognized at the last date of
registration.(w)
    
    DIVIDENDS DECLARED:Dividends proposed and the related transactions
thereon are recognized when declared by the the Board of directors.
Dividends paid therefore relate to those declared in the current fiscal
year. Dividends are payable in South African Rands.Dividends declared which are payable to foreign shareholders are
subject to approval by the South African Reserve Bank in terms of
South African foreign exchange control regulations. In practice,
dividends are freely transferable to foreign shareholders.(x)
    
    (LOSS)/EARNINGS PER SHARE:(Loss)/earnings per share is based on net
(loss)/income divided by the weighted average number of ordinary shares
in issue during the year. Diluted (loss)/earnings per share is presented
when the inclusion of potential ordinary shares has a dilutive effect on
earnings per share.(y)
    
    RECENT ACCOUNTING PRONOUNCEMENTS:In September 2006, The Financial Accounting Standards Board (FASB)
issued SFAS No. 157 Fair Value Measurements (SFAS No. 157). This
Statement defines fair value, establishes a framework for measuring
fair value and expands disclosures about fair value measurements.
This Statement does not require any new fair value measurements, it
emphasizes that fair value is a market-based measurement, not an
entity-specific measurement. Therefore, a fair value measurement
should be determined based on the assumptions that market
participants would use in pricing the asset or liability. SFAS No.
157 expands disclosures about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to
initial recognition. This statement applies for derivatives and
other financial instruments measured at fair value under SFAS No.
133, Derivative Financial Instruments at initial recognition and
in all subsequent periods. The group will be required to adopt SFAS
No. 157 on July 1, 2008, and is currently evaluating the impact of
SFAS No. 157 on its financial position and results of operations.In June 2006, the FASB issued FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes, (FIN No. 48) an interpretation of
FASB Statement No. 109, Accounting for Income Taxes. FIN No. 48
prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. The Interpretation
requires that the Company recognize in the financial statements, the
impact of a tax position, if that position is more likely than not
of being sustained on audit, based on the technical merits of the
position. FIN No. 48 also provides guidance on derecognition,
classification, interest and penalties, accounting in interim
periods and disclosure. The provisions of FIN No. 48 are effective
for the years beginning after December 31, 2006 (July 1, 2007), with
the cumulative effect of the change in accounting principle recorded
as an adjustment to the opening balance of retained earnings. The
Company is currently evaluating the impact of adopting FIN No. 48 on
its financial statements.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
   3 ACCOUNTING CHANGES
  (a)
    
    Underground development costs
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (b)
    
    Stripping costs incurred during the production phase of a mineOn July 1, 2005, the Company adopted Emerging Issues Task Force
Issue No. 04-06, Accounting for Stripping Costs Incurred during
Production in the Mining Industry (EITF 04-06) . EITF 04-06
addresses the accounting for stripping costs incurred during the
production phase of a mine and refers to these costs as variable
production costs that should be included as a component of inventory
to be recognized in Production costs exclusive of depreciation and
amortisationin the same period as the revenue from the sale of
inventory. As a result, capitalization of post-production stripping
costs is appropriate only to the extent product inventory exists at
the end of a reporting period.Prior to July 1, 2005, at the Companys Kalgold operations, deferred stripping costs were
charged to
Production costs exclusive of depreciation and amortizationas gold
was produced and sold using the units of production method based on
estimated recoverable quantities of proven and probable gold or
copper reserves, using a stripping ratio calculated as the ratio of
total tons to be moved to total proven and probable ore reserves,
which resulted in the recognition of the costs of waste removal
activities over the life of the mine as gold was produced. The
application of the deferred stripping accounting method previously
generally resulted in the recognition of an asset (deferred
stripping costs).(c)
    
    Share-based paymentsOn July 1, 2005, the Company adopted the fair value recognition
provisions of SFAS No. 123(R), Share-Based Payments (SFAS No.
123(R)). Prior to that date, the Company applied SFAS No. 123,
Accounting for Stock-Based Compensation (SFAS No. 123) in
accounting for options granted after July 1, 2001 and Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25) together with its related interpretations in
accounting for options granted prior to July 1, 2001.(d)
    
    Effect of accounting changesIn connection with the changes relating to underground development
costs and stripping costs incurred during the production phase of a
mine, the Company early adopted SFAS No. 154, Accounting Changes
and Error Corrections (SFAS No. 154), which established new
standards on accounting for changes in accounting principles.
Voluntary changes in accounting principles were previously required
to be recognized by including in net (loss) income of the period of
the change the cumulative effect of changing to the new accounting
principle. SFAS No. 154 requires retrospective application to prior
periods financial statements of changes in accounting principle,
unless it is impracticable to do so. The Company has therefore
adjusted its financial statements for the years ended June 30, 2005
and 2004 as if the revised principles had always been used.In connection with the change relating to share-based payments, the
Company followed the modified retrospective approach permitted by
SFAS No. 123(R). Under this method, the Company has adjusted its
financial statements for the years ended June 30, 2005 and 2004
based on the amounts previously recognized under SFAS No. 123 for
purposes of pro forma disclosures, without adjustment. Prior to the
adoption of SFAS No. 123(R) however, the Company recognized actual
forfeitures when they occurred (as opposed to estimating forfeitures
at the grant date and subsequently adjusting their estimated
forfeitures to actuals). In accordance with SFAS No. 123(R)s
specific transition provisions, the Company recorded a cumulative
effect adjustment on July 1, 2005 related to outstanding awards that
are not expected to vest based on an estimate of forfeitures as of
that date.
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##### Table of Contents



Year ended June 30,2005
    
    
    2004$000
    
    
    $000Net income
    
    
    
    
    
    
    63,918
    
    
    
    31,585Effect on per share amounts:Increase in basic (loss)/earnings before cumulative
effect of changes in accounting principal  ($)
    
    
    
    
    
    
    17.63
    
    
    
    12.42Increase in basic (loss)/earnings per share  ($)
    
    
    
    
    
    
    17.63
    
    
    
    12.42Increase in fully diluted (loss)/earnings before cumulative effect of
change in accounting principal  ($)
    
    
    
    
    
    
    17.63
    
    
    
    12.36Increase in fully diluted (loss)/earnings per share  ($)
    
    
    
    
    
    
    17.63
    
    
    
    12.36
 June 30,2005
    
    
    2004$000
    
    
    $000Increase in retained earnings as at July 1, 2003
    
    
    
    
    
    
    42,525
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
  (i) Underground development costs
 Year ended June 30,2005
    
    
    2004$000
    
    
    $000Decrease in production costs as a result of capitalizing
underground development costs after the reef horizon has
been intersected (exclusive of depreciation and amortization)
    
    
    96,223
    
    
    
    81,241Increase in depreciation and amortization as a result of
amortization of capitalized underground development costs
after the reef horizon has been intersected
    
    
    (34,498
    )
    
    
    (35,786
    )Decrease in production costs (inclusive of depreciation and
amortization)
    
    
    61,725
    
    
    
    45,455Increase in equity income of joint venture
    
    
    
    
    
    
    1,585Increase in deferred income tax expense
    
    
    (11,882
    )
    
    
    (9,025
    )Effect on (loss)/income before cumulative effect of change in
accounting principle
    
    
    49,843
    
    
    
    38,015Effect on net (loss)/income
    
    
    49,843
    
    
    
    38,015Effect on per share amounts:Increase in basic (loss)/earnings before cumulative effect of
change in accounting principle  ($)
    
    
    13.75
    
    
    
    14.95Increase in basic (loss)/earnings per share  ($)
    
    
    13.75
    
    
    
    14.95Increase in fully diluted (loss)/earnings before cumulative effect
of change in accounting principle  ($)
    
    
    13.75
    
    
    
    14.87Increase in fully diluted (loss)/earnings per share  ($)
    
    
    13.75
    
    
    
    14.87
 June 30,2005
    
    
    2004$000
    
    
    $000Increase in inventories
    
    
    708
    
    
    
    Increase in property, plant and equipment, net
    
    
    180,944
    
    
    
    133,197Increase in deferred income taxes
    
   
    30,890
    
    
    
    21,275Increase in retained earnings as at July 1, 2003
    
    
    
    
    
    
    45,375
 (ii) Stripping costs incurred during the production phase of a mine
 Year ended June 30,2005
    
    
    2004$000
    
    
    $000Elimination of deferred stripping costs
    
    
    15,362
    
    
    
    (4,119
    )Decrease/(increase) in production costs
    
    
    15,362
    
    
    
    (4,119
    )Effect on (loss)/income before cumulative effect of change in
accounting principle
    
    
    15,362
    
    
    
    (4,119
    )Effect on net (loss)/income
    
    
    15,362
    
    
    
    (4,119
    )
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Year ended June 30,2005
    
    
    2004$000
    
    
    $000Effect on per share amounts:Increase/(decrease) in basic (loss)/earnings before cumulative
effect of change in accounting principle  ($)
    
    
    4.24
    
    
    
    (1.62
    )Increase/(decrease) in basic (loss)/earnings per share  ($)
    
    
    4.24
    
    
    
    (1.62
    )Increase/(decrease) in fully diluted (loss)/earnings before
cumulative effect of change in accounting principle  ($)
    
    
    4.24
    
    
    
    (1.62
    )Increase/(decrease) in fully diluted (loss)/earnings per share  ($)
    
    
    4.24
    
    
    
    (1.62
    )
 June 30,2005
    
    
    2004$000
    
    
    $000Decrease in other assets
    
    
    (1,511
    )
    
    
    (16,157
    )Decrease in retained earnings as at July 1, 2003
    
    
    
    
    
    
    (9,621
    )
 (iii) Share-based payments
 Year ended June 30,2005
    
    
    2004$000
    
    
    $000Increase in share-based compensation costs
    
    
    (1,287
    )
    
    
    (2,311
    )Effect on (loss)/income before cumulative effect of change in
accounting principle
    
    
    (1,287
    )
    
    
    (2,311
    )Effect on net (loss)/income
    
    
    (1,287
    )
    
    
    (2,311
    )Effect on per share amounts:Decrease in basic (loss)/earnings before cumulative effect of
change in accounting principle  ($)
    
    
    (0.36
    )
    
    
    (0.91
    )Decrease in basic (loss)/earnings per share  ($)
    
    
    (0.36
    )
    
    
    (0.91
    )Decrease in fully diluted (loss)/earnings before cumulative
effect of change in accounting principle  ($)
    
    
    (0.36
    )
    
    
    (0.91
    )Decrease in fully diluted (loss)/earnings per share  ($)
    
    
    (0.36
    )
    
    
    (0.91
    )
 June 30,2005
    
    
    2004$000
    
    
    $000Increase in retained earnings as at July 1, 2003
    
    
    
    
    
    
    6,771
 4 ACQUISITION AND DISPOSAL OF BUSINESSES
AND INVESTMENTS
 (a)  Disposal of Highland
Gold Limited (Highland Gold)
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (b) Disposal of High River Gold Mines Limited (High River)
  (c) Acquisition of Abelle Limited (Abelle)
    2004$000Total purchase price
    
    
    85,168Plus: Fair value of liabilities assumed by Harmony
Deferred tax
    
    
    24,034Less: Fair value of assets acquired by Harmony
Property, plant and equipment
    
    
    (80,115
    )Minority interest
    
    
    (29,087
    )Residual purchase price allocated to goodwill
    
    
    
 (d)
    
    Acquisition and disposal of African Rainbow Minerals Limited
(ARM) (formerly Anglovaal Mining Limited) (Avmin)
    F-21




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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
     (e)
    
    Acquisition of Avgold Limited (Avgold)
   F-22




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
   2004$000Shares issued
    
    
    977,515Direct costs of acquisition
    
    
    257Total purchase price
    
    
    977,772Plus: Fair value of liabilities assumed by HarmonyAccounts payable and accrued liabilities
    
    
    13,536Income and mining taxes
    
    
    7,003Deferred financial liability
    
    
    35,777Provision for environmental rehabilitation
    
    
    1,299Minority interest
    
    
    2,621Less: Fair value of assets acquired by HarmonyCash and cash equivalents at acquisition
    
    
    (183
    )Inventories
    
    
    (6,036
    )Accounts receivable
    
    
    (5,510
    )Investments
    
    
    (5,793
    )Property, plant and equipment
    
    
    (1,020,486
    )Residual purchase price allocated to goodwill
    
    
    
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (f)
    
    Acquisition of African Rainbow Minerals Gold Limited (ARMgold)
   2004$000Shares issued
    
    
    696,775Direct costs of acquisition
    
    
    195Total purchase price
    
    
    696,970Plus: Fair value of liabilities assumed by HarmonyAccounts payable and accrued liabilities
    
    
    57,837Income and mining taxes
    
    
    50,517Long-term loans
    
    
    66,092Deferred tax
    
    
    206,951Provision for environmental rehabilitation
    
    
    30,236Provision for post retirement benefits
    
    
    154Less: Fair value of assets acquired by HarmonyCash and cash equivalents at acquisition
    
    
    (100,689
    )Inventories
    
    
    (4,106
    )Accounts receivable
    
    
    (31,266
    )Investments
    
    
    (171,588
    )Property, plant and equipment
    
    
    (754,795
    )Residual purchase price allocated to goodwill
    
    
    46,313
 (g)
    
    Disposal of Harmony Gold (Canada) Incorporated (Bissett)
  F-24




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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (h)
    
    Disposal of interest in Bendigo Mining NL (Bendigo)
  (i)
    
    Acquisition and disposal of Gold Fields Limited (Gold Fields)
    (j)
    
    Acquisition of Orpheo by Harmony (Proprietary) Limited (Orpheo)
  (k)
    
    Acquisition of Western Areas Limited (Western Areas)
  F-25




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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (l)
    
    Disposal of Buffalo Creek Mines (Proprietary) Limited (Buffalo Creek)
  (m)
    
    Acquisition of Village Main Reef Gold Mining Company (1934) Limited (Village)
  (n)
    
    Pro-forma information relating to Avgold, ARMgold and Abelle
   2004As adjusted(note 3)$000UnauditedRevenues
    
    
    1,479,265(Loss)/income before cumulative effect of change in accounting principles
    
    
    (14,866
    )Net (loss)/income
    
    
    (14,866
    )Basic (loss)/earnings per share before cumulative effect of change in
accounting principles$
    
    
    (0.06
    )Fully diluted (loss)/earnings per share before cumulative effect of change in
accounting principles$
    
    
    (0.06
    )Basic (loss)/earnings per share$
    
    
    (0.06
    )Fully diluted (loss)/earnings per share$
    
    
    (0.06
    )Average shares used in the computation of basic (loss)/earnings
    
    
    254,240,500Average shares used in the computation of fully diluted (loss)/earnings
    
    
    254,240,500
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 5 CONSOLIDATION OF VARIABLE INTEREST ENTITIES
 (a) Africa Vanguard Resources (Proprietary) Limited transaction
    (b) ARM Trust transaction
  F-27




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 6 PRODUCTION COSTS EXCLUSIVE OF DEPRECIATION AND AMORTISATION
 2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000Production costs include mine production, transport and refinery
costs, general and administrative costs, movement in inventories and
ore stockpiles as well as transfers to and from deferred stripping.
Ongoing employee termination cost is included, however employee
termination costs associated with major restructuring and shaft
closures are excluded. These costs, analyzed by nature, consist of the
following:Labor costs, including contractors
    
    
    673,322
    
    
    
    707,798
    
    
    
    626,818Stores and materials
    
    
    213,744
    
    
    
    234,187
    
    
    
    237,443Water and electricity
    
    
    116,532
    
    
    
    128,993
    
    
    
    115,443Hospital costs
    
    
    12,788
    
    
    
    21,968
    
    
    
    15,785Changes in inventory
    
    
    (18,775
    )
    
    
    (4,393
    )
    
    
    16,433Share-based compensation
    
    
    17,055
    
    
    
    15,618
    
    
    
    9,446Other
    
    
    42,165
    
    
    
    32,786
    
    
    
    79,3201,056,831
    
    
    
    1,136,956
    
    
    
    1,100,688
 7 IMPAIRMENT OF ASSETS
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000South African operations:Free State operations
    
    
    
    
    
    
    42,018
    
    
    
    Lydenburg Exploration
    
    
    15,951
    
    
    
    
    
    
    
    Evander operations
    
    
    
    
    
    
    15,324
    
    
    
    Kalgold operations
    
    
    
    
    
    
    12,441
    
    
    
    Freegold operations
    
    
    
    
    
    
    52,557
    
    
    
    ARMgold operations
    
    
    
    
    
    
    479
    
    
    
    Australian operations
    
    
    
    
    
    
    120,305
    
    
    
    3,14515,951
    
    
    
    243,124
    
    
    
    3,145
   F-28




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##### Table of Contents



Notes to the Consolidated Financial Statements
For the years ended June 30
   8 EMPLOYMENT TERMINATION AND RESTRUCTURING COSTS
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Free State
    
    
    (8,695
    )
    
    
    20,909
    
    
    
    9,083Evander
    
    
    917
    
    
    
    4,005
    
    
    
    3,841Kalgold
    
    
    4
    
    
    
    143
    
    
    
    Randfontein and Elandskraal
    
    
    751
    
    
    
    16,721
    
    
    
    8,245Freegold
    
    
    (4,867
    )
    
    
    28,076
    
    
    
    6,756ARMgold (Welkom and Orkney)
    
    
    (914
    )
    
    
    1,872
    
    
    
    3,743Avgold
    
    
    369
    
    
    
    1,489
    
    
    
    Musuku (Refinery)
    
    
    146
    
    
    
    
    
    
    
    (12,289
    )
    
    
    73,215
    
    
    
    31,668
     F-29




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2006
    
    
    2005$000
    
    
    $000Balance at July 1, 2005 and 2004
    
    
    32,910
    
    
    
    26,368Employment termination costs paid
    
    
    (22,001
    )
    
    
    (57,244
    )(Benefit from)/provision for employment termination costs
    
    
    (12,480
    )
    
    
    66,174Foreign currency translation adjustment
    
    
    1,571
    
    
    
    (2,388
    )Balance at June 30, 2006 and 2005
    
    
    
    
    
    
    32,910
 9 PROFIT/(LOSS) ON SALE OF LISTED INVESTMENTS
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Profit on sale of investment in Atlas Gold Limited
    
    
    79
    
    
    
    
    
    
    
    Loss on sale of investment in San Gold Corporation
    
    
    (121
    )
    
    
    
    
    
    
    Profit/(loss) on sale of investment in Gold Fields Limited
    
    
    45,387
    
    
    
    (60,168
    )
    
    
    Profit on sale of investment in Gindalbie Gold NL
    
    
    
    
    
    
    9
    
    
    
    Loss on sale of investment in ARM Limited
    
    
    
    
    
    
    (38,242
    )
    
    
    Profit on sale of investment in Bendigo NL
    
    
    
    
    
    
    4,931
    
    
    
    Profit on sale of investment in Legend Mining Limited
    
    
    
    
    
    
    
    
    
    
    1,755Profit on sale of investment in Midas Resources Limited
    
    
    
    
    
    
    
    
    
    
    12Profit on sale of investment in High River Gold Mines Limited
    
    
    
    
    
    
    
    
    
    
    3,14345,345
    
    
    
    (93,470
    )
    
    
    4,910
         F-30




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
  10   IMPAIRMENT OF LISTED INVESTMENT
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Impairment of shares in listed companies
    
    
    
    
    
    
    (63,234
    )
    
    
    
  11  PROFIT ON SALE AND LOSS ON DILUTION OF INVESTMENT IN ASSOCIATES  NET
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Profit on sale of investment in Highland Gold Limited
    
    
    
    
    
    
    
    
    
    
    77,596Loss on dilution of investment in ARM
    
    
    
    
    
    
    
    
    
    
    (12,499
    )
    
    
    
    
    
    
    
    65,097
   12  PROFIT/(LOSS) ON SALE OF SUBSIDIARIES
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Profit on sale of investment in Buffalo Creek
    
    
    3,035
    
    
    
    
    
    
    
    Profit on sale of investment in Ubuntu
    
    
    
    
    
    
    1,125
    
    
    
    Loss on sale of investment in Future
    
    
    
    
    
    
    (1,367
    )
    
    
    Profit on sale of investment in NACS
    
    
    
    
    
    
    128
    
    
    
    Profit on sale of investment in Bissett
    
    
    
    
    
    
    
    
    
    
    1153,035
    
    
    
    (114
    )
    
    
    115
  F-31




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
     13  OTHER (EXPENSES)/INCOMENET
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Profit on sale of property, plant and equipment
    
    
    10,148
    
    
    
    12,542
    
    
    
    22,303Foreign exchange (losses)/gains
    
    
    (3,959
    )
    
    
    452
    
    
    
    (4,279
    )Non-mining bad debts
    
    
    854
    
    
    
    (6,079
    )
    
    
    Other expenditure  net
    
    
    (10,845
    )
    
    
    (10,576
    )
    
    
    (3,869
    )(3,802
    )
    
    
    (3,661
    )
    
    
    14,155
 14  TAXATION
  2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000Current income and mining taxes
    
    
    (642
    )
    
    
    (12,255
    )
    
    
    (5,820
    )Deferred income and mining taxes
    
    
    2,986
    
    
    
    101,066
    
    
    
    38,679Total income and mining taxation benefit
    
    
    2,344
    
    
    
    88,811
    
    
    
    32,859
  F-32




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000South Africa
    
    
    (69,024
    )
    
    
    (538,791
    )
    
    
    2,453Foreign
    
    
    (91,104
    )
    
    
    (102,569
    )
    
    
    (36,409
    )Total
    
    
    (160,128
    )
    
    
    (641,360
    )
    
    
    (33,956
    )
  2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000Income and mining tax benefit on loss before tax, minority
interests and cumulative effect of changes in accounting
principles at the maximum statutory mining tax rate
    
    
    71,770
    
    
    
    287,641
    
    
    
    12,074Valuation allowance raised against deferred tax assets
    
    
    4,004
    
    
    
    
    
    
    
    Non-taxable income / additional deductions
    
    
    (39,006
    )
    
    
    (25,273
    )
    
    
    30,677Difference between estimated effective mining tax rate and
maximum mining statutory rate on timing differences
    
    
    6,048
    
    
    
    18,602
    
    
    
    (2,467
    )Difference between South African mining formula tax rate and
maximum mining statutory rate on mining income
    
    
    1,534
    
    
    
    (108,338
    )
    
    
    9,861Difference between South African formula tax rate and
maximum mining statutory rate on non-mining income
    
    
    (11,950
    )
    
    
    (12,552
    )
    
    
    262Change in estimated effective mining tax rate on deferred tax
    
    
    (30,056
    )
    
    
    (71,269
    )
    
    
    (17,547
    )Income and mining tax benefit
    
    
    2,344
    
    
    
    88,811
    
    
    
    32,859Effective income and mining tax rate
    
    
    2
    %
    
    
    14
    %
    
    
    75
    %
  2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000Deferred income and mining tax assets:Derivative financial liability
    
    
    10,101
    
    
    
    11,346Unredeemed capital expenditure
    
    
    95,088
    
    
    
    90,482Provisions, including rehabilitation accruals
    
    
    25,754
    
    
    
    19,515Tax losses
    
    
    65,262
    
    
    
    52,707Other
    
    
    
    
    
    
    173196,205
    
    
    
    174,223Valuation allowance for deferred tax assets
    
    
    (4,004
    )
    
    
    Total deferred income and mining tax assets
    
    
    192,200
    
    
    
    174,223
 F-33




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000Deferred income and mining tax liabilities:Mining assets
    
    
    (560,559
    )
    
    
    (574,429
    )Product inventory not taxed
    
    
    (8,939
    )
    
    
    (2,463
    )Other
    
    
    (1,593
    )
    
    
    Total deferred income and mining tax liabilities
    
    
    (571,091
    )
    
    
    (576,892
    )Net deferred income and mining tax liabilities
    
    
    (378,891
    )
    
    
    (402,670
    )Net deferred income and mining tax liabilities comprise of:Current deferred income and mining tax assets
    
    
    142,109
    
    
    
    138,519Non-current deferred income and mining tax liabilities
    
    
    (521,000
    )
    
    
    (541,189
    )Net deferred income and mining tax liabilities
    
    
    (378,891
    )
    
    
    (402,670
    )
   15 (LOSS)/EARNINGS PER SHARE
 For the year ended June 30, 2006Loss
    
    
    Shares
    
    
    Per-share(Numerator)
    
    
    (Denominator)
    
    
    amount$000
    
    
    
    
    
    
    ($)Basic loss per shareShares outstanding July 1, 2005
    
    
    
    
    
    
    394,023,694
    
    
    
    Weighted average number of ordinary shares issued during
the year
    
    
    
    
    
    
    385,818
    
    
    
    Loss available to common shareholders
    
    
    (155,725
    )
    
    
    394,409,512
    
    
    
    (0.39
    )Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    
    
    
    
    Diluted loss per share
    
    
    (155,725
    )
    
    
    394,409,512
    
    
    
    (0.39
    )
  F-34




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 For the year ended June 30, 2005Loss
    
    
    Shares
    
    
    Per-share(Numerator)
    
    
    (Denominator)
    
    
    amountAs adjusted
    
    
    
    
    
    
    As adjusted(note 3)
    
    
    
    
    
    
    (note 3)$000
    
    
    
    
    
    
    ($)Basic loss per shareShares outstanding July 1, 2004
    
    
    
    
    
    
    321,424,077
    
    
    
    Weighted average number of ordinary shares issued during
the year
    
    
    
    
    
    
    41,074,935
    
    
    
    Loss available to common shareholders
    
    
    (552,549
    )
    
    
    362,499,012
    
    
    
    (1.52
    )Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    
    
    
    
    Diluted loss per share
    
    
    (552,549
    )
    
    
    362,499,012
    
    
    
    (1.52
    )
  For the year ended June 30, 2004Earnings
    
    
    Shares
    
    
    Per-share(Numerator)
    
    
    (Denominator)
    
    
    amountAs adjusted
    
    
    
    
    
    
    As adjusted(note 3)
    
    
    
    
    
    
    (note 3)$000
    
    
    
    
    
    
    ($)Basic earnings per shareShares outstanding July 1, 2003
    
    
    
    
    
    
    185,536,615
    
    
    
    Weighted average number of ordinary shares issued during
the year
    
    
    
    
    
    
    68,703,885
    
    
    
    Income available to common shareholders
    
    
    184
    
    
    
    254,240,500
    
    
    
    0.00Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    1,330,334
    
    
    
    Diluted earnings per share
    
    
    184
    
    
    
    255,570,834
    
    
    
    0.00
 16 RECEIVABLES
 2006
    
    
    2005$000
    
    
    $000CurrentTrade receivables (gold)
    
    
    40,738
    
    
    
    43,133Other mining related receivables  net of allowance for doubtful accounts of $1.8
million and $1.1 million in 2006 and 2005, respectively
    
    
    12,422
    
    
    
    9,779Value Added Tax
    
    
    15,098
    
    
    
    15,009Insurance claims and prepayments
    
    
    8,339
    
    
    
    5,013Employee receivables
    
    
    5,621
    
    
    
    5,240Deferred consideration for sale of Buffalo Creek
    
    
    6,531
    
    
    
    Interest and other
    
    
    11,426
    
    
    
    16,556100,175
    
    
    
    94,730Non-currentDeferred consideration for sale of Buffalo Creek
    
    
    4,047
    
    
    
    Total receivables
    
    
    104,222
    
    
    
    94,730
 F-35




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 17 INVENTORIES
 2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000Gold in-process
    
    
    63,465
    
    
    
    50,645Consumable stores
    
    
    28,533
    
    
    
    36,18491,998
    
    
    
    86,829
  18 PROPERTY, PLANT AND EQUIPMENT
 2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000Mining properties, mine development costs and mine plant facilities  cost
    
    
    4,832,328
    
    
    
    4,916,547Other non-mining assets  cost
    
    
    57,518
    
    
    
    53,321Accumulated depreciation and amortization
    
    
    (1,583,291
    )
    
    
    (1,517,905
    )3,306,555
    
    
    
    3,451,963
   19 OTHER ASSETS
 2006
    
    
    2005As adjusted(note 3)$000
    
    
    $000Mineral subscriptions, participation rights and slimes dams
    
    
    
    
    
    
    7,084Bond issue costs, net of amortization
    
    
    3,605
    
    
    
    5,7333,605
    
    
    
    12,817
  20 GOODWILL
  F-36




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 21 RESTRICTED CASH
 2006
    
    
    2005$000
    
    
    $000Bissett proceeds held in trust
    
    
    182
    
    
    
    143Australian dissentient shareholders funds
    
    
    1,064
    
    
    
    1,334Security deposits
    
    
    34,353
    
    
    
    6,32135,599
    
    
    
    7,798
    22 LISTED AND OTHER INVESTMENTS
 2006
    
    
    2005$000
    
    
    $000Listed investmentsInvestments in listed shares (a)
    
    
    196,346
    
    
    
    453,712Other investmentsUnlisted investments and loans (b)
    
    
    11,383
    
    
    
    13,109Amounts contributed to environmental trust funds (c)
    
    
    179,667
    
    
    
    175,695191,050
    
    
    
    188,804Total non-current investments
    
    
    387,396
    
    
    
    642,516
 (a)
    
    On January 25, 2005 the Company received 5 million ordinary shares
in Peninsula Minerals Limited, issued at A$0.02 per share, as partial
consideration for the sale of tenements. The market value of the
investment was $0.07 million (A$0.02 per share) on June 30, 2006 (2005:
$0.04 million (A$0.01 per share)).During January 2006 the Company disposed of the 500 000 ordinary
held in Atlas Gold Limited (Atlas) for $0.2 million (A$0.2
million). See note 9. The Company received the shares in Atlas,
issued at A$0.20 per share, on January 13, 2005, as partial
consideration for the sale of tenements. The market value of the
investment was $0.07 million (A$0.20 per share) on 30 June 2005.On November 30, 2004 the Company acquired 56,606,482 ordinary
shares in Gold Fields, representing 11.5% of their issued share
capital, at a total cost of $767.2 million by the issue of 1.275
Harmony shares for every Gold Fields share. Gold Fields is a
mineral resources company, primarily gold, which is listed on the
JSE and has a secondary listing on the New York Stock Exchange. The
investment was classified as an available-for-sale investment since
acquisition. On June 3, 2005 the Company disposed of 30 million
shares in Gold Fields, representing 6.5% of their issued share
capital, for $297.6 million. These shares were acquired at a total
cost of $415.2 million, resulting in a loss of $60.2 million. The
Company disposed of its remaining investment held in Gold Fields
Limited (Gold Fields) for $361.8 million, through market disposals
which commenced on November 10, 2005 and an open market offering on
November 15 and 16, 2005. This resulted in a realized gain of $45.4
million. See note 9.The market value of the remaining investment was $304.0
million (R76.20 per share) on June 30, 2005, resulting in a
decrease of $17.5 million since acquisition, which was reflected
as a component of shareholders equity. Dividends to the value of
$1.7 million were received from this investment during the year
ended June 30, 2006 (2005: $2.7 million).
 F-37




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
    note
9).
    F-38




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2006
    
    
    2005$000
    
    
    $000ARM
    
    
    85,767
    
    
    
    23,111San Gold
    
    
    
    
    
    
    153Gold City
    
    
    
    
    
    
    (649
    )Gold Fields
    
    
    
    
    
    
    (20,748
    )GBS Gold
    
    
    (735
    )
    
    
    Alloy Resources
    
    
    (57
    )
    
    
    84,975
    
    
    
    1,867
 (b)
    
    Unlisted investments comprise of various industry related
investments and loans, which have been recorded at cost. The
directors of the Company perform independent valuations of the
investments on an annual basis to ensure that no permanent
diminution in the value of the investments has occurred. No
dividends were received from these investments in the 2006, 2005
and 2004 fiscal years.(c)
    
    The environmental trust funds are irrevocable trusts under the Companys control. The cash
in the trusts are invested primarily in interest bearing short-term and other investments and
approximate their fair value.
 23 INVESTMENT IN ASSOCIATES
  Carrying amountsInvestment
    
    Description of business
    
    
     Ownership %
    
    
    2006
    
    
    20052006
    
    
    2005
    
    
    $000
    
    
    $000Western Areas Limited
    
    Gold mining
    
    
    29.2
    %
    
    
    
    
    
    
    266,267
    
    
    
    Village Main Reef Gold
Mining Company(1934)
Limited
    
    Dormant
    
    
    37.8
    %
    
    
    
    
    
    
    64
    
    
    
    266,331
    
    
    
    
 note 4(k).
  100%
    
    
    29.2%$000
    
    
    $000Revenue
    
    
    7,933
    
    
    
    2,316Production costs
    
    
    (25,949
    )
    
    
    (7,577
    )(18,016
    )
    
    
    (5,261
    )Net loss
    
    
    (56,317
    )
    
    
    (16,444
    )
  F-39




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 100%
    
    
    29.2%$000
    
    
    $000Non-current assets
    
    
    843,364
    
    
    
    246,262Current assets
    
    
    34,947
    
    
    
    10,205Total assets
    
    
    878,311
    
    
    
    256,467Equity
    
    
    123,838
    
    
    
    36,161Non-current liabilities
    
    
    647,927
    
    
    
    189,195Current liabilities
    
    
    106,546
    
    
    
    31,111Total equity and liabilities
    
    
    878,311
    
    
    
    256,467
 The difference between the cost of the Companys investment and the
underlying net assets has been allocated to undeveloped properties
($187.7 million) and goodwill ($66.9 million).On June 21, 2006 Harmony acquired 37.8% of the issued share capital of
Village at a total cost of $0.06 million. The equity stake was
purchased from ARM at a price of 20 cents per share. Village is listed
on the JSE Limited in the gold sector and has been dormant for some
time without any operating mines. The acquisition forms part of
Harmonys strategic positioning. See note 4(m).The following table summarizes the change in value of the Groups investments in associates:
 2006
    
    
    2005$000
    
    
    $000Opening carrying amount
    
    
    
    
    
    
    19,908Shares at cost
    
    
    321,541
    
    
    
    Net share of results of associates
    
    
    (16,444
    )
    
    
    Associate becoming a listed investment on dilution
    
    
    
    
    
    
    (20,303
    )Foreign currency translation differences
    
    
    (38,766
    )
    
    
    395Closing carrying amount
    
    
    266,331
    
    
    
    
 The investment in Bendigo was made during fiscal 2002. The Company did
not receive any dividends from Bendigo during the 2005 and 2004 fiscal
years. On July 7, 2004 Bendigo announced that it had raised A$100
million in a capital raising exercise, through the issuing of new
Bendigo shares at A$0.72 per share. As a result, Harmonys shareholding
in Bendigo has been diluted from 31.6% to 12.7%. From this date, Bendigo
was classified as an available-for-sale investment. See note 4(h).24
    
    INVESTMENT IN JOINT VENTURES(a)
    
    Interest in Orpheo by Harmony (Pty) LtdThe Company acquired 50% of the Orpheo by Harmony company on July 2,
2005. Orpheo by Harmony operates as a gold jewelry manufacturer and
retailer, with operations in Johannesburg and Cape Town. The 50% stake
in Orpheo was capitalized by means of a R5 million (US$ 1 million) cash
capital contributions from Harmony. (See note 4(j) for more details
regarding the joint venture formation and the acquisition of the Orpheo
assets).(b)
    
    Interest in Healthshare Solutions (Pty) LtdThe Company acquired the 45% of Healthshare on July 1, 2004, for a total
cash consideration of R45 ($7). Healthshare was capitalized by means of
capital contributions and loans from the joint venture partners. The
Company, together with the joint venture partner, Network Healthcare
Holdings Limited, control the entire shareholding of Healthshare, and
have treated it as a subsidiary since the acquisition date.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 25
    
    ACCOUNTS PAYABLE AND OTHER LIABILITIES
 2006
    
    
    2005$000
    
    
    $000Trade payables
    
    
    72,947
    
    
    
    49,664Short term borrowings
    
    
    1,107
    
    
    
    2,726Employment termination costs
    
    
    
    
    
    
    32,910Other liabilities
    
    
    4,337
    
    
    
    33,92478,391
    
    
    
    119,223
 26
    
    LONG TERM LOANS
 2006
    
    
    2005$000
    
    
    $000UncollateralizedSenior uncollaterized fixed rate bonds (a)
    
    
    
    
    
    
    179,991Fair value adjustment of cash flow hedge
    
    
    
    
    
    
    (3,577
    )Less : amortized discount
    
    
    
    
    
    
    (245
    )
    
    
    
    176,169Less : short term portion
    
    
    
    
    
    
    (176,169
    )
    
    
    
    Convertible uncollaterized fixed rate bonds (b)
    
    
    237,264
    
    
    
    254,987Africa Vanguard Resources (Proprietary) Limited (c)
    
    
    4,467
    
    
    
    4,800Total uncollateralized long term loans
    
    
    241,731
    
    
    
    259,787CollateralizedNedbank Limited (d)
    
    
    21,544
    
    
    
    20,970Gold Fields Limited (e)
    
    
    705
    
    
    
    822Less : short term portion
    
    
    (705
    )
    
    
    (308
    )
    
    
    
    514BOE Bank Limited (f)
    
    
    
    
    
    
    23,864Less : short term portion
    
    
    
    
    
    
    (23,864
    )
    
    
    
    Nedbank Limited (g)
    
    
    56,065
    
    
    
    54,542Nedbank Limited (h)
    
    
    75,173
    
    
    
    73,494Auriel Alloys (i)
    
    
    167
    
    
    
    248Less : short term portion
    
    
    (72
    )
    
    
    (69
    )95
    
    
    
    179Rand Merchant Bank Limited (j)
    
    
    139,567
    
    
    
    Less: short term portion
    
    
    (139,567
    )
    
    
    
    
    
    
    Total collateralized long term loans
    
    
    152,877
    
    
    
    149,699Total long term loans
    
    
    394,608
    
    
    
    409,486
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 
 (a)
    
    On June 16, 2001, Harmony launched and priced an issue of South
African Rand denominated senior uncollateralized fixed rate bonds in
an aggregate principal amount of R1, 200 million ($115.5 million), with
semi-annual interest payable at a rate of 13% per annum. The bonds
were listed on the Bond Exchange of South Africa and issued to settle
existing debt and fund the purchase of Elandskraal and New Hampton. As
long as the bonds were outstanding, Harmony was not permitted encumber
its present or future assets or revenues to secure indebtedness for
borrowed money, without collateralizing the outstanding bonds equally
and ratably with such indebtedness, except for certain specified
permitted encumbrances. Issuance costs of $1.9 million were incurred
and capitalized and are being amortized over the life of the bonds.
Included in the amortization charge in the income statement is $0.8
million (2005: $0.6 million) (2004: $0.7 million) for amortization of
the bond issue costs. On July 6, 2005 a total of $45.0 million of the
bonds notional value was repurchased at a cost of some $47.1
million. This represented 23.5% of the total issue due for redemption.
The remaining balance of the bond was settled on June 14, 2006
(original redemption date) at a total cost of $134.5 million.(b)
    
    On May 21, 2004, Harmony issued an international unsecured fixed
rate convertible bond in an aggregate principal amount of R1,700
million ($252 million). Interest at a rate of 4.875% per annum is
payable semi-annually in arrears on May 21 and November 21 of each
year, commencing November 21, 2004. The bonds mature 5 years from the
issue date at their nominal value of R1 700 million unless converted
into the Companys ordinary shares. The bonds are convertible at the
option of the bondholders at any time on or after July 1, 2004 and up
to and including May 15, 2009, unless previously redeemed, converted
or purchased and cancelled, into fully paid ordinary shares, at
nominal value Rand 0.50 per share. The number of ordinary shares to be
issued at such a conversion shall be determined by dividing the
principal amount of each bond by the conversion price in effect on the
relevant conversion date. The bonds are listed on the London Stock
Exchange for Bonds. The terms and conditions of the bonds prohibit
Harmony and its material subsidiaries from creating any encumbrance or
security interest over any of its assets to secure any relevant debt
(or any guarantee or indemnity in respect of any relevant debt)
without according the same security to the bondholders or without
obtaining the prior approval of the bondholders. Included in the
amortisation charge as per the income statement is $1.4 million (2005:
$1.4 million) (2004: $0.1 million) for amortization of the bond issue
costs.(c)
    
    During the 2005 fiscal year Africa Vanguard borrowed an
additional R18 million ($2.8 million) (2004: R14 million ($2.0
million)) from its holding company Africa Vanguard Resources to
service working capital commitments. The loan is uncollateralized and
interest free, with no fixed terms of repayment. See note 5.(d)
    
    On July 30, 2003, Africa Vanguard Resources (Doornkop)
(Proprietary) Limited (AVR) entered into a term loan facility of R116
million ($16 million) with Nedbank Limited for the purpose of
partially funding AVRs purchase of an undivided 26% share of the
Mining titles, to be contributed to the Doornkop joint venture with
Randfontein. See note 5. Interest at a fixed rate equal to JIBAR plus
the applicable margin plus stamp duties and holding costs shall be
repayable to the extent that the borrower received profit
participation interest for the interest periods. Unpaid interest shall
be accrued and repaid with the loan amount. The loan amount and any
interest accrued is repayable on July 30, 2008. Interest capitalized
during the year ended June 30, 2006 amounted to $2.3 million (2005:
$1.9 million and 2004: $1.7 million).(e)
    
    On July 1, 2002 Freegold entered into an agreement with St Helena
Gold Mines Limited, a fully owned subsiadiary of Gold Fields Limited,
to purchase its St Helena assets for R129 million ($12.8 million).
R120 million ($11.9 million) was payable on October 29, 2002, being
the effective date after the fulfilment of all the conditions
precedent. The balance of R9 million ($0.9 million) is payable by way
of a 1 % royalty on turnover, monthly in arrears, for a period of 48
months, commencing on the 10th of the month following the effective
date. F-42




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 
 (f)
    
    On April 5, 2002, ARMgold entered into a term loan facility of
R500 million ($45.3 million) with BOE Bank Limited for the purpose of
partially funding ARMgolds acquisition of shares in Freegold and
loans made by ARMgold to Freegold in connection with the acquisition
of mining assets from AngloGold Limited. The facility was
collateralized by a pledge of the following:(i) ARMgolds shares in
Freegold;(ii) The proceeds to ARMgold from the exercise of call
options of Harmony as set out in the Freegold Joint Venture Agreement;(iii)The proceeds to ARMgold of put options purchased by ARMgold to
create downside protection on the gold price,(iv) All amounts owing
to ARMgold by Freegold; and(v) Monies held to the account of the
Distribution Account, being the account to which all distributions by
Freegold to ARMgold in the form of the distribution on shares or
repayments of interest or capital in respect of unsecured shareholder
loans, must be credited.The loan was repayable over a 4 year period in bi-annual
installments of R90 million ($14.4 million), the first was on
December 31, 2002 and the final installment was settled on June 30,
2006. The loan bore interest, compounded monthly, at a fixed
interest rate of 15,49%.(g)
    
    On April 15, 2005 the ARM Trust entered into a term loan facility
of R356 million ($56.7 million) with Nedbank Limited for the purpose
of funding the ARM Trusts partial acquisition of the shares, the
Company held in ARM (See note 4(d)). The loan bears interest,
compounded monthly, at a fixed rate of 10.02%. Interest accrued
during the year ended June 30, 2006 amounted to $6.0 million (2005:
$1.3 million). The loan is repayable on the 5th anniversary of the
advance date.(h)
    
    On April 15, 2005 the ARM Trust entered into a second term loan
facility of R474 million ($75.4 million) with Nedbank Limited for the
purpose of funding the balance of the ARM Trusts acquisition of the
shares, the Company held in ARM (See note
4(d)). The loan bears
interest, compounded monthly, at a fixed rate of 9.52%. Interest
accrued during the year ended June 30, 2006 amounted to $7.6 million.
Interest and additional charges accrued during the year ended June 30,
2005 amounted to $1.4 million and $1.1 million, respectively. The loan
is repayable on the 5th anniversary of the advance date.(i)
    
    During December 2003 Musuku Beneficiation Systems (Proprietary)
Limited, a wholly owned subsidiary of the Company, entered into a long
term loan facility of R2 million ($0.3 million) with Auriel Alloys for
the purpose of financing the acquisition of Dental Alloy equipment.
The loan bears interest at 11% and is payable by way of 60 instalments
of R50,000 each.(j)
    
    On March 9, 2006, Harmony entered into a term loan facility of
R1,000 million ($159.7 million) with Rand Merchant Bank, for the
purpose of partially funding the acquisition of the 29.2% stake in
Western Areas. Interest is charged at a fixed rate equal to a 3 month
JIBAR plus 1.5%. The loan amount is repayable on March 13, 2007 and
interest accrued is repayable every quarter commencing on June 13,
2006. The loan facility is collateralized by the Western Areas
shares. The maturity of current and non-current borrowings is as follows:
 2006
    
    
    2005$000
    
    
    $000Current
    
    
    140,344
    
    
    
    200,451Between 1 to 2 years
    
    
    95
    
    
    
    693Between 2 to 5 years
    
    
    390,046
    
    
    
    403,993Over 5 years
    
    
    14,467
    
    
    
    4,800Total borrowings
    
    
    534,952
    
    
    
    609,937
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 27
    
    DERIVATIVE FINANCIAL LIABILITY
 2006
    
    
    2005$000
    
    
    $000Mark-to-market of financial instruments at year end
    
    
    88,680
    
    
    
    57,863ARM Empowerment Trust
    
    
    61,358
    
    
    
    18,857150,038
    
    
    
    76,720
 During the year ended June 30, 2006 Harmony closed out 30,000oz call
options sold and 108,000oz forward sales agreements of the New Hampton
Gold and Hill 50 hedge books at a cost of R213 million (US$34 million).
During the previous year, Harmony closed out the remaining gold lease
rate swaps which were inherited through the acquisition of New Hampton
Gold and Hill 50. These close outs are in accordance with Harmonys
strategy of being unhedged.All forward-pricing commitments and forward exchange contracts do not
meet the criteria to qualify for hedge accounting and the mark-to-market
movements are reflected in the income statement.The liability of $61.4 million (2005: $18.9 million) represents the
fair value of the net increase in the ARM Empowerment Trust. See note
4(d). Changes in the fair value of this derivative financial liability
have been accounted for in the consolidated income statements.Refer to note 34 for more detail on the outstanding financial instruments.28
    
    PROVISION FOR ENVIRONMENTAL REHABILITATIONThe Companys mining and exploration activities are subject to
extensive environmental laws and regulations. These laws and
regulations are continually changing and are generally becoming more
restrictive. The Company has made, and expects to make in the future,
expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. Estimated future
reclamation costs are based principally on legal and regulatory
requirements. The following is a reconciliation of the total liability
for environmental rehabilitation:
 2006
    
    
    2005$000
    
    
    $000Balance as at July 1, 2005 and 2004
    
    
    120,450
    
    
    
    125,917Revisions in estimates
    
    
    (10,184
    )
    
    
    (3,891
    )Accretion expenses
    
    
    6,917
    
    
    
    4,053Foreign currency translation adjustment
    
    
    (7,019
    )
    
    
    (5,629
    )Balance as at June 30, 2006 and 2005
    
    
    110,164
    
    
    
    120,450
 The Company intends to finance the ultimate rehabilitation costs of the
South African operations from the money invested with the environmental
trust funds, ongoing contributions, as well as the proceeds on sale of
assets and gold from plant clean-up at the time of mine closure. The
Company will finance the ultimate rehabilitation costs of the non-South
African operations from funds to be set aside for that purpose.
 F-44




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 29
    
    PROVISION FOR SOCIAL PLAN
 2006
    
    
    2005$000
    
    
    $000Opening balance
    
    
    2,109
    
    
    
    1,958Charge to income statement
    
    
    334
    
    
    
    299Foreign currency translation adjustment
    
    
    (184
    )
    
    
    (148
    )Closing balance
    
    
    2,259
    
    
    
    2,109
 The company has undertaken to donate R50 million ($8.0 million) over a
period of 10 years to The Harmony Gold Mining Company Social Plan Trust
in terms of an agreement signed on November 3, 2003. R18.5 million ($2.7
million) was donated during the 2004 year and the balance will be
donated in instalments of R3.5 million ($0.6 million) annually over 9
years. The purpose of the trust is to fund the social plan to reduce the
negative effects of retructuring on the companys workforce, to put
measures in place to ensure that the technical and life skills of the
companys workforce are developed and to develop the companys workforce
in such a manner to avoid or minimize job losses and a decline in
employment through turnaround or redeployment strategies.30
    
    PROVISION FOR POST-RETIREMENT BENEFITSMost of the supervisory and managerial workers in South Africa
participate in the Minemed defined contribution medical scheme, as well
as other medical schemes. The Company contributes to these schemes on
behalf of current employees and retired employees who retired prior to
December 31, 1996 (the Minemed scheme). The Companys contributions to
these schemes on behalf of retired and current employees amounted to
$13.9 million, $10.0 million and $6.6 million for 2006, 2005 and 2004
respectively.With the exception of some Freegold employees, included from date of
acquisition, no post-retirement benefits are available to other workers.
No liability exists for employees who were members of these schemes who
retired after the date noted above. The medical schemes pay certain
medical expenses for both current and retired employees and their
dependents. Current and retired employees pay an annual fixed
contribution to these schemes.Assumptions used to determine the liability relating to the Minemed
medical scheme included, a discount rate of 9%, no increases in
employer subsidies (in terms of the agreement) and mortality rates
according to the SA a mf tables, which are generally used in South
Africa to represent the mortality of CAWMs, and a medical inflation
rate of 6.34%.The company operates a post retirement medical aid benefit scheme. The
amounts were based on an actuarial valuation conducted during the year
ended June 30, 2006, on the Minemed medical scheme, following the last
actuarial valuation on June 30, 2005. The liability was valued using the
projected unit credit method. The next actuarial valuation will be
performed on June 30, 2007.The movements in the present value of the unfunded obligations of the
accrued post-retirement health care costs recognised in the balance
sheet are as follows:
 F-45




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2006
    
    
    2005
    
    
    2004$000
    
    
    $000
    
    
    $000Opening balance at the beginning of the year
    
    
    13,276
    
    
    
    1,584
    
    
    
    1,017Acquired through purchase of subsidiary
    
    
    
    
    
    
    
    
    
    
    157Additional provision for the current employees
    
    
    
    
    
    
    6,470
    
    
    
    Contributions paid
    
    
    (333
    )
    
    
    (971
    )
    
    
    Other expenses included in staff costs:Current service cost
    
    
    528
    
    
    
    971
    
    
    
    Interest cost
    
    
    1,237
    
    
    
    3,235
    
    
    
    Net actuarial gains recognised during the year
    
    
    1,507
    
    
    
    3,074
    
    
    
    Foreign currency translation adjustments
    
    
    (1,251
    )
    
    
    (1,087
    )
    
    
    413Balance at the end of the year
    
    
    14,964
    
    
    
    13,276
    
    
    
    1,584The principal actuarial assumptions used for accounting purposes were:Discount rate
    
    
    9
    %
    
    
    9
    %
    
    
    4% - 12
    %Healthcare inflation rate
    
    
    6.34
    %
    
    
    6.34
    %
    
    0
    % - 7
    %Normal retirement age
    
    
    60
    
    
    
    60
    
    
    
    60
 The obligation has been valued using the projected unit credit funding method on past service
liabilities.
   Period Ending June 30:
    
    $'0002007
    
    
    3482008
    
    
    3612009
    
    
    3752010
    
    
    3912011
    
    
    406Thereafter
    
    
    2,308
  31
    
    COMMITMENTS AND CONTINGENCIES
 2006
    
    
    2005$000
    
    
    $000Capital expenditure commitmentsContracts for capital expenditure
    
    
    21,398
    
    
    
    4,226Authorized by the directors but not contracted for
    
    
    373,794
    
    
    
    274,318395,192
    
    
    
    278,544
  Contingent liabilitiesGuarantees and suretyships
    
    
    2,481
    
    
    
    2,666Environmental guarantees
    
    
    18,054
    
    
    
    20,10720,535
    
    
    
    22,773
 F-46




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
  Occupational healthcare services are made available by Harmony to
employees from its existing facilities. There is a risk that the cost of
providing such services could increase in the future depending upon
changes in the nature of underlying legislation and the profile of
employees. This increased cost, should it transpire, is currently
indeterminate. The group is monitoring developments in this regard.Action was instituted by 10 Plaintiffs employed at Elandsrand Mine in
December 2004. The First Defendant in these matters is Anglo American
Corporation of South Africa Limited (Anglo American), with Harmony cited
as the Second Defendant. These 10 claims constitute test cases in
relation to claims for damages for silicosis allegedly contracted by the
Plaintiffs over their period of employment with Anglo American and
Harmony at Elandsrand. The Board of directors do not believe that the
present 10 test cases present a significant risk and the probabilities
vastly favour a dismissal of the actions. At this stage, any potential
liability can not be reasonably quantified.32
    
    DISCLOSURES REGARDING FAIR VALUE OF FINANCIAL INSTRUMENTSCash and equivalentsThe carrying amount approximates fair value as a result of the short-term maturity of these
instruments.InvestmentsIt is not practical to determine the fair value of unlisted equity
investments. These investments are carried at their original cost in the
balance sheet. The fair value of listed equity investments is determined
with reference to their market value at the end of each reporting
period.Receivables, accounts payable and accrued liabilitiesThe carrying amount of receivables, accounts payable and accrued
liabilities approximates fair value as a result of the short-term
maturity of these items.Long-term and short-term debtThe fair value of long-term debt is estimated based on the effective
interest rate and expected future cash flows. The fair value of
short-term debt approximates the carrying value as a result of the
short-term maturity periods.Interest rate swapsThe fair value of interest rate swaps is determined by reference
to quoted market prices for similar instruments.Derivative liabilitiesThe fair value of a derivative liability is defined as the amount at
which the instrument could be exchanged in a current transaction between
willing parties.The fair values of financial instruments were as follows:
 2006Carrying value
    
    
    Fair Value$000
    
    
    $000Cash and cash equivalents
    
    
    89,189
    
    
    
    89,189Receivables
    
    
    104,222
    
    
    
    104,222Investments in listed securities
    
    
    196,346
    
    
    
    196,346Investments in unlisted securities
    
    
    11,383
    
    
    
    11,382Accounts payable and accrued liabilities
    
    
    78,391
    
    
    
    78,391Long and short-term debt
    
    
    534,952
    
    
    
    526,420Derivative liabilities
    
    
    150,038
    
    
    
    150,038
 F-47




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 2005Carrying value
    
    
    Fair Value$000
    
    
    $000Cash and cash equivalents
    
    
    266,746
    
    
    
    266,746Receivables
    
    
    94,730
    
    
    
    94,730Investments in listed securities
    
    
    453,712
    
    
    
    453,712Investments in unlisted securities
    
    
    13,109
    
    
    
    13,109Accounts payable and accrued liabilities
    
    
    119,224
    
    
    
    119,224Long and short-term debt
    
    
    609,937
    
    
    
    649,693Derivative liabilities
    
    
    76,720
    
    
    
    76,720Interest rate swaps
    
    
    3,577
    
    
    
    3,577
 33
    
    EMPLOYEE BENEFIT PLANS(a)
    
    PENSION AND PROVIDENT FUNDS:The Company contributes to several defined
contribution pension and provident funds governed by the Pension Funds Act,
1946 for the employees of its South African subsidiaries. The pension funds
are multi-employer industry plans. The Companys liability is limited to
its annually determined contributions.The provident funds are funded on the money accumulative basis
with the members and employers contributions having been fixed in
the constitution of the funds.The Australian group companies make contributions to each employees
Superannuation (pension) funds in accordance with the Superannuation
Guarantee Scheme (SGS). The SGS is a Federal Government initiative
enforced by law which compels employers to make regular payments to
regulated funds providing for each employee on their retirement. The
Superannuation Guarantee Contributions were set at a minimum of 9% of
gross salary and wages for the year ended June 30, 2006 (2005: 9% and
2004: 9%).Substantially all the Companys employees are covered by the above
mentioned retirement benefit plans. Funds contributed by the Company
for the year ended June 30, 2006, amounted to $49.8 million (2005 :
$56.0 million and 2004 : $43.4 million).(b)
    
    SHARE OPTION SCHEMES(i)
    
    HARMONY SHARE OPTION SCHEMES:The Company currently has three employee
share option schemes, being the Harmony (1994) Share Option Scheme (HSOS
1994 Scheme), the Harmony (2001) Share Option Scheme (HSOS 2001 Scheme)
and the Harmony (2003) Share Option Scheme (HSOS 2003 Scheme). Pursuant
to the rules of the HSOS 1994 Scheme, the HSOS 2001 Scheme and the HSOS
2003 Scheme certain qualifying employees may be granted options to purchase
shares in the Companys authorized but unissued ordinary shares. The HSOS
2001 Scheme was established following approval by the Companys
shareholders during fiscal 2002. The HSOS 2001 Scheme came into effect on
November 16, 2001 and the HSOS 2003 Scheme came into effect on November 12,
2003, however, options previously issued under the HSOS 1994 Scheme remain
in force. The terms of the HSOS 2001 Scheme and the HSOS 2003 Scheme are
substantially equivalent to the terms of the HSOS 1994 Scheme, except that
the maximum number of share options that may be granted under the HSOS2001 Scheme is a fixed amount (8,000,000), rather than a percentage of
share capital. Options granted under the HSOS 1994 Scheme are not counted
against this maximum. Of the 8,000,000 ordinary shares under the specific
authority of the directors in terms of the HSOS 2001 Scheme, 7,572,500
shares have been offered to participants leaving a balance of 427,500 to
be offered to eligible employees. Upon the date of adoption of the HSOS
2001 Scheme, 1,065,400 shares were still outstanding under the HSOS 1994
Scheme. Following the adoption of the HSOS 2001 Scheme, no further option
grants have been made under the HSOS 1994 Scheme. On June 30, 2005
13,532,997 shares of the 23,204,960 ordinary shares have been offered to
participants in terms of the HSOS 2003 Scheme, leaving a balance of
9,671,963. In terms of the rules of the HSOS 1994 Scheme, the HSOS 2001
Scheme and the HSOS 2003 Scheme, the exercise price of the options
granted is equal to fair market value of the shares at the date of the
grant.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 On November 29, 1999, the Company adopted a share purchase scheme (the
Share Purchase Scheme), in which eligible employees may participate.
The Share Purchase Scheme provides for a share purchase trust controlled
by the Company. The share purchase trust provides recourse loans to
enable employees to acquire shares or exercise their options under the
HSOS 1994 Scheme. To date, the Share Purchase Scheme has only been used
for the purpose of making recourse loans to employees to enable them to
exercise their options under the HSOS 1994 Scheme. The shares acquired
by an employee pursuant to the exercise of the option are then pledged
by that employee to the share purchase trust to secure repayment of the
recourse loan granted by the share purchase trust, plus any interest
thereon. The share purchase trust is funded by a loan from the Company,
which it repays once it receives repayment of the loans granted to
employees. Three non-executive directors of the Company serve as
trustees of the share purchase trust. The trustees are not eligible to
receive loans from the trust. The Company cancelled the share purchase
scheme on March 21, 2003.Options currently expire no later than 10 years from the grant date.
Pursuant to the HSOS 1994 Scheme rules, annually upon anniversary of the
grant date, a third of the total options granted are exercisable.
Pursuant to the HSOS 2001 Scheme rules, annually upon anniversary of the
grant date, a third or a fifth of the total options granted are
exercisable, depending on the vesting terms of the respective grant.
Pursuant to the HSOS 2003 Scheme rules, annually upon anniversary of the
grant date, a fifth of the total options granted are exercisable.
Proceeds received by the Company from the exercise are credited to share
capital and additional paid in capital.Details of the activity in the HSOS 1994 Scheme, the HSOS 2001 Scheme
and the HSOS 2003 Scheme were as follows (For convenience of the
reader, the Rand amounts have been converted to US$ at the balance
sheet date for the respective fiscal years):
 Average
    
    
    AverageNumber of
    
    
    exercise price
    
    
    exercise priceAvailable for
    
    
    share options
    
    
    per share
    
    
    per sharegrant
    
    
    granted
    
    
    SA Rand
    
    
    US DollarBalance as at June 30, 2003
    
    
    4,291,400
    
    
    
    7,763,154
    
    
    
    
    
    
    
    Share options exercised during the year
    
    
    
    
    
    
    (874,808
    )
    
    
    41.82
    
    
    
    6.07Share options forfeited during the year
    
    
    786,388
    
    
    
    (786,388
    )
    
    
    
    
    
    
    Balance as at June 30, 2004
    
    
    5,077,788
    
    
    
    6,101,958
    
    
    
    
    
    
    
    Share options reserved during the year
    
    
    23,204,960
    
    
    
    
    
    
    
    
    
    
    
    Share options granted during the year
    
    
    (13,611,762
    )
    
    
    13,611,762
    
    
    
    
    
    
    
    Share options exercised during the year
    
    
    
    
    
    
    (471,962
    )
    
    
    45.69
    
    
    
    7.39Share options forfeited during the year
    
    
    883,695
    
    
    
    (883,695
    )
    
    
    
    
    
    
    Balance as at June 30, 2005
    
    
    15,554,681
    
    
    
    18,358,063
    
    
    
    
    
    
    
    Share options exercised during the year
    
    
    
    
    
    
    (4,167,575
    )
    
    
    49.76
    
    
    
    7.82Share options forfeited during the year
    
    
    1,449,181
    
    
    
    (1,449,181
    )
    
    
    
    
    
    
    Balance as at June 30, 2006
    
    
    17,003,862
    
    
    
    12,741,307
    
    
    
    
    
    
    
    
 The options exercisable on June 30, 2006 and 2005 were 1,525,234 and 2,596,250, respectively.The range of exercise prices for options outstanding at June 30, 2006
was R22.90 to R91.60. The range of exercise prices for options is wide
primarily due to the fluctuation of the prices of the Companys shares
over the period of the grants.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 The following tables summarize information relating to the options
outstanding at June 30, 2006 (Tables are denominated in South African
Rand and US$ where applicable):
 Outstanding options weighted averageRange of prices
    
    
    
    
    
    Number of
    
    
    Contractual life
    
    
    Exercise price
    
    
    Exercise priceSA Rand
    
    US$
    
    
    shares
    
    
    (in years)
    
    
    SA Rand
    
    
    US$22.90 - 27.20
    
    
    3.20 - 3.80
    
    
    
    37,600
    
    
    
    3.90
    
    
    
    25.42
    
    
    
    3.5535.40 - 49.60
    
    
    4.94 - 6.92
    
    
    
    8,832,806
    
    
    
    7.83
    
    
    
    40.19
    
    
    
    5.6166.00 - 66.15
    
    
    9.21 - 9.23
    
    
    
    3,203,901
    
    
    
    8.04
    
    
    
    66.14
    
    
    
    9.2391.60
    
    
    12.78
    
    
    
    667,000
    
    
    
    6.75
    
    
    
    91.60
    
    
    
    12.78Total
    
    
    
    
    
    
    12,741,307
    
    
    
    8.20
    
    
    
    49.36
    
    
    
    6.89
 Exercisable optionsWeighted
    
    
    Weightedaverage
    
    
    averageRange of prices
    
    
    
    
    
    Number of
    
    
    exercise price
    
    
    exercise priceSA Rand
    
    US$
    
    
    shares
    
    
    Rand
    
    
    US$22.90 - 27.20
    
    
    3.20 - 3.80
    
    
    
    37,600
    
    
    
    25.42
    
    
    
    3.5535.40 - 49.60
    
    
    4.94 - 6.92
    
    
    
    898,152
    
    
    
    39.32
    
    
    
    5.4966.00 - 66.15
    
    
    9.21 - 9.23
    
    
    
    221,282
    
    
    
    66.12
    
    
    
    9.2391.60
    
    
    12.78
    
    
    
    368,200
    
    
    
    91.60
    
    
    
    12.78Total
    
    
    
    
    
    
    1,525,234
    
    
    
    55.49
    
    
    
    7.74
 These options will expire if not exercised at specific dates ranging
from September 2009 to April 2015. The market prices for options
exercised during the three years ended June 30, 2006 ranged from
R50.85 (US$7.09) to R117.02 (US$16.32).The Company used the following assumptions under FAS No. 123 and FAS
No. 123(R), as applicable, in valuing the option grants:
 April 26,
    
    
    August 10,
    
    
    March 27 ,
    
    
    November2005 option
    
    
    2004 option
    
    
    2003 option
    
    
    20, 2001grant
    
    
    grant
    
    
    grant
    
    
    option grantExpected life (in years)
    
    
    5.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    3.5Risk free interest rate (%)
    
    
    8.37
    %
    
    
    9.94
    %
    
    
    11.63
    %
    
    
    11.50
    %Volatility (%)
    
    
    35.00
    %
    
    
    40.00
    %
    
    
    45.00
    %
    
    
    40.00
    %Dividend yield (%)
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    1.52
    %
    
    
    4.00
    %Price at date of grant (Rand per share)
    
    
    39.00
    
    
    
    66.15
    
    
    
    91.60
    
    
    
    49.60Vesting period (in years)
    
    
    5.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    3.0 to 5.0
 The Company used the binomial method in determining the fair value of the options granted.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (ii)
    
    ABELLE SHARE OPTION SCHEME:Prior to the Companys acquisition of the
entire outstanding shareholdings in Abelle, Abelle also had a share option
scheme (the Abelle Scheme). Abelle established the Abelle Scheme to
incentivize and to assist in the recruitment, reward and retention of
employees of Abelle. All employees may have been granted options to
purchase shares in Abelles authorized but unissued ordinary shares
pursuant to the Abelle Scheme rules. The Abelle Scheme was established
following approval by Abelles shareholders during fiscal 2002. The Abelle
Scheme came into effect on April 29, 2002. The maximum number of share
options that may have been granted under the Abelle Scheme were not to
exceed 5% of the total number of Abelle shares in issue. In terms of the
rules of the Abelle Scheme, the exercise price of the options granted must
be equal to at least 112% of the fair market value of the shares at the
date the participant is invited to apply for an option.Options currently expire no later than 3 years from the grant date. 12
months after the options were granted, 50% of the total option grant are
exercisable. 18 months after the options were granted, the remaining 50%
of the total option grant is exercisable. Proceeds received by Abelle
from the exercise of options are credited to share capital and
additional paid in capital.Details of the activity in the Abelle Scheme was as follows (For
convenience of the reader, the Australian dollar amounts have been
converted to US$ at the balance sheet date for the respective fiscal
years):
 Average
    
    
    AverageNumber of
    
    
    exercise price
    
    
    exercise priceAvailable for
    
    
    share options
    
    
    per share
    
    
    per sharegrant
    
    
    granted
    
    
    AUS$
    
    
    US$Balance as at June 30, 2003
    
    
    5,460,382
    
    
    
    4,440,000
    
    
    
    
    
    
    
    Acquisition of outstanding options by Harmony
    
    
    (5,460,382
    )
    
    
    (4,440,000
    )Balance as at June 30, 2004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Upon acquisition by Harmony of Abelle on May 1, 2003, the 2,662,500
Abelle options outstanding at a weighted average exercise price of
A$0.53 per option were fair valued. The weighted average fair value of
the outstanding options was determined to be A$0.70 per option, and
accordingly deferred share based compensation expense of $1.3 million
was recorded. $0.78 million was recognized as share based compensation
expense related to these option grants in fiscal 2004. A further
1,800,000 Abelle options were granted on June 15, 2003 at A$1.01 per
option. These options were fair valued at A$0.47 per option and deferred
share based compensation of $0.5 million was recorded. $0.42 million was
recognized as share based compensation expense during fiscal 2004. As
part of the acquisition of the remaining interest in Abelle on March 15,
2004, the Company acquired all the outstanding share options. The
Company used the following assumptions in valuing the option grants:
 2004Expected life (in years)
    
    
    3.0Risk free interest rate
    
    
    4.64
    %Volatility
    
    
    53.00
    %Dividend yield
    
    
    0.00
    %
 The Company used the binomial method in determining the fair value of the Abelle options granted.
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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 34
    
    DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE AND CREDIT RISK OF FINANCIAL INSTRUMENTSHarmony is exposed to various market risks, including commodity price risk, foreign
currency risk, interest rate risk, liquidity risk and credit risk associated with the
underlying assets and liabilities of the company as well as with anticipated
transactions. Harmony does not issue derivative financial instruments for trading or
speculative purposes. However, following periodic evaluation of these exposures,
Harmony may enter into derivative financial instruments to manage these exposures.Commodity price sensitivity
As a general rule, the Company sells its gold production at market prices. The Company,
generally, does not enter into forward sales, derivatives or other hedging arrangements
to establish a price in advance for the sale of its future gold production. A significant proportion of New Hampton and Hill 50s production was already hedged when acquired
by the Company. During the 2006 fiscal year, in accordance with Harmonys strategy, a
significant portion of the inherited hedge books of both New Hampton and Hill 50, were
closed out. Harmony closed out 30,000oz call options sold and 108,000 farward sale
agreements at a cost of US$34 million.It is Harmonys strategy to continuously evaluate the hedge agreements as well as
market conditions in order to close these contracts out at the most beneficial time.The group had the following net forward-pricing commitments against future production at June 30,
2006.Summary of the groups gold hedge position at June 30, 2006
 Mark-to-June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    
    
    
    marketYear
    
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    Total
    
    
    $000AUSTRALIAN DOLLAR GOLDForward contracts
    
    Kilograms
    
    
    4,573
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    10,793Ounces
    
    
    147,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    347,000
    
    
    
    (86,276
    )A$ per oz
    
    
    515
    
    
    
    518
    
    
    
    518
    
    
    
    516Call options sold
    
    Kilograms
    
    
    311
    
    
    
    
    
    
    
    
    
    
    
    311Ounces
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    (1,842
    )A$ per oz
    
    
    562
    
    
    
    
    
    
    
    
    
    
    
    562Total commodity
    
    Kilograms
    
    
    4,884
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    11,104contracts
    
    Ounces
    
    
    157,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    357,000
    
    
    
    (88,118
    )
 The mark-to-market of these contracts was a negative R631 million (negative USD88
million) at June 30, 2006. The values at June 30, 2006 were based on a gold price of
USD600 (AUD808) per ounce, exchange rates of USD1 / R7.17 and AUD1 / USD0.74 and
prevailing market interest rates and volatilities at that date. These valuations were
provided by independent risk and treasury management experts.Summary of the groups gold hedge position at June 30, 2005
 Mark-toJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,
    
    
    
    
    
    
    marketYear
    
    
    
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    Total
    
    
    $000AUSTRALIAN DOLLAR GOLDForward contracts
    
    Kilograms
    
    
    3,359
    
    
    
    4,573
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    14,152Ounces
    
    
    108,000
    
    
    
    147,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    455,000
    
    
    
    (36,828
    )A$ per oz
    
    
    510
    
    
    
    515
    
    
    
    518
    
    
    
    518
    
    
    
    515Call options sold
    
    Kilograms
    
    
    933
    
    
    
    311
    
    
    
    
    
    
    
    
    
    
    
    1,244Ounces
    
    
    30,000
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    (994
    )A$ per oz
    
    
    552
    
    
    
    562
    
    
    
    
    
    
    
    
    
    
    
    554Total commodity
    
    Kilograms
    
    
    4,292
    
    
    
    4,884
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    15,396contracts
    
    Ounces
    
    
    138,000
    
    
    
    157,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    495,000
    
    
    
    (37,822
    )
 The mark-to-market of these contracts was a negative R252 million (US$38 million) at
June 30, 2005. The values at June 30, 2005 were based on a gold price of US$435 (A$571)
per ounce, exchange rates of US$1 / R6.6670 and A$1 / US$0.7622 and prevailing market interest rates and volatilities at that date. These valuations were provided by
independent risk and treasury management experts. These contracts are classified as
speculative and the marked-to-market movement is reflected in the income statement.These marked-to-market valuations are not predictive of the future value of the hedge
position, nor of the future impact on the revenue of the company. The valuation
represents the cost of buying all hedge contracts at the time of the valuation, at
market prices and rates avaliable at the time.
 F-52




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Foreign currency sensitivity
    Summary of the groups currency hedge position at June 30, 2005
 Mark-to-June 30,
    
    
    
    
    
    
    marketYear
    
    
    
    2006
    
    
    Total
    
    
    $000Forward exchange contracts
    
    US$ million
    
    
    39
    
    
    
    39
    
    
    
    (16,467
    )(Buy US$, sell ZAR at the agreed exchange rate)
    
    Average strike ZAR/US$
    
    
    9.54
    
    
    
    9.54Forward exchange call contracts sold
    
    US$ million
    
    
    39
    
    
    
    39
    
    
    
    (Sell US$, buy ZAR at the agreed exchange rate)
    
    Average strike ZAR/US$
    
    
    9.54
    
    
    
    9.54(16,467
    )
 Interest rates and liquidity risk
  Gold Lease Rate Swaps:
   Interest Rate Swaps:
      Surplus Funds
  Concentration of credit risk
    F-53




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 35 CASH (UTILIZED)/GENERATED BY OPERATIONS
 2006
    
    
    2005
    
    
    2004As adjusted
    
    
    As adjusted(note 3)
    
    
    (note 3)$000
    
    
    $000
    
    
    $000Reconciliation of loss before taxation to cash generated from operations:Loss before taxation, minority interest and effect of change in
accounting principal
    
    
    (160,127
    )
    
    
    (641,360
    )
    
    
    (33,955
    )Adjustments for:(Profit)/loss on sale of listed investments
    
    
    (45,345
    )
    
    
    93,470
    
    
    
    (4,910
    )Profit on sale and loss on dilution of investment in associates  net
    
    
    
    
    
    
    
    
    
    
    (65,097
    )(Profit)/loss on sale of subsidiaries
    
    
    (3,035
    )
    
    
    114
    
    
    
    (115
    )Profit on sale of mining assets
    
    
    (10,148
    )
    
    
    (12,542
    )
    
    
    (22,303
    )Depreciation and amortization
    
    
    166,120
    
    
    
    151,967
    
    
    
    139,829Impairment of assets
    
    
    15,951
    
    
    
    243,124
    
    
    
    3,145Loss on derivative financial instruments
    
    
    131,444
    
    
    
    17,672
    
    
    
    32,385Equity income of joint venture
    
    
    (445
    )
    
    
    
    
    
    
    (9,503
    )Equity loss/(profit) of associated companies
    
    
    16,444
    
    
    
    
    
    
    
    (2,020
    )Impairment of investment in associate
    
    
    
    
    
    
    
    
    
    
    1,956Permanent diminution in value of listed investment
    
    
    
    
    
    
    63,234
    
    
    
    Net decrease in provision for environmental rehabilitation
    
    
    (2,162
    )
    
    
    (2,828
    )
    
    
    (19,461
    )Provision for post retirement benefits
    
    
    1,175
    
    
    
    9,137
    
    
    
    Other non cash transactions
    
    
    12,778
    
    
    
    13,256
    
    
    
    5,564Income and mining taxes paid
    
    
    (1,829
    )
    
    
    (8,952
    )
    
    
    (83,881
    )Cash cost to close out hedges
    
    
    (54,045
    )
    
    
    (34,248
    )
    
    
    (19,349
    )Share-based compensation
    
    
    17,055
    
    
    
    15,618
    
    
    
    9,446Effect of changes in operating working capital items:Receivables
    
    
    (8,702
    )
    
    
    38,092
    
    
    
    25,400Inventories
    
    
    (12,822
    )
    
    
    (8,121
    )
    
    
    (700
    )Accounts payable and accrued liabilities
    
    
    (10,496
    )
    
    
    (53,247
    )
    
    
    33,929Cash generated/(utilized) by operations
    
    
    51,811
    
    
    
    (115,614
    )
    
    
    (9,640
    )
 36 RELATED PARTY TRANSACTIONS
     F-54




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
        37 SUBSEQUENT EVENTS
 On June 21, 2006 Harmony announced that it had
acquired 37.8% of the issued share capital of
Village. Due to the fact that the acquisition
exceeded 35% of Villiages issued share capital,
Harmony was obliged under the Securities
Regulation Code on Takeovers and Mergers to extend
an offer to the remaining shareholders of Village
to acquire all of their shares at the same price
at which it acquired the 37.8% stake. On August
14, 2006 Harmony announced that minority
shareholders holding 3,163 shares in Village
(being 8.38% of the shares in respect of which the
offer was made) had accepted its offer. Harmony
currently holds 2,295,663 shares representing
37.83% of the issued share capital of Village.
(See note 4(m) and 23).On October 19, 2006 Harmony entered into an
agreement with Simmers and Jack Mines Limited and
Enzulwini Mining Company (Pty) Ltd (a
100% subsidiary of Simmers and Jack Mines Limited)
to sell certain land and infrastructure around the
old Randfontein 4 Shaft for R55 million (US$7.7
million at the closing balance sheet rate) in
cash. This shaft was placed on care and
maintenance by Harmony in 2001. The carrying value
of the assets sold in Harmonys balance sheet at
June 30, 2006 was US$nil. The R25.6 million
(US$3.6 million at the closing balance sheet rate)
environmental rehabilitation liability and the
associated rehabilitation fund of R19 million
(U$2.7 million at the closing balance sheet rate)
of the asset is to be assumed by Simmers and Jack
Mines Limited. The transaction is subject to a
number of conditions precedent, including
regulatory approvals.During the first quarter of fiscal 2007, Harmony
took the decision to refine all our South African
production through Rand Refinery. Prior to this
date approximately 84% of our annual production
was refined by the Harmony Refinery. The decision
was made to close the Harmony Refinery due to the
historic lossess incurred by the refinery. In
fiscal 2006, the Harmony Refinery incurred losses
of US$1.9 million. The staff in the
refinery is to be offered alternative positions
within Harmony, and some of the assets of the
company are to be sold to Rand Refinery. The terms
of this sale are currently being negotiated.
 F-55




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##### Table of Contents



38
    
    GEOGRAPHICAL AND SEGMENT INFORMATIONThe company is primarily involved in gold mining, exploration and related activities. Activities
are conducted and investments held both inside and outside of South Africa.The Companys operations are managed on a shaft-by-shaft (geographical) basis and discrete
financial information under International Financial Reporting
Standards (IFRS) for each shaft
is reviewed by the Companys chief operating decision maker to assess performance and allocate
resources. The accompanying geographical and segment information has therefore been presented on
a shaft by shaft basis and reconciled to U.S. GAAP.These segments have been grouped together in the regions in which they operate, being the
Free State, Evander, Kalgold, Randfontein, Elandskraal, Free Gold, ARMgold and Avgold. The
Bissett mine in Canada, which ceased operations at the end of fiscal 2001, has been reported as
part of the other segment for fiscal 2004. The Big Bell, Mt Magnet, South Kal and Abelle mines
are located primarily in Western Australia. The Hidden Valley project is located in Papua New
Guinea. The Company also has exploration interests in Southern Africa and Australia which are
included in Other. Selling, administrative, general charges and corporate costs are allocated
between segments based on the size of activities based on production results.In addition to the grouping of its operating segments by geographic region, management has also
categorized its South African underground operations as follows:
 o
    
    Quality assets,which are typically those with a
larger reserve base and hence a longer life which form
the core of the groups operations;o
    
    Leveraged assets,which are those that supplement
operations and provide significant upside in the
event of a rising gold price;o
    
    Growth assets,which comprise the expansion
projects/new mines in South Africa; ando
    
    Surface operations
  Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Year ended June 30, 2006
 CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    
    
    
    
    Total
    
    Capital
    
    Ounces
    
    Tons milledRevenue
    
    costs
    
    profit/(loss)
    
    assets
    
    assets
    
    Total assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    (*)$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000SOUTH AFRICAFree State operationsQuality
assetsMasimong
    
    
    72,854
    
    
    
    66,563
    
    
    
    6,291
    
    
    
    65,928
    
    
    
    
    
    
    
    65,928
    
    
    
    
    
    
    
    14,520
    
    
    
    136,153
    
    
    
    1,020Leveraged
assetsHarmony 2
    
    
    36,716
    
    
    
    33,527
    
    
    
    3,189
    
    
    
    6,933
    
    
    
    
    
    
    
    6,933
    
    
    
    
    
    
    
    3,964
    
    
    
    69,446
    
    
    
    598Merriespruit 1
    
    
    25,685
    
    
    
    24,061
    
    
    
    1,624
    
    
    
    6,217
    
    
    
    
    
    
    
    6,217
    
    
    
    Information not allocated
at shaft level
    
    
    
    2,445
    
    
    
    48,069
    
    
    
    410Merriespruit 3
    
    
    23,078
    
    
    
    24,188
    
    
    
    ( 1,110
    )
    
    
    5,175
    
    
    
    
    
    
    
    5,175
    
    
    
    
    
    
    
    1,783
    
    
    
    43,691
    
    
    
    452Unisel
    
    
    38,172
    
    
    
    28,789
    
    
    
    9,383
    
    
    
    29,519
    
    
    
    
    
    
    
    29,519
    
    
    
    
    
    
    
    3,907
    
    
    
    72,963
    
    
    
    500Brand 3
    
    
    22,147
    
    
    
    23,272
    
    
    
    ( 1,125
    )
    
    
    2,557
    
    
    
    
    
    
    
    2,557
    
    
    
    
    
    
    
    987
    
    
    
    41,647
    
    
    
    405Brand 5
    
    
    236
    
    
    
    975
    
    
    
    ( 793
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    469
    
    
    
    3Surface
operations
    
    
    8,614
    
    
    
    6,427
    
    
    
    2,187
    
    
    
    33,666
    
    
    
    
    
    
    
    33,666
    
    
    
    
    
    
    
    3,818
    
    
    
    15,902
    
    
    
    897




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##### Table of Contents

]

CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    
    
    
    
    Total
    
    Capital
    
    Ounces
    
    Tons milledRevenue
    
    costs
    
    profit/(loss)
    
    assets
    
    assets
    
    Total assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    (*)$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,711
    
    
    
    126,700
    
    
    
    188,411
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Free State
    
    
    227,502
    
    
    
    207,802
    
    
    
    19,700
    
    
    
    211,706
    
    
    
    126,700
    
    
    
    338,406
    
    
    
    506,639
    
    
    
    31,424
    
    
    
    428,340
    
    
    
    4,285Evander operationsQuality
assetsEvander 5 (note b)
    
    
    32,183
    
    
    
    33,068
    
    
    
    ( 885
    )
    
    
    33,020
    
    
    
    
    
    
    
    33,020
    
    
    
    
    
    
    
    6,453
    
    
    
    62,388
    
    
    
    450Evander 7
    
    
    42,365
    
    
    
    32,648
    
    
    
    9,717
    
    
    
    47,034
    
    
    
    
    
    
    
    47,034
    
    
    
    
    
    
    
    10,021
    
    
    
    83,202
    
    
    
    435Evander 8
    
    
    67,325
    
    
    
    44,863
    
    
    
    22,462
    
    
    
    40,464
    
    
    
    
    
    
    
    40,464
    
    
    
    
    
    
    
    9,726
    
    
    
    128,849
    
    
    
    815Information not allocated
at shaft levelLeveraged assetsEvander 9
    
    
    
    
    
    
    21
    
    
    
    ( 21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,025
    
    
    
    26,212
    
    
    
    64,237
    
    
    
    
    
    
    
    1,033
    
    
    
    
    
    
    
    Total Evander
    
    
    141,873
    
    
    
    110,600
    
    
    
    31,273
    
    
    
    158,543
    
    
    
    26,212
    
    
    
    184,755
    
    
    
    45,017
    
    
    
    27,233
    
    
    
    274,439
    
    
    
    1,700Randfontein operationsQuality assetsCooke 1
    
    
    42,978
    
    
    
    32,274
    
    
    
    10,704
    
    
    
    11,835
    
    
    
    
    
    
    
    11,835
    
    
    
    
    
    
    
    3,759
    
    
    
    80,495
    
    
    
    490Cooke 2
    
    
    32,025
    
    
    
    23,082
    
    
    
    8,943
    
    
    
    12,962
    
    
    
    
    
    
    
    12,962
    
    
    
    
    
    
    
    3,738
    
    
    
    59,836
    
    
    
    353Cooke 3
    
    
    55,901
    
    
    
    41,329
    
    
    
    14,572
    
    
    
    27,692
    
    
    
    
    
    
    
    27,692
    
    
    
    
    
    
    
    8,197
    
    
    
    104,758
    
    
    
    652Information not allocated
at shaft levelGrowth assetsDoornkop
    
    
    23,294
    
    
    
    24,322
    
    
    
    ( 1,028
    )
    
    
    200,096
    
    
    
    
    
    
    
    200,096
    
    
    
    
    
    
    
    26,031
    
    
    
    43,593
    
    
    
    515Surface
operations
    
    
    6,108
    
    
    
    5,022
    
    
    
    1,086
    
    
    
    5,143
    
    
    
    
    
    
    
    5,143
    
    
    
    
    
    
    
    8,712
    
    
    
    11,650
    
    
    
    539Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114,154
    
    
    
    114,154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Randfontein
    
    
    160,306
    
    
    
    126,029
    
    
    
    34,277
    
    
    
    257,728
    
    
    
    114,154
    
    
    
    371,882
    
    
    
    130,543
    
    
    
    50,437
    
    
    
    300,332
    
    
    
    2,549Elandsrand operationsGrowth assetsElandsrand
    
    
    90,097
    
    
    
    89,349
    
    
    
    748
    
    
    
    259,500
    
    
    
    
    
    
    
    259,500
    
    
    
    
    
    
    
    30,523
    
    
    
    170,867
    
    
    
    987Leveraged assetsDeelkraal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Information not allocated
at shaft levelSurface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    
    
    
    
    300
    
    
    
    

    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    91,572
    
    
    
    91,572
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Elandsrand
    
    
    90,097
    
    
    
    89,349
    
    
    
    748
    
    
    
    259,800
    
    
    
    91,572
    
    
    
    351,372
    
    
    
    80,720
    
    
    
    30,523
    
    
    
    170,867
    
    
    
    987




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##### Table of Contents



CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    
    
    
    
    Total
    
    Capital
    
    Ounces
    
    Tons milledRevenue
    
    costs
    
    profit/(loss)
    
    assets
    
    assets
    
    Total assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    (*)$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Freegold operationsQuality assetsTshepong
    
    
    179,626
    
    
    
    111,462
    
    
    
    68,164
    
    
    
    429,453
    
    
    
    
    
    
    
    429,453
    
    
    
    
    
    
    
    23,529
    
    
    
    335,289
    
    
    
    1,786Growth assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260,966
    
    
    
    
    
    
    
    260,966
    
    
    
    
    
    
    
    21,522
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    93,111
    
    
    
    87,064
    
    
    
    6,047
    
    
    
    98,472
    
    
    
    
    
    
    
    98,472
    
    
    
    
    
    
    
    14,870
    
    
    
    175,214
    
    
    
    1,196Joel
    
    
    31,346
    
    
    
    29,170
    
    
    
    2,176
    
    
    
    10,239
    
    
    
    
    
    
    
    10,239
    
    
    
    
    
    
    
    3,644
    
    
    
    58,595
    
    
    
    436Information not allocated
at shaft levelEland
    
    
    2,026
    
    
    
    1,066
    
    
    
    960
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,058
    
    
    
    21Kudu/Sable
    
    
    890
    
    
    
    895
    
    
    
    ( 5
    )
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    13West Shaft
    
    
    13,117
    
    
    
    13,650
    
    
    
    ( 533
    )
    
    
    8,900
    
    
    
    
    
    
    
    8,900
    
    
    
    
    
    
    
    887
    
    
    
    25,525
    
    
    
    206Nyala
    
    
    81
    
    
    
    226
    
    
    
    ( 145
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    184
    
    
    
    2St Helena
    
    
    6,867
    
    
    
    10,802
    
    
    
    ( 3,935
    )
    
    
    6,416
    
    
    
    
    
    
    
    6,416
    
    
    
    
    
    
    
    443
    
    
    
    12,791
    
    
    
    127Surface
operations
    
    
    5,366
    
    
    
    5,386
    
    
    
    ( 20
    )
    
    
    858
    
    
    
    
    
    
    
    858
    
    
    
    
    
    
    
    340
    
    
    
    11,019
    
    
    
    336Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160,980
    
    
    
    257,043
    
    
    
    418,023
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Freegold
    
    
    332,430
    
    
    
    259,721
    
    
    
    72,709
    
    
    
    976,284
    
    
    
    257,043
    
    
    
    1,233,327
    
    
    
    402,860
    
    
    
    65,238
    
    
    
    624,699
    
    
    
    4,123ARMgold operationsLeveraged assetsOrkney 2
    
    
    36,589
    
    
    
    29,716
    
    
    
    6,873
    
    
    
    9,231
    
    
    
    
    
    
    
    9,231
    
    
    
    
    
    
    
    2,380
    
    
    
    69,877
    
    
    
    347Orkney 4
    
    
    31,117
    
    
    
    29,273
    
    
    
    1,844
    
    
    
    11,690
    
    
    
    
    
    
    
    11,690
    
    
    
    
    
    
    
    4,759
    
    
    
    58,897
    
    
    
    406Welkom 1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Information not allocated
at shaft levelSurface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    671
    
    
    
    340,179
    
    
    
    340,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total ARMgold
    
    
    67,706
    
    
    
    58,989
    
    
    
    8,717
    
    
    
    21,592
    
    
    
    340,179
    
    
    
    361,771
    
    
    
    20,065
    
    
    
    7,139
    
    
    
    128,774
    
    
    
    753Avgold operationsQuality assetsTarget
    
    
    81,178
    
    
    
    51,904
    
    
    
    29,274
    
    
    
    279,852
    
    
    
    
    
    
    
    279,852
    
    
    
    
    
    
    
    9,644
    
    
    
    150,196
    
    
    
    813Information not allocated
at shaft levelSurface
operations
    
    
    404
    
    
    
    968
    
    
    
    ( 564
    )
    
    
    678
    
    
    
    
    
    
    
    678
    
    
    
    
    
    
    
    
    
    
    
    746
    
    
    
    204Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    717,182
    
    
    
    19,180
    
    
    
    736,362
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Avgold
    
    
    81,582
    
    
    
    52,872
    
    
    
    28,710
    
    
    
    997,712
    
    
    
    19,180
    
    
    
    1,016,892
    
    
    
    5,309
    
    
    
    9,644
    
    
    
    150,942
    
    
    
    1,017Kalgold operationsSurface
operations
    
    
    39,341
    
    
    
    31,740
    
    
    
    7,601
    
    
    
    12,190
    
    
    
    
    
    
    
    12,190
    
    
    
    
    
    
    
    389
    
    
    
    77,071
    
    
    
    2,008Information not allocated
at shaft levelOther
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,402
    
    
    
    5,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Kalgold
    
    
    39,341
    
    
    
    31,740
    
    
    
    7,601
    
    
    
    12,190
    
    
    
    5,402
    
    
    
    17,592
    
    
    
    1,933
    
    
    
    389
    
    
    
    77,071
    
    
    
    2,008




---



##### Table of Contents



CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    
    
    
    
    Total
    
    Capital
    
    Ounces
    
    Tons milledRevenue
    
    costs
    
    profit/(loss)
    
    assets
    
    assets
    
    Total assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    (*)$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,450
    
    
    
    429,445
    
    
    
    430,895
    
    
    
    133,630
    
    
    
    
    
    
    
    
    
    
    
    TOTAL SOUTH AFRICA
    
    
    1,140,837
    
    
    
    937,102
    
    
    
    203,735
    
    
    
    2,897,005
    
    
    
    1,409,887
    
    
    
    4,306,892
    
    
    
    1,326,716
    
    
    
    222,027
    
    
    
    2,155,464
    
    
    
    17,422AUSTRALASIAMt Magnet
    
    
    80,090
    
    
    
    59,427
    
    
    
    20,663
    
    
    
    71,897
    
    
    
    9,401
    
    
    
    81,298
    
    
    
    23,669
    
    
    
    22,651
    
    
    
    148,822
    
    
    
    1,918South Kal
    
    
    42,406
    
    
    
    37,523
    
    
    
    4,883
    
    
    
    42,637
    
    
    
    8,367
    
    
    
    51,004
    
    
    
    12,213
    
    
    
    2,320
    
    
    
    82,639
    
    
    
    1,480Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212,166
    
    
    
    851
    
    
    
    213,017
    
    
    
    3,164
    
    
    
    18,221
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,367
    
    
    
    93,253
    
    
    
    114,620
    
    
    
    162,640
    
    
    
    104
    
    
    
    
    
    
    
    TOTAL AUSTRALASIA
    
    
    122,496
    
    
    
    96,950
    
    
    
    25,546
    
    
    
    348,067
    
    
    
    111,872
    
    
    
    459,939
    
    
    
    201,686
    
    
    
    43,296
    
    
    
    231,461
    
    
    
    3,398TOTAL HARMONY
    
    
    1,263,333
    
    
    
    1,034,052
    
    
    
    229,281
    
    
    
    3,245,072
    
    
    
    1,521,759
    
    
    
    4,766,831
    
    
    
    1,528,402
    
    
    
    265,323
    
    
    
    2,386,925
    
    
    
    20,820Reconciliation of
segment data to consolidated financial statements
    
    
    
    
    
    
    200,947
    
    
    
    
    
    
    
    51,141
    
    
    
    (355,773
    )
    
    
    ( 304,632
    )
    
    
    8 432
    
    
    
    
    
    
    
    
    
    
    
    1,263,333
    
    
    
    1,234,999
    
    
    
    
    
    
    
    3,296,213
    
    
    
    1,165,986
    
    
    
    4,462,199
    
    
    
    1,536,834
    
    
    
    265,323
    
    
    
    2,386,925
    
    
    
    20,820
 
 (*)
    
    Production statistics are unaudited F-56




---



##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Year ended June 30, 2005
 CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    
    000SOUTH AFRICAFree State operationsQuality assetsMasimong
    
    
    68,342
    
    
    
    65,388
    
    
    
    2,954
    
    
    
    48,026
    
    
    
    
    
    
    
    48,026
    
    
    
    
    
    
    
    10,630
    
    
    
    159,981
    
    
    
    1,046Leveraged assetsHarmony 2
    
    
    29,295
    
    
    
    30,021
    
    
    
    (726
    )
    
    
    6,234
    
    
    
    
    
    
    
    6,234
    
    
    
    
    
    
    
    3,555
    
    
    
    68,547
    
    
    
    559Merriespruit 1
    
    
    19,428
    
    
    
    21,719
    
    
    
    (2,291
    )
    
    
    5,865
    
    
    
    
    
    
    
    5,865
    
    
    
    
    
    
    
    2,833
    
    
    
    45,559
    
    
    
    414Merriespruit 3
    
    
    23,325
    
    
    
    24,379
    
    
    
    (1,054
    )
    
    
    5,091
    
    
    
    
    
    
    
    5,091
    
    
    
    
    
    
    
    1,696
    
    
    
    54,690
    
    
    
    548Unisel
    
    
    27,798
    
    
    
    31,055
    
    
    
    (3,257
    )
    
    
    21,106
    
    
    
    
    
    
    
    21,106
    
    
    
    Information not 
allocated 
at 
shaft 
level
    
    
    
    4,147
    
    
    
    65,011
    
    
    
    494Brand 3
    
    
    19,807
    
    
    
    22,883
    
    
    
    (3,076
    )
    
    
    3,435
    
    
    
    
    
    
    
    3,435
    
    
    
    
    
    
    
    1,267
    
    
    
    46,299
    
    
    
    448Brand 5
    
    
    8
    
    
    
    2,120
    
    
    
    (2,112
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    Saaiplaas 3
    
    
    1,026
    
    
    
    4,831
    
    
    
    (3,805
    )
    
    
    475
    
    
    
    
    
    
    
    475
    
    
    
    
    
    
    
    4
    
    
    
    2,541
    
    
    
    30Surface
operations
    
    
    3,720
    
    
    
    3,318
    
    
    
    402
    
    
    
    37,481
    
    
    
    
    
    
    
    37,481
    
    
    
    
    
    
    
    1,589
    
    
    
    9,542
    
    
    
    467Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,795
    
    
    
    604,336
    
    
    
    671,131
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    Total Free State
    
    
    192,749
    
    
    
    205,714
    
    
    
    (12,965
    )
    
    
    194,508
    
    
    
    604,336
    
    
    
    798,844
    
    
    
    539,519
    
    
    
    25,751
    
    
    
    452,203
    
    
    
    4,006Evander operationsQuality assetsEvander 2
    
    
    20,695
    
    
    
    27,404
    
    
    
    (6,709
    )
    
    
    10,872
    
    
    
    
    
    
    
    10,872
    
    
    
    
    
    
    
    15
    
    
    
    48,764
    
    
    
    357Evander 5
    
    
    20,078
    
    
    
    15,912
    
    
    
    4,166
    
    
    
    10,499
    
    
    
    
    
    
    
    10,499
    
    
    
    
    
    
    
    7,006
    
    
    
    47,093
    
    
    
    245Evander 7
    
    
    55,502
    
    
    
    32,795
    
    
    
    22,707
    
    
    
    44,770
    
    
    
    
    
    
    
    44,770
    
    
    
    
    
    
    
    7,948
    
    
    
    130,009
    
    
    
    541Evander 8
    
    
    64,912
    
    
    
    41,500
    
    
    
    23,412
    
    
    
    40,526
    
    
    
    
    
    
    
    40,526
    
    
    
    
    
    
    
    8,216
    
    
    
    151,936
    
    
    
    734Leveraged assetsEvander 9
    
    
    1,078
    
    
    
    3,005
    
    
    
    (1,927
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Information
not allocated 
at 
shaft 
level
    
    
    
    
    
    
    
    2,573
    
    
    
    31Surface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,101
    
    
    
    31,242
    
    
    
    71,343
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Evander
    
    
    162,265
    
    
    
    120,616
    
    
    
    41,649
    
    
    
    146,768
    
    
    
    31,242
    
    
    
    178,010
    
    
    
    46,946
    
    
    
    23,185
    
    
    
    380,375
    
    
    
    1,908
 F-57




---



##### Table of Contents



CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    
    000Randfontein
operationsQuality assetsCooke 1
    
    
    33,888
    
    
    
    31,115
    
    
    
    2,773
    
    
    
    13,317
    
    
    
    
    
    
    
    13,317
    
    
    
    
    
    
    
    2,811
    
    
    
    79,101
    
    
    
    520Cooke 2
    
    
    23,274
    
    
    
    24,144
    
    
    
    (870
    )
    
    
    13,848
    
    
    
    
    
    
    
    13,848
    
    
    
    
    
    
    
    2,538
    
    
    
    54,441
    
    
    
    403Cooke 3
    
    
    49,478
    
    
    
    42,278
    
    
    
    7,200
    
    
    
    24,610
    
    
    
    
    
    
    
    24,610
    
    
    
    
    
    
    
    8,287
    
    
    
    116,300
    
    
    
    740Information not allocated at shaft levelGrowth assetsDoornkop
    
    
    22,478
    
    
    
    23,573
    
    
    
    (1,095
    )
    
    
    192,666
    
    
    
    
    
    
    
    192,666
    
    
    
    
    
    
    
    28,621
    
    
    
    52,695
    
    
    
    526Surface
operations
    
    
    14,185
    
    
    
    14,117
    
    
    
    68
    
    
    
    2,676
    
    
    
    
    
    
    
    2,676
    
    
    
    
    
    
    
    6,120
    
    
    
    33,397
    
    
    
    2,757Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,082
    
    
    
    69,082
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Randfontein
    
    
    143,303
    
    
    
    135,227
    
    
    
    8,076
    
    
    
    247,117
    
    
    
    69,082
    
    
    
    316,199
    
    
    
    59,469
    
    
    
    48,377
    
    
    
    335,934
    
    
    
    4,946Elandsrand operationsGrowth assetsElandsrand
    
    
    88,577
    
    
    
    88,599
    
    
    
    (22
    )
    
    
    257,670
    
    
    
    
    
    
    
    257,670
    
    
    
    
    
    
    
    26,081
    
    
    
    207,371
    
    
    
    1,019Leveraged assetsDeelkraal
    
    
    958
    
    
    
    714
    
    
    
    244
    
    
    
    2,514
    
    
    
    
    
    
    
    2,514
    
    
    
    
    
    
    
    
    
    
    
    2,284
    
    
    
    1Information not allocated at shaft levelSurface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    334
    
    
    
    
    
    
    
    334
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,919
    
    
    
    98,919
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Elandsrand
    
    
    89,535
    
    
    
    89,313
    
    
    
    222
    
    
    
    260,518
    
    
    
    98,919
    
    
    
    359,437
    
    
    
    100,437
    
    
    
    26,088
    
    
    
    209,655
    
    
    
    1,020Freegold operationsQuality assetsTshepong
    
    
    162,958
    
    
    
    101,091
    
    
    
    61,867
    
    
    
    642,328
    
    
    
    
    
    
    
    642,328
    
    
    
    
    
    
    
    23,346
    
    
    
    380,695
    
    
    
    1,700Growth assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,424
    
    
    
    
    
    
    
    258,424
    
    
    
    
    
    
    
    18,756
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    84,165
    
    
    
    83,289
    
    
    
    876
    
    
    
    101,291
    
    
    
    
    
    
    
    101,291
    
    
    
    
    
    
    
    12,178
    
    
    
    197,535
    
    
    
    1,090Joel
    
    
    27,282
    
    
    
    28,990
    
    
    
    (1,708
    )
    
    
    8,271
    
    
    
    
    
    
    
    8,271
    
    
    
    
    
    
    
    2,582
    
    
    
    64,464
    
    
    
    498Information not allocated at shaft levelEland
    
    
    11,436
    
    
    
    13,404
    
    
    
    (1,968
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,782
    
    
    
    175Kudu/Sable
    
    
    10,764
    
    
    
    18,885
    
    
    
    (8,121
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,175
    
    
    
    194West Shaft
    
    
    12,049
    
    
    
    12,907
    
    
    
    (858
    )
    
    
    10,230
    
    
    
    
    
    
    
    10,230
    
    
    
    
    
    
    
    107
    
    
    
    28,165
    
    
    
    176Nyala
    
    
    9,897
    
    
    
    17,587
    
    
    
    (7,690
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,440
    
    
    
    23,503
    
    
    
    198St Helena
    
    
    12,660
    
    
    
    24,191
    
    
    
    (11,531
    )
    
    
    2,227
    
    
    
    
    
    
    
    2,227
    
    
    
    
    
    
    
    901
    
    
    
    29,965
    
    
    
    245Surface
operations
    
    
    15,407
    
    
    
    15,436
    
    
    
    (29
    )
    
    
    3,376
    
    
    
    
    
    
    
    3,376
    
    
    
    
    
    
    
    314
    
    
    
    36,420
    
    
    
    1,361Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    596,686
    
    
    
    596,686
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Freegold
    
    
    346,618
    
    
    
    315,780
    
    
    
    30,838
    
    
    
    1,026,147
    
    
    
    596,686
    
    
    
    1,622,833
    
    
    
    455,720
    
    
    
    59,624
    
    
    
    812,704
    
    
    
    5,637ARMgold operationsLeveraged assetsOrkney 2
    
    
    33,279
    
    
    
    31,495
    
    
    
    1,784
    
    
    
    9,666
    
    
    
    
    
    
    
    9,666
    
    
    
    
    
    
    
    1,443
    
    
    
    78,449
    
    
    
    413Orkney 4
    
    
    32,720
    
    
    
    29,616
    
    
    
    3,104
    
    
    
    10,321
    
    
    
    
    
    
    
    10,321
    
    
    
    
    
    
    
    915
    
    
    
    76,971
    
    
    
    455Welkom 1
    
    
    1,164
    
    
    
    1,604
    
    
    
    (440
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    21Information not allocated at shaft levelSurface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,088
    
    
    
    21,088
    
    
    
    
    
    
    
    394
    
    
    
    
    
    
    
    Total ARMgold
    
    
    67,163
    
    
    
    62,715
    
    
    
    4,448
    
    
    
    19,987
    
    
    
    21,088
    
    
    
    41,075
    
    
    
    48,872
    
    
    
    2,752
    
    
    
    158,154
    
    
    
    889
 F-58




---



##### Table of Contents



CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    
    000Avgold operationsQuality assetsTarget
    
    
    89,233
    
    
    
    54,391
    
    
    
    34,842
    
    
    
    303,491
    
    
    
    
    
    
    
    303,491
    
    
    
    Information

not allocated

at shaft level
    
    
    
    10,818
    
    
    
    209,847
    
    
    
    1,178Surface operations
    
    
    579
    
    
    
    467
    
    
    
    112
    
    
    
    942
    
    
    
    
    
    
    
    942
        
    
    

    
    
    
    1,790
    
    
    
    1,350
    
    
    
    88Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    770,753
    
    
    
    16,303
    
    
    
    787,056
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Avgold
    
    
    89,812
    
    
    
    54,858
    
    
    
    34,954
    
    
    
    1,075,186
    
    
    
    16,303
    
    
    
    1,091,489
    
    
    
    29,989
    
    
    
    12,608
    
    
    
    211,197
    
    
    
    1,266Kalgold operationsSurface operations
    
    
    46,331
    
    
    
    40,341
    
    
    
    5,990
    
    
    
    20,442
    
    
    
    
    
    
    
    20,442
    
    
    
    Information 
not allocated 
at shaft level
    
    
    
    (4,145
    )
    
    
    108,195
    
    
    
    1,855Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,217
    
    
    
    7,403
    
    
    
    8,620
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Kalgold
    
    
    46,331
    
    
    
    40,341
    
    
    
    5,990
    
    
    
    21,659
    
    
    
    7,403
    
    
    
    29,062
    
    
    
    4,621
    
    
    
    (4,145
    )
    
    
    108,195
    
    
    
    1,855Other entities
    
    
    1,755
    
    
    
    
    
    
    
    1,755
    
    
    
    900
    
    
    
    172,201
    
    
    
    173,102
    
    
    
    122,657
    
    
    
    2,035
    
    
    
    
    
    
    
    TOTAL SOUTH AFRICA
    
    
    1,139,531
    
    
    
    1,024,564
    
    
    
    114,967
    
    
    
    2,992,790
    
    
    
    1,617,260
    
    
    
    4,610,051
    
    
    
    1,408,230
    
    
    
    196,275
    
    
    
    2,668,417
    
    
    
    21,527AUSTRALASIAMt Magnet
    
    
    77,242
    
    
    
    60,915
    
    
    
    16,327
    
    
    
    78,172
    
    
    
    
    
    
    
    78,172
    
    
    
    74,686
    
    
    
    15,652
    
    
    
    181,233
    
    
    
    2,743South Kal
    
    
    48,427
    
    
    
    39,263
    
    
    
    9,164
    
    
    
    55,289
    
    
    
    
    
    
    
    55,289
    
    
    
    52,123
    
    
    
    10,161
    
    
    
    115,615
    
    
    
    1,405Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200,749
    
    
    
    
    
    
    
    200,749
    
    
    
    2,680
    
    
    
    12,051
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,265
    
    
    
    103,357
    
    
    
    127,622
    
    
    
    51,541
    
    
    
    2,178
    
    
    
    
    
    
    
    TOTAL AUSTRALASIA
    
    
    125,669
    
    
    
    100,178
    
    
    
    25,491
    
    
    
    358,475
    
    
    
    103,357
    
    
    
    461,832
    
    
    
    181,030
    
    
    
    40,042
    
    
    
    296,848
    
    
    
    4,148TOTAL HARMONY
    
    
    1,265,200
    
    
    
    1,124,742
    
    
    
    140,458
    
    
    
    3,351,265
    
    
    
    1,720,617
    
    
    
    5,071,883
    
    
    
    1,589,260
    
    
    
    236,317
    
    
    
    2,965,265
    
    
    
    25,675Reconciliation of segment
data to consolidated
financial statements
    
    
    
    
    
    
    173,695
    
    

    
    
    
    
    85,334
    
    
    
    (420,399
    )
    
    
    (335,065
    )
    
    
    2 724
    
    
    
    
    
    
    
    
    
    
    
    1,265,200
    
    
    
    1,298,437
    
    
    
    
    
    
    
    3,436,599
    
    
    
    1,300,218
    
    
    
    4,736,818
    
    
    
    1,591,984
    
    
    
    236,317
    
    
    
    2,965,265
    
    
    
    25,675
 
 (*)
    
    Production statistics are unaudited F-59




---



##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Year ended June 30, 2004
 CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    
    000SOUTH AFRICAFree State operationsQuality assetsMasimong
    
    
    84,119
    
    
    
    69,774
    
    
    
    20,390
    
    
    
    57,468
    
    
    
    
    
    
    
    57,468
    
    
    


    Information not allocated at shaft level
    
    
    
    10,615
    
    
    
    234,307
    
    
    
    1,378Leveraged
assetsHarmony 2
    
    
    31,213
    
    
    
    27,362
    
    
    
    3,851
    
    
    
    5,401
    
    
    
    
    
    
    
    5,401
    
    
    
    
    
    
    
    2,526
    
    
    
    81,317
    
    
    
    643Merriespruit 1
    
    
    20,980
    
    
    
    19,521
    
    
    
    1,459
    
    
    
    8,209
    
    
    
    
    
    
    
    8,209
    
    
    
    
    
    
    
    3,328
    
    
    
    54,565
    
    
    
    477Merriespruit 3
    
    
    27,376
    
    
    
    28,026
    
    
    
    (650
    )
    
    
    5,005
    
    
    
    
    
    
    
    5,005
    
    
    
    
    
    
    
    2,287
    
    
    
    71,156
    
    
    
    743Unisel
    
    
    32,475
    
    
    
    29,713
    
    
    
    2,762
    
    
    
    29,009
    
    
    
    
    
    
    
    29,009
    
    
    
    
    
    
    
    6,181
    
    
    
    84,308
    
    
    
    677Brand 3
    
    
    21,412
    
    
    
    21,052
    
    
    
    360
    
    
    
    7,957
    
    
    
    
    
    
    
    7,957
    
    
    
    
    
    
    
    1,390
    
    
    
    55,400
    
    
    
    531Brand 5
    
    
    5,702
    
    
    
    11,591
    
    
    
    (5,889
    )
    
    
    3,022
    
    
    
    
    
    
    
    3,022
    
    
    
    
    
    
    
    
    
    
    
    14,662
    
    
    
    153Saaiplaas 3
    
    
    10,331
    
    
    
    13,485
    
    
    
    (3,154
    )
    
    
    5,291
    
    
    
    
    
    
    
    5,291
    
    
    
    
    
    
    
    200
    
    
    
    26,783
    
    
    
    254Surface operations
    
    
    10,215
    
    
    
    9,289
    
    
    
    926
    
    
    
    55,246
    
    
    
    
    
    
    
    55,246
    
    
    
    
    
    
    
    2,501
    
    
    
    26,732
    
    
    
    2,368Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,834
    
    
    
    215,497
    
    
    
    287,331
    
    
    
    
    
    
    
    1,717
    
    
    
    
    
    
    
    Total Free State
    
    
    243,823
    
    
    
    223,768
    
    
    
    20,055
    
    
    
    248,442
    
    
    
    215,497
    
    
    
    463,939
    
    
    
    592,666
    
    
    
    30,745
    
    
    
    633,248
    
    
    
    7,224Evander operationsQuality assetsEvander 2
    
    
    33,216
    
    
    
    29,018
    
    
    
    4,198
    
    
    
    13,564
    
    
    
    
    
    
    
    13,564
    
    
    


    Information not allocated at shaft level
    




    
    
    619
    
    
    
    86,172
    
    
    
    491Evander 5
    
    
    18,559
    
    
    
    14,192
    
    
    
    4,367
    
    
    
    20,062
    
    
    
    
    
    
    
    20,062
    
    
    
    
    
    
    
    5,811
    
    
    
    48,103
    
    
    
    223Evander 7
    
    
    35,566
    
    
    
    29,297
    
    
    
    6,269
    
    
    
    44,007
    
    
    
    
    
    
    
    44,007
    
    
    
    
    
    
    
    8,705
    
    
    
    92,505
    
    
    
    577Evander 8
    
    
    41,945
    
    
    
    35,280
    
    
    
    6,665
    
    
    
    39,136
    
    
    
    
    
    
    
    39,136
    
    
    
    
    
    
    
    9,519
    
    
    
    109,513
    
    
    
    692Leveraged
assetsEvander 9
    
    
    9,079
    
    
    
    9,042
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,440
    
    
    
    202Surface operations
    
    
    756
    
    
    
    496
    
    
    
    260
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,367
    
    
    
    1,961
    
    
    
    101Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,881
    
    
    
    24,613
    
    
    
    67,494
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Evander
    
    
    139,121
    
    
    
    117,325
    
    
    
    21,796
    
    
    
    159,650
    
    
    
    24,613
    
    
    
    184,263
    
    
    
    40,628
    
    
    
    27,021
    
    
    
    361,694
    
    
    
    2,286Randfontein operationsQuality assetsCooke 1
    
    
    39,891
    
    
    
    29,472
    
    
    
    10,419
    
    
    
    16,900
    
    
    
    
    
    
    
    16,900
    
    
    

    Information not allocated at shaft level

    
    
    
    2,985
    
    
    
    104,168
    
    
    
    605Cooke 2
    
    
    34,748
    
    
    
    30,615
    
    
    
    4,133
    
    
    
    14,853
    
    
    
    
    
    
    
    14,853
    
    
    
    
    
    
    
    4,411
    
    
    
    90,761
    
    
    
    749Cooke 3
    
    
    51,283
    
    
    
    42,036
    
    
    
    9,247
    
    
    
    21,828
    
    
    
    
    
    
    
    21,828
    
    
    
    
    
    
    
    8,084
    
    
    
    134,003
    
    
    
    999Growth assetsDoornkop
    
    
    24,913
    
    
    
    20,546
    
    
    
    4,367
    
    
    
    183,313
    
    
    
    
    
    
    
    183,313
    
    
    
    
    
    
    
    16,819
    
    
    
    65,234
    
    
    
    567Surface operations
    
    
    7,264
    
    
    
    6,590
    
    
    
    674
    
    
    
    5,542
    
    
    
    
    
    
    
    5,542
    
    
    
    
    
    
    
    4,511
    
    
    
    18,872
    
    
    
    2,428Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,252
    
    
    
    62,252
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Randfontein
    
    
    158,099
    
    
    
    129,259
    
    
    
    28,840
    
    
    
    242,436
    
    
    
    62,252
    
    
    
    304,688
    
    
    
    93,053
    
    
    
    36,810
    
    
    
    413,038
    
    
    
    5,348
 F-60




---



##### Table of Contents



CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    
    000Elandsrand operationsGrowth assetsElandsrand
    
    
    96,831
    
    
    
    90,627
    
    
    
    6,204
    
    
    
    210,309
    
    
    
    
    
    
    
    210,309
    
    
    
    
    
    
    
    26,087
    
    
    
    250,581
    
    
    
    1,437Leveraged assetsDeelkraal
    
    
    26,206
    
    
    
    37,796
    
    
    
    (11,590
    )
    
    
    50,630
    
    
    
    
    
    
    
    50,630
    
    
    
    
    
    
    
    1,305
    
    
    
    68,127
    
    
    
    522Information not allocated at shaft levelSurface
operations
    
    
    2,047
    
    
    
    2,640
    
    
    
    (593
    )
    
    
    891
    
    
    
    
    
    
    
    891
    
    
    
    
    
    
    
    294
    
    
    
    5,301
    
    
    
    451Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,777
    
    
    
    17,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Elandsrand
    
    
    125,084
    
    
    
    131,063
    
    
    
    (5,979
    )
    
    
    261,830
    
    
    
    17,777
    
    
    
    279,607
    
    
    
    31,067
    
    
    
    27,686
    
    
    
    324,009
    
    
    
    2,410Freegold operationsQuality assetsTshepong
    
    
    130,491
    
    
    
    74,494
    
    
    
    55,997
    
    
    
    686,493
    
    
    
    
    
    
    
    686,493
    
    
    
    
    
    
    
    21,866
    
    
    
    339,259
    
    
    
    1,584Growth assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    258,043
    
    
    
    
    
    
    
    258,043
    
    
    
    
    
    
    
    16,845
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    96,943
    
    
    
    83,793
    
    
    
    13,150
    
    
    
    117,453
    
    
    
    
    
    
    
    117,453
    
    
    
    
    
    
    
    14,756
    
    
    
    251,970
    
    
    
    1,403Joel
    
    
    22,906
    
    
    
    21,481
    
    
    
    1,425
    
    
    
    10,587
    
    
    
    
    
    
    
    10,587
    
    
    
    
    
    
    
    1,922
    
    
    
    59,642
    
    
    
    494Information not allocated at shaft levelEland
    
    
    16,952
    
    
    
    22,465
    
    
    
    (5,513
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    44,017
    
    
    
    303Kudu/Sable
    
    
    13,331
    
    
    
    14,473
    
    
    
    (1,142
    )
    
    
    14,341
    
    
    
    
    
    
    
    14,341
    
    
    
    
    
    
    
    
    
    
    
    34,597
    
    
    
    240West Shaft
    
    
    12,061
    
    
    
    9,546
    
    
    
    2,515
    
    
    
    11,744
    
    
    
    
    
    
    
    11,744
    
    
    
    
    
    
    
    622
    
    
    
    31,318
    
    
    
    175Nyala
    
    
    4,033
    
    
    
    3,578
    
    
    
    455
    
    
    
    15,663
    
    
    
    
    
    
    
    15,663
    
    
    
    
    
    
    
    7,276
    
    
    
    10,482
    
    
    
    98St Helena
    
    
    23,643
    
    
    
    27,012
    
    
    
    (3,369
    )
    
    
    21,975
    
    
    
    
    
    
    
    21,975
    
    
    
    
    
    
    
    1,538
    
    
    
    61,668
    
    
    
    443Surface
operations
    
    
    23,850
    
    
    
    20,427
    
    
    
    3,423
    
    
    
    3,368
    
    
    
    
    
    
    
    3,368
    
    
    
    
    
    
    
    21
    
    
    
    61,192
    
    
    
    3,538Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    520,795
    
    
    
    520,795
    
    
    
    
    
    
    
    228,305
    
    
    
    
    
    
    
    Total Freegold
    
    
    344,210
    
    
    
    277,269
    
    
    
    66,941
    
    
    
    1,139,667
    
    
    
    520,795
    
    
    
    1,660,462
    
    
    
    453,412
    
    
    
    293,425
    
    
    
    894,145
    
    
    
    8,278ARMgold operationsLeveraged
assetsOrkney 1
    
    
    123
    
    
    
    194
    
    
    
    (71
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    322
    
    
    
    3Orkney 2
    
    
    31,435
    
    
    
    25,026
    
    
    
    6,409
    
    
    
    11,581
    
    
    
    
    
    
    
    11,581
    
    
    
    
    
    
    
    1,866
    
    
    
    81,434
    
    
    
    387Orkney 3
    
    
    4,425
    
    
    
    6,440
    
    
    
    (2,015
    )
    
    
    427
    
    
    
    
    
    
    
    427
    
    
    
    
    
    
    
    464
    
    
    
    11,413
    
    
    
    137Orkney 4
    
    
    26,269
    
    
    
    19,543
    
    
    
    6,726
    
    
    
    12,295
    
    
    
    
    
    
    
    12,295
    
    
    
    
    
    
    
    860
    
    
    
    67,931
    
    
    
    401Orkney 6
    
    
    4,304
    
    
    
    5,378
    
    
    
    (1,074
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,060
    
    
    
    157Orkney 7
    
    
    1,760
    
    
    
    1,970
    
    
    
    (210
    )
    
    
    19
    
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    4,533
    
    
    
    28Information not allocated at shaft levelwelkom 1
    
    
    7,415
    
    
    
    9,939
    
    
    
    (2,524
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,226
    
    
    
    159welkom 2
    
    
    525
    
    
    
    547
    
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,350
    
    
    
    12welkom 3
    
    
    592
    
    
    
    581
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,511
    
    
    
    15welkom 4
    
    
    1,531
    
    
    
    1,496
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,922
    
    
    
    13welkom 6
    
    
    935
    
    
    
    894
    
    
    
    41
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,411
    
    
    
    24welkom 7
    
    
    3,890
    
    
    
    3,566
    
    
    
    324
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,902
    
    
    
    88Surface
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,097
    
    
    
    20,097
    
    
    
    
    
    
    
    614,962
    
    
    
    
    
    
    
    Total ARMgold
    
    
    83,204
    
    
    
    75,574
    
    
    
    7,630
    
    
    
    24,322
    
    
    
    20,097
    
    
    
    44,419
    
    
    
    73,715
    
    
    
    618,152
    
    
    
    215,015
    
    
    
    1,424Avgold operationsQuality
assetsTarget
    
    
    19,772
    
    
    
    11,514
    
    
    
    8,258
    
    
    
    384,862
    
    
    
    
    
    
    
    384,862
    
    
    
    
    
    
    
    1,175
    
    
    
    53,434
    
    
    
    228Information not allocated at shaft levelOther
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    772,158
    
    
    
    22,766
    
    
    
    794,924
    
    
    
    
    
    
    
    1,106,736
    
    
    
    
    
    
    
    Total Avgold
    
    
    19,772
    
    
    
    11,514
    
    
    
    8,258
    
    
    
    1,157,020
    
    
    
    22,766
    
    
    
    1,179,786
    
    
    
    75,671
    
    
    
    1,107,911
    
    
    
    53,434
    
    
    
    228
 F-61




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##### Table of Contents



CashProduction
    
    
    operating
    
    
    Mining
    
    
    Unallocated
    
    
    
    
    
    
    Total
    
    
    Capital
    
    
    Ounces
    
    
    Tons milledRevenue
    
    
    costs
    
    
    profit/(loss)
    
    
    assets
    
    
    assets
    
    
    Total assets
    
    
    liabilities
    
    
    expenditure
    
    
    produced (*)
    
    
    (*)$000
    
    

$000
    
    

$000
    
    

$000
    
    

$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    

oz
    
    

000Kalgold operationsSurface
operations
    
    
    31,532
    
    
    
    28,511
    
    
    
    3,021
    
    
    
    38,066
    
    
    
    
    
    
    
    38,066
    
    
    
    
    
    
    
    4,405
    
    
    
    82,756
    
    
    
    1,530Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,509
    
    
    
    17,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Kalgold
    
    
    31,532
    
    
    
    28,511
    
    
    
    3,021
    
    
    
    38,066
    
    
    
    17,509
    
    
    
    55,575
    
    
    
    3,293
    
    
    
    4,405
    
    
    
    82,756
    
    
    
    1,530Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    278,676
    
    
    
    278,676
    
    
    
    2,617
    
    
    
    1,278
    
    
    
    
    
    
    
    Information not allocated at shaft levelTOTAL SOUTH AFRICA
    
    
    1,144,84
    
    
    
    994,283
    
    
    
    150,562
    
    
    
    3,271,433
    
    
    
    1,179,982
    
    
    
    4,451,415
    
    
    
    1,366,122
    
    
    
    2,147,433
    
    
    
    2,977,339
    
    
    
    28,728AUSTRALASIAMt Magnet
    
    
    67,714
    
    
    
    58,202
    
    
    
    9,512
    
    
    
    122,297
    
    
    
    
    
    
    
    122,297
    
    
    
    50,794
    
    
    
    13,596
    
    
    
    173,228
    
    
    
    3,058South Kal
    
    
    46,651
    
    
    
    38,848
    
    
    
    7,803
    
    
    
    81,053
    
    
    
    
    
    
    
    81,053
    
    
    
    28,052
    
    
    
    5,435
    
    
    
    120,532
    
    
    
    1,843Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    211,671
    
    
    
    
    
    
    
    211,671
    
    
    
    1,222
    
    
    
    1,857
    
    
    
    
    
    
    
    Other entities
    
    
    17,103
    
    
    
    13,457
    
    
    
    3,646
    
    
    
    12,332
    
    
    
    100,353
    
    
    
    112,685
    
    
    
    73,026
    
    
    
    9,614
    
    
    
    44,528
    
    
    
    326TOTAL AUSTRALASIA
    
    
    131,468
    
    
    
    110,507
    
    
    
    20,961
    
    
    
    427,353
    
    
    
    100,353
    
    
    
    527,706
    
    
    
    153,094
    
    
    
    30,502
    
    
    
    338,288
    
    
    
    5,227TOTAL HARMONY
    
    
    1,276,313
    
    
    
    1,104,790
    
    
    
    171,523
    
    
    
    3,698,786
    
    
    
    1,280,335
    
    
    
    4,979,121
    
    
    
    1,519,216
    
    
    
    2,177,935
    
    
    
    3,315,627
    
    
    
    33,955Reconciliation of
segment
data to consolidated
financial statements(35,974
    )
    
    
    128,981
    
    
    
    
    
    
    
    35,524
    
    
    
    (235,781
    )
    
    
    (200,257
    )
    
    
    184,800
    
    
    
    (1,964,093
    )
    
    
    (90,439
    )
    
    
    1,240,339
    
    
    
    1,233,771
    
    
    
    
    
    
    
    3,734,310
    
    
    
    1,044,554
    
    
    
    4,778,864
    
    
    
    1,704,016
    
    
    
    213,842
    
    
    
    3,225,188
    
    
    
    33,955
 
 (*)
    
    Production statistics are unaudited F-62




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##### Table of Contents

\

Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Notes to the reconciliation of segment data to the consolidated financial statements
 a)
    
    Reversal of proportionate consolidationFor management reporting purposes, the Free Gold Company was proportionately consolidated until its
acquisition on September 22, 2003. Under US GAAP, the equity method of accounting is applied in
accounting for joint ventures.b)
    
    Exploration costsFor management reporting purposes, certain exploration costs are capitalized. US GAAP does not
permit the capitalization of exploration and evaluation expenditure.(c)
    
    Business combinations  goodwillFor management reporting purposes, prior to 2004, goodwill was amortized using the straight-line
method over the estimated life of the underlying asset. Under US GAAP, goodwill is not subject to
amortization. Instead, the Company evaluates, on at least an annual basis, the carrying amount of
goodwill to determine whether current events and circumstances indicate that such carrying amount
may no longer be recoverable. From July 1, 2004, this is in line
with managements reporting.d)
    
    Business combinations  acquisition dateFor management reporting purposes, the Free Gold Company results have been included from the date
upon which the Company assumed joint operational control of the assets together with the seller.
Under US GAAP, the Company accounts for its interest in the Free Gold Company from the date that
all the conditions precedent to the transaction were met, and the assets were no longer subject to
joint operational control.e)
    
    Business combinations  purchase priceIn addition, for management reporting purposes, the purchase price of the initial investment in
Free Gold was determined as the sum of a cash payment, the fair value of an interest free loan and
the taxes payable on the transaction by the seller. Under US GAAP, the purchase price was
determined as the sum of a cash payment, the fair value of the interest free loan, the taxes
payable on the transaction by the seller, offset by the cash flows generated by the joint venture
during the period the assets were subject to joint operational control with the seller, as the cash
flows generated during this period were for the account of the joint venture.f)
    
    Reversal of previously recognized impairmentsFor management reporting purposes, certain impairments recognized in prior periods have been
reversed. Under US GAAP, the reversal of previously recognized impairments is not permitted.g)
    
    Provision for environmental rehabilitation(i) Revisions to the asset retirement obligationFor management reporting purposes, all changes in the carrying amount of the obligation are
recognized in the income statement. Changes resulting from revisions in the timing or amount of
estimated cash flows are recognized as an increase or decrease in the carrying amount of the asset
retirement obligation and the associated capitalized retirement cost for US GAAP.In addition, the current discount rate is applied to measure the retirement obligation for
management reporting purposes. Under US GAAP any decreases in the asset retirement obligation as a
result of downward revisions in cash flow estimates should be treated as a modification of an
existing asset retirement obligation, and should be measured at the historical discount rate used
to measure the initial asset retirement obligation.
 F-63




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##### Table of Contents



(ii) Amortization of rehabilitation assetThe rehabilitation assets carrying value for management reporting purposes is different to that
under US GAAP, mainly as a result of the unique transition provisions under SFAS No. 143 and
revisions to the asset retirement obligation described above, which results in a different
amortization charge.h)
    
    Share-based compensationFor management reporting purposes, share-based compensation expense has been recognized on a fair
value basis for all grants subsequent to November 2002. Under US GAAP, the Company has recognized
share-based compensation expense for the fair value of options granted subsequent to January 2001.
It has adopted FAS 123(R) using the modified prospective approach effective July 1, 2005.i) Transfer of ARM shares to the ARM TrustAlthough the transfer of the ARM shares to the ARM Trust was
also not recognised for management
reporting purposes, the Company ceased accounting for the increase in the fair value of ARM shares
subsequent to the transfer of those shares to the ARM Trust. Under US GAAP, the Company has
continued to account for the investment as available-for sale with gains and losses arising from
changes in the fair value of the shares excluded from earnings and included as a separate component
of stockholders equity. In turn, under US GAAP only, the Company recorded a derivative financial
liability in respect of the increase in fair value of the shares and to reflect the fact that the
upside on appreciation of the ARM shares now legally belongs to the intended beneficiaries of the
ARM Trust.
 F-64