##### Table of Contents



As
filed with the Securities and Exchange Commission on December 7, 2007
   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, 2007
 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)
 
 RANDFONTEIN OFFICE PARK, CNR WARD AVENUE AND MAIN REEF ROAD,
RANDFONTEIN, SOUTH AFRICA, 1760
 (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 AdvisersItem 2. Offer Statistics and Expected TimetableItem 3. Key InformationItem 4. Information on the CompanyItem 4A. Unresolved Staff CommentsItem 5. Operating and Financial Review and ProspectsItem 6. Directors, Senior Management and EmployeesItem 7. Major Shareholders and Related Party TransactionsItem 8. Financial InformationItem 9. The Offer and ListingItem 10. Additional InformationItem 11. Quantitative and Qualitative Disclosures About Market RiskItem 12. Description of Securities Other than Equity SecuritiesPart IIItem 13. Defaults, Dividend Arrearages and DelinquenciesItem 14. Material Modifications to the Rights of Security and Use of ProceedsItem 15. Disclosure Controls and ProceduresItem 16. [Reserved]Item 16A. Audit Committee Financial ExpertItem 16B. Code of EthicsItem 16C. Principal Accountant Fees and ServicesItem 16D. Exemptions from Listing Standards for Audit CommitteesItem 16E. Purchases of Equity Securities by the Issuer and AffiliatesItem 17. Financial StatementsItem 18. Financial StatementsItem 19. ExhibitsSIGNATUREINDEX TO FINANCIAL STATEMENTSExhibit 2.1Exhibit 4.2Exhibit 4.16Exhibit 4.17Exhibit 4.18Exhibit 4.19Exhibit 4.20Exhibit 4.21Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 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
  3




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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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##### Table of Contents



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.
 5




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##### Table of Contents



SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
  Item 4. Information of the Company  Business  Australasian Operations
  Item 5. Operating and Financial Review and Prospects  Costs  Reconciliation of
Non-GAAP Measures.
 Fiscal Year Ended June 30,2007
    
    2006
    
    2005
    
    2004
    
    2003(in $ thousands, except per share amounts)Income
Statement DataContinuing operationsRevenues
    
    
    1,346,596
    
    
    
    1,140,838
    
    
    
    1,139,531
    
    
    
    1,120,896
    
    
    
    628,211Operating profit/(loss)
    
    
    146,453
    
    
    
    (30,789
    )
    
    
    (303,825
    )
    
    
    (44,613
    )
    
    
    18,112Equity income of joint venture
    
    
    1,702
    
    
    
    445
    
    
    
    
    
    
    
    9,503
    
    
    
    52,843Equity (loss)/income of associate companies
    
    
    (2,576
    )
    
    
    (16,444
    )
    
    
    
    
    
    
    2,020
    
    
    
    (1,233
    )(Loss)/Income from continuing operations before
taxes and minority interests
    
    
    (188,846
    )
    
    
    (97,324
    )
    
    
    (536,266
    )
    
    
    (10,286
    )
    
    
    135,700Loss from discontinued operations
    
    
    (72,386
    )
    
    
    (61,483
    )
    
    
    (80,335
    )
    
    
    (18,983
    )
    
    
    (14,692
    )Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,281
    
    
    
    (468
    )(Loss)/income before cumulative effect of
change in accounting principles
    
    
    (295,435
    )
    
    
    (157,783
    )
    
    
    (552,549
    )
    
    
    184
    
    
    
    89,597Cumulative effect of change in accounting
principles, net of tax
    
    
    
    
    
    
    2,058
    
    
    
    
    
    
    
    
    
    
    
    14,770Net (loss)/income
    
    
    (295,435
    )
    
    
    (155,725
    )
    
    
    (552,549
    )
    
    
    184
    
    
    
    104,367Continuing OperationsBasic (loss)/earnings per share($) before
cumulative effect of change in accounting
principles
    
    
    (0.56
    )
    
    
    (0.28
    )
    
    
    (1.30
    )
    
    
    0.00
    
    
    
    0.58
 6




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Fiscal Year Ended June 30,2007
    
    2006
    
    2005
    
    2004
    
    2003(in $ thousands, except per share amounts)Basic (loss)/earnings per share($)
    
    
    (0.56
    )
    
    
    (0.28
    )
    
    
    (1.30
    )
    
    
    0.00
    
    
    
    0.67Diluted (loss)/earnings per share before
cumulative effect of change in accounting
principles
    
    
    (0.56
    )
    
    
    (0.24
    )
    
    
    (1.30
    )
    
    
    0.00
    
    
    
    0.57Diluted (loss)/earnings per share
    
    
    (0.56
    )
    
    
    (0.24
    )
    
    
    (1.30
    )
    
    
    0.00
    
    
    
    0.65Discountinued OperationsBasic loss per share($)
    
    
    (0.18
    )
    
    
    (0.16
    )
    
    
    (0.22
    )
    
    
    0.00
    
    
    
    (0.08
    )Diluted loss per share
    
    
    (0.18
    )
    
    
    (0.16
    )
    
    
    (0.22
    )
    
    
    0.00
    
    
    
    (0.08
    )Weighted average number of shares used in the
computation of basic earnings per share
    
    
    398,593,297
    
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    254,240,500
    
    
    
    177,954,245Weighted average number of shares used in the
computation of diluted earnings per share
    
    
    398,593,297
    
    
    
    394,409,512
    
    
    
    362,499,012
    
    
    
    255,570,834
    
    
    
    182,721,629Cash dividends per share ($)(1)
    
    
    
    
    
    
    
    
    
    
    0.05
    
    
    
    0.26
    
    
    
    0.57Cash dividends per share (R)(1)
    
    
    
    
    
    
    
    
    
    
    0.30
    
    
    
    1.90
    
    
    
    5.50Other Financial DataCash cost per ounce of gold ($/oz)(2)
    
    
    486
    
    
    
    436
    
    
    
    378
    
    
    
    338
    
    
    
    239
 Fiscal Year Ended June 30,2007
    
    2006
    
    2005
    
    2004
    
    2003(in $ thousands)Balance Sheet DataContinuing operationsCash and cash equivalents
    
    
    99,759
    
    
    
    89,189
    
    
    
    266,746
    
    
    
    217,022
    
    
    
    189,040Other current assets
    
    
    1,053,874
    
    
    
    339,156
    
    
    
    324,611
    
    
    
    294,502
    
    
    
    162,487Non-current assets held for sale
    
    
    182,475
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Property, plant and equipment  net
    
    
    3,533,938
    
    
    
    3,306,555
    
    
    
    3,451,963
    
    
    
    3,769,971
    
    
    
    1,188,910Intangible assets
    
    
    34,005
    
    
    
    28,256
    
    
    
    30,367
    
    
    
    32,480
    
    
    
    Restricted cash
    
    
    723
    
    
    
    35,599
    
    
    
    7,798
    
    
    
    9,922
    
    
    
    Investments in associates
    
    
    853
    
    
    
    266,331
    
    
    
    
    
    
    
    19,908
    
    
    
    63,782Investment in joint ventures
    
    
    1,336
    
    
    
    2,065
    
    
    
    
    
    
    
    
    
    
    
    272,754Other long-term assets
    
    
    206,954
    
    
    
    395,048
    
    
    
    655,333
    
    
    
    435,058
    
    
    
    79,562Total assets
    
    
    5,113,917
    
    
    
    4,462,199
    
    
    
    4,736,818
    
    
    
    4,778,863
    
    
    
    1,956,535Current liabilities
    
    
    685,596
    
    
    
    343,802
    
    
    
    428,756
    
    
    
    393,764
    
    
    
    189,668Liabilities relating to non-current
assets held for sale
    
    
    77,614
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Provision for environmental rehabilitation
    
    
    131,913
    
    
    
    110,164
    
    
    
    120,450
    
    
    
    125,917
    
    
    
    62,977Provision of social plan
    
    
    2,429
    
    
    
    2,259
    
    
    
    2,109
    
    
    
    1,958
    
    
    
    Deferred income and mining taxes
    
    
    512,829
    
    
    
    521,000
    
    
    
    541,188
    
    
    
    580,086
    
    
    
    218,995Provision for post-retirement benefits
    
    
    15,257
    
    
    
    14,964
    
    
    
    13,276
    
    
    
    1,584
    
    
    
    1,017Deferred financial liability
    
    
    354,896
    
    
    
    150,038
    
    
    
    76,720
    
    
    
    91,513
    
    
    
    37,228Share appreciation rights liability
    
    
    877Long-term loans
    
    
    270,079
    
    
    
    394,608
    
    
    
    409,486
    
    
    
    509,195
    
    
    
    301,572Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,408Shareholders equity (3)
    
    
    3,062,426
    
    
    
    2,925,364
    
    
    
    3,144,833
    
    
    
    3,074,846
    
    
    
    1,126,670Total liabilities and shareholders equity
    
    
    5,113,917
    
    
    
    4,462,199
    
    
    
    4,736,818
    
    
    
    4,778,863
    
    
    
    1,956,535
 
 (1)
    
    Reflects dividends related to fiscal 2004 and 2003 that were declared on July 30, 2004 and
August 1, 2003 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 7




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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 U.S. 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.(3)
    
    The Company elected to apply provisions from SAB 108 Considering the effects of prior year
misstatements when quantifying misstatements in current year financial statementsas at July
1, 2006. Adjustments have been made to the carrying values of assets and liabilities as of
July 1, 2006 with an offsetting adjustment recorded to the operating balance of retained
earnings. For further information, see note 3 of the consolidated financial statements. 8




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EXCHANGE RATES
    Fiscal Year EndedJune 30,
    
    Average(1)
    
    Period End2003
    
    
    9.13
    
    
    
    7.512004
    
    
    6.89
    
    
    
    6.232005
    
    
    6.18
    
    
    
    6.672006
    
    
    6.36
    
    
    
    7.172007
    
    
    7.20
    
    
    
    7.04
 Month of
    
    High
    
    LowJune 2007
    
    
    7.27
    
    
    
    7.04July 2007
    
    
    7.15
    
    
    
    6.81August 2007
    
    
    7.5
    
    
    
    7.07September 2007
    
    
    7.25
    
    
    
    6.89October 2007
    
    
    6.91
    
    
    
    6.49November 2007 (through November 28 )
    
    
    7.0
    
    
    
    6.45
 
 (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 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 effect 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 risks
described below may, in retrospect, turn out not to be complete and therefore may not be the only
risks to which we are exposed. Additional risks and uncertainties not presently known to us or that
we now believe are immaterial, could also adversely affect our businesses, results of operations or
financial condition. The order of presentation of the risk factors below does not indicate the
likelihood of their occurrence or the magnitude or the significance of the individual risks. The
risks described below could occur individually or cumulatively and intensify in case of a
cumulative occurrence.
 Risks Relating to Our Business and Our Industry
 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 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 U.S. dollar 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; and
    
    the production and cost levels for gold in major gold-producing nations, such as South
Africa, United States, Australia and China.
   Price per ounceHigh
    
    Low
    
    AverageCalendar Year
    
    ($)
    
    ($)
    
    ($)1997
    
    
    367
    
    
    
    283
    
    
    
    3311998
    
    
    313
    
    
    
    273
    
    
    
    2941999
    
    
    326
    
    
    
    253
    
    
    
    2792000
    
    
    313
    
    
    
    264
    
    
    
    282
 10




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Price per ounceHigh
    
    Low
    
    AverageCalendar Year
    
    ($)
    
    ($)
    
    ($)2001
    
    
    293
    
    
    
    256
    
    
    
    2712002
    
    
    332
    
    
    
    278
    
    
    
    3092003
    
    
    412
    
    
    
    322
    
    
    
    3612004
    
    
    427
    
    
    
    343
    
    
    
    3892005
    
    
    476
    
    
    
    411
    
    
    
    4342006
    
    
    725
    
    
    
    525
    
    
    
    6042007 (through November 28)
    
    
    833
    
    
    
    608
    
    
    
    687
   Due to the fact that the majority of Harmonys production costs are incurred in Rand and that gold
is sold in U.S. dollars, Harmonys financial condition could be materially harmed by an
appreciation in the value of the Rand against the U.S. dollar.
   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;
 11




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
    
    identifying the metallurgical properties of orebodies;
    
    estimating the economic feasibility of mining orebodies;
    
    developing appropriate metallurgical processes;
    
    obtaining necessary governmental permits; and
    
    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 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.
 PNG
 As we currently do not enter into forward sales, derivatives or hedging arrangements with respect
to our future gold production, we are exposed to the impact of any significant decrease in the
gold price.
  12




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Harmony may experience problems in identifying, financing and managing new acquisitions and
integrating them with its existing operations.
  
    
    Harmonys ability to identify appropriate acquisition candidates or negotiate
acquisitions on favorable terms;
    
    obtaining the financing necessary to complete future acquisitions;
    
    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
    
    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;
    
    pillar mining
    
    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;
 13




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##### Table of Contents




    
    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;
    
    pillar mining; and
    
    production disruptions due to weather.
  The nature of Harmonys mining operations presents safety risks.
  Harmonys insurance coverage may prove inadequate to satisfy future claims against it.
  Harmonys 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.
  14




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##### Table of Contents



Actual and potential shortages of production inputs 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 (SARB).
  
    
    is generally not permitted to export capital from South Africa, to hold foreign currency
or incur indebtedness denominated in foreign currencies without the approval of the South
African exchange control authorities;
    
    is generally not permitted to acquire an interest in a foreign venture without the
approval of the South African exchange control authorities and first having complied with
the investment criteria 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.
 NUM
   15




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Harmony may suffer adverse consequences as a result of its reliance on outside contractors to
conduct its operations.
  
    
    negotiating agreements with contractors on acceptable terms;
    
    the inability to replace a contractor and its operating equipment in the event that
either party terminates the agreement;
    
    reduced control over those aspects of operations which are the responsibility of the
contractor;
    
    failure of a contractor to perform under its agreement with Harmony;
    
    interruption of operations in the event that a contractor ceases its business due to
insolvency or other unforeseen events;
    
    failure of a contractor to comply with applicable legal and regulatory requirements, to
the extent it is responsible for such compliance; and
    
    problems of a contractor with managing its workforce, labor unrest or other employment
issues.
 Directors, Senior
Management and EmployeesEmployees
 HIV/AIDS poses risks to Harmony in terms of productivity and costs.
  The cost of occupational healthcare services may increase in the future.
   16




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Laws governing mineral rights affect our business.
 MPRDA RegulationHealth and Safety MattersSouth Africa
 Mining Charter
 HDSA
    Regulation
  17




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##### Table of Contents



Regulation
 Harmony is subject to extensive environmental regulations.
      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.
  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.
  18




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##### Table of Contents




    
    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;
    
    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.
   See Item 15.  Disclosure
Controls and Procedures.
  Investors may face liquidity risk in trading Harmonys ordinary shares on the JSE Limited.
 The Offer and ListingThe Securities Exchange in South Africa.
 19




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##### Table of Contents



Because Harmony has a significant number of outstanding share options and convertible debt
instruments, Harmonys ordinary shares are subject to dilution.
  
 Item 4. INFORMATION ON THE COMPANY
 BUSINESS
 History and Development
  Item 4. Information on the
Company   Business  Harmonys Mining Operations  Overview Item 4. Information on the Company  Regulation Item 10.
Additional Information  Memorandum and Articles of Association
    South African Operations
  20




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##### Table of Contents



Pamodzi Gold Item 8  Recent Developments
    
    
    the Quality Assets,which typically have a larger reserve base and hence a longer mine
life. These form the core of our operations;
    
    the Leveraged Assetsare those that have a large resource base and provide significant
upside in the event of a rising gold price; and
    
    the Growth Assets, which comprise the expansion projects and new mines currently under
development in South Africa.
  SurfaceQuality Assets
    
    Leveraged Assets***
    
    Growth Assets
    
    OperationsTarget
    
    Bambanani
    
    Elandsrand mine and project
    
    KalgoldTshepong
    
    Joel
    
    Doornkop mine and project
    
    FreegoldMasimong shaft complex
    
    West Shaft*
    
    Phakisa capital project
    
    Free StateEvander 2,3 & 5
    
    St. Helena
    
    
    
    RandfonteinEvander 7
    
    Harmony 2
    
    
    
    TargetEvander 8
    
    Merriespruit 1Cooke 1
    
    Merriespruit 3Cooke 2
    
    UniselCooke 3
    
    Brand 3Orkney 2**Orkney 4**Orkney 7**
 
 *
    
    West Shaft closed end of March 2007.**
    
    On September 24, 2007 an agreement to sell the Orkney shaft was entered into with Pamodzi
Gold and is expected to be concluded by the first half of 2008.***
    
    The Harmony 4 Shaft, St. Helena 2 Shaft and Eland Shaft are all currently under care and
maintenance as of June 30, 2007. Australasian Operations
   21




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##### Table of Contents



Competitive Strengths
 Leading market position in the attractive gold industry
 
    
    We believe that our size and leading market position enables us to undertake exploration
and simultaneously develop multiple projects around the world, as well as secure capital on
competitive terms.
    
    The global gold industry offers a number of attractive industry fundamentals from which
we benefit. This includes the absence of available substitutes, relatively high barriers
to entry, and increasing gold producer concentration.
    
    We are developing new mines at a planned lower cost per ounce than our current
operations, which we believe will help make them robust enough to survive any margin
squeeze and to withstand any reversal in the gold price. We expect the gold price to
continue its upward trend in the medium term.
 Significant reserves with long mine lives
 
    
    Harmonys ore reserves as of June 30, 2007 amounted to 53.67 million ounces of gold
spread across our assets in South Africa, Australia and PNG. This ore reserve base is
sufficient to support our existing operations in excess of 20 years at current production
levels. Year-on-year depletion accounted for 2.3 million ounces after disposals, shaft
closures and the loss of Western Area equity ounces of 5.4 million ounces. However, the
positive progress made with prefeasibility studies at the Evander South Project and at
Wafi/Golpu in PNG added 3.5 million ounces to reserves.
    
    Of the companys 53.67 million ounces of reserves, 41.5 million ounces are classified as
above infrastructure and 12.2 million ounces are classified below infrastructure (reserves
for which capital expenditure has still to be approved).
 Highly attractive project pipeline
 
    
    We have a diverse portfolio of gold development projects spread across South Africa and
PNG. These projects include Elandsrand, Doornkop, Tshepong and Phakisa in South Africa,
and Hidden Valley in PNG, which, when developed, could deliver up to 1.4 million ounces of
additional production by 2011.
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##### Table of Contents




    
    We believe the relatively higher grade of these South African deposits and/or lower cost
base will result in these additional ounces being produced at highly competitive cash
costs. This in turn may result in a reduction in our overall cash cost position as these
new projects are commissioned.
    
    In addition to these projects, we have a number of additional development prospects that
are being considered and progressed, including the processing of sand dumps and tailings
dams in our Mega Dumps projects, the processing of rock dumps, and developing the
Wafi/Golpu copper/gold deposit in PNG, which, when all developed, could increase production
by a further 1.0 million ounces per annum.
    
    We have also expanded our exploration skill base, evidenced by our progress in PNG.
    
    We are also currently assessing potential options for our uranium deposits.
 Positive gold market outlook
 
    
    The gold market continued its strong trend over the last year, with the fiscal 2007
average gold price of $694 per ounce. This increase in the gold price has been driven
predominantly by a combination of increased investment, consumer demand, flat mine
production and relatively weak US dollar.
    
    Increased investment demand has been one of the major catalysts behind a recent surge in
gold demand, with private investors now owning more gold than the governments of the world.
The reasons behind this increased demand are varied, and include: concerns over the future
of the U.S. economy and its currency; investors seeking portfolio diversification; the
launch of a number of gold exchange traded funds; and investors seeking a safe haven in
turbulent geopolitical tensions.
    
    We believe these fundamental drivers behind increased demand and decreased new supply of
gold will remain in the future, which will in turn support a higher gold price over this
period. As an unhedged gold producer, Harmony will benefit from a rising gold price
environment.
    
    In addition, the fundamental demand for gold appears to have continued with lower
official sales and an acceptance of a new floor price in the gold jewelry sector.
Producer de-hedging, combined with the continued decline in global gold output, underpins
the positive view.
 Increased focus on earnings margins and cost
 
    
    Our aim to return to profitability is assisted by improved market conditions for South
African gold producers, but also importantly, through a restructuring of our portfolio to
increase productivity and optimize overall production levels, while closing or divesting
lower quality ounces.
    
    We are committed to lower our cost base and extensively benchmark our costing parameters
both internally between operations within Harmony, and externally against other gold
producers.
    
    We are confident that the benefits of our restructuring process and ongoing cost focus
will be sustained in the long term, and as a result, our ability to withstand any future
adverse market conditions has been significantly enhanced.
 Conservative balance sheet and low gearing
 
    
    We maintain a conservative gearing policy and seek to fund ongoing capital expenditure
(excluding growth projects) through cash generated from existing operations.
    
    Our low level of gearing should provide us with the ability to utilize debt to fund
capital and development expenditure requirements for our new projects.
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##### Table of Contents



Experienced management team with significant industry expertise
 
    
    Our senior management team consists of experienced mining executives with extensive
industry backgrounds combined with geological and metallurgical expertise.
    
    Our senior management team has a proven track record in developing and managing the
operations under its control, and has demonstrated an ability to optimize underperforming
assets as well as developing new projects around the world.
 Leading Black Economic Empowerment strategy
 
    
    Harmony is proud to be a South African company and fully embraces the countrys
transformation initiatives. We are 16% owned by African Rainbow Minerals (ARM Limited), a
black empowerment company in which our chairman, Patrice Motsepe, owns an interest.
    
    We believe that we have gone beyond the requirements of the Mining Charter by ensuring
that our historically disadvantaged South African (HDSA) partners are truly empowered,
that we are largely managed by a HDSA Board, and that we continue to engage with black
shareholders and/or partners to find more opportunities to invest in BEE transactions and
involve HDSA partners.
    
    We will continue to embrace empowerment as part of our growth strategy and we
acknowledge that empowerment forms a fundamental part of our business into the future.
 Strategy of organic growth
  Organic growth focused on high quality ounces
 
    
    Harmonys extensive experience and ten-year track record of successfully identifying,
exploring and developing its own projects is a core component of our value creation
strategy.
    
    Our ongoing exploration programme is focused on both on-mine exploration, which
targets resources within the economic radius of existing mines, and new mine
exploration, which targets promising early to advanced stage projects around the world.
    
    Harmony is currently expanding its production base in South Africa and PNG, with a
focus on developing new mines at competitive cash costs and upgrading the overall
quality of our portfolio.
    
    We currently have a diverse project pipeline, comprising five projects that are well
advanced and, if all developed, could deliver up to an additional 1.4 million ounces of
low-cost production by 2011. These projects include Elandsrand New Mine, Doornkop South
Reef, Tshepong Sub 66 Decline and Phakisa in South Africa, and Hidden Valley in PNG,
which, if all developed, would contribute to a reduction in our overall cash costs per
ounce when they come on-stream.
    
    In addition to these projects, we have a number of additional development prospects
that are being progressed, including surface sand dumps, rock dumps and tailings dams,
reviewing the potential of our uranium deposits, and developing the Wafi/Golpu
copper/gold deposit in PNG, which, when an investment decision is taken by the board to
develop them once feasibility studies are complete, could increase production by up to a
further 1.0 million ounces.
    
    We have also expanded our exploration skill base, evidenced by our progress in PNG.
 
 24




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##### Table of Contents



Operational Strategy: Back to Basics:
  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 involvement and management
 
    
    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 management team develops an operational plan to implement the goals and targets for
its mine site. Members of Harmonys executive committee review and measure the results
at each mining site on a regular basis throughout the year.
 Focus on increased productivity
 
    
    Gold mining in South Africa is labor intensive, accounting for about 50% of Harmonys
South African operating 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.
 Commitment to cost control
 
    
    Harmony is committed to reducing its cost base and, to this end, Harmony benchmarks
its costing parameters both internally between operations within Harmony and externally
against other gold producers.
 Proactive maintenance practices
 
    
    Harmony 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 and reduces capital that may be used ineffectively on mines that have a
limited life.
 Implementation of new 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.
 Increasing consistency at our operations
 
    
    We are committed to increasing the consistency of our operations, in terms of both
gold ore grades and production levels, in order to extract optimal value from our
orebodies. To achieve this, we have undertaken an intensive program over the last 18
months to significantly improve the mining flexibility of our operations by increasing
our development expenditure and focusing on comprehensive ore reserve management. We
have made significant progress on this objective, as evidenced by our substantially
improved development rates.
    
    We are currently reviewing potential opportunities in respect of certain deposits and
assets which we may develop independently of our core gold business, and in particular,
our uranium assets, of which the underground resources are not currently reflected on
our balance sheet or reserve statement. In respect of our Wafi/Golpu copper/gold
prospects, we may seek to develop those assets with partners.
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##### Table of Contents



Selected acquisitions that diversify our operations and complement our competitive strengths
 
    
    Harmony has a long track-record of acquisitions, having completed over 25
transactions over the last eleven years and successfully integrating each of these
operations into the Company.
    
    We possess broad and extensive gold mining experience gained through the development
and operation of both surface, opencast mines and mechanized, underground mines. This
breadth of expertise provides us with a competitive advantage when evaluation
acquisition opportunities.
    
    Our acquisition strategy is currently focused on establishing another major growth
area outside of South Africa by 2011. We believe that there is value in further
diversifying our production base outside of South Africa, as well as applying our broad
development and operational skills to new types of deposits.
 Targeted disposals that will upgrade our overall portfolio quality
 
    
    Harmony has accumulated a diverse portfolio of assets, a number of which are nearing
the end of their productive lives for Harmony and are considered non-core to our
business. However, these assets may be of higher value to smaller producers who are less
concerned about short mine lives, and can still profitably operate these assets for a
number of years.
    
    As a result, we believe our disposal strategy will create value through the targeted
sale of these assets which for Harmony have relatively higher cost bases and/or shorter
mine lives.
    
    However, we will look to retain upside gold exposure from any disposal through gold
royalty arrangements. essentially a deferred purchase payment that is geared to
increased production and increased gold price.
    
    This disposal process is already well progressed, with an agreement entered into for
the sale of the Orkney operations in September 2007. This sale includes gold royalty
arrangements, and is due to be concluded by the first half of calendar 2008.
    
    We have also signed sale agreements or letters of intent for the disposal of our
Western Australian gold operations which includes South Kal and Mt Magnet.
 Initiatives that target specific opportunities
 
    
    We acknowledge significant capital expenditure and a commitment to a long time
horizon are required to develop our projects into new mines. However, we firmly believe
that this is the foundation of Harmonys future, and to this end, have made substantial
investments in our major projects both in South Africa and PNG.
 Principal Investments
  Rio Tinto
 Village
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##### Table of Contents



Item 7. Related Party Transactions.
 RMB Item 7. Related Party
Transactions. Item 5. Recently Retired
Credit Facilities and Other Borrowings.
   Disposals
 Recent Developments
        27




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##### Table of Contents



the ARM Empowerment
Trust See Item 7. Major Shareholders
and Related Party Transactions
 Hedging 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.
 28




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##### Table of Contents



Mining
  
    
    Accessing 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.
  29




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##### Table of Contents



Item 4. Information on the Company Regulation  Mineral Rights.
 Harmonys Management Structure
  Capital Expenditures
 Item 5.  Operating and Financial Review and Prospects  Critical
Accounting Policies and Estimates .
  Business  Harmonys Mining Operations. Item 4.  Information on the Company  Business  Harmonys Mining Operations  Evander
Operations.
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Reserves
  SAMREC Code
 For the reporting of Ore Reserves at our South African and Australian operations Harmony uses
a gold price of $520 per ounce. An exchange rate of R6.88 per U.S. dollar is used for South Africa
and for Australia an exchange rate of $0.73 per Australian dollar is used giving a gold price of
R115,000 per kilogram or AU$712 per ounce, respectively. These gold prices have also been used in
mine planning. At Papua New Guinea, the Hidden Valley feasibility study was completed using a base
case of US$520 per ounce (gold) and a silver price of US$8 per ounce and these prices have
therefore been used in the declaration of Ore Reserves.
  
    
    the database of measured and indicated resource blocks (per shaft section);
    
    an assumed gold price which, for this ore reserve statement, was taken as R115,000 per
kilogram;
    
    planned production rates;
    
    the mine recovery factor (MRF) which is equivalent to the mine call factor (MCF)
multiplied by the plant recovery factor; and
    
    planned cash costs (cost per tonne).
    31




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##### Table of Contents



Ore reserve statement (Imperial) as at June 30, 2007 (4)
 Gold
 PROVEN
    
    PROBABLE
    
    
    TOTALTonnes
    
    Grade
    
    Gold1
    
    Tonnes
    
    Grade
    
    Gold1
    
    Tonnes
    
    Grade
    
    Gold1Operations
    
    (million)
    
    (oz/ton)
    
    (Moz)
    
    (million)
    
    (oz/ton)
    
    (Moz)
    
    (million)
    
    (oz/ton)
    
    (Moz)South Africa UndergroundElandskraal
    
    
    7.1
    
    
    
    0.222
    
    
    
    1.57
    
    
    
    27.9
    
    
    
    0.240
    
    
    
    6.71
    
    
    
    35.0
    
    
    
    0.237
    
    
    
    8.28Free State
    
    
    10.2
    
    
    
    0.161
    
    
    
    1.64
    
    
    
    8.5
    
    
    
    0.155
    
    
    
    1.32
    
    
    
    18.8
    
    
    
    0.158
    
    
    
    2.96Randfontein
    
    
    3.5
    
    
    
    0.232
    
    
    
    0.80
    
    
    
    4.7
    
    
    
    0.173
    
    
    
    0.82
    
    
    
    8.2
    
    
    
    0.198
    
    
    
    1.62Evander
    
    
    5.4
    
    
    
    0.195
    
    
    
    1.04
    
    
    
    15.5
    
    
    
    0.184
    
    
    
    2.84
    
    
    
    20.8
    
    
    
    0.187
    
    
    
    3.88Evander(below infrastructure)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57.2
    
    
    
    0.213
    
    
    
    12.21
    
    
    
    57.2
    
    
    
    0.213
    
    
    
    12. 21Target
    
    
    8.7
    
    
    
    0.209
    
    
    
    1.82
    
    
    
    13.4
    
    
    
    0.185
    
    
    
    2.47
    
    
    
    22.1
    
    
    
    0.194
    
    
    
    4.29Free Gold
    
    
    15.2
    
    
    
    0.198
    
    
    
    3.02
    
    
    
    45.9
    
    
    
    0.224
    
    
    
    10.28
    
    
    
    61.1
    
    
    
    0.217
    
    
    
    13.30Total S.A. Underground
    
    
    50.0
    
    
    
    0.198
    
    
    
    9.90
    
    
    
    173.2
    
    
    
    0.213
    
    
    
    36.64
    
    
    
    223.2
    
    
    
    0.209
    
    
    
    46.54South Africa surfaceRandfontein
    
    
    4.1
    
    
    
    0.020
    
    
    
    0.08
    
    
    
    0.1
    
    
    
    0.054
    
    
    
    0.00
    
    
    
    4.2
    
    
    
    0.021
    
    
    
    0.09Kalgold
    
    
    4.0
    
    
    
    0.029
    
    
    
    0.12
    
    
    
    4.3
    
    
    
    0.053
    
    
    
    0.23
    
    
    
    8.4
    
    
    
    0.041
    
    
    
    0.35Free Gold
    
    
    212.1
    
    
    
    0.008
    
    
    
    1.76
    
    
    
    12.6
    
    
    
    0.017
    
    
    
    0.22
    
    
    
    224.7
    
    
    
    0.009
    
    
    
    1.97Total S.A. Surface
    
    
    220.2
    
    
    
    0.009
    
    
    
    1.96
    
    
    
    17.0
    
    
    
    0.026
    
    
    
    0.45
    
    
    
    237.2
    
    
    
    0.010
    
    
    
    2.41Australian operations2Mt. Magnet
    
    
    1.9
    
    
    
    0.064
    
    
    
    0.12
    
    
    
    0.6
    
    
    
    0.147
    
    
    
    0.09
    
    
    
    2.5
    
    
    
    0.083
    
    
    
    0.21South Kalgoorlie
    
    
    0.5
    
    
    
    0.028
    
    
    
    0.01
    
    
    
    4.3
    
    
    
    0.055
    
    
    
    0.24
    
    
    
    4.8
    
    
    
    0.052
    
    
    
    0.25Total Australian Operations
    
    
    2.4
    
    
    
    0.056
    
    
    
    0.14
    
    
    
    4.9
    
    
    
    0.066
    
    
    
    0.32
    
    
    
    7.3
    
    
    
    0.063
    
    
    
    0.46Papua New GuineaHidden valley
    
    
    5.6
    
    
    
    0.064
    
    
    
    0.36
    
    
    
    36.4
    
    
    
    0.055
    
    
    
    2.01
    
    
    
    42.0
    
    
    
    0.056
    
    
    
    2.37Kaveroi and Hamata
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.3
    
    
    
    0.070
    
    
    
    0.51
    
    
    
    7.2
    
    
    
    0.070
    
    
    
    0.51Golpu
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78.1
    
    
    
    0.018
    
    
    
    1.39
    
    
    
    78.5
    
    
    
    0.018
    
    
    
    1.39Total
Papua New Guinea
    
    
    5.6
    
    
    
    0.064
    
    
    
    0.36
    
    
    
    121.7
    
    
    
    0.032
    
    
    
    3.90
    
    
    
    127.3
    
    
    
    0.033
    
    
    
    4.26Grand total
    
    
    278.3
    
    
    
    0.044
    
    
    
    12.35
    
    
    
    316.7
    
    
    
    0.130
    
    
    
    41.31
    
    
    
    595.1
    
    
    
    0.090
    
    
    
    53.67
 
 NB : Rounding of figures may result in slight computational discrepancies(1)
    
    Gold oz figures are fully inclusive of all mining dilutions and gold losses, and are reported
as mill-delivered tons and head grades. Metallurgical recovery factors have not been applied
to the reserve figures stated above. The approximate metallurgical recovery factors for the
table above are as follows: Elandskraal 97%; Free State 95%; Randfontein 96%; Evander 97%;
Kalgold 85%; Freegold 96%; Target 97%; Mt. Magnet 93%; South Kalgoorlie 92%; PNG 93%. In order
to derive the appropriate plant recovery factors for ore reserve estimates a process have been
followed where realistic assumptions based on historical performance have been applied. There
may be short term fluctuation either positive or negative which can lead to small
discrepancies between actual and planned recovery factors.(2)
    
    Includes reserves from underground and surface mining at each of the Australian operations.(3)
    
    Includes reserves from underground and surface mining at the operations.(4)
    
    Cut-off grades are calculated per individual shaft, each having its own unique cost
structure, ore flow and recovery factors, which are entered into Harmonys Optimizer
software for a cut-off calculation per shaft and expressed in oz/t units. These cut offs
indicated below are oz/ton and used on in situ grades. They are as follows: Harmony 2 (
0.173); Merriespruit 1 (0.128); Merriespruit 3 (0.133); Unisel (0.146); Brand 3 (0.136);
Masimong 5 (0.160); Bambanani (0.167); Phakisa (0.191); Tshepong (0.198); St Helena 8 (0.177);
Joel (0.131); Evander 2 + 5 (0.211); Evander 7 (0.169); Evander 8 (0.203); Rolspruit (0.159);
Poplar (0.204); Cooke 1 (0.204); Cooke 2 (0.211); Cooke 3 (0.214).; Doornkop Kr (0.090);
Doornkop Sr (0.167); Elandsrand (0.176); Target (0.155); Kalgold (0.014) 33




---



##### Table of Contents



Silver
 PROVEN
    
    
    
    
    
    
    
    
    
    PROBABLE
    
    
    
    
    
    
    
    
    
    TOTALTonnes
    
    
    
    
    
    Silver
    
    Silver
    
    Tonnes
    
    
    
    
    
    Silver
    
    Silver
    
    Tonnes
    
    
    
    
    
    Silver
    
    SilverMine
    
    (Mt)
    
    g/t
    
    (000kg)
    
    (000oz)
    
    (Mt)
    
    g/t
    
    (000kg)
    
    (000oz)
    
    (Mt)
    
    g/t
    
    (000kg)
    
    (000oz)Hidden Valley
and Kaveroi
    
    
    5.1
    
    
    
    39.63
    
    
    
    202.1
    
    
    
    6498
    
    
    
    33.0
    
    
    
    33.23
    
    
    
    1096.7
    
    
    
    35261
    
    
    
    38.1
    
    
    
    34.09
    
    
    
    1298.9
    
    
    
    41759Grand total
    
    
    5.1
    
    
    
    39.63
    
    
    
    202.1
    
    
    
    6498
    
    
    
    33.0
    
    
    
    33.23
    
    
    
    1096.7
    
    
    
    35261
    
    
    
    38.1
    
    
    
    34.09
    
    
    
    1298.9
    
    
    
    41759
 
 Silver price used = US$8/ozNB : Rounding of figures may result in slight computational discrepancies Copper
 PROVEN
    
    
    
    
    
    
    
    
    
    PROBABLE
    
    
    
    
    
    
    
    
    
    TOTALTonnes
    
    
    
    
    
    Cu
    
    Cu
    
    Tonnes
    
    
    
    
    
    Cu
    
    Cu
    
    Tonnes
    
    
    
    
    
    Cu
    
    CuMine
    
    (Mt)
    
    %
    
    (000 t)
    
    (M lbs)
    
    (Mt)
    
    %
    
    (000 t)
    
    (M lbs)
    
    (Mt)
    
    %
    
    (000 t)
    
    (M lbs)Golpu
    
    
    0.0
    
    
    
    0.00
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    70.8
    
    
    
    1.13
    
    
    
    800.0
    
    
    
    1763
    
    
    
    70.8
    
    
    
    1.13
    
    
    
    800.0
    
    
    
    1763Grand total
    
    
    0.0
    
    
    
    0.00
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    70.8
    
    
    
    1.13
    
    
    
    800.0
    
    
    
    1763
    
    
    
    70.8
    
    
    
    1.13
    
    
    
    800.0
    
    
    
    1763
 
 Copper price used = US$30/lbNB : Rounding of figures may result in slight computational discrepancies Molybdenum
 PROVEN
    
    
    
    
    
    
    
    
    
    PROBABLE
    
    
    
    
    
    
    
    
    
    TOTALTonnes
    
    
    
    
    
    Cu
    
    Cu
    
    Tonnes
    
    
    
    
    
    Cu
    
    Cu
    
    Tonnes
    
    
    
    
    
    Cu
    
    CuMine
    
    (Mt)
    
    ppm
    
    (000 t)
    
    (M lbs)
    
    (Mt)
    
    ppm
    
    (000 t)
    
    (M lbs)
    
    (Mt)
    
    ppm
    
    (000 t)
    
    (M lbs)Golpu
    
    
    0.0
    
    
    
    0.00
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    70.8
    
    
    
    121.00
    
    
    
    8.6
    
    
    
    19
    
    
    
    70.8
    
    
    
    121.00
    
    
    
    8.6
    
    
    
    19Grand total
    
    
    0.0
    
    
    
    0.00
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    70.8
    
    
    
    121.00
    
    
    
    8.6
    
    
    
    19
    
    
    
    70.8
    
    
    
    121.00
    
    
    
    8.6
    
    
    
    19
 
 Molybdenum price used = US$20/lbNB : Rounding of figures may result in slight computational discrepancies    R103,500 /kilogram (-10 percent)
    
    R115,000/kilogram
    
    R126,500 /kilogram (+10 percent)50.685 million ounces
    
    53.67 million ounces
    
    55.747 million ounces
   
Reserves
 34




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##### Table of Contents



Risk Factors.
 Worldwide Operations
 Description of Property
  
  Hectares
    
    AcresCooke (Randfontein)
    
    
    8,696
    
    
    
    21,488Lindum (Randfontein)
    
    
    3,143
    
    
    
    7,766Doornkop (Randfontein)
    
    
    2,941
    
    
    
    7,267Elandskraal
    
    
    5,113
    
    
    
    12,634Free State
    
    
    22,583
    
    
    
    55,802Freegold
    
    
    21,173
    
    
    
    52,318Kalgold
    
    
    615
    
    
    
    1,520Evander
    
    
    36,898
    
    
    
    91,174Target
    
    
    7,952
    
    
    
    19,649Total
    
    
    109,114
    
    
    
    269,618
  Hectares
    
    AcresMt. Magnet
    
    
    83,419
    
    
    
    206,133South Kalgoorlie
    
    
    113,375
    
    
    
    280,156Total
    
    
    196,794
    
    
    
    486,289
  35




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##### Table of Contents



Hectares
    
    AcresPNG
    
    
    346,138
    
    
    
    855,326Total Worldwide Operations
    
    
    642,046
    
    
    
    1,611,233
  Geology
     Harmonys Mining Operations  Overview
  
    
    Elandskraal
    
    Free State
    
    Randfontein
    
    Evander
    
    Freegold
    
    Target
 36




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##### Table of Contents




    
    Free State
    
    Randfontein
    
    Freegold
    
    Kalgold
    
    Target
   
    
    Mt. Magnet  (we have signed a letter of intent for the sale of this operation  See
Disposalsabove.)
    
    South Kalgoorlie  (we have entered into an agreement for the sale of this operation 
See Disposalsabove.)
   
    
    an overview of our South African mining operations with a discussion of each site;
    
    a production analysis of our South African mining operations based on individual shafts
or mine grouped into categories (Quality, Leveraged and Growth); and
    
    an overview of our Australasian (Australian and PNG) operations.
 37




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##### Table of Contents



38




---



##### Table of Contents



South African Mining Operations  General
 
 Introduction:
 History:
 39




---



##### Table of Contents



Geology:
   Mining Operations:
     40




---



##### Table of Contents



Safety:
 Plants:
  Average Milled for theProcessing
    
    Fiscal YearPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)Elandsrand Plant
    
    185,000 *
    
    
    84,783
 
 *
    
    Processing capacity will reach its optimal capacity upon completion of the Elandsrand New Mine
Project.  41




---



##### Table of Contents



Randfontein Operations
 Introduction:
 History:
 Geology:
 42




---



##### Table of Contents



Mining Operations:
       Safety:
  Plants:
  43




---



##### Table of Contents



Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)Cooke
    
    
    280,000
    
    
    
    56,619Doornkop
    
    
    220,000
    
    
    
    169,613
 s
 
 Introduction:
 History:
 44




---



##### Table of Contents



Geology:
 Mining Operations:
     Safety:
 Plants:
  Average Milledfor the Fiscal YearProcessing
    
    EndedPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)Central
    
    
    168,000
    
    
    
    162,737Saaiplaas
    
    
    250,000
    
    
    
    178,646
 %
 45




---



##### Table of Contents



Introduction:
 History:
 Geology:
 Mining Operations:
  46




---



##### Table of Contents



Safety:
 Plants: .
  Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)Kinross-Winkelhaak
    
    
    200,000
    
    
    
    126,250
  
 Introduction:
 History:
 Geology: .
  47




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##### Table of Contents



Mining Operations:
 Safety:
 Plants:
   Average Milled for theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)CIL
    
    
    135,000
    
    
    
    132,485Heap Leach*
    
    
    
    
    
    
    
 
 *
    
    Active use of heap leaching was discontinued in July 2001; however, the Heap Leach is treated
through the current circuit on a monthly basis.  48




---



##### Table of Contents



Introduction:
  History:
 Geology:
 49




---



##### Table of Contents



Mining Operations:
        Safety:
  Plants:
 50




---



##### Table of Contents



Average Milled forProcessing
    
    the Fiscal YearPlant
    
    Capacity
    
    Ended June 30, 2007(tons/month)
    
    (tons/month)FS 1
    
    
    420,000
    
    
    
    404,167
  
 Introduction: Recent Developments
 51




---



##### Table of Contents



History:
 Geology:
  Mining operations:
   Safety:
 Plants:
 52




---



##### Table of Contents



Introduction:
  History:
 Geology:
 53




---



##### Table of Contents



Mining operations:
  Safety:
  Plants:
   54




---



##### Table of Contents



Average Milled For theProcessing
    
    Fiscal Year EndedPlant
    
    Capacity
    
    June 30, 2007(tons/month)
    
    (tons/month)Target Plant
    
    
    105,000
    
    
    
    101,217
  South African Operations  Production Analysis
  Quality assets
 Leveraged assets
 Growth assets
  Quality assets
  Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    6,901
    
    
    
    6,814
    
    
    
    7,464Recovered grade (ounces/ton)
    
    
    0.155
    
    
    
    0.167
    
    
    
    0.185Gold sold (ounces)
    
    
    1,068,902
    
    
    
    1,141,166
    
    
    
    1,378,167Results of operations ($)Product sales (000)
    
    
    682,029
    
    
    
    606,435
    
    
    
    588,360Cash cost (000)
    
    
    472,749
    
    
    
    437,193
    
    
    
    436,018Cash profit (000)
    
    
    209,280
    
    
    
    169,242
    
    
    
    152,342Cash costsPer ounce of gold ($)
    
    
    442
    
    
    
    383
    
    
    
    316Capex(000) ($)
    
    
    105,578
    
    
    
    89,587
    
    
    
    81,615
 Board of Directors, Senior Management and Employees  Unionized Labor
 55




---



##### Table of Contents



Fiscal Year Ended June 30,Target
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    904
    
    
    
    813
    
    
    
    1,178Recovered grade (ounces/ton)
    
    
    0.158
    
    
    
    0.185
    
    
    
    0.178Gold sold (ounces)
    
    
    142,433
    
    
    
    150,196
    
    
    
    209,847Results of operations ($)Product sales (000)
    
    
    91,228
    
    
    
    81,178
    
    
    
    89,233Cash cost (000)
    
    
    52,730
    
    
    
    51,904
    
    
    
    54,391Cash profit (000)
    
    
    38,498
    
    
    
    29,274
    
    
    
    34,842Cash costsPer ounce of gold ($)
    
    
    370
    
    
    
    346
    
    
    
    259Capex(000 )($)
    
    
    16,745
    
    
    
    9,644
    
    
    
    10,818
  Operating and Financial Review and
Prospects  Exchange Rates.
      56




---



##### Table of Contents



Capital expenditure
 Fiscal Year Ended June 30,Tshepong
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,824
    
    
    
    1,786
    
    
    
    1,700Recovered grade (ounces/ton)
    
    
    0,175
    
    
    
    0.188
    
    
    
    0.224Gold sold (ounces)
    
    
    318,887
    
    
    
    335,289
    
    
    
    380,695Results of operations ($)Product sales (000)
    
    
    202,757
    
    
    
    179,626
    
    
    
    162,958Cash cost (000)
    
    
    112,043
    
    
    
    111,462
    
    
    
    101,091Cash profit (000)
    
    
    90,714
    
    
    
    68,164
    
    
    
    61,867Cash costsPer ounce of gold ($)
    
    
    351
    
    
    
    332
    
    
    
    266Capex(000) ($)
    
    
    26,072
    
    
    
    23,529
    
    
    
    23,346
  Operating and Financial Review and Prospects 
Exchange
Rates.
    Capital Expenditure :
 57




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##### Table of Contents



Fiscal Year Ended June 30,Masimong Shaft Complex
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,074
    
    
    
    1,020
    
    
    
    1,046Recovered grade (ounces/ton)
    
    
    0.138
    
    
    
    0.133
    
    
    
    0.153Gold sold (ounces)
    
    
    147,958
    
    
    
    136,153
    
    
    
    159,981Results of operations ($)Product sales (000)
    
    
    94,534
    
    
    
    72,854
    
    
    
    68,342Cash cost (000)
    
    
    82,815
    
    
    
    66,563
    
    
    
    65,388Cash profit (000)
    
    
    11,719
    
    
    
    6,291
    
    
    
    2,954Cash costsPer ounce of gold ($)
    
    
    560
    
    
    
    489
    
    
    
    409Capex(000) ($)
    
    
    15,141
    
    
    
    14,520
    
    
    
    10,630
  Operating
and Financial Review and Prospects  Exchange Rates.
     58




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##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Evander 2
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    357Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.137Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    48,764Results of operations ($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    20,695Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    27,404Cash loss (000)
    
    
    
    
    
    
    
    
    
    
    (6,709
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    562Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    15
   Risk Factors  Risks Relating to Our Business and Our Industry 
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.
 Capital Expenditure.
  Fiscal Year Ended June 30,Evander 5
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    377
    
    
    
    450
    
    
    
    245Recovered grade (ounces/ton)
    
    
    0.148
    
    
    
    0.139
    
    
    
    0.192Gold sold (ounces)
    
    
    55,643
    
    
    
    62,388
    
    
    
    47,093Results of operations ($)Product sales (000)
    
    
    35,673
    
    
    
    32,183
    
    
    
    20,078Cash cost (000)
    
    
    28,923
    
    
    
    33,068
    
    
    
    15,912Cash (loss)/profit (000)
    
    
    6,750
    
    
    
    (885
    )
    
    
    4,166Cash costsPer ounce of gold ($)
    
    
    520
    
    
    
    530
    
    
    
    338Capex(000) ($)
    
    
    5,451
    
    
    
    6,453
    
    
    
    7,006
  59




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##### Table of Contents



Operating and Financial Review and Prospects
 Exchange Rates.
     Capital Expenditure :
 Fiscal Year Ended June 30,Evander 7
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    447
    
    
    
    435
    
    
    
    541Recovered grade (ounces/ton)
    
    
    0.137
    
    
    
    0.191
    
    
    
    0.240Gold sold (ounces)
    
    
    61,044
    
    
    
    83,202
    
    
    
    130,009Results of operations ($)Product sales (000)
    
    
    39,242
    
    
    
    42,365
    
    
    
    55,502Cash cost (000)
    
    
    38,633
    
    
    
    32,648
    
    
    
    32,795Cash profit (000)
    
    
    609
    
    
    
    9,717
    
    
    
    22,707Cash costsPer ounce of gold ($)
    
    
    633
    
    
    
    392
    
    
    
    252Capex(000) ($)
    
    
    11,899
    
    
    
    10,021
    
    
    
    7,948
  Operating and Financial Review and Prospects  Exchange Rates.
 60




---



##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Evander 8
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    842
    
    
    
    815
    
    
    
    734Recovered grade (ounces/ton)
    
    
    0.141
    
    
    
    0.158
    
    
    
    0.207Gold sold (ounces)
    
    
    118,692
    
    
    
    128,849
    
    
    
    151,936Results of operations ($)Product sales (000)
    
    
    76,124
    
    
    
    67,325
    
    
    
    64,912Cash cost (000)
    
    
    45,792
    
    
    
    44,863
    
    
    
    41,500Cash profit (000)
    
    
    30,332
    
    
    
    22,462
    
    
    
    23,412Cash costsPer ounce of gold ($)
    
    
    386
    
    
    
    348
    
    
    
    273Capex(000) ($)
    
    
    11,039
    
    
    
    9,726
    
    
    
    8,216
  Operating and
Financial Review and Prospects  Exchange Rates.
 61




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##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Cooke 1
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    426
    
    
    
    490
    
    
    
    520Recovered grade (ounces/ton)
    
    
    0.178
    
    
    
    0.164
    
    
    
    0.152Gold sold (ounces)
    
    
    75,698
    
    
    
    80,495
    
    
    
    79,101Results of operations ($)Product sales (000)
    
    
    48,311
    
    
    
    42,978
    
    
    
    33,888Cash cost (000)
    
    
    32,852
    
    
    
    32,274
    
    
    
    31,115Cash profit (000)
    
    
    15,459
    
    
    
    10,704
    
    
    
    2,773Cash costsPer ounce of gold ($)
    
    
    434
    
    
    
    401
    
    
    
    393Capex(000) ($)
    
    
    1,967
    
    
    
    3,759
    
    
    
    2,811
  Operating and Financial
Review and Prospects  Exchange Rates.
  62




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##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Cooke 2
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    385
    
    
    
    353
    
    
    
    403Recovered grade (ounces/ton)
    
    
    0.149
    
    
    
    0.170
    
    
    
    0.135Gold sold (ounces)
    
    
    57,215
    
    
    
    59,836
    
    
    
    54,441Results of operations ($)Product sales (000)
    
    
    36,290
    
    
    
    32,025
    
    
    
    23,274Cash cost (000)
    
    
    34,880
    
    
    
    23,082
    
    
    
    24,144Cash profit (000)
    
    
    1,410
    
    
    
    8,943
    
    
    
    (870
    )Cash costsPer ounce of gold ($)
    
    
    610
    
    
    
    386
    
    
    
    443Capex(000) ($)
    
    
    3,682
    
    
    
    3,738
    
    
    
    2,538
 Operating and Financial Review and Prospects  Exchange Rates.
     63




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##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Cooke 3
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    622
    
    
    
    652
    
    
    
    740Recovered grade (ounces/ton)
    
    
    0.147
    
    
    
    0.161
    
    
    
    0.157Gold sold (ounces)
    
    
    91,332
    
    
    
    104,758
    
    
    
    116,300Results of operations ($)Product sales (000)
    
    
    57,870
    
    
    
    55,901
    
    
    
    49,478Cash cost (000)
    
    
    44,081
    
    
    
    41,329
    
    
    
    42,278Cash profit (000)
    
    
    13,789
    
    
    
    14,572
    
    
    
    7,200Cash costsPer ounce of gold ($)
    
    
    483
    
    
    
    395
    
    
    
    364Capex(000 )($)
    
    
    13,582
    
    
    
    8,197
    
    
    
    8,287
  Operating and Financial Review and Prospects  Exchange Rates.
     Capital Expenditure :
 Leveraged assets
  64




---



##### Table of Contents



Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    5,507
    
    
    
    5,122
    
    
    
    5,990Recovered grade (ounces/ton)
    
    
    0.125
    
    
    
    0,133
    
    
    
    0.140Gold sold (ounces)
    
    
    687,499
    
    
    
    683,450
    
    
    
    841,280Results of operations ($)Product sales (000)
    
    
    438,310
    
    
    
    361,178
    
    
    
    358,139Cash cost (000)
    
    
    377,238
    
    
    
    336,695
    
    
    
    402,695Cash profit (000)
    
    
    61,072
    
    
    
    24,483
    
    
    
    (44,556
    )Cash costsPer ounce of gold ($)
    
    
    549
    
    
    
    493
    
    
    
    479Capex(000) ($)
    
    
    56,780
    
    
    
    40,072
    
    
    
    33,068
     Fiscal Year Ended June 30,Bambanani
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,191
    
    
    
    1,196
    
    
    
    1,090Recovered grade (ounces/ton)
    
    
    0.159
    
    
    
    0.147
    
    
    
    0.181Gold sold (ounces)
    
    
    189,683
    
    
    
    175,214
    
    
    
    197,535Results of operations ($)Product sales (000)
    
    
    120,733
    
    
    
    93,111
    
    
    
    84,165Cash cost (000)
    
    
    107,539
    
    
    
    87,064
    
    
    
    83,289Cash profit (000)
    
    
    13,194
    
    
    
    6,047
    
    
    
    876Cash costsPer ounce of gold ($)
    
    
    567
    
    
    
    497
    
    
    
    422Capex(000) ($)
    
    
    16,639
    
    
    
    14,870
    
    
    
    12,178
  Operating and Financial Review and
Prospects  Exchange Rates.
 65




---



##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Evander 9
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    31Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.083Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    2,573Results of operations ($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    1,078Cash cost (000)
    
    
    
    
    
    
    21
    
    
    
    3,005Cash profit (000)
    
    
    
    
    
    
    (21
    )
    
    
    (1,927
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    1,168Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    
   Fiscal Year Ended June 30,Joel
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    504
    
    
    
    436
    
    
    
    498Recovered grade (ounces/ton)
    
    
    0.158
    
    
    
    0.134
    
    
    
    0.129Gold sold (ounces)
    
    
    79,923
    
    
    
    58,595
    
    
    
    64,464Results of operations ($)Product sales (000)
    
    
    50,839
    
    
    
    31,346
    
    
    
    27,282Cash cost (000)
    
    
    33,412
    
    
    
    29,170
    
    
    
    28,990Cash profit (000)
    
    
    17,427
    
    
    
    2,176
    
    
    
    (1,708
    )Cash costsPer ounce of gold ($)
    
    
    418
    
    
    
    498
    
    
    
    450Capex(000 )($)
    
    
    3,911
    
    
    
    3,644
    
    
    
    2,582
  66




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##### Table of Contents



Operating and Financial
Review and Prospects  Exchange Rates.
     Capital Expenditure :
 Fiscal Year Ended June 30,Kudu/Sable
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    15
    
    
    
    13
    
    
    
    194Recovered grade (ounces/ton)
    
    
    0.053
    
    
    
    0.156
    
    
    
    0.130Gold sold (ounces)
    
    
    845
    
    
    
    2,024
    
    
    
    25,175Results of operations ($)Product sales (000)
    
    
    553
    
    
    
    890
    
    
    
    10,764Cash cost (000)
    
    
    189
    
    
    
    895
    
    
    
    18,885Cash profit (000)
    
    
    364
    
    
    
    (5
    )
    
    
    (8,121
    )Cash costsPer ounce of gold ($)
    
    
    224
    
    
    
    442
    
    
    
    750Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    
   67




---



##### Table of Contents



Capital expenditure:
 Fiscal Year Ended June 30,West Shaft
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    93
    
    
    
    206
    
    
    
    176Recovered grade (ounces/ton)
    
    
    0,080
    
    
    
    0.124
    
    
    
    0.160Gold sold (ounces)
    
    
    7,377
    
    
    
    25,525
    
    
    
    28,165Results of operations ($)Product sales (000)
    
    
    4,592
    
    
    
    13,117
    
    
    
    12,049Cash cost (000)
    
    
    7,929
    
    
    
    13,650
    
    
    
    12,907Cash loss (000)
    
    
    (3,337
    )
    
    
    (533
    )
    
    
    (858
    )Cash costsPer ounce of gold ($)
    
    
    1,075
    
    
    
    535
    
    
    
    458Capex(000) ($)
    
    
    666
    
    
    
    887
    
    
    
    107
   See Item 5. Operating and
Financial Review and Prospects  Exchange Rates.
    68




---



##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Nyala
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    2
    
    
    
    198Recovered grade (ounces/ton)
    
    
    
    
    
    
    0.092
    
    
    
    0.119Gold sold (ounces)
    
    
    
    
    
    
    184
    
    
    
    23,503Results of operations ($)Product sales (000)
    
    
    
    
    
    
    81
    
    
    
    9,897Cash cost (000)
    
    
    
    
    
    
    226
    
    
    
    17,587Cash profit (000)
    
    
    
    
    
    
    (145
    )
    
    
    (7,690
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    1,228
    
    
    
    748Capex(000 )($)
    
    
    
    
    
    
    3
    
    
    
    1,440
    Capital expenditure:
 Fiscal Year Ended June 30,Eland
    
    2007
    
    
    2006
    
    
    2005ProductionTons (000)
    
    
    11
    
    
    
    21
    
    
    
    175Recovered grade (ounces/ton)
    
    
    0.229
    
    
    
    0.193
    
    
    
    0.153Gold sold (ounces)
    
    
    2,420
    
    
    
    4,058
    
    
    
    26,782Results of operations( $)Product sales (000)
    
    
    1,505
    
    
    
    2,026
    
    
    
    11,436Cash cost (000)
    
    
    
    
    
    
    1,066
    
    
    
    13,404Cash profit (000)
    
    
    1,505
    
    
    
    960
    
    
    
    (1,968
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    263
    
    
    
    500Capex(000) ($)
    
    
    79
    
    
    
    
    
    
    
    
   69




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##### Table of Contents



Capital Expenditure :
 Fiscal Year Ended June 30,Deelkraal
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    1Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    2.284Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    2,284Results of operations ($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    958Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    714Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    244Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    313Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    
  Capital Expenditure :
 Fiscal Year Ended June 30,St. Helena
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    240
    
    
    
    127
    
    
    
    245Recovered grade (ounces/ton)
    
    
    0,089
    
    
    
    0.101
    
    
    
    0.122Gold sold (ounces)
    
    
    21,319
    
    
    
    12,791
    
    
    
    29,965Results of operations ($)Product sales (000)
    
    
    13,650
    
    
    
    6,867
    
    
    
    12,660Cash cost (000)
    
    
    17,909
    
    
    
    10,802
    
    
    
    24,191Cash loss (000)
    
    
    (4,259
    )
    
    
    (3,935
    )
    
    
    (11,531
    )Cash costsPer ounce of gold ($)
    
    
    840
    
    
    
    845
    
    
    
    807Capex(000) ($)
    
    
    1,440
    
    
    
    443
    
    
    
    901
 Operating and Financial Review and Prospects  Exchange Rates.
  70




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##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Harmony 2
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    516
    
    
    
    598
    
    
    
    559Recovered grade (ounces/ton)
    
    
    0.090
    
    
    
    0.116
    
    
    
    0.123Gold sold (ounces)
    
    
    46,274
    
    
    
    69,446
    
    
    
    68,547Results of operations ($)Product sales (000)
    
    
    29,936
    
    
    
    36,716
    
    
    
    29,295Cash cost (000)
    
    
    29,887
    
    
    
    33,527
    
    
    
    30,021Cash profit (000)
    
    
    49
    
    
    
    3,189
    
    
    
    (726
    )Cash costsPer ounce of gold ($)
    
    
    646
    
    
    
    483
    
    
    
    438Capex(000) ($)
    
    
    4,905
    
    
    
    3,964
    
    
    
    3,556
  Operating and Financial Review and
Prospects  Exchange Rates.
    71




---



##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Merriespruit 1
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    476
    
    
    
    410
    
    
    
    414Recovered grade (ounces/ton)
    
    
    0.106
    
    
    
    0.117
    
    
    
    0.110Gold sold (ounces)
    
    
    50,612
    
    
    
    48,069
    
    
    
    45,559Results of operations ($)Product sales (000)
    
    
    32,520
    
    
    
    25,685
    
    
    
    19,428Cash cost (000)
    
    
    26,507
    
    
    
    24,061
    
    
    
    21,719Cash profit (000)
    
    
    6,013
    
    
    
    1,624
    
    
    
    (2,291
    )Cash costsPer ounce of gold ($)
    
    
    524
    
    
    
    501
    
    
    
    477Capex(000) ($)
    
    
    3,509
    
    
    
    2,445
    
    
    
    2,833
 Operating and Financial Review and Prospects  Exchange Rates.
     72




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##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Merriespruit 3
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    444
    
    
    
    452
    
    
    
    548Recovered grade (ounces/ton)
    
    
    0.098
    
    
    
    0.097
    
    
    
    0.100Gold sold (ounces)
    
    
    43,541
    
    
    
    43,691
    
    
    
    54,690Results of operations ($)Product sales (000)
    
    
    27,933
    
    
    
    23,078
    
    
    
    23,325Cash cost (000)
    
    
    25,035
    
    
    
    24,188
    
    
    
    24,379Cash profit (000)
    
    
    2,898
    
    
    
    (1,110
    )
    
    
    (1,054
    )Cash costsPer ounce of gold ($)
    
    
    575
    
    
    
    554
    
    
    
    446Capex(000) ($)
    
    
    3,420
    
    
    
    1,783
    
    
    
    1,696
  Operating and Financial Review and Prospects 
Exchange Rates.
     Capital Expenditure
 73




---



##### Table of Contents



Fiscal Year Ended June 30,Unisel
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    614
    
    
    
    500
    
    
    
    494Recovered grade (ounces/ton)
    
    
    0.130
    
    
    
    0.146
    
    
    
    0.132Gold sold (ounces)
    
    
    79,992
    
    
    
    72,963
    
    
    
    65,011Results of operations ($)Product sales (000)
    
    
    51,142
    
    
    
    38,172
    
    
    
    27,798Cash cost (000)
    
    
    35,013
    
    
    
    28,789
    
    
    
    31,055Cash profit (000)
    
    
    16,129
    
    
    
    9,383
    
    
    
    (3,257
    )Cash costsPer ounce of gold ($)
    
    
    438
    
    
    
    395
    
    
    
    478Capex(000) ($)
    
    
    5,436
    
    
    
    3,907
    
    
    
    4,147
  Operating and Financial Review and Prospects  Exchange
Rates.
     Capital Expenditure
 Fiscal Year Ended June 30,Brand 3
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    444
    
    
    
    405
    
    
    
    448Recovered grade (ounces/ton)
    
    
    0.103
    
    
    
    0.103
    
    
    
    0.103Gold sold (ounces)
    
    
    45,611
    
    
    
    41,647
    
    
    
    46,299Results of operations ($)Product sales (000)
    
    
    29,174
    
    
    
    22,147
    
    
    
    19,807Cash cost (000)
    
    
    27,771
    
    
    
    23,272
    
    
    
    22,883Cash profit (000)
    
    
    1,403
    
    
    
    (1,125
    )
    
    
    (3,076
    )Cash costsPer ounce of gold ($)
    
    
    609
    
    
    
    559
    
    
    
    494Capex(000) ($)
    
    
    1,590
    
    
    
    987
    
    
    
    1,267
 74




---



##### Table of Contents



Operating and Financial Review and Prospects  Exchange
Rates.
     Capital Expenditure .
 Fiscal Year Ended June 30,Brand 5
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    12
    
    
    
    3
    
    
    
    Recovered grade (ounces/ton)
    
    
    0.077
    
    
    
    0.156
    
    
    
    Gold sold (ounces)
    
    
    918
    
    
    
    469
    
    
    
    33Results of operations ($)Product sales (000)
    
    
    592
    
    
    
    236
    
    
    
    8Cash cost (000)
    
    
    1526
    
    
    
    975
    
    
    
    2,120Cash loss (000)
    
    
    (934
    )
    
    
    (739
    )
    
    
    (2,112
    )Cash costsPer ounce of gold ($)
    
    
    1,661
    
    
    
    2,079
    
    
    
    64,242Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    
   75




---



##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Orkney 2
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    311
    
    
    
    347
    
    
    
    413Recovered grade (ounces/ton)
    
    
    0.168
    
    
    
    0.201
    
    
    
    0.190Gold sold (ounces)
    
    
    52,275
    
    
    
    69,877
    
    
    
    78,449Results of operations ($)Product sales (000)
    
    
    33,048
    
    
    
    36,589
    
    
    
    33,279Cash cost (000)
    
    
    26,262
    
    
    
    29,716
    
    
    
    31,495Cash profit (000)
    
    
    6,786
    
    
    
    6,873
    
    
    
    1,784Cash costsPer ounce of gold ($)
    
    
    502
    
    
    
    425
    
    
    
    401Capex(000) ($)
    
    
    4,273
    
    
    
    2,380
    
    
    
    1,443
  Operating and Financial Review and Prospects 
Exchange Rates.
     Capital Expenditure
 Fiscal Year Ended June 30,Orkney 4
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    397
    
    
    
    406
    
    
    
    455Recovered grade (ounces/ton)
    
    
    0.116
    
    
    
    0.145
    
    
    
    0.169Gold sold (ounces)
    
    
    46,041
    
    
    
    58,897
    
    
    
    76,971Results of operations ($)Product sales (000)
    
    
    28,960
    
    
    
    31,117
    
    
    
    32,720Cash cost (000)
    
    
    26,317
    
    
    
    29,273
    
    
    
    29,616Cash profit (000)
    
    
    2,643
    
    
    
    1,844
    
    
    
    3,104Cash costsPer ounce of gold ($)
    
    
    572
    
    
    
    497
    
    
    
    385Capex(000) ($)
    
    
    5,101
    
    
    
    4,759
    
    
    
    915
 76




---



##### Table of Contents



Operating and Financial Review and Prospects  Exchange Rates.
     Capital Expenditure
 Fiscal Year Ended June 30,Orkney 7
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    239
    
    
    
    
    
    
    
    Recovered grade (ounces/ton)
    
    
    0.086
    
    
    
    
    
    
    
    Gold sold (ounces)
    
    
    20,668
    
    
    
    
    
    
    
    Results of operations ($)Product sales (000)
    
    
    13,133
    
    
    
    
    
    
    
    Cash cost (000)
    
    
    11,942
    
    
    
    
    
    
    
    Cash profit (000)
    
    
    1,191
    
    
    
    
    
    
    
    Cash costsPer ounce of gold ($)
    
    
    578
    
    
    
    
    
    
    
    Capex(000) ($)
    
    
    5,768
    
    
    
    
    
    
    
    
  77




---



##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Saaiplaas 3
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    30Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.085Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    2,541Results of operations ($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    1,026Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    4,831Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (3,805
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    1,901Capex(000 )($)
    
    
    43
    
    
    
    
    
    
    
    4
  Capital Expenditure :
 Fiscal Year Ended June 30,Welkom 1
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    
    
    
    
    
    
    
    
    21Recovered grade (ounces/ton)
    
    
    
    
    
    
    
    
    
    
    0.130Gold sold (ounces)
    
    
    
    
    
    
    
    
    
    
    2,734Results of operations ($)Product sales (000)
    
    
    
    
    
    
    
    
    
    
    1,164Cash cost (000)
    
    
    
    
    
    
    
    
    
    
    1,604Cash profit (000)
    
    
    
    
    
    
    
    
    
    
    (440
    )Cash costsPer ounce of gold ($)
    
    
    
    
    
    
    
    
    
    
    587Capex(000) ($)
    
    
    
    
    
    
    
    
    
    
    
 Welkom shafts 1, 2, 3, 4, 6 and 7
 78




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##### Table of Contents



Capital Expenditure :
 Growth assets
  Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,714
    
    
    
    1,502
    
    
    
    1,545Recovered grade (ounces/ton)
    
    
    0.147
    
    
    
    0.143
    
    
    
    0.168Gold sold (ounces)
    
    
    252,074
    
    
    
    214,460
    
    
    
    260,066Results of operations ($)Product sales (000)
    
    
    160,850
    
    
    
    113,391
    
    
    
    111,055Cash cost (000)
    
    
    127,744
    
    
    
    113,671
    
    
    
    112,172Cash profit (000)
    
    
    33,106
    
    
    
    (280
    )
    
    
    (1,117
    )Cash costsPer ounce of gold ($)
    
    
    507
    
    
    
    530
    
    
    
    431Capex(000) ($)
    
    
    102,244
    
    
    
    78,076
    
    
    
    73,458
  Operating and Financial
Review and Prospects  Exchange Rates.
    Fiscal Year Ended June 30,Elandsrand
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,117
    
    
    
    987
    
    
    
    1,019Recovered grade (ounces/ton)
    
    
    0.174
    
    
    
    0.173
    
    
    
    0.204Gold sold (ounces)
    
    
    194,710
    
    
    
    170,867
    
    
    
    207,371Results of operations ($)Product sales (000)
    
    
    124,347
    
    
    
    90,097
    
    
    
    88,577Cash cost (000)
    
    
    102,534
    
    
    
    89,349
    
    
    
    88,599Cash profit (000)
    
    
    21,813
    
    
    
    748
    
    
    
    (22
    )Cash costsPer ounce of gold ($)
    
    
    527
    
    
    
    523
    
    
    
    427Capex(000) ($)
    
    
    33,094
    
    
    
    30,523
    
    
    
    26,081
 79




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##### Table of Contents



Elandsrand New Mine Project
   
    
    Sinking and equipping of the No 2 Service Shaft to its final depth (105 level) was
completed during the year.
    
    The 92 level turbine dam was sunk to its depth of 26m, and supported and sealed.
    
    The Man 1 Winder stations on the sub-shaft were commissioned on all five levels (102,
105, 109, 113 and 115). The sub-shaft can now hoist men and material with both winders on
the project levels.
    
    All the electrical main sub-stations on the project levels (except 115 level) have now
been completed and commissioned. This includes all main feeder cables below 100 level. All
the services cables have been installed from 100 level to 115 level. These are expected to
be commissioned during the first quarter of the 2008 fiscal year.
    
    The 22 kV systems from surface to 100 level was completed during the year and is
awaiting the installation of the 10 MVA transformer on 100 level.
    
    The installation of the No. 1 Settler was completed during the year and is planned to be
brought on line towards the end of December 2007.
    
    The winder and headgear chamber for the No 3 Service shaft was completed during the
year.
  80




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##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Doornkop
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    597
    
    
    
    515
    
    
    
    526Recovered grade (ounces/ton)
    
    
    0.096
    
    
    
    0.085
    
    
    
    0.100Gold sold (ounces)
    
    
    57,364
    
    
    
    43,593
    
    
    
    52,695Results of operations ($)Product sales (000)
    
    
    36,503
    
    
    
    23,294
    
    
    
    22,478Cash cost (000)
    
    
    25,210
    
    
    
    24,322
    
    
    
    23,573Cash profit (000)
    
    
    11,293
    
    
    
    (1,028
    )
    
    
    (1,095
    )Cash costsPer ounce of gold ($)
    
    
    439
    
    
    
    558
    
    
    
    447Capex(000) ($)
    
    
    37,557
    
    
    
    26,031
    
    
    
    28,621
       Doornkop South Reef Project
 Capital Expenditure
 81




---



##### Table of Contents



Fiscal Year Ended June 30,Phakisa
    
    2007
    
    2006
    
    2005ProductionTons (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) ($)
    
    
    31,593
    
    
    
    21,522
    
    
    
    18,756
   Phakisa Shaft Project
   Capital Expenditure
 Surface Operations
  Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    5,451
    
    
    
    3,984
    
    
    
    6,528Recovered grade (ounces/ton)
    
    
    0.019
    
    
    
    0.029
    
    
    
    0.029Gold sold (ounces)
    
    
    100,925
    
    
    
    116,388
    
    
    
    188,904Results of operations ($)Product sales (000)
    
    
    65,407
    
    
    
    59,833
    
    
    
    80,222Cash cost (000)
    
    
    40,790
    
    
    
    49,543
    
    
    
    73,679Cash profit (000)
    
    
    24,617
    
    
    
    10,290
    
    
    
    (6,543
    )
 82




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##### Table of Contents



Fiscal Year Ended June 30,2007
    
    2006
    
    2005Cash costsPer ounce of gold ($)
    
    
    404
    
    
    
    426
    
    
    
    390Capex(000) ($)
    
    
    16,417
    
    
    
    13,259
    
    
    
    5,675
       Fiscal Year Ended June 30,Kalgold
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,740
    
    
    
    2,008
    
    
    
    1,855Recovered grade (ounces/ton)
    
    
    0.032
    
    
    
    0.038
    
    
    
    0.058Gold sold (ounces)
    
    
    56,129
    
    
    
    77,071
    
    
    
    108,195Results of operations ($)Product sales (000)
    
    
    35,743
    
    
    
    39,342
    
    
    
    46,331Cash cost (000)
    
    
    27,218
    
    
    
    31,740
    
    
    
    40,341Cash profit (000)
    
    
    8,525
    
    
    
    7,602
    
    
    
    5,990Cash costsPer ounce of gold ($)
    
    
    485
    
    
    
    412
    
    
    
    373Capex(000) ($)
    
    
    376
    
    
    
    389
    
    
    
    (4,145
    )
     83




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##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Elandsrand
    
    2007
    
    2006
    
    2005ProductionTons (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) ($)
    
    
    810
    
    
    
    
    
    
    
    7
 Fiscal Year Ended June 30,Freegold
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    300
    
    
    
    336
    
    
    
    1,361Recovered grade (ounces/ton)
    
    
    0.010
    
    
    
    0.033
    
    
    
    0.027Gold sold (ounces)
    
    
    3,035
    
    
    
    11,019
    
    
    
    36,420Results of operations ($)Product sales (000)
    
    
    2,848
    
    
    
    5,366
    
    
    
    15,407Cash cost (000)
    
    
    302
    
    
    
    5,386
    
    
    
    15,436Cash profit (000)
    
    
    2,546
    
    
    
    (20
    )
    
    
    (29
    )Cash costsPer ounce of gold ($)
    
    
    99
    
    
    
    489
    
    
    
    424Capex(000) ($)
    
    
    913
    
    
    
    340
    
    
    
    314
  Operating and Financial Review and Prospects  Exchange Rates.
 84




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##### Table of Contents



Capital Expenditure
 Fiscal Year Ended June 30,Free State
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    2,369
    
    
    
    897
    
    
    
    467Recovered grade (ounces/ton)
    
    
    0.009
    
    
    
    0.018
    
    
    
    0.020Gold sold (ounces)
    
    
    21,345
    
    
    
    15,902
    
    
    
    9,542Results of operations ($)Product sales (000)
    
    
    13,628
    
    
    
    8,614
    
    
    
    3,720Cash cost (000)
    
    
    6,448
    
    
    
    6,427
    
    
    
    3,318Cash profit (000)
    
    
    7,180
    
    
    
    2,187
    
    
    
    402Cash costsPer ounce of gold ($)
    
    
    304
    
    
    
    404
    
    
    
    348Capex(000) ($)
    
    
    4,711
    
    
    
    3,818
    
    
    
    1,589
  Operating and Financial
Review and Prospects  Exchange Rates.
   Capital Expenditure
 Fiscal Year Ended June 30,Randfontein
    
    2007
    
    2006
    
    2006ProductionTons (000)
    
    
    894
    
    
    
    539
    
    
    
    2,757Recovered grade (ounces/ton)
    
    
    0.021
    
    
    
    0.022
    
    
    
    0.012Gold sold (ounces)
    
    
    18,974
    
    
    
    11,650
    
    
    
    33,397Results of operations ($)Product sales (000)
    
    
    12,239
    
    
    
    6,108
    
    
    
    14,185
 85




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##### Table of Contents



Fiscal Year Ended June 30,Randfontein
    
    2007
    
    2006
    
    2006Cash cost (000)
    
    
    5,791
    
    
    
    5,022
    
    
    
    14,117Cash profit (000)
    
    
    6,448
    
    
    
    1,086
    
    
    
    68Cash costsPer ounce of gold ($)
    
    
    305
    
    
    
    431
    
    
    
    423Capex(000) ($)
    
    
    7,263
    
    
    
    8,712
    
    
    
    6,120
  Operating and Financial
Review and Prospects  Exchange Rates.
    Capital Expenditure
 Fiscal Year Ended June 30,Target
    
    2007
    
    2006
    
    2005ProductionTons (000)
    
    
    147
    
    
    
    204
    
    
    
    88Recovered grade (ounces/ton)
    
    
    0.009
    
    
    
    0.004
    
    
    
    0.015Gold sold (ounces)
    
    
    1,316
    
    
    
    746
    
    
    
    1,350Results of operations ($)Product sales (000)
    
    
    869
    
    
    
    404
    
    
    
    579Cash cost (000)
    
    
    1,028
    
    
    
    968
    
    
    
    467Cash profit (000)
    
    
    (159
    )
    
    
    (564
    )
    
    
    112Cash costsPer ounce of gold ($)
    
    
    781
    
    
    
    1,298
    
    
    
    346Capex(000) ($)
    
    
    1,707
    
    
    
    
    
    
    
    1,790
    86




---



##### Table of Contents



Capital Expenditure
 
  87




---



##### Table of Contents



SKM
       Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    3,266
    
    
    
    3,398
    
    
    
    4,148Recovered grade (ounces/ton)
    
    
    0.069
    
    
    
    0.068
    
    
    
    0.072Gold sold (ounces)
    
    
    224,799
    
    
    
    231,461
    
    
    
    296,848Results of operations ($)Product sales (000)
    
    
    141,874
    
    
    
    122,496
    
    
    
    125,669Cash cost (000)
    
    
    115,193
    
    
    
    96,950
    
    
    
    100,178Cash profit (000)
    
    
    26,681
    
    
    
    25,546
    
    
    
    25,491Cash costsPer ounce of gold ($)
    
    
    512
    
    
    
    419
    
    
    
    337Capex(000) ($)
    
    
    26,919
    
    
    
    24,971
    
    
    
    25,813
   88




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##### Table of Contents



Capital expenditure:
 Mt. Magnet Operations
 Introduction.
 History.
 Geology.
 Mining Operations.
   Risk Factors  Risks Relating to Our Business and Our Industry  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.
  89




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##### Table of Contents



Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,875
    
    
    
    1,918
    
    
    
    2,743Recovered grade (ounces/ton)
    
    
    0.073
    
    
    
    0.078
    
    
    
    0.066Gold sold (ounces)
    
    
    136,428
    
    
    
    148,822
    
    
    
    181,233Results of operations ($)Product sales (000)
    
    
    85,760
    
    
    
    80,090
    
    
    
    77,242Cash cost (000)
    
    
    70,626
    
    
    
    59,427
    
    
    
    60,915Cash profit (000)
    
    
    15,134
    
    
    
    20,663
    
    
    
    16,327Cash costsPer ounce of gold ($)
    
    
    518
    
    
    
    399
    
    
    
    336Capex(000) ($)
    
    
    20,199
    
    
    
    22,651
    
    
    
    15,652
      Plant.
 Average Milled forthe Year Ended JunePlant
    
    Processing Capacity*
    
    30, 2007(tons/month)
    
    (tons/month)Mt. Magnet
    
    
    243,000
    
    
    
    156,145
   Capital Expenditure.
 90




---



##### Table of Contents



Exploration.
 South Kalgoorlie Operations
 Introduction.
  History. HBJ
 Geology.
 Mining Operations.
 Risk
Factors  Risks Relating to Our Business and Our Industry  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 development or discovery.
   91




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##### Table of Contents



Fiscal Year Ended June 30,2007
    
    2006
    
    2005ProductionTons (000)
    
    
    1,391
    
    
    
    1,480
    
    
    
    1,405Recovered grade (ounces/ton)
    
    
    0.064
    
    
    
    0.056
    
    
    
    0.082Gold sold (ounces)
    
    
    88,371
    
    
    
    82,639
    
    
    
    115,615Results of operations($)Product sales (000)
    
    
    56,114
    
    
    
    42,406
    
    
    
    48,427Cash cost (000)
    
    
    44,567
    
    
    
    37,523
    
    
    
    39,263Cash profit (000)
    
    
    11,547
    
    
    
    4,883
    
    
    
    9,164Cash costsPer ounce of gold($)
    
    
    504
    
    
    
    454
    
    
    
    340Capex(000)($)
    
    
    6,720
    
    
    
    2,320
    
    
    
    10,161
     Plants.
   Average Milled forthe Year Ended JunePlant
    
    Processing Capacity*
    
    30, 2007(tons/month)
    
    (tons/month)Jubilee
    
    
    122,000
    
    
    
    115,878
   92




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##### Table of Contents



Capital Expenditure.
 Exploration.
  Papua New Guinea Operations
 Overview
 Introduction.
 93




---



##### Table of Contents



Harmony PNG tenement locations.
   PFS
 94




---



##### Table of Contents



Hidden Valley Project
 Introduction.
 History.
 Site Access.
 Engineering Procurement and Construction Management Contract.
 Power supply. PPL
  Customs and Excise.
 Mining Fleet.
 95




---



##### Table of Contents



Geology
 Environment.
 Community affairs/landowner discussions.
 Project Overview.
  Plant.
    Government royalty and other rights.
  96




---



##### Table of Contents



Third Party Royalties.
 MAC
 Capital Expenditure.
  Morobe Consolidated Goldfields Limited (MCG) Tenements
   
    
    Major new stand alone discoveries;
    
    High-grade drivers to improve cash flows of the Hidden Valley Project; and
    
    Additional reserves to substantially increase mine life of the Hidden Valley Project.
   Kerimenge and the broader prospect potential
 Introduction.
 97




---



##### Table of Contents



Geology.
 Project Status.
 Morobe Coast Exploration License
 Introduction.
 Project status.
 Giu Prospect
   Project Status.
 Wafi Golpu Project Area
 Introduction.
 Geography.
 98




---



##### Table of Contents



Mining Reserves.
 Ton
    
    Cu
    
    Au
    
    As
    
    Ag
    
    Mo
    
    Cu Metal
    
    Au Metal
    
    Mo MetalGolpu
    
    (Mt)
    
    %
    
    ppm
    
    ppm
    
    ppm
    
    ppm
    
    (000t)
    
    (000oz)
    
    (000t)Proven Reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Probable Reserve
    
    
    78.5
    
    
    
    1.1
    
    
    
    0.6
    
    
    
    136
    
    
    
    1.2
    
    
    
    121
    
    
    
    881
    
    
    
    1,389
    
    
    
    9.5Total
    
    
    78.5
    
    
    
    1.1
    
    
    
    0.6
    
    
    
    136
    
    
    
    1.2
    
    
    
    121
    
    
    
    881
    
    
    
    1,389
    
    
    
    9.5
         Government Royalty and Other Rights.
 Third Party Royalties.
 Additional Prospects and Exploration Potential.
 99




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##### Table of Contents



Capital Expenditure.
  Wafi Gold Projects
 Introduction.
 Geology.
  NRG1"
 Project Status.
  Wafi Leases
  100




---



##### Table of Contents



Golpu Copper-Gold Project
 Introduction.
 Geology.
     Project Status.
  101




---



##### Table of Contents



REGULATION
 Mineral Rights
 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 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;
    
    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; and
    
    to ensure that holders of mining and production rights contribute towards socio-economic
development of the areas in which they are operating.
    102




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##### Table of Contents




    
    limits ministerial discretion insofar as applications relating to the conversion of old
order mining rights are concerned,
    
    introduces a first-come first-served principle with respect to the consideration of
applications for new order mining rights,
    
    introduces a mining advisory board to advise the Minister of Minerals and Energy on
matters relating to minerals and mining, consisting of representatives of, inter alia, the
South African state, organized labor, organized business and relevant community based
organizations,
    
    provides for compensation for currently held rights in certain circumstances, and
    
    provides that a party aggrieved by an administration decision made in terms of the MPRDA
has the right of appeal to either the Director General or the Minister and may only take
matters to the courts once that party has exhausted his or her remedies in terms of the
appeal procedures that are to be set forth.
 Australia
    103




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##### Table of Contents



Papua New Guinea
     Morobe"
   Environmental Matters
 South Africa
   
    
    clean the surface environment after mining and ensure certificates of closure are
obtained;
 104




---



##### Table of Contents




    
    promote clean mining and minerals processing;
    
    support Harmonys social plan requirements, such as required by the MPRDA and Mining
Charter, Black Economic Empowerment (BEE) and local community involvement;
    
    reduce environmental liabilities by 10% per annum by optimising assets; and
    
    self-fund environmental rehabilitation through economic activities/savings, thus
contributing to the bottom line.Our approach to environmental management encompasses the following four broad principles:
    
    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 notified and 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 Harmony;
    
    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.
 EMS EMPR
 EMP
 105




---



##### Table of Contents



EMF
 DWAF KOSH DEAT MWC WBEC WUC
   106




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##### Table of Contents



WBEC
  
    
    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.
    
    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.
 EIA
   107




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Australia
       108




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##### Table of Contents



Papua New Guinea
 DEC
      
    
    development and implementation of environmental management procedures;
    
    monitoring of environmental impacts and performance; and
    
    review of procedures to ensure continual improvement.
 109




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##### Table of Contents



Health and Safety Matters
 South Africa
 The Mine Health and Safety Act
 MPRDA
 
    
    to protect the health and safety of employees and other persons at mines;
    
    to promote a culture of health and safety;
    
    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 health and safety committees at mines;
    
    to provide for the effective monitoring of health and safety conditions at mines;
    
    to provide for the enforcement of health and safety measures at mines; and
    
    to foster and promote co-operation and consultation on health and safety between the
Department of Minerals and Energy, employers, employees and their representatives.
    HIV/AIDS Policy
 Risk Factors  Risks Relating
to Our Business and Our Industry  HIV/AIDS poses risks to Harmony in terms of productivity and
costs Risk Factors  Risks Relating to Our Business and Our Industry  The cost of
occupational healthcare services may increase in the future
 NUM UASA
 110




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##### Table of Contents



Australia
    Papua New Guinea
   Risk Factors  Risks Relating to Our Business and Our Industry  HIV/AIDS poses
risks to Harmony in terms of productivity and costs Risk Factors  Risks Relating to Our
Business and Our Industry  The cost of occupational healthcare services may increase in the
future"
 
 Item 4A. UNRESOLVED STAFF COMMENTS
  111




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##### Table of Contents



Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 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; and
    
    the Growth Assets, which comprisethe 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 capital project
    
    Free StateEvander 2, 3 & 5
    
    St. Helena
    
    
    
    RandfonteinEvander 7
    
    Harmony 2
    
    
    
    TargetEvander 8
    
    Merriespruit 1Cooke 1
    
    Merriespruit 3Cooke 2
    
    UniselCooke 3
    
    Brand 3Orkney 2**Orkney 4**
Orkney 7**
 
 *
    
    West Shaft closed end of March 2007.**
    
    On September 24, 2007 an agreement to sell the Orkney shaft was entered into with Pamodzi
Gold and is expected to be concluded by the first half of 2008.***
    
    The Harmony 4 Shaft, St. Helena 2 Shaft and Eland Shaft are all currently under care and
maintenance as of June 30, 2007. Critical Accounting Policies And Estimates
  112




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##### Table of Contents



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
  Carrying Value of Goodwill
  113




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##### Table of Contents



Impairment of Long-Lived Assets
    Hedging and Financial Derivatives
 Item 11. Quantitative and Qualitative
Disclosures About Market Risk  General.
 Remediation Obligations (Asset Retirement Obligations)
   114




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##### Table of Contents



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.
   Item 11. Quantitative and Qualitative
Disclosures About Market Risk.
  115




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##### Table of Contents



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 302007
    
    2006
    
    2005($/oz)Average
    
    
    638
    
    
    
    527
    
    
    
    422High
    
    
    692
    
    
    
    726
    
    
    
    454Low
    
    
    561
    
    
    
    418
    
    
    
    387Harmonys average sales price(1)
    
    
    638
    
    
    
    529
    
    
    
    427
 
 (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. 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
   116




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##### Table of Contents



"- Critical Accounting Policies"
  Continuing operations
  Fiscal year ended June 30,2006
    
    2006
    
    2005(in $ thousands, except per ounce amounts)Total production costs from continuing operations  under U.S. GAAP
    
    
    1,170,320
    
    
    
    1,123,153
    
    
    
    1,195,179Depreciation and amortization expense (excluding depreciation on non-mining assets)
    
    
    (120,795
    )
    
    
    (147,344
    )
    
    
    (141,354
    )Other items to be excluded from GAAP measure (1)
    
    
    (25,967
    )
    
    
    (17,255
    )
    
    
    (17,045
    )Production costs exclusive of depreciation and amortization per financial statements
    
    
    1,023,558
    
    
    
    958,554
    
    
    
    1,036,780Less: share-based compensation
    
    
    (5,113
    )
    
    
    (15,726
    )
    
    
    (15,618
    )Total cash costs  using Gold Institute guidance
    
    
    1,018,445
    
    
    
    942,828
    
    
    
    1,021,162Per ounce calculation:Ounces sold
    
    
    2,109,400
    
    
    
    2,155,464
    
    
    
    2,668,417Total cash cost per ounce  using Gold Institute guidance
    
    
    483
    
    
    
    437
    
    
    
    383Total production cost per ounce  under U.S. GAAP
    
    
    555
    
    
    
    521
    
    
    
    448
 
 (1)
    
    Includes corporate costs and decrease in rehabilitation cost from continuing operations. Discontinued operations
  117




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##### Table of Contents



Fiscal year ended June 30,2007
    
    2006
    
    2005(in $ thousands, except per ounce amounts)Total production costs from discontinuing operations  under U.S. GAAP
    
    
    146,902
    
    
    
    111,846
    
    
    
    103,258Depreciation and amortization expense (excluding depreciation on non-mining assets)
    
    
    (31,547
    )
    
    
    (12,089
    )
    
    
    (3,971
    )Other items to be excluded from GAAP measure (1)
    
    
    321
    
    
    
    (1,480
    )
    
    
    890Production costs exclusive of depreciation and amortization per financial statements
    
    
    115,676
    
    
    
    98,277
    
    
    
    100,177Less; Share-based compensation
    
    
    (483
    )
    
    
    (1,329
    )
    
    
    Total cash costs  using Gold Institute guidance
    
    
    115,193
    
    
    
    96,948
    
    
    
    100,177Per ounce calculation:Ounces sold
    
    
    224,798
    
    
    
    231,461
    
    
    
    296,848Total cash cost per ounce  using Gold Institute guidance
    
    
    512
    
    
    
    419
    
    
    
    337Total production cost per ounce  under U.S. GAAP
    
    
    653
    
    
    
    483
    
    
    
    348
 
 (1)
    
    Includes corporate costs and decrease in rehabilitation cost from discontinued operations. Total Harmony  Continuing and discontinued operations
 Fiscal year ended June 30,2007
    
    2006
    
    2005(in $ thousands, except
per ounce amounts)Total production costs  under U.S. GAAP
    
    
    1,317,222
    
    
    
    1,234,999
    
    
    
    1,298,437Depreciation and amortization expense (excluding depreciation on non-mining assets)
    
    
    (152,342
    )
    
    
    (159,433
    )
    
    
    (145,325
    )Other items to be excluded from GAAP measure (1)
    
    
    (25,646
    )
    
    
    (18,735
    )
    
    
    (16,155
    )Production costs exclusive of depreciation and amortization per financial statements
    
    
    1,139,234
    
    
    
    1,056,831
    
    
    
    1,136,957Less: share-based compensation
    
    
    (5,596
    )
    
    
    (17,055
    )
    
    
    (15,618
    )Total cash costs  using Gold Institute guidance
    
    
    1,133,638
    
    
    
    1,039,776
    
    
    
    1,121,339Per ounce calculation:Ounces sold
    
    
    2,334,198
    
    
    
    2,386,925
    
    
    
    2,965,265Total cash cost per ounce  using Gold Institute guidance
    
    
    486
    
    
    
    436
    
    
    
    378Total production cost per ounce  under U.S. GAAP
    
    
    564
    
    
    
    517
    
    
    
    438
 
 (1)
    
    Includes corporate costs and decrease in rehabilitation cost.  Item 4. Information on the Company  Business  Strategy.
 Exchange Rates
    118




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##### Table of Contents



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, 2007 and 2006
 Continuing Operations
 Revenues
    119




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Costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2007
    
    2006
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSOUTH AFRICAFree State operationsQuality assetsMasimong
    
    
    147,958
    
    
    
    560
    
    
    
    136,153
    
    
    
    489
    
    
    
    15Leveraged assetsHarmony 2
    
    
    46,274
    
    
    
    646
    
    
    
    69,446
    
    
    
    483
    
    
    
    34Merriespruit 1
    
    
    50,612
    
    
    
    524
    
    
    
    48,069
    
    
    
    501
    
    
    
    5Merriespruit 3
    
    
    43,541
    
    
    
    575
    
    
    
    43,691
    
    
    
    554
    
    
    
    4Unisel
    
    
    79,992
    
    
    
    438
    
    
    
    72,963
    
    
    
    395
    
    
    
    11Brand 3
    
    
    45,611
    
    
    
    609
    
    
    
    41,647
    
    
    
    559
    
    
    
    9Brand 5
    
    
    918
    
    
    
    1,662
    
    
    
    469
    
    
    
    2,079
    
    
    
    (20
    )
 120




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##### Table of Contents



PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2007
    
    2006
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)
    
    Costs per ounceSurface operations
    
    
    21,346
    
    
    
    302
    
    
    
    15,902
    
    
    
    404
    
    
    
    (25
    )Evander operationsQuality assetsEvander 5
    
    
    55,643
    
    
    
    520
    
    
    
    62,388
    
    
    
    530
    
    
    
    (2
    )Evander 7
    
    
    61,044
    
    
    
    633
    
    
    
    83,202
    
    
    
    392
    
    
    
    61Evander 8
    
    
    118,692
    
    
    
    386
    
    
    
    128,849
    
    
    
    348
    
    
    
    11Randfontein operationsQuality assetsCooke 1
    
    
    75,698
    
    
    
    434
    
    
    
    80,495
    
    
    
    401
    
    
    
    8Cooke 2
    
    
    57,215
    
    
    
    610
    
    
    
    59,836
    
    
    
    386
    
    
    
    58Cooke 3
    
    
    91,332
    
    
    
    483
    
    
    
    104,758
    
    
    
    395
    
    
    
    22Growth assetsDoornkop
    
    
    57,364
    
    
    
    439
    
    
    
    43,593
    
    
    
    558
    
    
    
    (21
    )Surface operations
    
    
    18,974
    
    
    
    305
    
    
    
    11,650
    
    
    
    431
    
    
    
    (29
    )Elandskraal operationsGrowth assetsElandsrand
    
    
    194,710
    
    
    
    527
    
    
    
    170,867
    
    
    
    523
    
    
    
    1Freegold operationsQuality assetsTshepong
    
    
    318,887
    
    
    
    351
    
    
    
    335,289
    
    
    
    332
    
    
    
    6Growth assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    189,683
    
    
    
    567
    
    
    
    175,214
    
    
    
    497
    
    
    
    14Joel
    
    
    79,923
    
    
    
    418
    
    
    
    58,595
    
    
    
    498
    
    
    
    (16
    )Eland
    
    
    2,420
    
    
    
    
    
    
    
    4,058
    
    
    
    263
    
    
    
    (100
    )Kudu/Sable
    
    
    845
    
    
    
    224
    
    
    
    2,024
    
    
    
    442
    
    
    
    (49
    )West Shaft
    
    
    7,377
    
    
    
    1,075
    
    
    
    25,525
    
    
    
    535
    
    
    
    101Nyala
    
    
    
    
    
    
    
    
    
    
    184
    
    
    
    1,228
    
    
    
    (100
    )St. Helena
    
    
    21,319
    
    
    
    840
    
    
    
    12,791
    
    
    
    845
    
    
    
    (1
    )Surface operations
    
    
    3,035
    
    
    
    99
    
    
    
    11,019
    
    
    
    489
    
    
    
    (80
    )ARMgold operationsLeveraged assetsOrkney 2
    
    
    52,275
    
    
    
    502
    
    
    
    69,877
    
    
    
    425
    
    
    
    18Orkney 4
    
    
    46,041
    
    
    
    572
    
    
    
    58,897
    
    
    
    497
    
    
    
    15Orkney 7
    
    
    20,668
    
    
    
    578
    
    
    
    
    
    
    
    
    
    
    
    100Surface
    
    
    125
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    100Avgold operationsQuality assetsTarget
    
    
    142,433
    
    
    
    370
    
    
    
    150,196
    
    
    
    346
    
    
    
    7Surface operations
    
    
    1,316
    
    
    
    781
    
    
    
    746
    
    
    
    1,298
    
    
    
    (40
    )Kalgold operationsSurface operations
    
    
    56,129
    
    
    
    485
    
    
    
    77,071
    
    
    
    412
    
    
    
    18AUSTRALASIAPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total continuing operations
    
    
    2,109,400
    
    
    
    
    
    
    
    2,155,464Weighted average
    
    
    
    
    
    
    483
    
    
    
    
    
    
    
    437
    
    
    
    11
  121




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##### Table of Contents



Depreciation and Amortization
       Impairment of Assets
  122




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##### Table of Contents



Employment Termination Costs
  Care and Maintenance Cost of Restructured Shafts
  Profit on sale of property, plant and equipment
  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
  123




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##### Table of Contents



Post-Retirement Benefits Expense
  Dividends Received
  Loss on Derivative Financial Instruments
  (Loss)/Profit on Sale of Other Assets and Listed Investments
   Impairment of listed investments
  Profit on Sale of Associate
  Profit on Sale of Subsidiary
  Profit on Sale of Investment in Joint Ventures
  124




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##### Table of Contents



Interest Income
  Interest Expense
  Other (Expenses)/Income
   Income and Mining Taxes
 South Africa.
  Income and Mining Tax
    
    2007
    
    2006Effective
tax rate (expense)/benefit
    
    
    (18
    )%
    
    
    1
    %
  Papua New Guinea.
    125




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##### Table of Contents



Equity Income of Joint Ventures
  Equity Loss of Associated Companies
  Discontinued operations
 Revenue
  Costs
  Impairment of assets
  Taxation
     126




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##### Table of Contents



Continuing and discontinued operations
 Cumulative Effect of Change in Accounting Principle, Net of Tax
  Net Loss
  Years Ended June 30, 2006 and 2005
 Continuing operations
 Revenues
          127




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128




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Costs
  PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2006
    
    2005
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)(1)
    
    Costs per ounceAdjustedSOUTH 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 operationsQuality 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
    
    
    
    26Growth 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 assets
 129




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##### Table of Contents



PercentageYear Ended June 30,
    
    Year Ended June 30,
    
    Increase2006
    
    2005
    
    in Cash(oz)
    
    ($/oz)
    
    (oz)
    
    ($/oz)(1)
    
    Costs per ounceAdjustedOrkney 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
    )AUSTRALASIAPapua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,155,464
    
    
    
    
    
    
    
    2,668,417Weighted average
    
    
    
    
    
    
    437
    
    
    
    
    
    
    
    383
    
    
    
    14
 Item 5. Operating and Financial Review and Prospects  Exchange Rates.
           130




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##### Table of Contents



Depreciation and Amortization
   Impairment of Assets
  Employment Termination Costs
    Care and Maintenance Cost of Restructured Shafts
  Profit on sale of property, plant and equipment
  131




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##### Table of Contents



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
  Post-Retirement Benefits
  Dividends Received
  Loss on Derivative Financial Instruments
  132




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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
  Other (Expenses)/Income
   133




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##### Table of Contents



Income and Mining Taxes
 South Africa.
  Income and Mining Tax
    
    2006
    
    2005Effective tax rate benefit
    
    
    1
    %
    
    
    12
    %
  Papua New Guinea.
     Equity income from Joint Venture Companies
  Equity Loss of Associate Companies
  Discontinued Operations
 Revenue
  134




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##### Table of Contents



Costs
  Impairment charge
  Taxation
     Cumulative Effect of Change in Accounting Principle, Net of Tax
  Net Loss
  Recent Accounting Pronouncements
  135




---



##### Table of Contents



Liquidity and Capital Resources
  136




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##### Table of Contents



Cash Resources
 2007
    
    2006
    
    2005$000
    
    $000
    
    $000Continuing operationsOperating cash flows
    
    
    217,795
    
    
    
    61,772
    
    
    
    (143,126
    )Investing cash flows
    
    
    (323,242
    )
    
    
    (268,415
    )
    
    
    233,979Financing cash flows
    
    
    163,389
    
    
    
    (16,615
    )
    
    
    7,709Foreign exchange differences
    
    
    (6,950
    )
    
    
    31,235
    
    
    
    (11,085
    )Total cash flows from continuing operations
    
    
    50,993
    
    
    
    (192,023
    )
    
    
    87,477Discontinued operationsOperating cash flows
    
    
    (53,111
    )
    
    
    (9,961
    )
    
    
    27,512Investing cash flows
    
    
    9,962
    
    
    
    21,520
    
    
    
    (76,029
    )Financing cash flows
    
    
    
    
    
    
    
    
    
    
    Foreign exchange differences
    
    
    3,138
    
    
    
    2,907
    
    
    
    10,762Total cash flows from discontinued operations
    
    
    (40,011
    )
    
    
    14,466
    
    
    
    (37,755
    )
 Operations
    Investing
   137




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##### Table of Contents



Financing
   Outstanding Credit Facilities and Other Borrowings
     Recently Retired Credit Facilities and Other Borrowings
 Randfontein
 138




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##### Table of Contents



Safex Overnight Rate
  Recently Retired Credit Facilities and Other Borrowings
    139




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##### Table of Contents



Contractual Obligations and Commercial Commitments
  Contractual Obligations on the Balance Sheet
  Payments Due by PeriodLess Than
    
    12-36
    
    36-60
    
    After 6012 Months
    
    Months
    
    Months
    
    MonthsJuly 1, 2007
    
    July 1, 2008
    
    July 1, 2010
    
    Subsequentto June 30,
    
    to June 30,
    
    to June 30,
    
    June 30,Total
    
    2008
    
    2010
    
    2012
    
    2012($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Convertible uncollaterized bonds(1)
    
    
    264,544
    
    
    
    11,766
    
    
    
    252,778
    
    
    
    
    
    
    
    Africa Vanguard Resources(1)
    
    
    4,543
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,543Nedbank  AVR(1)
    
    
    28,892
    
    
    
    28,892
    
    
    
    
    
    
    
    
    
    
    
    Nedbank  ARM 1(1)
    
    
    121,985
    
    
    
    121,985
    
    
    
    
    
    
    
    
    
    
    
    Nedbank  ARM 2(1)
    
    
    92,932
    
    
    
    92,932
    
    
    
    
    
    
    
    
    
    
    
    RMB Financing (1)
    
    
    108,430
    
    
    
    108,430
    
    
    
    
    
    
    
    
    
    
    
    RMB Preference Shares (1)
    
    
    79,530
    
    
    
    79,530
    
    
    
    
    
    
    
    
    
    
    
    RMB senior bridge loan facility (1)
    
    
    73,211
    
    
    
    73,211
    
    
    
    
    
    
    
    
    
    
    
    Westpac Bank
    
    
    981
    
    
    
    981
    
    
    
    
    
    
    
    
    
    
    
    Post retirement health care(2)
    
    
    15,257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,257Environmental obligations(3)
    
    
    168,853
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168,853Total contractual obligations
    
    
    959,158
    
    
    
    273,918
    
    
    
    496,587
    
    
    
    
    
    
    
    188,653
 
 (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 2007.(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,
    
    Months2007
    
    2008
    
    2010
    
    Subsequentto June
    
    to June
    
    to June
    
    to JuneTotal
    
    30, 2008
    
    30, 2010
    
    30, 2012
    
    30, 2012($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Melrose Arch, South Africa
    
    
    35
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    Perth Office, Australia
    
    
    221
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    Brisbane Office, Australia
    
    
    446
    
    
    
    297
    
    
    
    149
    
    
    
    
    
    
    
    PNG Offices (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Contractual Obligations Off Balance Sheet
    
    
    702
    
    
    
    553
    
    
    
    149
    
    
    
    
    
    
    
    
 
 (1)
    
    The PNG offices are rented on a monthly basis and the agreement may be cancelled within a
months notice. 140




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##### Table of Contents



Capital Expenditure
 $000Authorized and contracted for
    
    
    49,972Authorized but not yet contracted for
    
    
    267,036Total
    
    
    317,008
 Commercial Commitments
  Amount of Commitments Expiring by PeriodLessThan 12
    
    12-36
    
    36-60Months
    
    Months
    
    Months
    
    After 60July 1,
    
    July 1,
    
    July 1,
    
    Months2007 to
    
    2008 to
    
    2010 to
    
    SubsequentJune 30,
    
    June 30,
    
    June 30,
    
    to June 30,Total
    
    2008
    
    2010
    
    2012
    
    2012($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Guarantees(1)
    
    
    20,868
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,86Capital commitments(2)
    
    
    49,972
    
    
    
    49,972
    
    
    
    
    
    
    
    
    
    
    
    Total commitments expiring by period
    
    
    70,841
    
    
    
    49,972
    
    
    
    
    
    
    
    
    
    
    
    20,869
 
 (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 $317.0 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.
 141




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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
  Board of directors
 Name
    
    Date of appointment
    
    Date of resignationPatrice Motsepe*
    
    23 September 2003
    
    By rotation or resignationBernard Swanepoel
    
    16 May 1995
    
    Resigned on 6 August 2007Frank Abbott**
    
    1 October 1994
    
    By rotation or resignationGraham Briggs
    
    6 August 2007
    
    By rotation or resignationJoaquim Chissano*#
    
    20 April 2005
    
    By rotation or resignationFikile De Buck*#
    
    30 March 2006
    
    By rotation or resignationDr Simo Lushaba*#
    
    18 October 2002
    
    By rotation or resignationCathie Markus*#
    
    1 May 2007
    
    By rotation or resignationModise Motloba*#
    
    30 July 2004
    
    By rotation or resignationNomfundo Qangule
    
    26 July 2004
    
    Resigned on 21 August 2007Cedric Savage*#
    
    23 September 2003
    
    By rotation or retirementAndré Wilkens*
    
    6 August 2007
    
    By rotation or retirement
 
 *
    
    Non-executive directors**
    
    Frank Abbott served as a non-executive director until 20 August 2007 and was appointed
interim financial director on 21 August 2007.#
    
    Independent Non-Executive Chairman
 Patrice Motsepe (45) BA (Legal), LLB.
 142




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##### Table of Contents



Executive Directors
 Graham Briggs (54) BSc (Hons) (Geology), PrSciNat  Acting Chief Executive
 Frank Abbott (52), BCom, CA(SA), MBL  Interim Finance Director.
 Non-Executive Directors
 Joaquim Chissano (67) independent non-executive Director.
 Fikile De Buck (47), (BA Economics), FCCA (UK)  non-executive Director.
 Dr. Simo Lushaba (41) BSc (Hon), MBA, DBA, independent non-executive director
 143




---



##### Table of Contents



Cathie Markus (50) BA, LLB  Independent non-executive director
 Modise Motloba (41) (BSc), Diploma in Strategic Management, independent non-executive Director
 Cedric
Savage (68) BSc (Eng), MBA, ISMP (Harvard)  Independent non-executive Director.
 André Wilkens (58), Mine Managers Certificate of Competency, MDPA, RMIIA  non-executive director.
 Management
  Bob Atkinson (55), NHD (Metalliferous Mining).
 Jaco Boshoff (38), BSc (Hons), MSc (Geology), MBA, PrSciNat.
 144




---



##### Table of Contents



Mashego Mashego (43) BA Ed, BA Hons., GEDP, JMDP
 Jackie Mathebula (37), BAdmin Hons, MBA, Master of Management, HR
 Alwyn Pretorius (35) BSc Mining Engineering, BSc Industrial Engineering.
 Tom Smith (51) NHD (Mine Surveying and Metalliferous Mining).
 Marian van der Walt (34), BCom (Law), LLB, Higher Diploma in Tax, Diploma in Corporate
Governance, Diploma in Insolvency Law, Certificate in Business Leadership.
 Johannes van Heerden (35), BCompt (Hons), CA(SA).
 Abre van Vuuren (47), BComm, MDP, DPLR.
 Board and Management Changes
 145




---



##### Table of Contents



Executive Directors
 Bernard Swanepoel (45) BSc (Mining Engineering), BCom (Hons)
 Nomfundo Qangule (39), BCom, BCom (Hons) CTA, CA (SA), Member of CAIB (SA) and the Financial
Director of Harmony.
 Management
 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).
 Board Practices
    146




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##### Table of Contents



Executive Committee
   Graham Briggs
    
    Acting Chief ExecutiveFrank Abbott
    
    Interim Chief Financial OfficerBob Atkinson
    
    ProjectsJaco Boshoff
    
    Ore ReservesMashego Mashego
    
    Human ResourcesJackie Mathebula
    
    Corporate AffairsAlwyn Petorius
    
    Chief Operating Officer (North)Tom Smith
    
    Chief Operating Officer (South)Marian van der Walt
    
    Company Secretary; Legal and ComplianceJohannes van Heerden
    
    Acting Managing Director of International OperationsAbre van Vuuren
    
    Corporate Services
 
  Audit Committee
        147




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##### Table of Contents



Nomination Committee
   Remuneration Committee
    Investment Committee
    Sustainable Development Committee
   §
    
    Health§
    
    HIV/AIDS
 148




---



##### Table of Contents



§
    
    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. Three meetings were held
during the 2007 financial year, and it is planned that in future, this committee should meet
on a quarterly basis.
  Compensation of Directors and Senior Management
  Retirementcontribu-Directors
    
    Salaries and
    
    tions during
    
    Bonusesfee(1)
    
    Benefits
    
    the year
    
    paid
    
    Total($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Name
    
    2007
    
    2007
    
    2007
    
    2007
    
    2007Non-executivePatrice Motsepe
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Frank Abbott (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mr Joaquim Chissano
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38Ms Fikile de Buck
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Dr Simo Lushaba
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39
 149




---



##### Table of Contents



Retirementcontribu-Directors
    
    Salaries and
    
    tions during
    
    Bonusesfee(1)
    
    Benefits
    
    the year
    
    paid
    
    Total($000)
    
    ($000)
    
    ($000)
    
    ($000)
    
    ($000)Name
    
    2007
    
    2007
    
    2007
    
    2007
    
    2007Cathie Markus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Modise Motloba
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42Cedric Savage
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45Executive(3)Nomfundo Qangule
    
    
    
    
    
    
    255
    
    
    
    23
    
    
    
    
    
    
    
    278Bernard Swanepoel
    
    
    
    
    
    
    447
    
    
    
    61
    
    
    
    
    
    
    
    508TOTAL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,071Senior Management (as a
group)
    
    
    n/a
    
    
    
    5,741
    
    
    
    171
    
    
    
    35
    
    
    
    5,947
    Directors Terms of Employment
      Annual FeeBoard*
    
    R110,000 annuallyAudit Committee
    
    R45,000 annuallyEmpowerment Committee
    
    R30,000 annuallyInvestment Committee
    
    R30,000 annuallyNomination Committee
    
    R30,000 annually
 150




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##### Table of Contents



Annual FeeRemuneration Committee
    
    R30,000 annuallySustainable Development Committee
    
    R40,000 annuallySpecial fee for additional work performed
    
    R5,000Chairman of Board
    
    R495,000 (4.5 times the individual directors fee) annuallyChairman of Board committees
    
    Double the amount that the individual Board committee member received annually
   Share Options
  AverageNumber of
    
    StrikeDirectors and
    
    Share
    
    Price
    
    ExpirationSenior Management
    
    Options
    
    (R)
    
    DatesDirectors (total)
    
    
    430,805
    
    
    
    49.62
    
    
    
    2012-2015Senior Management (as a group)
    
    
    685,701
    
    
    
    52.82
    
    
    
    2012-2015Total
    
    
    1,116,506
    
    
    
    51.58
    
    
    
    2012-2015
  Shares issued in terms of the Harmony 2006 Share Plan
  PSDirectors and
    
    Share Appreciation
    
    
    
    
    
    Performance Shares
    
    Price
    
    ExpirationSenior Management
    
    Rights (SAR)
    
    SAR Price (R)
    
    (PS)
    
    (R)
    
    DatesFrank Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Graham Briggs
    
    
    3,473 / 159,484
    
    
    
    112.64 /  70.54
    
    
    
    11,326 / 42,529
    
    
    
    112.64 / 70.54
    
    
    
    2012 / 2013Senior Management (as a group)
    
    
    23,074 / 518,940
    
    
    
    112.64 / 70.54
    
    
    
    64,411 / 155,135
    
    
    
    112.64 / 70.54
    
    
    
    2012 / 2013
 Share Ownership
  OrdinaryOrdinary
    
    
    
    
    
    SharesShares Number
    
    
    
    
    
    Number as atas at
    
    
    
    
    
    NovemberHolder
    
    June 30, 2007
    
    Percentage
    
    28, 2007
    
    PercentageNon-executive chairmanP. Motsepe
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Directors Non-executiveJ. Chissano
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F De Buck
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dr. S. Lushaba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Markus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 151




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##### Table of Contents



OrdinaryOrdinary
    
    
    
    
    
    SharesShares Number
    
    
    
    
    
    Number as atas at
    
    
    
    
    
    NovemberHolder
    
    June 30, 2007
    
    Percentage
    
    28, 2007
    
    PercentageM. Motloba
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    C. Savage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    A. Wilkens
    
    
    203,000
    
    
    
    *
    
    
    
    203,000
    
    
    
    *Executive Directors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    G. Briggs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    F. Abbott
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Directors (10 persons)
    
    
    203,000
    
    
    
    
    
    
    
    203,000
    
    
    
    Total Senior Management as a group (11 persons)
    
    
    242
    
    
    
    *
    
    
    
    242
    
    
    
    *
  
 Employees
 General
  Harmony Employees at
    
    Outside Contractors atJune 30,
    
    June 30,2007
    
    2006
    
    2005
    
    2007
    
    2006
    
    2005South Africa
    
    
    47,600
    
    
    
    43,283
    
    
    
    46,669
    
    
    
    9,075
    
    
    
    5,287
    
    
    
    359Australia
    
    
    209
    
    
    
    204
    
    
    
    198
    
    
    
    426
    
    
    
    416
    
    
    
    512Papua New Guinea
    
    
    516
    
    
    
    237
    
    
    
    200
    
    
    
    350
    
    
    
    73
    
    
    
    5Grand total
    
    
    48,325
    
    
    
    43,724
    
    
    
    47,067
    
    
    
    9,851
    
    
    
    5,776
    
    
    
    876
 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.
  152




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##### Table of Contents




    
    Collective Bargaining Fund: 5.44%
    
    Non- union: 8.62%
    
    NUM: 76.28%
    
    SA Equity Workers Association: 0.06%
    
    Solidarity: 1.77%
    
    UASA: 7.81%
    
    Umiwasa: 0.02%
   
    
    re-skilling, 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.
   DME
  153




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##### Table of Contents



Work Stoppages
    Australia
   Papua New Guinea
   Long Term Incentive Schemes
 154




---



##### Table of Contents



Existing share option schemes
    Broad-Based Employee Scheme
  The Harmony 2006 Share Plan
     155




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##### Table of Contents



Annual incentive scheme
   
 Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
   Related Party Transactions.
  Number ofHolder
    
    Shares
    
    Percentage1. Bank of New York(1)
    
    
    141,644,415
    
    
    
    35.41
    %2. ARM
Ltd.(2)
    
    
    63,632,922
    
    
    
    15.91
    %3. Allan Gray Ltd.
    
    
    51,230,844
    
    
    
    12.81
    %4. JP Morgan
Chase Bank(3)
    
    
    24,317,568
    
    
    
    6.08
    %
 
 (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.  156




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Related Party Transactions
   AHJIC
 Nedbank
    157




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##### Table of Contents



Village
  INTERESTS OF EXPERTS AND COUNSEL
  
 Item 8. FINANCIAL INFORMATION
 CONSOLIDATED STATEMENTS
 Item 18. Financial Statements
 Legal Proceedings
  Silicosis
  Arcelor Mittal
  158




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##### Table of Contents



Gold Fields Proceedings
  Post closure water treatment
  Dividends and Dividend Policy
   Recent Developments
 159




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##### Table of Contents



Changes in Management
   Disposals
    See Item 5. Operating and Financial Review and Prospects.
  Trading Statement
  160




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##### Table of Contents



See Item 15
 Disclosure Controls and Procedures.
 Nedbank Loan Facility
  
 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
  Harmony OrdinaryShares(Rand per OrdinaryShare)High
    
    LowFiscal year ended June 30, 2005First 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, 2006First Quarter
    
    
    71.99
    
    
    
    46.62Second Quarter
    
    
    88.35
    
    
    
    65.50Third Quarter
    
    
    117.05
    
    
    
    76.00Fourth Quarter
    
    
    114.21
    
    
    
    80.51Full Year
    
    
    117.05
    
    
    
    46.62Fiscal year ended June 30, 2007First Quarter
    
    
    121.54
    
    
    
    86.10Second Quarter
    
    
    123.00
    
    
    
    101.00Third Quarter
    
    
    113.45
    
    
    
    90.85
 161




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##### Table of Contents



Harmony OrdinaryShares(Rand per OrdinaryShare)High
    
    LowFourth Quarter
    
    
    117.85
    
    
    
    94.30Full Year
    
    
    118.96
    
    
    
    93.06Month ofJuly 2007
    
    
    104.05
    
    
    
    92.40August 2007
    
    
    99.48
    
    
    
    60.00September 2007
    
    
    88.52
    
    
    
    63.88October 2007
    
    
    83.05
    
    
    
    63.00
   NYSE
    
    NASDAQHarmony ADRs
    
    Harmony ADRs($ per ADR)
    
    ($ per ADR)High
    
    Low
    
    High
    
    LowFiscal year ended June 30, 2005First Quarter
    
    
    13.74
    
    
    
    9.75
    
    
    
    16.29
    
    
    
    12.93Second Quarter
    
    
    14.29
    
    
    
    9.05
    
    
    
    16.96
    
    
    
    15.54Third Quarter
    
    
    9.58
    
    
    
    7.51
    
    
    
    13.90
    
    
    
    13.39Fourth Quarter
    
    
    8.80
    
    
    
    5.96
    
    
    
    15.88
    
    
    
    14.27Full Year
    
    
    14.29
    
    
    
    5.96
    
    
    
    16.96
    
    
    
    12.93Fiscal 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
    
    
    
    7.21Fiscal year ended June 30, 2007First Quarter
    
    
    17.10
    
    
    
    11.91
    
    
    
    17.10
    
    
    
    11.91Second Quarter
    
    
    17.26
    
    
    
    12.81
    
    
    
    17.26
    
    
    
    12.81Third Quarter
    
    
    15.97
    
    
    
    12.80
    
    
    
    15.97
    
    
    
    12.80Fourth Quarter
    
    
    16.70
    
    
    
    13.15
    
    
    
    16.70
    
    
    
    13.15Full Year
    
    
    16.76
    
    
    
    12.67
    
    
    
    16.76
    
    
    
    12.67Month ofJuly 2007
    
    
    15.27
    
    
    
    15.13
    
    
    
    15.19
    
    
    
    13.36August 2007
    
    
    14.10
    
    
    
    8.41
    
    
    
    13.97
    
    
    
    8.48September 2007
    
    
    12.36
    
    
    
    8.97
    
    
    
    12.31
    
    
    
    9.33October 2007
    
    
    11.90
    
    
    
    9.41
    
    
    
    11.90
    
    
    
    9.58
   THE SECURITIES EXCHANGE IN SOUTH AFRICA
  History
  162




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th
  STRATE Settlement
  PLAN OF DISTRIBUTION
  SELLING SHAREHOLDERS
  DILUTION
  EXPENSES OF THE ISSUE
  
 Item 10. ADDITIONAL INFORMATION
 SHARE CAPITAL
  163




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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.
 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;
 164




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
    
    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
   Rotation
  165




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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
      166




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Voting Rights
  Distribution of Assets on Liquidation
  Redemption/Purchase of Shares
     Issue of Additional Shares and Pre-emptive Rights
  167




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
    
    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
   Rights of Minority Shareholders and Fiduciary Duties
   168




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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;
    
    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
  169




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
    
    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;
    
    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.
 
 170




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##### Table of Contents



Non-South African Shareholders
  Disclosure of Interest in Shares
  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
 171




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##### Table of Contents




    
    the date on which any person ceased to be a member.
 Annual Report and Accounts
    MATERIAL CONTRACTS
 Item
4. Information on the Company  Business Item 5. Operating and Financial Review and Prospects  Liquidity and Capital
Resources
 EXCHANGE CONTROLS
 Introduction
       172




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##### Table of Contents



Government Regulatory Considerations
 Shares
   Loans
   Investments
  Dividends
    CERTAIN SOUTH AFRICAN TAX CONSIDERATIONS
  Dividends
 173




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##### Table of Contents



Capital Gains Tax
  Stamp Duty on the Shares
        Capitalization Shares
  174




---



##### Table of Contents



Voting Rights
  CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
     ADSs
  Taxation of Dividends
   Capital Gains
  175




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##### Table of Contents



Non-U.S. Holders
  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
 176




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Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 General
   
    
    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 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.
 177




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##### Table of Contents



Harmonys Hedging Policy
 Item 4. Information on the Company  Business  Hedge
Policy.
  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
    
    
    4,572
    
    
    
    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 contracts
    
    Kilograms
    
    
    4,883
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    11,104Ounces
    
    
    157,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    357,000
    
    
    
    (88,118
    )
 Commodity Sales Agreements
  Commodity Hedging Experience
   Foreign Currency Sensitivity
  178




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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):
 179




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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:
 fatal injury frequency rate:
 Fluvial:
 Footwall:
 Forward purchase:
 Forward sale:
 180




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##### Table of Contents



Gold reserves:
 Gold lease rate swap:
 Grade:
 Greenfield:
 Greenstone:
 Grinding:
 Head grade:
 Heap leaching:
 Leaching:
 Level:
 Littoral:
 Longhole sub-level caving:
 lost time injury frequency rate:
 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:
 Mineable:
 181




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##### Table of Contents



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:
 Probable reserves:
 182




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##### Table of Contents



Prospect:
 Prospecting license:
 Proven reserves:
 Put option:
 Pyrite:
 Quartz:
 Recovery grade:
 Reef:
 Refining:
 Rehabilitation:
 Sampling:
 Shaft:
 Slimes:
 Slurry:
 Smelting:
 Spot price:
 Stockpile:
 Stockwork:
 Stope:
 Stripping:
 Sulphide:
 Syncline:
 Tailings:
 Ton:
 183




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##### Table of Contents



Tonnage:
 Tonne:
 Trend:
 Unconformity:
 Waste:
 Waste rock:
 Yield:
 Zinc precipitation:
 184




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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
      USE OF PROCEEDS
  
 Item 15. DISCLOSURE CONTROLS AND PROCEDURES
 (a) Disclosure Controls and Procedures
  185




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##### Table of Contents



(b) Managements Annual Report on Internal Control over Financial Reporting
  Internal Control 
Integrated Framework
   1.
    
    Information technology control environment
  2.
    
    Assets brought into use
  3.
    
    Capitalisation of borrowing costs
  4.
    
    Valuation of inventory
  5.
    
    Deferred tax
 186




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##### Table of Contents



Background and Additional Information Regarding Material Weaknesses
 Information technology control environment
  o
    
    To move away from legacy systems which make extensive use of external spreadsheets and databases which are prone to both
error and manipulation;o
    
    To assist in complying with the requirements of the Sarbanes Oxley Act of 2002;o
    
    Lack of external support for the system from the software providers.
     Standard reconciliations
 o
    
    The automated bank reconciliation function within the Oracle ERP system was not
available due to incorrect configuration of the system at the implementation date. As a
result bank reconciliations were not performed timely.o
    
    Supplier reconciliations were not performed and payments were not allocated
accurately to suppliers which resulted in duplicated payments.
 Inventory valuation
 Business performance reviews
 The Companys plan for remediation of material weakness
 187




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##### Table of Contents



Information Technology Control Environment
  o
    
    Proof of global accreditation has been verified with Oracle. The consultant has Global Implementation Partner status with
Oracle Corporation.o
    
    A reference check on the credentials of the consultant has been performed.o
    
    A service level agreement has been signed with the consultant and deliverables are measured and monitored on a periodic
basis.o
    
    Proof of implementation methodology developed by the consultant has been provided with all supporting documentation.o
    
    A background check has been performed on all other consultants assisting with this project. .
  o
    
    The committee members will analyse and request information to enable
them to understand the reported issues as well as identify other
risks.o
    
    The chief information officer will ensure that accurate and detailed
information is provided to the monitoring committees within the
company.
  o
    
    The Company is continuing with the manual reconciliations between the general
ledger and Projects module to ensure accurate financial reporting.o
    
    The following key accounts are now reconciled and reviewed on a monthly basis.
 
    
    Project clearance account
    
    Oracle ERP Suspense accounts
    
    Balance sheet account review
    
    Stores valuations
    
    Bank accounts
  Access to programmes and data and change controls
   188




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Financial reporting closing process
       (c) Attestation Report of the Registered Public Accounting Firm
  (d) Changes in Internal Control Over Financial Reporting
  
 Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
  Item 7.
Directors and Management  Board Practices  Audit Committee.
 
 Item 16B. CODE OF ETHICS
  189




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Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 AUDIT FEES
  Fiscal year ended June 30, 2006
    
    $1.634 millionFiscal year ended June 30, 2007
    
    $1.343 million
 AUDIT-RELATED FEES
  Fiscal year ended June 30, 2006
    
    $0.688 millionFiscal year ended June 30, 2007
    
    $0.451 million
  TAX FEES
  Fiscal year ended June 30, 2006
    
    $0.24 millionFiscal year ended June 30, 2007
    
    $0.168 million
  ALL OTHER FEES
  Fiscal year ended June 30, 2006
    
    
    Fiscal year ended June 30, 2007
    
    
    
 AUDIT COMMITTEE APPROVAL
  
 Item 16D. EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES
  
 Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER
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Item 17. FINANCIAL STATEMENTS
  
 Item 18. FINANCIAL STATEMENTS
 Financial Statements
  191




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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 25, 2007 in respect of the Annual General Meeting held
on November 26, 2007.2.2
    
    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).2.3
    
    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).2.4
    
    Form of ADR (included in Exhibit 2.3).2.5
    
    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).2.6
    
    Form of Global Bond (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).2.7
    
    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).4.1
    
    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).4.2
    
    Harmony 2006 Share Scheme.4.3
    
    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).4.4
    
    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).4.5
    
    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).


193




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4.6
    
    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).4.7
    
    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).4.8
    
    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).4.9
    
    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).4.10
    
    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).4.11
    
    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).4.12
    
    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).4.13
    
    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).4.14
    
    Term Loan Agreement with Rand Merchant Bank dated March 9, 2006 (incorporated by reference to
Harmonys Annual Report on Form 20-F for the fiscal year ended June 30, 2006, filed on October
31, 2006).4.15
    
    Pledge Agreement in favor of FirstRand Bank Limited (acting through its Rand Merchant Bank
division) dated March 9, 2006 (incorporated by reference to Harmonys Annual Report on Form
20-F for the fiscal year ended June 30, 2006, filed on October 31, 2006).4.16
    
    Senior Facility Agreement among Nedbank Limited and Harmony Gold Mining Company Limited and
the Guarantors named therein dated on or about September 28, 2007.4.17
    
    Cession and Pledge in Security by African Rainbow Minerals Gold Limited in favour of Nedbank
dated on or about September 28, 2007.4.18
    
    Cession and Pledge in Security by Harmony Gold Mining Company Limited in favour of Nedbank
dated on or about September 28, 2007.4.19
    
    Preference Share Subscription Agreement dated March 20, 2007 by and among FirstRand Bank
Limited (RMB), Harmony and the subsidiaries named therein.4.20
    
    Senior Bridge Loan Facility with RMB dated June 29, 2007.4.21
    
    Draw Down Facility Agreement with Westpac Bank dated June 27, 2007.
 194




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##### Table of Contents



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).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 principal executive officer, pursuant to Section 906 of the Sarbanes
Oxley Act of 2002.13.2
    
    Certification of the principal financial officer, pursuant to Section 906 of the Sarbanes
Oxley Act of 2002.
 195




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SIGNATURE
  HARMONY GOLD MINING COMPANY LIMITED
 /s/ Graham Briggs
 196




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Index to Financial Statements


PageHarmony Gold Mining Company LimitedReport of the Independent Registered Public Accounting Firm

    F-2Consolidated Income Statements for the years ended June 30, 2007, 2006 and 2005

    F-3Consolidated
Balance Sheets at June 30, 2007 and 2006
    F-6Consolidated Statements of Changes in Shareholders Equity for the years ended June 30, 2007, 2006 and 2005
F-7Consolidated Statements of Cash Flows for the years ended June 30, 2007, 2006 and 2005
    F-9Notes to the Consolidated Financial Statements
    F-10


F-1




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Report of Independent Registered Public Accounting Firm








Internal Control  Integrated Framework




































































F-2



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##### Table of Contents



Harmony Gold Mining Company Limited
Consolidated Statements of Income
For the years ended June 30
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000CONTINUING OPERATIONSREVENUESProduct sales
    
    
    1,346,596
    
    
    
    1,140,838
    
    
    
    1,139,531COSTS AND EXPENSESProduction costs exclusive of depreciation and amortization
    
    
    1,023,558
    
    
    
    958,554
    
    
    
    1,036,780Depreciation and amortization
    
    
    122,530
    
    
    
    154,031
    
    
    
    147,997Impairment of assets
    
    
    10,243
    
    
    
    15,951
    
    
    
    122,819Employment termination and restructuring costs
    
    
    
    
    
    
    (12,289
    )
    
    
    73,215Care and maintenance cost of restructured shafts
    
    
    9,184
    
    
    
    26,837
    
    
    
    29,975Profit on sale of property, plant and equipment
    
    
    (25,346
    )
    
    
    (10,148
    )
    
    
    (13,594
    )Corporate expenditure
    
    
    27,564
    
    
    
    19,929
    
    
    
    17,943Exploration expenditure
    
    
    26,864
    
    
    
    11,090
    
    
    
    4,672Marketing and new business expenditure
    
    
    8,987
    
    
    
    9,171
    
    
    
    15,310Decrease in rehabilitation costs
    
    
    (1,597
    )
    
    
    (2,674
    )
    
    
    (898
    )Post retirement benefits expense
    
    
    (1,844
    )
    
    
    1,175
    
    
    
    9,1371,200,143
    
    
    
    1,171,627
    
    
    
    1,443,356OPERATING PROFIT/(LOSS)
    
    
    146,453
    
    
    
    (30,789
    )
    
    
    (303,825
    )OTHER (EXPENSES)/INCOMEDividends received
    
    
    2,030
    
    
    
    3,321
    
    
    
    2,785Loss on derivative financial instruments
    
    
    (284,692
    )
    
    
    (52,659
    )
    
    
    (18,386
    )(Loss)/profit on sale of listed investments
    
    
    (4,898
    )
    
    
    45,345
    
    
    
    (93,479
    )Impairment of listed investment
    
    
    (51,087
    )
    
    
    
    
    
    
    (63,234
    )Profit on sale of investment in associates
    
    
    33,478
    
    
    
    
    
    
    
    Profit/(loss) on sale of subsidiaries
    
    
    
    
    
    
    3,035
    
    
    
    (114
    )Profit on sale of investment in joint ventures
    
    
    30
    
    
    
    
    
    
    
    Interest income
    
    
    24,910
    
    
    
    32,411
    
    
    
    21,295Interest expense  net of amounts capitalized of $7.7 million,
$2.3 million and $1.9 million in 2007, 2006 and 2005,
respectively
    
    
    (47,596
    )
    
    
    (55,544
    )
    
    
    (63,936
    )Other expenses
    
    
    (6,599
    )
    
    
    (26,444
    )
    
    
    (17,372
    )(334,425
    )
    
    
    (50,535
    )
    
    
    (232,441
    )LOSS FROM CONTINUING OPERATIONS BEFORE TAXATION AND EQUITY
INCOME/(LOSS) FROM JOINT VENTURES AND ASSOCIATED COMPANIES
    
    
    (187,972
    )
    
    
    (81,324
    )
    
    
    (536,266
    )Income and mining tax (expense)/benefit
    
    
    (34,202
    )
    
    
    1,023
    
    
    
    64,052Equity income of joint venture
    
    
    1,702
    
    
    
    445
    
    
    
    Equity loss of associated companies
    
    
    (2,576
    )
    
    
    (16,444
    )
    
    
    LOSS FROM CONTINUING OPERATIONS
    
    
    (223,049
    )
    
    
    (96,300
    )
    
    
    (472,214
    )LOSS FROM DISCONTINUED OPERATIONS
    
    
    (72,386
    )
    
    
    (61,483
    )
    
    
    (80,335
    )LOSS BEFORE CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLE
    
    
    (295,435
    )
    
    
    (157,783
    )
    
    
    (552,549
    )Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    2,058
    
    
    
    NET LOSS
    
    
    (295,435
    )
    
    
    (155,725
    )
    
    
    (552,549
    )
 F-3




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##### Table of Contents



2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000CONTINUING OPERATIONSBASIC LOSS PER SHARE ($) BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
    
    
    (0.56
    )
    
    
    (0.28
    )
    
    
    (1.30
    )FULLY DILUTED LOSS PER SHARE ($) BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE
    
    
    (0.56
    )
    
    
    (0.28
    )
    
    
    (1.30
    )BASIC LOSS PER SHARE ($)
    
    
    (0.56
    )
    
    
    (0.24
    )
    
    
    (1.30
    )FULLY DILUTED LOSS PER SHARE ($)
    
    
    (0.56
    )
    
    
    (0.24
    )
    
    
    (1.30
    )DISCONTINUED OPERATIONSBASIC LOSS PER SHARE ($)
    
    
    (0.18
    )
    
    
    (0.16
    )
    
    
    (0.22
    )FULLY DILUTED LOSS PER SHARE ($)
    
    
    (0.18
    )
    
    
    (0.16
    )
    
    
    (0.22
    )WEIGHTED AVERAGE NUMBER OF SHARES USED IN THE COMPUTATION OF
BASIC EARNINGS PER SHARE
    
    
    398,593,297
    
    
    
    394,409,512
    
    
    
    362,499,012WEIGHTED AVERAGE NUMBER OF SHARES USED IN THE COMPUTATION OF
FULLY DILUTED EARNINGS PER SHARE
    
    
    398,593,297
    
    
    
    394,409,512
    
    
    
    362,499,012DIVIDEND PER SHARE ($)
    
    
    
    
    
    
    
    
    
    
    0.05
 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 Comprehensive Income
For the years ended June 30
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Loss  before cumulative effect of change in accounting principle
    
    
    (295,435
    )
    
    
    (157,783
    )
    
    
    (552,549
    )Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    2,058
    
    
    
    Net loss
    
    
    (295,435
    )
    
    
    (155,725
    )
    
    
    (552,549
    )Other comprehensive income/(loss)Mark-to-market of listed and other investments  unrealized
    
    
    296,980
    
    
    
    119,713
    
    
    
    (44,674
    )Mark-to-market of listed and other investments  realized
    
    
    4,046
    
    
    
    (38,253
    )
    
    
    105,892Foreign currency translation adjustment
    
    
    98,206
    
    
    
    (191,651
    )
    
    
    (197,665
    )Other comprehensive income/(loss)
    
    
    399,232
    
    
    
    (110,191
    )
    
    
    (136,447
    )Comprehensive income/(loss)
    
    
    103,797
    
    
    
    (265,916
    )
    
    
    (688,996
    )
 The accompanying notes are an integral part of these consolidated financial statements
 F-5




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##### Table of Contents



Harmony Gold Mining Company Limited
Consolidated Balance Sheets
At June 30
 2007
    
    
    2006$000
    
    
    $000ASSETSCURRENT ASSETSCash and cash equivalents
    
    
    99,759
    
    
    
    89,189Restricted cash
    
    
    38,881
    
    
    
    Receivables
    
    
    135,868
    
    
    
    100,175Listed and other investments
    
    
    705,985
    
    
    
    Inventories
    
    
    104,422
    
    
    
    91,998Materials contained in heap leach pads
    
    
    524
    
    
    
    515Income and mining taxes
    
    
    2,298
    
    
    
    4,359Deferred income and mining taxes
    
    
    65,896
    
    
    
    142,1091,153,633
    
    
    
    428,345Non-current assets classified as held for sale
    
    
    182,475
    
    
    
    Total current assets
    
    
    1,336,108
    
    
    
    428,345Property, plant and equipment
    
    
    3,533,938
    
    
    
    3,306,555Other assets
    
    
    2,398
    
    
    
    3,605Intangible assets
    
    
    34,005
    
    
    
    28,256Restricted cash
    
    
    723
    
    
    
    35,599Receivables
    
    
    7,057
    
    
    
    12,701Listed and other investments
    
    
    197,499
    
    
    
    378,742Investments in associates
    
    
    853
    
    
    
    266,331Investments in joint ventures
    
    
    1,336
    
    
    
    2,065Total non-current assets
    
    
    3,777,809
    
    
    
    4,033,854TOTAL ASSETS
    
    
    5,113,917
    
    
    
    4,462,199LIABILITIES AND SHAREHOLDERS EQUITY
CURRENT LIABILITIESAccounts payable and other liabilities
    
    
    94,546
    
    
    
    78,391Short term portion of long term loans
    
    
    404,985
    
    
    
    140,344Payroll and leave liabilities
    
    
    100,373
    
    
    
    87,909Accrued liabilities
    
    
    53,466
    
    
    
    36,182Bank overdraft
    
    
    31,232
    
    
    
    Dividends payable
    
    
    994
    
    
    
    976685,596
    
    
    
    343,802Liabilities directly associated with non-current assets classified as held for sale
    
    
    77,614
    
    
    
    Total current liabilities
    
    
    763,210
    
    
    
    343,802Long-term loans
    
    
    270,079
    
    
    
    394,608Deferred income and mining taxes
    
    
    512,829
    
    
    
    521,000Derivative financial liabilities
    
    
    354,896
    
    
    
    150,038Share appreciation rights liability
    
    
    877
    
    
    
    Provision for environmental rehabilitation
    
    
    131,913
    
    
    
    110,164Provision for social plan
    
    
    2,429
    
    
    
    2,259Provision for post retirement benefits
    
    
    15,257
    
    
    
    14,9641,288,280
    
    
    
    1,193,032Commitments and contingencies (Note 34)
    
    
    
    
    
    
    SHAREHOLDERS EQUITYShare capital - 1,200,000,000 (2006: 1,200,000,000) authorized ordinary shares of
50 South African cents each. Shares issued 400,290,884 (2006: 397,616,950)
    
    
    31,916
    
    
    
    31,730Additional paid-in capital
    
    
    3,449,119
    
    
    
    3,429,775Accumulated loss
    
    
    (822,287
    )
    
    
    (540,587
    )Accumulated other comprehensive income
    
    
    403,678
    
    
    
    4,446Total shareholders equity
    
    
    3,062,426
    
    
    
    2,925,364TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    5,113,917
    
    
    
    4,462,199
 The accompanying notes are an integral part of these consolidated financial statements
 F-6




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Harmony Gold Mining Company Limited
Consolidated Statements of Changes in Shareholders Equity
For the years ended June 30
 AccumulatedNumber of
    
    
    
    
    
    
    
    
    
    (Accumulated
    
    
    otherordinary
    
    
    
    
    
    Additional
    
    
    loss)/retained
    
    
    comprehensiveshares issued
    
    
    Share capital
    
    
    paid-in capital
    
    
    earnings
    
    
    income
    
    
    Total$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000BALANCE  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
    
    
    
    2,925,364Adjustment to accumulated loss in respect of
adoption of SAB 108 (see note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,735
    
    
    
    
    
    
    
    13,735Issue of sharesExercise of employee share options
    
    
    2,673,934
    
    
    
    186
    
    
    
    18,094
    
    
    
    
    
    
    
    
    
    
    
    18,280Consolidation of share trusts
    
    
    
    
    
    
    
    
    
    
    1,250
    
    
    
    
    
    
    
    
    
    
    
    1,250Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (295,435
    )
    
    
    
    
    
    
    (295,435
    )Mark-to-market of listed and other investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    301,026
    
    
    
    301,026Foreign exchange translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,206
    
    
    
    98,206BALANCE  JUNE 30, 2007
    
    
    400,290,884
    
    
    
    31,916
    
    
    
    3,449,119
    
    
    
    (822,287
    )
    
    
    403,678
    
    
    
    3,062,426
 The accompanying notes are an integral part of these consolidated financial statements
 F-7




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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
  Mark-to-
    
    
    Mark-to-market of
    
    
    market of
    
    
    Foreign
    
    
    
    
    
    
    Accumulatedcash flow
    
    
    listed and
    
    
    currency
    
    
    Deferred share-
    
    
    otherhedging
    
    
    other
    
    
    translation
    
    
    based
    
    
    comprehensiveinstruments
    
    
    investments
    
    
    adjustment
    
    
    compensation
    
    
    income/(loss)$000
    
    
    $000
    
    
    $000
    
    
    $000
    
    
    $000BALANCE  JUNE 30, 2004
    
    
    54
    
    
    
    (59,283
    )
    
    
    310,313
    
    
    
    
    
    
    
    251,084Mark-to-market of listed and other investments 
unrealized
    
    
    
    
    
    
    (43,656
    )
    
    
    
    
    
    
    
    
    
    
    (43,656
    )Mark-to-market of listed and other investments  realized
    
    
    
    
    
    
    105,892
    
    
    
    
    
    
    
    
    
    
    
    105,892Mark-to-market of environmental trust funds
    
    
    
    
    
    
    (1,018
    )
    
    
    
    
    
    
    
    
    
    
    (1,018
    )Foreign currency translation adjustment
    
    
    (54
    )
    
    
    (68
    )
    
    
    (197,543
    )
    
    
    
    
    
    
    (197,665
    )BALANCE  JUNE 30, 2005
    
    
    
    
    
    
    1,867
    
    
    
    112,770
    
    
    
    
    
    
    
    114,637Mark-to-market of listed and other investments 
unrealized
    
    
    
    
    
    
    120,014
    
    
    
    
    
    
    
    
    
    
    
    120,014Mark-to-market of listed and other investments  realized
    
    
    
    
    
    
    (38,253
    )
    
    
    
    
    
    
    
    
    
    
    (38,253
    )Mark-to-market of environmental trust funds
    
    
    
    
    
    
    (301
    )
    
    
    
    
    
    
    
    
    
    
    (301
    )Foreign currency translation adjustment
    
    
    
    
    
    
    1,648
    
    
    
    (193,299
    )
    
    
    
    
    
    
    (191,651
    )BALANCE  JUNE 30, 2006
    
    
    
    
    
    
    84,974
    
    
    
    (80,529
    )
    
    
    
    
    
    
    4,446Mark-to-market of listed and other investments 
unrealized
    
    
    
    
    
    
    330,610
    
    
    
    
    
    
    
    
    
    
    
    386,177Mark-to-market of listed and other investments  realized
    
    
    
    
    
    
    4,046
    
    
    
    
    
    
    
    
    
    
    
    4,046Mark-to-market of environmental trust funds
    
    
    
    
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    257Other-than-temporary
impairment of listed investment
    
    
    
    
    
    
    51,087
    
    
    
    
    
    
    
    
    
    
    
    (3,401
    )Foreign currency translation adjustment
    
    
    
    
    
    
    90
    
    
    
    98,116
    
    
    
    
    
    
    
    98,206BALANCE  JUNE 30, 2007
    
    
    
    
    
    
    386,090
    
    
    
    17,587
    
    
    
    
    
    
    
    403,678
 The accompanying notes are an integral part of these consolidated financial statements
 F-8




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##### Table of Contents



Harmony Gold Mining Company Limited
Consolidated Statements of Cash Flows
For the years ended June 30
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000CASH FLOW FROM OPERATIONSSources of cashCash received from customers
    
    
    1,488,469
    
    
    
    1,263,333
    
    
    
    1,265,200Interest and dividends received
    
    
    27,342
    
    
    
    35,826
    
    
    
    24,181Cash provided by operating activities
    
    
    1,515,811
    
    
    
    1,299,159
    
    
    
    1,289,381Uses of cashCash paid to suppliers and employees
    
    
    1,317,768
    
    
    
    1,213,910
    
    
    
    1,353,887Interest paid
    
    
    31,455
    
    
    
    31,609
    
    
    
    42,156Income and mining taxes paid
    
    
    1,903
    
    
    
    1,829
    
    
    
    8,952Cash used in operating activities
    
    
    1,351,126
    
    
    
    1,247,348
    
    
    
    1,404,995NET CASH GENERATED/(UTILIZED) BY OPERATIONS
    
    
    164,685
    
    
    
    51,811
    
    
    
    (115,614
    )CASH FLOW FROM INVESTING ACTIVITIESNet increase in amounts invested in environmental trusts
    
    
    (1,696
    )
    
    
    (4,318
    )
    
    
    (251
    )Restricted cash
    
    
    (4,011
    )
    
    
    (31,913
    )
    
    
    1,585Cash held by subsidiaries on acquisition
    
    
    
    
    
    
    
    
    
    
    723Cash held by subsidiaries at disposal
    
    
    
    
    
    
    
    
    
    
    (1,830
    )Other direct costs of investment in Gold Fields
    
    
    
    
    
    
    
    
    
    
    (13,802
    )Cash paid for Village
    
    
    
    
    
    
    (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
    
    
    54,634
    
    
    
    364,974
    
    
    
    380,363(Increase)/decrease in other non-current investments
    
    
    (4,755
    )
    
    
    2,824
    
    
    
    (1,204
    )Additions to intangible assets
    
    
    (5,769
    )
    
    
    
    
    
    
    Proceeds on disposal of mining assets
    
    
    26,448
    
    
    
    12,509
    
    
    
    20,892Additions to property, plant and equipment
    
    
    (378,131
    )
    
    
    (271,755
    )
    
    
    (228,524
    )NET CASH (UTILIZED)/GENERATED BY INVESTING ACTIVITIES
    
    
    (313,280
    )
    
    
    (246,895
    )
    
    
    157,952CASH FLOWS FROM FINANCING ACTIVITIESLong-term borrowings raised
    
    
    252,526
    
    
    
    160,149
    
    
    
    231,554Long-term borrowings paid
    
    
    (138,610
    )
    
    
    (204,414
    )
    
    
    (199,655
    )Increase in bank overdraft
    
    
    31,232
    
    
    
    
    
    
    
    Ordinary shares issued  net of expenses
    
    
    19,158
    
    
    
    28,684
    
    
    
    (9,695
    )Dividends paid
    
    
    (917
    )
    
    
    (1,034
    )
    
    
    (14,495
    )NET CASH GENERATED/(UTILIZED) BY FINANCING ACTIVITIES
    
    
    163,389
    
    
    
    (16,615
    )
    
    
    7,709EFFECTS OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
    
    
    (3,812
    )
    
    
    34,142
    
    
    
    (323
    )NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    10,982
    
    
    
    (177,557
    )
    
    
    49,724CASH AND CASH EQUIVALENTS  JULY 1
    
    
    89,189
    
    
    
    266,746
    
    
    
    217,022CASH AND CASH EQUIVALENTS  JUNE 30
    
    
    100,171
    
    
    
    89,189
    
    
    
    266,746
 The accompanying notes are an integral part of these consolidated financial statements
  F-9




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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 OPERATIONSHarmony Gold Mining Company Limited and its subsidiaries (collectively Harmony or the
Company) are engaged in gold mining and related activities, including exploration, extraction
and processing. Gold bullion, the Companys principal product, is currently produced at its
operations in South Africa. As discussed in note 17, Harmony has classified the
results of its Australian operations as discontinued 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 have been consistently
applied, unless otherwise stated:(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.(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.
 F-10




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (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)
    
    RESTRICTED CASHconsists of cash held as security deposits on mining tenements, cash held
to acquire shares in subsidiaries as part of the compulsory takeover of shares as well as cash
held on margin call in terms of certain conditions of borrowing agreements.(g)
    
    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
separate 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.(ii)
    
    Unlisted investmentsare 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.
 (h)
    
    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.
 F-11




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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.(i)
    
    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.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.(j)
    
    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.(k)
    
    ACCOUNTS PAYABLEare stated at cost adjusted for payments made to reflect the value of
the anticipated economic outflow of resources.(l)
    
    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.
 F-12




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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.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.(m)
    
    EXPLORATION COSTSare expensed as incurred prior to the completion of a final feasibility
study to establish proved and probable reserves.Costs incurred associated with upgrading or converting measured, indicated and inferred
resources to probable reserves, including drilling and analysis costs at locations that are either
in production or development stage, are expensed as incurred.(n)
    
    PROPERTY, PLANT AND EQUIPMENT
 (i)
    
    Mining assetsincluding 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.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.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. Interest from all interest-bearing loans
are included in the calculation of the interest capitalized.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 (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.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.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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
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.
 (o)
    
    INTANGIBLE ASSETSconsist of all identifiable non-monetary assets without physical
substance. They are stated at cost less accumulated amortization and accumulated impairment
losses, if any. The following are the main categories of intangible assets:
 i)
    
    Intangible assets with an indefinite useful lifeIntangible assets with an indefinite useful life are not amortised but tested for impairment
on an annual basis.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
separately 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.The intangible assets are tested for impairment at April 30.(ii)
    
    Intangible assets with a finite useful lifeAcquired computer software licenses and development costs are capitalized on the basis of
costs incurred to acquire and bring into use the acquired software.Intangible assets with a finite useful life are amortized on a straight line basis over their
estimated useful lives, which are reviewed annually, as follows:- Computer software at 20% per year.The assets are reviewed for impairment at least annually or 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.
 (p)
    
    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
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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 liability, the
Company 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.(q)
    
    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 Listed and Other Investments on the balance sheet.(r)
    
    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.(s)
    
    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.(t)
    
    PENSION PLANS AND OTHER EMPLOYEE BENEFITS:
 (i)
    
    Pension plansare 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 years ended June 30, 2006 and 2007 include: (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
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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. 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.
 (u)
    
    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, 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 realized profit and losses
arising from hedging transactions from matched gold sales contracts. Revenues from silver and
other by-products sales are credited to production costs as a by-product credit.(v)
    
    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.(w)
    
    DIVIDEND INCOMEis recognized when the shareholders right to receive payment is
established, recognized at the last date of registration.(x)
    
    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.(y)
    
    LOSS PER SHARE:Loss per share is based on net loss divided by the weighted average
number of ordinary shares in issue during the year. Diluted loss per share includes potential ordinary shares that have a dilutive effect on earnings per share.(z)
    
    RECENT ACCOUNTING PRONOUNCEMENTS:In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159 The
Fair Value Option for Financial Assets and Financial Liabilities  including an amendment of FAS
115 (SFAS No. 159 or Fair Value Option). This Statement permits entities to choose to measure
many financial instruments and certain other items at fair value through profit and loss.
Application of the provisions of the Fair Value Option is optional and the provisions can be
elected on an instrument by instrument basis. If the Company elects to utilize the provisions of
this Statement, it may do so beginning on July 1, 2008. The Company plans to early-adopt SFAS No. 159 and anticipates
electing the Fair Value Options for its investment in African Rainbow Minerals Limited, held
through ARM Broad-Based Economic Empowerment Trust. The adoption of the Fair Value Option for this
investment, will result in a cumulative-effect adjustment of $386.1 million, representing the
unrealized gain included in Accumulated Other Comprehensive Income as at June 30, 2007. Going
forward, changes in the fair value of the investment will be recorded in the Consolidated
Statements of Income, consistent with changes in the fair value of derivative liability. See note
4(a), 25 and 30.In November 2006, the FASB ratified the consensus reached by the Emerging Issues Task Force
(EITF) in connection with EITF Issue No. 06-6, Debtors Accounting for a Modification (or
Exchange) of Convertible Debt Instruments (EITF 06-6). EITF 06-6 addresses the analysis
required to determine the accounting for a modification of or exchange in convertible debt
instruments that changes the terms of an embedded conversion option. The consensus reached under
EITF 06-6 is applicable to modifications or exchanges of debt instruments occurring after July 1,
2008. The Company will evaluate the impact of EITF 06-6 on its financial position and results of
operations should there be any modifications or exchanges in debt instruments.In September 2006, the 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.
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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 Company plans to early-adopt SFAS
No. 157 on July 1, 2007, and is
currently evaluating the impact of SFAS No. 157 on its financial position and results of
operations.In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans an amendment of FASB Statements No. 87, 88, 106, and
132(R) (SFAS No.158). SFAS 158 improves financial reporting by requiring an employer to
recognize the overfunded or underfunded status of a defined benefit postretirement plan (other
than a multiemployer plan) as an asset or liability in its statement of financial position and to
recognize changes in that funded status in the year in which the changes occur through
comprehensive income. SFAS 158 requires an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited exceptions. The adoption
of SFAS No. 158 on July 1, 2006 did not have an impact on the Companys 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. In May 2007,
the FASB issued FSP No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 (FSP
No. FIN 48-1). This Staff Position clarifies how an enterprise should determine whether a tax
position is effectively settled for the purpose of recognizing previously unrecognized tax
benefits. FSP No. FIN 48-1 specifically addresses the interaction between reviews and
examinations by the taxing authority and settlement of uncertain tax positions. The provisions of FIN No. 48 and FSP No. FIN 48-1 are effective for
the years beginning after December 31, 2006 (i.e., July 1,
2007 for the Company), 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 and FSP FIN No.
48-1 on its financial statements.
 3
    
    ACCOUNTING CHANGE
 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.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 123(R) however, the Company recognized actual
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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 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.Adoption of Staff Accounting Bulletin No. 108
Considering the effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements
(SAB No. 108).In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108 was issued in order
to eliminate the diversity of practice surrounding how public companies quantify financial
statement misstatements.Traditionally, there have been two widely-recognized methods for quantifying the effects of
financial statement misstatements: the roll-over method and the iron curtain method. The
roll-over method focuses primarily on the impact of a misstatement on the income
statement-including the reversing effect of prior year misstatements-but its use can lead to the
accumulation of misstatements in the balance sheet. The iron-curtain method, on the other hand,
focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on
the reversing effects of prior year errors on the income statement. Prior to our application of
the guidance in SAB No 108, we used the roll-over method for quantifying financial statement
misstatements.In SAB No 108, the SEC staff established an approach that requires quantification of
financial statement misstatements based on the effects of the misstatements on each of the
companys financial statements and the related financial statement disclosures. This model is
commonly referred to as a dual approach because it requires quantification of errors under both
the iron curtain and the roll-over methods.SAB No 108 permits existing public companies to initally apply its provisions either by (i)
restating prior financial statements as if the dual approach had always been applied or (ii)
recording the cumulative effect of initially applying the dual approach as adjustments to the
carrying values of assets and liabilities as of July 1, 2006 with an offsetting adjustment
recorded to the opening balance of retained earnings. We elected to record the effects of applying
SAB No 108 using the cumulative effect transition method, as follows:
 Period in which the misstatementoriginated (1)Cumulativeprior toJune
    
    
    
    
    
    
    
    
    
    Adjustment30,
    
    Year ended June 30,
    
    recorded July2004
    
    2005
    
    2006
    
    1,2006$000
    
    $000
    
    $000
    
    $000Depreciation on assets not yet in production (2)
    
    
    1,547
    
    
    
    3,592
    
    
    
    3 854
    
    
    
    8,993Capitalized borrowing costs not accounted for (3)
    
    
    5,460
    
    
    
    2,630
    
    
    
    2 598
    
    
    
    10,687Deferred tax (4)
    
    
    (2,093
    )
    
    
    (1,904
    )
    
    
    (1 949
    )
    
    
    (5,946
    )Impact on net loss (5)
    
    
    4,914
    
    
    
    4,318
    
    
    
    4 503Accumulated loss (6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,735
 
 (1)
    
    The Company considered these errors to be immaterial under the roll-over method individually
and in the aggregate.(2)
    
    The Company previously recognized depreciation on assets that had not yet reached
production levels. As a result the Company overstated its depreciation and amortization expense by
$1.5 million (cumulatively) in years prior to fiscal 2005, by $3.6 million in fiscal 2005 and $3.9
million in fiscal 2006. The Company recorded an increase of $8.9 million in its mining assets for
the depreciation as of July 1, 2006 with a corresponding decrease in its accumulated loss to
correct these misstatements.(3)
    
    The Company previously did not capitalize borrowing costs on all qualifying assets. As a
result, the Company overstated its interest expense by $5.5 million (cumulatively) in years prior
to fiscal 2005, by $2.6 million in fiscal 2005 and $2.6 million in fiscal 2006. The Company
recorded an increase of $10.7 million in its mining assets for the borrowing costs as of July 1,
2006 with a corresponding decrease in its accumulated loss to correct these misstatements.(4)
    
    As a result of the of the misstatements described, the Companys provision for income taxes
was understated by $2.1 million in years prior to fiscal 2005, by $1.9 million in fiscal 2005 and
by $1.9 million in fiscal 2006. The Company recorded an increase of $5.9 million in its deferred
tax liability as of July 1, 2006 with a corresponding increase in its accumulated loss to correct
these misstatements.(5)
    
    Represents the net overstatment of net loss for the indicated periods resulting from these
misstatements.(6)
    
    Represents the net reduction in accumulated loss as of July 1, 2006 to record the initial
application of SAB No 108. F-19




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Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 4
    
    ACQUISITION AND DISPOSAL OF BUSINESSES AND INVESTMENTS
 (a)
    
    Acquisition and disposal of African Rainbow Minerals Limited (ARM) (formerly Anglovaal
Mining Limited) (Avmin)
 On May 8, 2003 and May 14, 2003 the Company acquired a 17.25% interest in ARM through its 50%
interest in a joint venture with ARMgold Limited, ARMgold/Harmony Joint Investment Company
(Proprietary) Limited (Clidet). The joint venture company purchased 27,786,362 shares in ARM
from Anglo American Plc for a cash consideration of R1,209 million ($167 million) on May 8, 2003
and a further 11,003,399 shares for a cash consideration of R478 million ($63 million) on May 14,
2003, giving it a combined interest of 34.5% in the issued share capital of ARM. ARM is listed on
the Johannesburg Stock Exchange and has interests in operating gold, manganese, iron, chrome,
platinum, and nickel mines in South Africa, as well as cobalt and copper mines in Zambia.The Company equity accounted its investment in Clidet from May 8, 2003 through September 22,
2003. With the acquisition of ARMgold on September 22, 2003, the Company obtained control over the
entire shareholding of Clidet, and has treated it as a subsidiary from that date. Accordingly,
the Company equity accounted its investment in ARM, directly, from September 22, 2003.The Company continued to equity account its investment in ARM through May 3, 2004, the date
on which the Company acquired ARMs 42.2% interest in Avgold.
Following the acquisition of Avgold, in which the Companys
investment in ARM was reduced to 19.5%, Harmony has classified the investment in ARM as available-for-sale.The Company disposed of 5.82% of the 19.5% investment held in ARM in the open market for
$57.3 million through a range of transactions on February 3, 2005, March 15, 2005 and May 27,
2005, resulting in a loss of $38.2 million. See note 10. On April 15, 2005, the Company
transferred the remaining 13.68% of the investment in ARM to the ARM Broad-Based Economic
Empowerment Trust (the ARM Trust) for an aggregate cash consideration of R829.8 million ($132.1
million), representing a price of R29 per ARM share.The acquisition of the shares by the ARM Trust was financed through two term loan facilities
with Nedbank Limited (Nedbank). The first term loan facility of R473.6 million ($75.4 million)
previously contained a put option whereby Nedbank could have put the loan to the Company in the
event of default by the ARM Trust. The Company was also entitled, at any time up to the facilities
discharge date, to call the loan and step into the shares of Nedbank as the lender. On June 6,
2006, this put and call option was replaced by a guarantee from the Company to the value of R367
million ($54.0 million), plus interest accrued at the applicable funding rate. On the same date,
the Company received an indemnity from ARM to the value of 50% of the Companys liability under the guarantee. The second term loan
facility amounting to R356.2 million ($56.7 million) continues to be collaterialized by the
underlying ARM shares in the ARM Trust. Nedbank is entitled to force the trust to sell the shares
if the market price of the ARM shares decrease to a certain level.For accounting purposes, the Company did not account for the transfer of the shares to the
ARM Trust as a sale. This is because the previous put and call option on the first term loan
facility, as well as the new guarantee and the fact that the ARM Trusts ability to pledge or
exchange the shares is inhibited through restrictions imposed by Harmony and its related parties
as Trustees, are according to the guidance in SFAS No. 140 Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities, indications that Harmony has not
surrendered control over the ARM shares. The 13.68% investment therefore continues to be accounted
for 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. See
note 25.Harmony also considered the appropriate accounting for the fact that, in terms of the stated
objective of the ARM Trust, the upside on appreciation of the ARM shares legally belongs to the
intended beneficiaries of the ARM Trust. The Company determined that this written option would
qualify as a derivative instrument under the SEC staffs long standing position for written
options as noted in EITF 01-6 Accounting for Freestanding Derivative Financial Instruments
Indexed to, and Potentially Settled in, the Stock of a Consolidated Subsidiary. Harmony has
therefore recorded a derivative financial liability on its balance sheet to reflect the fair value
of the net increase in the ARM Empowerment Trust. Any changes in the fair value of the derivative
financial liability have been accounted for in the consolidated income statements. See Note 30.
 F-20




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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 interest in Bendigo Mining NL (Bendigo)
  (c) Acquisition and disposal of Gold Fields Limited (Gold Fields)
    
 (d) Acquisition and partial disposal of Orpheo by Harmony (Proprietary) Limited (Orpheo)
    (e) Acquisition and disposal of Western Areas Limited (Western Areas)
  F-21




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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) Disposal of Buffalo Creek Mines (Proprietary) Limited (Buffalo Creek)
  (g) Acquisition of Village Main Reef Gold Mining Company (1934) Limited (Village)
  (h) Disposal of GBS Gold International Inc (GBS Gold)
    (i) Disposal of Peninsula Minerals Limited (Peninsula)
  5 CONSOLIDATION OF VARIABLE INTEREST ENTITIES
 (a) Africa Vanguard Resources (Proprietary) Limited transaction
   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
  F-23




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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
 2007
    
    
    2006
    
    
    2005$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
    
    
    695,760
    
    
    
    622,655
    
    
    
    631,284Stores and materials
    
    
    229,600
    
    
    
    199,153
    
    
    
    224,375Water and electricity
    
    
    102,515
    
    
    
    98,607
    
    
    
    115,990Hospital costs
    
    
    3,732
    
    
    
    12,788
    
    
    
    21,968Changes in inventory
    
    
    (8,072
    )
    
    
    (20,331
    )
    
    
    (4,483
    )Share-based compensation
    
    
    5,113
    
    
    
    15,726
    
    
    
    15,618Other
    
    
    (5,090
    )
    
    
    29,956
    
    
    
    32,0281,023,558
    
    
    
    958,554
    
    
    
    1,036,780
 7 IMPAIRMENT OF ASSETS
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000South African operations:Free State operations
    
    
    4,441
    
    
    
    
    
    
    
    42,018Lydenburg Exploration
    
    
    
    
    
    
    15,951
    
    
    
    Evander operations
    
    
    
    
    
    
    
    
    
    
    15,324Kalgold operations
    
    
    
    
    
    
    
    
    
    
    12,441Freegold operations
    
    
    5,802
    
    
    
    
    
    
    
    52,557ARMgold operations
    
    
    
    
    
    
    
    
    
    
    47910,243
    
    
    
    15,951
    
    
    
    122,819
    F-24




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 8 EMPLOYMENT TERMINATION AND RESTRUCTURING COSTS
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Free State
    
    
    
    
    
    
    (8,695
    )
    
    
    20,909Evander
    
    
    
    
    
    
    917
    
    
    
    4,005Kalgold
    
    
    
    
    
    
    4
    
    
    
    143Randfontein and Elandskraal
    
    
    
    
    
    
    751
    
    
    
    16,721Freegold
    
    
    
    
    
    
    (4,867
    )
    
    
    28,076ARMgold (Welkom and Orkney)
    
    
    
    
    
    
    (914
    )
    
    
    1,872Avgold
    
    
    
    
    
    
    369
    
    
    
    1,489Musuku (Refinery)
    
    
    
    
    
    
    146
    
    
    
    
    
    
    
    (12,289
    )
    
    
    73,215
     2007
    
    
    2006$000
    
    
    $000Balance at July 1, 2006 and 2005
    
    
    
    
    
    
    32,910Employment termination costs paid
    
    
    
    
    
    
    (22,001
    )(Benefit from)/provision for employment termination costs
    
    
    
    
    
    
    (12,480
    )Foreign currency translation adjustment
    
    
    
    
    
    
    1,571Balance at June 30, 2007 and 2006
    
    
    
    
    
    
    
 F-25




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 9 PROFIT ON SALE OF PROPERTY, PLANT AND EQUIPMENT
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Sale of Randfontein 4 Shaft
    
    
    9,805
    
    
    
    
    
    
    
    Sale of Deelkraal surface assets
    
    
    13,743
    
    
    
    
    
    
    
    Other
    
    
    1,798
    
    
    
    10,148
    
    
    
    13,59425,346
    
    
    
    10,148
    
    
    
    13,594
    10 (LOSS)/PROFIT ON SALE OF LISTED INVESTMENTS
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Profit on sale of investment in Atlas Gold Limited
    
    
    
    
    
    
    79
    
    
    
    Loss on sale of investment in San Gold Corporation
    
    
    
    
    
    
    (121
    )
    
    
    (Loss)/profit on sale of investment in Gold Fields Limited
    
    
    (4,898
    )
    
    
    45,387
    
    
    
    (60,168
    )Loss on sale of investment in ARM Limited
    
    
    
    
    
    
    
    
    
    
    (38,242
    )Profit on sale of investment in Bendigo NL
    
    
    
    
    
    
    
    
    
    
    4,931(4,898
    )
    
    
    45,345
    
    
    
    (93,479
    )
        F-26




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 11 IMPAIRMENT OF LISTED INVESTMENT
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Impairment of shares in listed companies
    
    
    (51,087
    )
    
    
    
    
    
    
    (63,234
    )
   12 PROFIT ON SALE OF INVESTMENT IN ASSOCIATES
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Profit on sale of investment in Western Areas Limited
    
    
    33,478
    
    
    
    
    
    
    
    
  13 PROFIT/(LOSS) ON SALE OF SUBSIDIARIES
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Profit on sale of investment in Buffalo Creek
    
    
    
    
    
    
    3,035
    
    
    
    Profit on sale of investment in Ubuntu
    
    
    
    
    
    
    
    
    
    
    1,125Loss on sale of investment in Future
    
    
    
    
    
    
    
    
    
    
    (1,367
    )Profit on sale of investment in NACS
    
    
    
    
    
    
    
    
    
    
    128
    
    
    
    3,035
    
    
    
    (114
    )
     14 PROFIT ON SALE OF JOINT VENTURES
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Profit on sale of Orpheo by Harmony (Pty) Ltd
    
    
    30
    
    
    
    
    
    
    
    
 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
  15 OTHER (EXPENSES)/INCOMENET
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Foreign exchange (losses)/gains
    
    
    5,043
    
    
    
    (3,959
    )
    
    
    452Non-mining bad debts
    
    
    (1,816
    )
    
    
    854
    
    
    
    (6,079
    )Other expenditure
    
    
    (9,826
    )
    
    
    (23,339
    )
    
    
    (11,747
    )(6,599
    )
    
    
    (26,444
    )
    
    
    (17,374
    )
 16 TAXATION
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Current income and mining taxes
    
    
    (610
    )
    
    
    (642
    )
    
    
    (12,255
    )Deferred income and mining taxes
    
    
    (33,592
    )
    
    
    1,665
    
    
    
    76,307Total income and mining taxation benefit
    
    
    (34,202
    )
    
    
    1,023
    
    
    
    64,052
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000South Africa
    
    
    (163,285
    )
    
    
    (69,024
    )
    
    
    (538,791
    )Foreign
    
    
    (24,687
    )
    
    
    (12,301
    )
    
    
    2,524Total
    
    
    (187,972
    )
    
    
    (81,324
    )
    
    
    (536,266
    )
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Income and mining tax benefit on loss from continuing operations
before tax and equity income from joint ventures and associated
companies at the maximum
statutory mining tax rate
    
    
    84,587
    
    
    
    36,596
    
    
    
    241,320Non-deductible
expenses(1)
    
    
    (122,263
    )
    
    
    (5,153
    )
    
    
    (3,711
    )Difference between South African mining formula tax rate
and maximum mining statutory rate on mining income
    
    
    7,780
    
    
    
    1,534
    
    
    
    (108,338
    )Difference between non-mining tax rate and maximum mining
statutory rate on non-mining income
    
    
    5,633
    
    
    
    (11,950
    )
    
    
    (12,552
    )Difference between estimated effective tax rate and maximum mining statutory rate (deferred tax)
    
    
    (10,495
    )
    
    
    (20,004
    )
    
    
    (52,667
    )Prior year adjustment  mining and non-mining tax
    
    
    555
    
    
    
    
    
    
    
    Income and mining tax (expense)/benefit
    
    
    (34,202
    )
    
    
    1,023
    
    
    
    64,052Effective income and mining tax rate
    
    
    -18
    %
    
    
    1
    %
    
    
    12
    %
 (1) Non-deductible
expenses comprise primarily fair value adjustments on the
derivative financial liability relating to the ARM Trust. F-28




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
  2007
    
    
    2006$000
    
    
    $000Deferred income and mining tax assets:Derivative financial liability
    
    
    3,608
    
    
    
    10,101Unredeemed capital expenditure
    
    
    123,757
    
    
    
    95,088Provisions, including rehabilitation accruals
    
    
    36,651
    
    
    
    25,754Tax losses
    
    
    47,350
    
    
    
    65,262Other
    
    
    
    
    
    
    211,366
    
    
    
    196,205Valuation allowance for deferred tax assets
    
    
    
    
    
    
    (4,004
    )Total deferred income and mining tax assets
    
    
    211,366
    
    
    
    192,200
 2007
    
    
    2006$000
    
    
    $000Deferred income and mining tax liabilities:Mining assets
    
    
    (640,282
    )
    
    
    (560,559
    )Product inventory not taxed
    
    
    (14,294
    )
    
    
    (8,939
    )Other
    
    
    (510
    )
    
    
    (1,593
    )(655,086
    )
    
    
    (571,091
    )Valuation allowance
    
    
    
    
    
    
    Total deferred income and mining tax liabilities
    
    
    (655,086
    )
    
    
    (571,091
    )Reclassified as non-current assets held for sale
    
    
    3,213
    
    
    
    Net deferred income and mining tax liabilities
    
    
    (446,933
    )
    
    
    (378,891
    )Net deferred income and mining tax liabilities comprise of:Current deferred income and mining tax assets
    
    
    65,896
    
    
    
    142,109Non-current deferred income and mining tax liabilities
    
    
    (512,829
    )
    
    
    (521,000
    )Net deferred income and mining tax liabilities
    
    
    (446,933
    )
    
    
    (378,891
    )
  17 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS
  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
 Australia
    
    
    Other entities
    
    
    Total$000
    
    
    $000
    
    
    $000Non-current assets classified as held-for-sale:Property, plant and equipment
    
    
    88,087
    
    
    
    36,498
    
    
    
    124,585Restricted cash
    
    
    706
    
    
    
    
    
    
    
    706Listed and other investments
    
    
    638
    
    
    
    8,415
    
    
    
    9,053Deferred income tax
    
    
    14,621
    
    
    
    2,418
    
    
    
    17,039Income tax
    
    
    
    
    
    
    1,562
    
    
    
    1,562Inventories
    
    
    9,229
    
    
    
    7,991
    
    
    
    17,220Receivables
    
    
    2,826
    
    
    
    9,072
    
    
    
    11,898Cash and cash equivalents
    
    
    332
    
    
    
    80
    
    
    
    412116,439
    
    
    
    66,036
    
    
    
    182,475Liabilities directly associated with non-current assets classified as held-for-sale:Borrowings
    
    
    121
    
    
    
    
    
    
    
    121Deferred income tax
    
    
    10,147
    
    
    
    3,679
    
    
    
    13,826Provision for environmental rehabilitation
    
    
    24,602
    
    
    
    12,338
    
    
    
    36,940Trade and other payables
    
    
    13,225
    
    
    
    13,501
    
    
    
    26,72748,096
    
    
    
    29,518
    
    
    
    77,614
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Analysis of the results of discontinued operations:Revenue
    
    
    141,874
    
    
    
    122,496
    
    
    
    125,667Expenses
    
    
    (148,418
    )
    
    
    (185,299
    )
    
    
    (110,457
    )Impairment of assets
    
    
    (51,788
    )
    
    
    
    
    
    
    (120,305
    )(Loss) from discontinued operations before tax
    
    
    (58,332
    )
    
    
    (62,803
    )
    
    
    (105,095
    )Taxation
    
    
    (14,054
    )
    
    
    1,320
    
    
    
    24,759(Loss) from discontinued operations for the year
    
    
    (72,386
    )
    
    
    (61,483
    )
    
    
    (80,336
    )
 When the decision was taken to classify the operations as held-for-sale, the
assets carrying values were compared to their fair values less costs to sell.
The assets were found to be impaired and as a result, an impairment loss of
$51.8 million was recognized.The Australian operations also recorded an impairment loss of $120.3 million
during the year ended June 30, 2005. This impairment related to a $52.5
million impairment loss on amounts previously capitalized as undeveloped
properties for which no future benefits were expected by management. An
impairment loss of $67.8 million was also recorded on mining assets mainly
resulting from a review performed on life of mine plans. The revised life of
mine plans included an adjusted Australian dollar gold price and adjustments to
estimated production costs. Utilizing the revised mine plans, a gold price of
$380 per ounce and an exchange rate of AU$1=$0.69, the life of mine plans did
not support the carrying value of some of the Australian operations on an
undiscounted cash flow basis. Accordingly, an asset impairment of $120.3
million was charged against income, utilizing a discount rate of 7%.During the year ended June 30, 2005, the Australian operations recorded an
impairment of $3.1 million at its South Kalgoorlie operations, mainly as a
result of the depletion of open pit reserves through mining activities, despite
continued exploration around the South Kalgoorlie area.  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Operating cash flows
    
    
    (53,111
    )
    
    
    (9,961
    )
    
    
    27,512Investing cash flows
    
    
    9,962
    
    
    
    21,520
    
    
    
    (76,029
    )Financing cash flows
    
    
    
    
    
    
    
    
    
    
    Foreign exchange differences
    
    
    3,138
    
    
    
    2,907
    
    
    
    10,762Total cash flows
    
    
    (40,011
    )
    
    
    14,466
    
    
    
    (37,755
    )
 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
 18 EARNINGS PER SHARE
 For the year ended June 30, 2007Loss
    
    
    Shares
    
    
    Per-share(Numerator)
    
    
    (Denominator)
    
    
    amount$000
    
    
    
    
    
    ($)Basic loss per shareShares outstanding July 1, 2006
    
    
    
    
    
    
    397,616,950
    
    
    
    Weighted average number of ordinary
shares issued during the year
    
    
    
    
    
    
    976,347
    
    
    
    Total weighted average shares
    
    
    
    
    
    
    398,593,297Loss available to common shareholders- Continuing operations
    
    
    (223,049
    )
    
    
    
    
    
    
    (0.56
    )- Discontinued operations
    
    
    (72,386
    )
    
    
    
    
    
    
    (0.18
    )Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    
    
    
    
    Total diluted shares
    
    
    
    
    
    
    398,593,297
    
    
    
    Diluted loss per share- Continuing operations
    
    
    (223,049
    )
    
    
    
    
    
    
    (0.56
    )- Discontinued operations
    
    
    (72,386
    )
    
    
    
    
    
    
    (0.18
    )
 
 The inclusion of share options issued to employees totaling 4,471,214 as of
June 30, 2007, as potential ordinary shares, would have an anti-dilutive effect
on diluted loss per share. Accordingly, such additional shares have not been
taken into account in the determination of diluted loss 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
    
    
    
    Total weighted average shares
    
    
    
    
    
    
    394,409,512
    
    
    
    Loss available to common shareholders- Continuing operations
    
    
    (96,300
    )
    
    
    
    
    
    
    (0.24
    )- Discontinued operations
    
    
    (61,483
    )
    
    
    
    
    
    
    (0.16
    )Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    
    
    
    
    Total diluted shares
    
    
    
    
    
    
    394,409,512
    
    
    
    Diluted loss per share- Continuing operations
    
    
    (96,300
    )
    
    
    
    
    
    
    (0.24
    )- Discontinued operations
    
    
    (61,483
    )
    
    
    
    
    
    
    (0.16
    )
 
 The inclusion of share options issued to employees totaling 4,919,895 as of
June 30, 2006, as potential ordinary shares, would have an anti-dilutive effect
on diluted loss per share. Accordingly, such additional shares have not been
taken into account in the determination of diluted loss per share. For the year ended June 30, 2005Loss
    
    
    Shares
    
    
    Per-share(Numerator)
    
    
    (Denominator)
    
    
    amount$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
    
    
    
    Total weighted average shares
    
    
    
    
    
    
    362,499,012Loss available to common shareholders- Continuing operations
    
    
    (472,214
    )
    
    
    
    
    
    
    (1.30
    )- Discontinued operations
    
    
    (80,335
    )
    
    
    
    
    
    
    (0.22
    )
 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
 Effect of dilutive securitiesShare options issued to employees
    
    
    
    
    
    
    
    
    
    
    Total diluted shares
    
    
    
    
    
    
    362,499,012Diluted (loss)/earnings per share- Continuing operations
    
    
    (472,214
    )
    
    
    
    
    
    
    (1.30
    )- Discontinued operations
    
    
    (80,335
    )
    
    
    
    
    
    
    (0.22
    )
 
 The inclusion of share options issued to employees totaling 3,208,201 as of
June 30, 2005, as potential ordinary shares, would have an anti-dilutive effect
on diluted loss per share. Accordingly, such additional shares have not been
taken into account in the determination of diluted loss per share. 19 RECEIVABLES
 2007
    
    
    2006$000
    
    
    $000CurrentTrade receivables (gold)
    
    
    11,320
    
    
    
    40,738Other mining related receivables  net of allowance
for doubtful accounts of $3.4 million and $1.8
million in 2007 and 2006, respectively
    
    
    25,904
    
    
    
    12,422Value Added Tax
    
    
    68,071
    
    
    
    15,098Insurance claims and prepayments
    
    
    4,942
    
    
    
    8,339Employee receivables
    
    
    7,661
    
    
    
    5,621Deferred consideration for sale of Buffalo Creek
    
    
    4,543
    
    
    
    6,531Interest and other
    
    
    13,427
    
    
    
    11,426135,868
    
    
    
    100,175Non-currentDeferred consideration for sale of Buffalo Creek
    
    
    
    
    
    
    4,047Loans
    
    
    7,057
    
    
    
    8,6537,057
    
    
    
    12,701Total receivables
    
    
    142,925
    
    
    
    112,876
 20 INVENTORIES
 2007
    
    
    2006$000
    
    
    $000Gold in-process
    
    
    71,267
    
    
    
    63,465Consumable stores
    
    
    33,155
    
    
    
    28,533104,422
    
    
    
    91,998
 
 Gold in-process is valued at fair value less cost to sell, except for the Free
State, Evander, Freegold and Target operations (2006: Elandskraal
operations) gold in-process, that are valued at net realisable value. Gold
in-process includes immaterial amounts of stockpile inventories. 21 PROPERTY, PLANT AND EQUIPMENT
 2007
    
    
    2006$000
    
    
    $000Mining properties, mine development costs and mine plant facilities  cost
    
    
    3,237,909
    
    
    
    2,905,099Mining assets under construction
    
    
    393,258
    
    
    
    207,676Undeveloped properties
    
    
    1,046,163
    
    
    
    1,719,553Other non-mining assets
    
    
    289,630
    
    
    
    57,518Accumulated depreciation and amortization
    
    
    (1,433,022
    )
    
    
    (1,583,291
    )3,533,938
    
    
    
    3,306,555
 
 Other non-mining assets consist of freehold land, computer equipment and motor vehicles.Depreciation of property, plant and equipment amounted to $122.5 million in
2007, $154.0 million in 2006 and $147.9 million in 2005. 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
 In fiscal 2007, an impairment loss of $10.2 million was recorded at the
Companys Free State and Freegold operations. See note 7.During fiscal 2006, an impairment loss of $16.0 million was recorded on amounts
previously capitalized as undeveloped properties at its Lydenburg operations
for which no future financial benefits were expected by management. 22 OTHER ASSETS
 2007
    
    
    2006$000
    
    
    $000Bond issue costs, net of amortization
    
    
    2,398
    
    
    
    3,605
 23 INTANGIBLE ASSETS
 2007
    
    
    2006$000
    
    
    $000Goodwill
    
    
    28,742
    
    
    
    28,256Computer software
    
    
    5,263
    
    
    
    34,005
    
    
    
    28,256
 The Company allocated the goodwill arising from the ARMgold acquisition
primarily to the Tshepong and Phakisa reporting units. The allocation was based
on the valuations of those shafts and based on the mine-specific synergies
arising from the acquisition that are expected to be realized in future. There
have been no impairments or other adjustments to the goodwill since
acquisition. The movement in the goodwill balance compared to the prior year
relates to currency fluctuations. The goodwill is reflected in the Freegold
reportable segment. See note 41.The computer software asset relates to the acquisition and development costs
for the Oracle ERP software implemented in December 2006. Amortization for
fiscal 2007 was $0.6 million. The accumulated amortization balance for fiscal
2007 was $0.6 million. The estimated amortization expense over the next five
years is $1.2 million per annum, with the exception of the last year, in which
the expense recorded is expected to be $0.5 million.
 24 RESTRICTED CASH
 2007
    
    
    2006$000
    
    
    $000Rand Merchant Bank
    
    
    38,881
    
    
    
    Bissett proceeds held in trust
    
    
    
    
    
    
    182Australian dissentient shareholders funds
    
    
    85
    
    
    
    1,064Security deposits
    
    
    1,344
    
    
    
    34,353Reclassified as current
    
    
    (38,881
    )
    
    
    Reclassified as non-current assets held for sale
    
    
    (706
    )
    
    
    723
    
    
    
    35,599
 In connection with the refinancing of the Rand Merchant Bank term loan
facility, $39 million (R274 million) was placed in a security deposit account
with Rand Merchant Bank. See note 29(i).An amount of C$0.2 million of the proceeds on sale of Bissett was held in trust
with Stike and Elliot attorneys in Canada at June 30, 2006. The amount was held
in trust until clearance was provided by the Canadian tax authority that all
outstanding tax obligations by Harmony had been met.An amount of A$0.1 million (2006: A$1.4 million) is held to acquire the
remaining shares in Australian subsidiaries, as part of the compulsory takeover
of the New Hampton, Hill 50 and Abelle shares.An amount of A$1.6 million (2006: A$46 million) is held in respects of security
deposits on mining tenements. 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
 25 LISTED AND OTHER INVESTMENTS
 2007
    
    
    2006$000
    
    
    $000Listed investmentsInvestments in listed shares (a)
    
    
    706,623
    
    
    
    196,346Other investmentsUnlisted investments (b)
    
    
    8,416
    
    
    
    2,729Amounts contributed to environmental trust funds (c)
    
    
    189,083
    
    
    
    179,667197,499
    
    
    
    182,396Reclassified as current assets
    
    
    (705,985
    )
    
    
    Reclassified as non-current assets held for sale
    
    
    (638
    )
    
    
    Total non-current investments
    
    
    197,499
    
    
    
    378,742
 
 (a)
    
    On February 5, 2007 the Company disposed of its shares in Peninsula
Minerals Limited for A$0.4 million ($0.3 million), resulting in a
profit of $0.2 million (A$0.3 million). These shares, totaling 5
million ordinary shares, were received on January 25, 2005, issued at
A$0.02 per share, as partial consideration for the sale of tenements.During January 2006 the Company disposed of the 500 000 ordinary shares held in
Atlas Gold Limited (Atlas) for $0.2 million (A$0.2 million). The Company
received the shares in Atlas, issued at $0.20 per share, on January 13, 2005,
as partial consideration for the sale of tenements. See note 10.Harmonys 34.5% investment in 38,789,761 issued ordinary shares of ARM was
diluted to 19.5% on May 3, 2004, by the issue of new shares by ARM, following a
range of transactions between Harmony, ARM and ARMI. The result was that the
investment in ARM was reclassified from an investment in an associate to an
available-for-sale investment. Through the same range of transactions, Harmony
disposed of its interest in the Kalplats platinum project to ARM for the issue
of 2,000,000 new ordinary shares in ARM. The market value of the investment was
$233.2 million (R34.00 per share) on June 30, 2004, which resulted in a
decrease of $51.1 million in the carrying value of the investment. This
decrease was viewed as a temporary decrease in market value and thus recorded
as a component of other comprehensive income.During the 2005 fiscal year Harmony entered into a number of transactions to
dispose of the 19.5% investment held in ARM. These transactions included
transactions in the open market to dispose of a 5.82% share in ARM on which a
loss of some $38.2 million was recorded (See note 10). In addition Harmony
disposed of the remaining portion of the investment in ARM to the ARM Trust. As
part of the various agreements put in place to arrange the sale of the shares
to the ARM Trust, Harmony has accepted terms which resulted in the majority of
the risks not being transferred to the ARM Trust. Harmony has therefore not
derecognized the shares (See note 4(a) and 5(b)). The market value of the
remaining investment was $501.7 million (R123.49 per share) on June 30, 2007
(2006: $191.7 million (R47.99 per share)).On March 17, 2004 the Company received 5,000,000 ordinary shares in San Gold,
issued at C$0.40 per share, and 5,714,285 ordinary shares in Gold City, issued
at C$0.35 per share, as partial consideration for the sale of the Companys
wholly owned subsidiary, Bissett. San Gold and Gold City are mineral resources
companies, which have secondary listings on the Toronto Stock Exchange. The
market value of the investment in San Gold was $1.6 million (C$0.40 per share)
on June 30, 2005, resulting in an increase of $0.2 million since acquisition,
which was reflected in other comprehensive income. The market value of the
investment in Gold City was $0.9 million (C$0.20 per share) on June 30, 2005,
resulting in a decrease of $0.6 million since acquisition, which was reflected
in other comprehensive income. The decrease in the market values of both
companies was considered to be temporary.Effective June 30, 2005, San Gold and Gold City were amalgamated to form a new
company named San Gold Corporation. Accordingly the Company received 1 San Gold
Operation share for 1 San Gold share and 0.5176 San Gold Corporation shares for
each Gold City share held, bringing the total shares held in San Gold
Corporation to 7 957 498 shares. On December 29, 2005, the Company disposed of
its investment in San Gold Corporation for $3.1 million. The investment was
carried at a total cost of $3.2 million, resulting in a loss of $0.1 million
(See note 10).On March 31, 2006 Vadessa (Pty) Ltd, a subsidiary of Harmony Gold (Australia)
(Proprietary) Limited, received 1,907,892 shares in GBS Gold, issued at C$1.75,
as partial consideration for the sale of the Companys wholly owned subsidiary,
Buffalo Creek. See note 4(l). GBS Gold is a mineral resources company, which
are listed on the Toronto Stock Exchange. The market value of the investment
was $3.0 million (C$1.75 per share) on June 30, 2006, resulting in a decrease
of $0.7 million since acquisition, which was reflected in other comprehensive
income. 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
 
 On September 28, 2006 the Company sold 361 807 GBS Gold shares for $3.9 million
(R30 million), resulting in a profit of $0.1 million.On February 9, 2007 the Company disposed of the remaining 1 546 085 shares for
$5.3 million resulting in a profit of $1 million.On April 3, 2006, Big Bell Gold Operations (Pty) Ltd, a subsidiary of Harmony
Gold (Australia) (Proprietary) Limited, received 5,000,000 shares, valued at
A$0.20 per share, in Alloy Resources Limited (Alloy Resources), as partial
consideration for the sale of Comet tenements. The market value of the
investment was $0.6 million (A$0.15 per share) on June 30, 2007 (2006: $0.7
million (A$0.185 per share)), resulting in a decrease of $0.1 million (2006:
$0.1 million) for the year, which was reflected in other comprehensive income.
This investment has now been included in non-current assets held for sale (see
note 17).On December 8, 2006 the Company disposed of its interest in Western Areas in
exchange for Gold Fields ordinary shares. This was in terms of an offer by Gold
Fields whereby every 100 Western Areas shares were exchanged for 35 Gold Fields
shares. The Company received 15,745,079 Gold Fields shares, issued at R135.02
per share. Gold Fields is a mineral resources company, primarily gold, which is
listed on the JSE Limited (JSE) and has a secondary listing on the New York
Stock Exchange.The Company disposed of 1,150,000 Gold Fields shares for $19.7 million (R143
million) in a range of transactions between January 26, 2007 and February 12,
2007. The total cost of these shares was $21.4 million (R155.3 million),
resulting in a loss of $1.7 million (R12.3 million). During May and June 2007,
a further 1,500,000 shares with a cost of $28.3 million (R202.5 million) were
disposed of for $25.1 million (R179.6 million), resulting in a loss of $3.2
million (R22.9 million). After this transaction, the Company still held
7,348,079 shares in Gold Fields, excluding the 5,747,000 shares pledged to Rand
Merchant Bank Morgan Stanley for financing received. See note 29.The market value of the investment in Gold Fields shares was $203.4 million on
June 30, 2007, resulting in a decrease of $46.6 million since acquisition.
Management has assessed this decrease and determined that it was
other-than-temporary. As a result the loss was recognized in the consolidated
statement of income. Dividends to the value of $1.8 million was received from
this investment during the 2007 fiscal year.This investment is disclosed as a current asset as it was disposed of
subsequent to year end. See note 40.The following table summarizes the unrealized gains/(losses) in the market
value of the listed investments included in equity since their acquisition on
June 30, 2007 and 2006: 2007
    
    
    2006$000
    
    
    $000ARM
    
    
    386,146
    
    
    
    85,767GBS Gold
    
    
    
    
    
    
    (735
    )Alloy Resources
    
    
    (57
    )
    
    
    (57
    )386,090
    
    
    
    84,975
 (b)
    
    Unlisted investments comprise of various industry related investments,
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 other-than-temporary decline in the value of the investments has
occurred. No dividends were received from these investments in the
2007, 2006 and 2005 fiscal years.On December 11, 2006, Harmony subscribed to 50 000 cumulative redeemable
participating preference shares in Clidet No 700 (Proprietary) Limited (Clidet
700) for $7.1 million (R50 million). The consideration was paid on January 3,
2007. Clidet 700 used these funds to purchase 4 106 667 ordinary shares in
Pamodzi Gold Limited (Pamodzi Gold), which listed on the JSE on December 11,
2006. Clidet 700 has pledged the Pamodzi Gold shares to Harmony as security for
the amounts owing in terms of the redemption of the preference shares. The
preference shares may be redeemed after May 1, 2009 by Clidet 700.or after
three years and one day from the issue date by Harmony. Dividends are
accumulated and are payable on the redemption date, if not paid before.(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. 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
 26 INVESTMENT IN ASSOCIATES
  Carrying amountsInvestment
    
    Description of business
    
    
    Ownership %
    
    
    2007
    
    
    20062007
    
    
    2006
    
    
    $000
    
    
    $000Western Areas Limited
    
    Gold mining
    
    
    
    
    
    
    29.2
    %
    
    
    
    
    
    
    266,267Village Main Reef Gold Mining Company(1934) Limited
    
    Dormant
    
    
    37.8
    %
    
    
    37.8
    %
    
    
    
    
    
    
    64Orpheo by Harmony (Pty) Limited
    
    Jewelry manufacturing
    
    
    34.0
    %
    
    
    
    
    
    
    853
    
    
    
    853
    
    
    
    266,331
 
 On March 9, 2006 the Company acquired a 29.2% interest in the issued share
capital of Western Areas through its subsidiary ARMgold/Harmony Joint
Investment Company (Pty) Ltd. The Company purchased 44,985,939 shares in
Western Areas at R44.23 per share, resulting in total cost of $321 million.
Western Areas is listed on the JSE Limited and has interests in operating gold
mines in South Africa. On June 30, 2006 the fair value of the investment
decreased to $250 million (R39.83 per share), which was considered to be
temporary.On December 8, 2006 the Company disposed of its interest in Western Areas in
exchange for Gold Fields ordinary shares. This was in terms of an offer by Gold
Fields whereby every 100 Western Areas shares were exchanged for 35 Gold Fields
shares. The Company received 15,745,079 Gold Fields shares for its 44,985,939
Western Areas shares. The gain on the transaction was $33 million (R236
million). The Company recorded equity losses of $19 million (R123 million). See
note 12.The unaudited results of Western Areas for the period since acquisition of the
investment on March 9, 2006, to June 30, 2006, are as follows: 100%
    
    
    29.2%$000
    
    
    $000Revenue
    
    
    7,933
    
    
    
    2,316Production costs
    
    
    (25,949
    )
    
    
    (7,577
    )(18,016
    )
    
    
    (5,261
    )Net loss
    
    
    (56,317
    )
    
    
    (16,444
    )
  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. See note
4(g).On May 28, 2007 the Company disposed of 17% of its share in Orpheo by Harmony
(Pty) Limited (Orpheo), which had previously been accounted for as a joint
venture. After this transaction, the Group held a 34% interest in Orpheo. See
note 4(d). 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
   2007
    
    
    2006$000
    
    
    $000Opening carrying amount
    
    
    266,333
    
    
    
    Shares at cost
    
    
    
    
    
    
    321,541Disposal of investment in associate
    
    
    (268,063
    )
    
    
    Joint venture becoming associate
    
    
    847
    
    
    
    Net share of results of associates
    
    
    (2,576
    )
    
    
    (16,444
    )Foreign currency translation differences
    
    
    4,312
    
    
    
    (38,764
    )Closing carrying amount
    
    
    853
    
    
    
    266,333
 27
    
    INVESTMENT IN JOINT VENTURESInterest 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 joint
venture accounted under the equity method.28
    
    ACCOUNTS PAYABLE AND OTHER LIABILITIES
 2007
    
    
    2006$000
    
    
    $000Trade payables
    
    
    57,046
    
    
    
    72,947Value Added Tax
    
    
    16,718
    
    
    
    Short term borrowings
    
    
    1,442
    
    
    
    1,107Other liabilities
    
    
    19,340
    
    
    
    4,33794,546
    
    
    
    78,391
 29
    
    LONG TERM LOANS
 2007
    
    
    2006$000
    
    
    $000UncollateralizedConvertible uncollaterized fixed rate bonds (a)
    
    
    241,340
    
    
    
    237,264Africa Vanguard Resources (Proprietary) Limited (b)
    
    
    4,543
    
    
    
    4,467Total uncollateralized long term loans
    
    
    245,883
    
    
    
    241,731CollateralizedNedbank Limited (c)
    
    
    24,196
    
    
    
    21,544Gold Fields Limited (d)
    
    
    
    
    
    
    705Less : short term portion
    
    
    
    
    
    
    (705
    )
    
    
    
    Nedbank Limited (e)
    
    
    85,316
    
    
    
    75,173Less : short term portion
    
    
    (85,316
    )
    
    
    
    
    
    
    75,173Nedbank Limited (f)
    
    
    63,946
    
    
    
    56,065Less : short term portion
    
    
    (63,946
    )
    
    
    
    
    
    
    56,065Auriel Alloys (g)
    
    
    
    
    
    
    167Less : short term portion
    
    
    
    
    
    
    (72
    )
    
    
    
    95
 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
 2007
    
    
    2006$000
    
    
    $000Rand Merchant Bank Limited (h)
    
    
    
    
    
    
    139,567Less: short term portion
    
    
    
    
    
    
    (139,567
    )
    
    
    
    Rand Merchant Bank Limited (i)
    
    
    106,781
    
    
    
    Less: short term portion
    
    
    (106,781
    )
    
    
    
    
    
    
    Rand Merchant Bank Limited (j)
    
    
    78,081
    
    
    
    Less: short term portion
    
    
    (78,081
    )
    
    
    
    
    
    
    Rand Merchant Bank Limited (k)
    
    
    70,982
    
    
    
    Less: short term portion
    
    
    (70,982
    )
    
    
    
    
    
    
    Westpac Bank (l)
    
    
    121
    
    
    
    Less: short term portion
    
    
    (121
    )
    
    
    
    
    
    
    Total collateralized long term loans
    
    
    24,196
    
    
    
    152,877Total long term loans
    
    
    270,079
    
    
    
    394,608
 
 (a)
    
    On May 21, 2004, Harmony issued R1.7 billion ($252.0 million) in international
uncollateralized fixed-rate convertible bonds in order to refinance its domestic Rand debt.
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 initial
conversion price is R121 per ordinary share subject to certain standard anti-dilution provisions,
such as a stock-split, spinoff or rights offering, that are designed to maintain the value of the
conversion option.The trust deed for the convertible bonds contains clauses that restrict certain of Harmonys
activities, including a negative pledge, according to which Harmony will not create or permit any
mortgage, charge, lien, pledge or other form of encumbrance of security interest with respect to
any part of its undertaking or assets, present or future, to collateralize any relevant debt,
guarantee or indemnity. In addition, the trust deed contains covenants that require Harmony to,
among other things, maintain the listing of the bonds with the UK Listing Authority and to all
things necessary, in the opinion of the trustee, to give effect to the trust deed. Included in the
amortisation charge as per the income statement is $ 1.2 million (2006: $1.4 million, 2005: $1.4
million) for amortization of the bond issue costs.(b)
    
    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(a).(c)
    
    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(a). The loan bears interest
at JIBAR plus 2%, compounded monthly, and any stamp duties and holding costs. The loan matures on
July 30, 2008, at which date all loan amounts and any interest accrued are to be paid. The loan is
jointly and severally guaranteed by Evander Gold Mines Limited, Harmony, Kalahari Gold Ridge
Mining Company Limited, Lydenburg Exploration Limited and Randfontein. The facility from Nedbank to AVRD is
guaranteed by Harmony and certain of its subsidiaries. As a result of this guarantee and other
factors, the Company is required to consolidate AVR and has therefore included the loans from
Nedbank and Africa Vanguard Resources (Pty) Limited in its consolidated debt. Interest capitalized
during the year ended June 30, 2007 amounted to $ 2.2 million (2006: $2.3 million and 2005: $1.9
million).(d)
    
    On July 1, 2002 Freegold entered into an agreement with St Helena Gold Mines Limited, a fully
owned subsidiary 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) was
payable by way of a 1 % royalty on turnover, monthly in arrears, for a period of 48 months,
commencing on the 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
 
 10th of the month following the effective date. In October 2006, the obligation relating to the
royalty on turnover for the St Helena assets ended. The outstanding balance was not payable in
terms of the agreement and the balance was reversed.(e)
    
    On April 15, 2005 the ARM Trust entered into a 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(a)). The loan bears interest, compounded
monthly, at a fixed rate of 9.52%. The loan is repayable on April 15, 2010. Harmony has guaranteed
this loan, subject to a maximum guaranteed amount of R367.4 million ($50.4 million) plus interest.
In addition, if the ARM Empowerment Trust chooses to dispose of 8,175,640 of its ARM Limited shares
at cost, the maximum guaranteed amount will be reduced to R214.9 million ($29.5 million) plus
interest. Harmony has also entered into an indemnity agreement with
ARM Limited, pursuant to which ARM Limited has indemnified Harmony against 50% of all claims under the guarantee,
subject to a maximum of R107.4 million ($14.7 million) plus interest thereon at the applicable rate
from May 26, 2006. Interest accrued during the year ended June 30, 2007 amounted to $8.5 million
(2006: $7.6 million).Subsequent to year end, the guarantee was cancelled by Nedbank and consequently Harmony has no
further obligation to Nedbank. See note 40.(f)
    
    On April 15, 2005 the ARM Trust entered into a second 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(a)). The loan bears interest, compounded monthly, at a
fixed rate of 10.02%. Interest accrued during the year ended June 30, 2007 amounted to $6.7 million
(2006: $6.0 million). The loan is repayable on April 15, 2010.Subsequent to year end, the guarantee was cancelled by Nedbank and consequently Harmony has no
further obligation to Nedbank. See note 40.(g)
    
    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 bore
interest at 11% and was payable by way of 60 instalments of R50,000 each. During December 2006, the
loan was bought out in terms of a purchase agreement with Auriel Alloys for R812,733 ($0.1
million), which was the original amount reduced by the capital portion of the instalments paid to
date.(h)
    
    On March 9, 2006, Harmony entered into a term loan facility of R1.0 billion ($159.7
million) with RMB, for the purpose of partially funding the acquisition of the 29% stake in Western
Areas. Interest is compounded at a rate equal to three-month JIBAR plus 1.5%. This facility was
partially repaid on March 27, 2007 from the net proceeds of a sale of Gold Fields shares, and the
balance was repaid on April 4, 2007 from the net proceeds from the issuance of certain preference
shares by Randfontein (see note 4 (c )).(i)
    
    On March 20, 2007, Harmony received financing of R750.3 million ($103.4 million) from Rand
Merchant Bank (RMB). The Company pledged 5,747,000 Gold Fields shares as collateral for the
financing. Of the proceeds received, R599.8 million ($82.3 million) were applied towards partial
repayment of the R1.0 billion term loan facility with RMB. A cash deposit equal to 20% of the
notional amount was placed for any change in the Gold Fields share price below the reference price
of R130.88 per share(amounting to $38.9 million on June 30, 2007; see note 24). Interest is payable
at a rate equal to the SAFEX overnight deposit rate plus 35 basis points.Subsequent to year end, the Company repaid the loan. See note 40.(j)
    
    On March 20, 2007 Randfontein Estates Limited (Randfontein) (a wholly owned subsidiary of
Harmony) entered into a preference share subscription agreement with RMB. According to the terms of
the agreement, following the satisfaction of certain conditions, Randfontein issued R550.0 million
($75.4 million) principal amount of preference shares to RMB on April 5, 2007. Dividends on the
preference shares are payable semi-annually on the principal amount and are calculated at 35% of
the South African Prime Interest Rate from the issue date until August 31, 2007, 50% of the South
African Prime Interest Rate from September 1, 2007 to February 29, 2008 and 83% of the 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
 
 South African Prime Interest Rate thereafter. The preference shares have been guaranteed by
Harmony, Evander Gold Mines Limited, ARMgold/Harmony Freegold Joint Venture Company (Pty) Limited,
Avgold Limited and AHJIC, as well as certain future material subsidiaries.In the subscription agreement for the preference shares, AHJIC has also granted a security
interest over 6,196,863 Gold Fields shares held by it to collateralize its obligations under the
subscription agreement for the preference shares. In the subscription agreement for the preference
shares, AHJIC has also undertaken that, if the cover ratio of the value of the Gold Fields shares
to the redemption amount falls below 1.25, it will deposit additional Gold Fields shares or cash to
bring this ratio to 1.5. On or after March 1, 2008, if this ratio falls below 2.0, AHJIC will be
required to deposit cash equal to 75% of the redemption amount.The preference shares are redeemable at the option of the holders on the final redemption
date, which is three years and one day after the issue date, and upon the occurrence of certain
events, including a failure by AHJIC to meet its obligations under the subscription agreement, a
delisting of the Gold Fields shares from the Johannesburg Stock Exchange, cross-defaults or other
events that are customary events of default for financing agreements. The preference shares are
also redeemable by Randfontein at any time. These shares are redeemable at par value plus the
accrued dividends.The subscription agreement contains covenants that restrict certain of Harmonys activities,
including that it will not, without the prior written consent of RMB, merge with any other entity
or incur any indebtedness, with certain exceptions. Harmony also agreed that it would not give any
guarantees or surety, reduce its share capital or dispose of or encumber its assets, with certain
exceptions.Subsequent to year end, the preference shares were redeemed. See note 40.(k)
    
    On June 29, 2007, Harmony entered into a senior bridge loan facility for R500.0 million ($68.6
million) with RMB for the purpose of funding its capital expenditure requirements in respect to the
Hidden Valley mine project. The loan bears interest, compounded monthly at a rate equal to the
SAFEX Financial Derivatives overnight deposit rate (the Safex Overnight Rate) plus 2.4% until
July 31, 2007, the maturity date. In the event that Harmony elected to extend the loan facility
until September 30, 2007, the loan would bear interest at a rate equal to the Safex Overnight Rate
plus 3.6% during the extension period.This loan was settled on September 29, 2007. See note 40.(l)
    
    On June 27, 2007 the Company entered into a draw down facility agreement with Westpac Bank for
the Papua New Guinea operations. The limit is Kina 3 million (US$0.9 million) and interest is
payable at 9.45%. Subsequent to the balance sheet date, the facility was repaid and then cancelled.  2007
    
    
    2006$000
    
    
    $000Current
    
    
    405,226
    
    
    
    140,344Between 1 to 2 years
    
    
    265,536
    
    
    
    95Between 2 to 5 years
    
    
    
    
    
    
    390,046Over 5 years
    
    
    4,543
    
    
    
    4,467Total borrowings
    
    
    675,305
    
    
    
    534,952
  Convertible collateralized fixed rate bonds (a)
    
    
    10.0
    %
    
    
    10.0
    %Africa Vanguard Resources (Proprietary) Limited (b)
    
    
    0.0
    %
    
    
    0.0
    %Nedbank Limited (c)
    
    
    11.87
    %
    
    
    13.0
    %Gold Fields Limited (d)*
    
    
    
    
    
    
    0.0
    %Nedbank Limited (e)
    
    
    9.5
    %
    
    
    9.5
    %Nedbank Limited (f)
    
    
    10.0
    %
    
    
    10.0
    %Auriel Alloys (g)*
    
    
    11.0
    %
    
    
    11.0
    %Rand Merchant Bank (h)*
    
    
    
    
    
    
    9.0
    %Rand Merchant Bank (i)
    
    
    9.42
    %
    
    
    0.0
    %Rand Merchant Bank (j)
    
    
    4.6
    %
    
    
    0.0
    %Rand Merchant Bank (k)
    
    
    12.7
    %
    
    
    0.0
    %Westpac Bank (l)
    
    
    9.45
    %
    
    
    0.0
    %
 
 *
    
    Loan repaid in full  F-40




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 30
    
    DERIVATIVE FINANCIAL LIABILITY
 2007
    
    
    2006$000
    
    
    $000Mark-to-market of financial instruments at year end
    
    
    1,552
    
    
    
    88,680ARM Empowerment Trust
    
    
    353,344
    
    
    
    61,358354,896
    
    
    
    150,038
 In line with Harmonys strategy of continuously evaluating hedge agreements as well as market
conditions in order to close out these contracts at the most beneficial time, the Company was able
to close out the remainder of the Australian hedge book inherited with the acquisition of Hill 50
Mine in Western Australia: 220,000 ounces were closed out at an average spot rate of A$809 per
ounce, for a total cost of A$72.8 million ($60.0 million) on May 17, 2007. This close out results
in Harmony being totally unhedged in line with its stated company policy to give shareholders full
exposure to the gold price.The Company entered into a contract in November 2006 for the purchase of the mining fleet to
be used on the Hidden Valley project. The contract is in four different currencies and the
estimated value is $34.3 million (R241.7 million). The delivery date for the equipment has been
split into two phases with the first phase received in April 2007 and the second phase being
expected in November 2007.The underlying cash flows that will be required by the contract will therefore be modified in
accordance with the movements in the foreign exchange rates to which the contract is linked. The
embedded derivative relating to the exchange rates were calculated based on the adjusted price at
June 30, 2007 and Price Retail Index (PRI) movements since September 2005.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 $353.3 million (2006: $61.4 million) represents the fair value of the net
increase in the ARM Empowerment Trust. See note 4(a). Changes in the fair value of this derivative
financial liability have been accounted for in the consolidated
income statements, amounting to $284.7 million, $49.3 million and
$20.3 million for the year ended June 30, 2007, 2006 and 2005,
respectively. Unrealized gains on the
increase in fair value of available-for-sale investment have been included in Other
Comprehensive Income.Refer to note 37 for more detail on the outstanding financial instruments.31
    
    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:
 2007
    
    
    2006$000
    
    
    $000Balance as at July 1, 2006 and 2005
    
    
    110,164
    
    
    
    120,450Revisions in estimates
    
    
    48,865
    
    
    
    (10,184
    )Accretion expenses
    
    
    5,919
    
    
    
    6,917Disposal of assets
    
    
    (4,097
    )
    
    
    Reclassified as non-current assets held for sale
    
    
    (36,940
    )
    
    
    Foreign currency translation adjustment
    
    
    8,002
    
    
    
    (7,018
    )Balance as at June 30, 2007 and 2006
    
    
    131,913
    
    
    
    110,164
  F-41




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 32
    
    PROVISION FOR SOCIAL PLAN
 2007
    
    
    2006$000
    
    
    $000Opening balance
    
    
    2,259
    
    
    
    2,109Charge to income statement
    
    
    139
    
    
    
    334Foreign currency translation adjustment
    
    
    31
    
    
    
    (184
    )Closing balance
    
    
    2,429
    
    
    
    2,259
 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 with the final instalment to be made in
2013. The purpose of the trust is to fund the social plan to reduce the negative effects of
restructuring 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.33
    
    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 $10.3 million, $13.9 million and $10.0 million for 2007, 2006 and
2005 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, 2007, on the Minemed medical
scheme, following the last actuarial valuation on June 30, 2006. The liability was valued using the
projected unit credit method. The next actuarial valuation will be performed on June 30, 2008.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:
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Opening balance at the beginning of the year
    
    
    14,964
    
    
    
    13,276
    
    
    
    1,584Additional provision for the current employees
    
    
    
    
    
    
    
    
    
    
    6,470Contributions paid
    
    
    (278
    )
    
    
    (333
    )
    
    
    (971
    )Other expenses included in staff costs  current service cost
    
    
    556
    
    
    
    528
    
    
    
    971Interest cost
    
    
    1,389
    
    
    
    1,237
    
    
    
    3,235Net actuarial (loss)/gains recognised during the year
    
    
    (1,667
    )
    
    
    1,507
    
    
    
    3,074Foreign currency translation adjustments
    
    
    293
    
    
    
    (1,252
    )
    
    
    (1,087
    )Balance at the end of the year
    
    
    15,257
    
    
    
    14,964
    
    
    
    13,276The principal actuarial assumptions used for
accounting purposes were:Discount rate
    
    
    9
    %
    
    
    9
    %
    
    
    9
    %Healthcare inflation rate
    
    
    6.34
    %
    
    
    6.34
    %
    
    
    6.34
    %Normal retirement age
    
    
    60
    
    
    
    60
    
    
    
    60
 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
    Period ending June 30:
    
    $0002008
    
    
    3572009
    
    
    3772010
    
    
    4062011
    
    
    4332012
    
    
    471Thereafter
    
    
    3,221
 The post-retirement medical benefit plan is unfunded. The Companys best estimate of expected
contributions for the next year equals the expected benefit payment of $ 0.3 million (R2.4
million).34
    
    COMMITMENTS AND CONTINGENCIES
 2007
    
    
    2006$000
    
    
    $000Capital expenditure commitmentsContracts for capital expenditure
    
    
    49,972
    
    
    
    21,398Authorized by the directors but not contracted for
    
    
    267,036
    
    
    
    373,794317,008
    
    
    
    395,192
  Contingent liabilitiesGuarantees and suretyships
    
    
    2,555
    
    
    
    2,481Environmental guarantees
    
    
    18,313
    
    
    
    18,05420,868
    
    
    
    20,535
       F-43




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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 potential costs involved in remediating the groundwater impact cannot be quantified with
any level of confidence unless a number of detailed studies are conducted for each specific
situation and an agreed strategy for dealing with this issue has been adopted. This is an
industry-wide issue and it is unclear who will be liable for which portion of the water treatment.Directives issued by Department of Water Affairs and Forestry during 2005 are still active
with regard to the Klerksdorp, Orkney, Stilfontein and Hartebeestfontein (KOSH) area but
significant progress has been made towards managing the process going forward . A section 21
company has been formed in the name of the Margaret Water Company by the recipient mining houses,
namely Harmony, Anglogold Ashanti and Simmer and Jack to manage the water emanating from the now
defunct Stilfontein Gold Mine .The company is managed by directors appointed by each of the mining
houses and is in the process of funding the necessary infrastructure improvements to ensure the
sustainability of the pumping operations. Negotiations with the liquidator of Stilfontein Gold Mine
are in the final stages which will secure the necessary assets and staffing for the continued
operation.35
    
    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.Restricted cashThe 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:
 2007Carrying value
    
    
    Fair Value$000
    
    
    $000Cash and cash equivalents
    
    
    99,759
    
    
    
    99,759Restricted cash
    
    
    39,604
    
    
    
    39,604Bank overdraft
    
    
    31,232
    
    
    
    31,232Receivables
    
    
    142,925
    
    
    
    142,925Investments in listed securities
    
    
    706,623
    
    
    
    706,623Investments in unlisted securities
    
    
    8,416
    
    
    
    8,416Accounts payable and accrued liabilities
    
    
    248,386
    
    
    
    248,386Long and short-term debt
    
    
    675,063
    
    
    
    589,050Derivative liabilities
    
    
    354,896
    
    
    
    354,896
 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
 2006Carrying value
    
    
    Fair Value$000
    
    
    $000Cash and cash equivalents
    
    
    89,189
    
    
    
    89,189Restricted cash
    
    
    35,599
    
    
    
    35,599Receivables
    
    
    112,875
    
    
    
    112,875Investments in listed securities
    
    
    196,346
    
    
    
    196,346Investments in unlisted securities
    
    
    2,729
    
    
    
    2,729Accounts payable and accrued liabilities
    
    
    202,481
    
    
    
    202,481Long and short-term debt
    
    
    534,952
    
    
    
    526,420Derivative liabilities
    
    
    150,038
    
    
    
    150,038
 36
    
    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, 2007 (2006: 9% and
2005: 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, 2007, amounted to $47.0
million (2006: $49.8 million and 2005 : $56.0 million).(b)
    
    SHARE OPTION SCHEMES(i)
    
    HARMONY SHARE OPTION SCHEMES:The Company currently has four employee share option schemes,
being the Harmony (1994) Share Option Scheme (HSOS 1994 Scheme), the Harmony (2001) Share Option
Scheme (HSOS 2001 Scheme), the Harmony (2003) Share Option Scheme (HSOS 2003 Scheme) and the
Harmony (2006) Share Plan (HSP 2006 Scheme). Pursuant to the rules of these schemes, 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 HSOS 2001 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, 2007
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.On November 10, 2006, a maximum of 14% of the issued share capital was approved to be offered
to participants under the HSP (2006) Scheme. On June 30, 2007 929,994 share appreciation rights and
537,066 shares were offered to participants.In terms of the rules of the Schemes, the exercise price of the options granted is equal to
fair market value of the shares at the date of the grant.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.
 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
    Average
    
    
    AverageNumber of
    
    
    exercise price
    
    
    exercise priceAvailable for
    
    
    share options
    
    
    per share
    
    
    per share
    
    
    Average grant date fair valuegrant
    
    
    granted
    
    
    SA Rand
    
    
    US Dollar
    
    
    US DollarBalance 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
    
    
    
    
    
    
    
    
    
    
    
    3.59Share options exercised during the year
    
    
    
    
    
    
    (471,962
    )
    
    
    45.69
    
    
    
    7.39
    
    
    
    Share 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
    
    
    
    
    
    
    (4,201,575
    )
    
    
    49.76
    
    
    
    7.82
    
    
    
    Share options forfeited during the year
    
    
    1,449,181
    
    
    
    (1,449,181
    )
    
    
    
    
    
    
    
    
    
    
    Balance as at June 30, 2006
    
    
    17,003,862
    
    
    
    12,707,307
    
    
    
    
    
    
    
    
    
    
    
    Share options exercised during the year
    
    
    
    
    
    
    (2,666,833
    )
    
    
    51.65
    
    
    
    7.18
    
    
    
    Share options forfeited during the year
    
    
    1,748,408
    
    
    
    (1,748,408
    )
    
    
    
    
    
    
    
    
    
    
    Balance as at June30, 2007
    
    
    18,752,270
    
    
    
    8,292,066
    
    
    
    
    
    
    
    
    
    
    
    
     Outstanding options weighted averageExercise
    
    
    ExerciseNumber of
    
    
    Contractual
    
    
    price
    
    
    priceSA Rand
       
          
             
      Range of prices
    
    US$
    
    
    shares
    
    
    life (in years)
    
    
    SA Rand
    
    
    US$22.90 - 27.20
    
    
    3.25 - 3.86
    
    
    
    9,900
    
    
    
    2.70
    
    
    
    24.64
    
    
    
    3.5035.40 - 49.60
    
    
    5.03 - 7.04
    
    
    
    5,916,592
    
    
    
    7.53
    
    
    
    39.68
    
    
    
    5.6366.00 - 66.15
    
    
    9.37 - 9.39
    
    
    
    2,053,374
    
    
    
    7.05
    
    
    
    66.14
    
    
    
    9.3991.60
    
    
    13.00
    
    
    
    312,200
    
    
    
    5.75
    
    
    
    91.60
    
    
    
    13.00Total
    
    
    
    
    
    
    8,292,066
    
    
    
    12.60
    
    
    
    75.85
    
    
    
    10.77
 Exercisable optionsWeighted
    
    
    Weightedaverage
    
    
    averageNumber of
    
    
    exercise price
    
    
    exercise priceSA Rand       
          
             
      Range of prices
    
    US$
    
    
    shares
    
    
    Rand
    
    
    US$22.90 - 27.20
    
    
    3.25 - 3.86
    
    
    
    9,900
    
    
    
    24.64
    
    
    
    3.5035.40 - 49.60
    
    
    5.03 - 7.04
    
    
    
    1,482,873
    
    
    
    41.70
    
    
    
    5.9266.00 - 66.15
    
    
    9.37 - 9.39
    
    
    
    218,223
    
    
    
    66.13
    
    
    
    9.3991.60
    
    
    13.00
    
    
    
    206,700
    
    
    
    91.60
    
    
    
    13.00Total
    
    
    
    
    
    
    1,917,696
    
    
    
    44.13
    
    
    
    6.27
 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
    2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Fair value of vested shares during the year
    
    
    55,898
    
    
    
    45,211
    
    
    
    15,150
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Compensation costs
    
    
    3,713
    
    
    
    12,054
    
    
    
    13,180Expected weighted average period to be recognized in (years)
    
    
    7.6
    
    
    
    8.3
    
    
    
    9.2
  November 15,
    
    
    
    
    
    
    August 10,
    
    
    March 27 ,2006 option
    
    
    April 26, 2005
    
    
    2004 option
    
    
    2003 option
    
    
    November 20, 2001allocation
    
    
    option grant
    
    
    grant
    
    
    grant
    
    
    option grantExpected life (in years)
    
    
    3.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    3.5Risk free interest rate (%)
    
    
    8.84
    %
    
    
    8.37
    %
    
    
    9.94
    %
    
    
    11.63
    %
    
    
    11.50
    %Volatility (%)
    
    
    26.00
    %
    
    
    35.00
    %
    
    
    40.00
    %
    
    
    45.00
    %
    
    
    40.00
    %Dividend yield (%)
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    1.52
    %
    
    
    4.00
    %Price at date of grant (Rand per share)
    
    
    112.64
    
    
    
    39.00
    
    
    
    66.15
    
    
    
    91.60
    
    
    
    49.60Vesting period (in years)
    
    
    3.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    3.0 to 5.0
       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
 37
    
    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 sensitivityAs 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.Gold Hedge PositionOn May 17, 2007, Harmony closed out the remainder of the Australian hedge book inherited with
the acquisition of the Hill 50 mine in Western Australia. 220 000 ounces were closed out at an
average spot rate of $681 (A$809) per ounce, for a total cost of $60.0 million (A$72.8 milion).At year-end, partial settlement was effected with available cash resources, leaving $11.1
million (A$14.1 million) to be settled during July 2007.The mark-to-market movement for the 2007 year was a positive US$ 4.8 million (R 35.4million).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
    
    
    4,572
    
    
    
    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
    
    
    4,883
    
    
    
    3,110
    
    
    
    3,110
    
    
    
    11,104contracts
    
    Ounces
    
    
    157,000
    
    
    
    100,000
    
    
    
    100,000
    
    
    
    357,000
    
    
    
    (88,118
    )
 Foreign currency sensitivity
  Forward Exchange Commitment
    Interest rates and liquidity risk
   Surplus Funds
  Concentration of credit risk
    F-48




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 38
    
    CASH (UTILIZED)/GENERATED BY OPERATIONS
 2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Reconciliation of net loss to cash generated
from/(utilized by) operations:Net loss
    
    
    (295,435
    )
    
    
    (155,725
    )
    
    
    (552,549
    )Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    (2,058
    )
    
    
    Income and mining tax expense/(benefit)
    
    
    48,256
    
    
    
    (2,344
    )
    
    
    (88,811
    )Loss before taxation
    
    
    (247,178
    )
    
    
    (160,127
    )
    
    
    (641,360
    )Adjustments for:(Profit)/loss on sale of listed investments
    
    
    (29,261
    )
    
    
    (45,345
    )
    
    
    93,470Profit on sale of joint venture
    
    
    (29
    )
    
    
    
    
    
    
    (Profit)/loss on sale of subsidiaries
    
    
    
    
    
    
    (3,035
    )
    
    
    114Profit on sale of mining assets
    
    
    (25,419
    )
    
    
    (10,148
    )
    
    
    (12,542
    )Depreciation and amortization
    
    
    154,077
    
    
    
    166,120
    
    
    
    151,967Impairment of assets
    
    
    63,658
    
    
    
    15,951
    
    
    
    243,124Loss on financial instruments
    
    
    278,988
    
    
    
    131,444
    
    
    
    17,672Other-than-temporary
impairment in value of listed investment
    
    
    51,087
    
    
    
    
    
    
    
    63,234Equity income of joint venture
    
    
    (1,702
    )
    
    
    (445
    )
    
    
    Equity loss of associated companies
    
    
    2,576
    
    
    
    16,444
    
    
    
    Net decrease in provision for environmental rehabilitation
    
    
    (1,790
    )
    
    
    (2,162
    )
    
    
    (2,828
    )Provision for post retirement benefits
    
    
    (1,844
    )
    
    
    1,175
    
    
    
    9,137Other non cash transactions
    
    
    21,425
    
    
    
    12,778
    
    
    
    13,256Income and mining taxes paid
    
    
    (1,903
    )
    
    
    (1,829
    )
    
    
    (8,952
    )Cash cost to close out hedges
    
    
    (97,847
    )
    
    
    (54,045
    )
    
    
    (34,248
    )Share-based compensation
    
    
    5,596
    
    
    
    17,055
    
    
    
    15,618Effect of changes in operating working capital items:Receivables
    
    
    (29,493
    )
    
    
    (8,702
    )
    
    
    38,092Inventories
    
    
    (27,529
    )
    
    
    (12,822
    )
    
    
    (8,121
    )Accounts payable and accrued liabilities
    
    
    51,273
    
    
    
    (10,496
    )
    
    
    (53,247
    )Cash generated/(utilized) by operations
    
    
    164,685
    
    
    
    51,811
    
    
    
    (115,614
    )
 39
    
    RELATED PARTY TRANSACTIONSOn June 21, 2006 Harmony acquired 37.8%of the issued share capital of Village Main Reef Gold
Mining Company (1934) Limited (Village) from ARM Limited. The Chairman of the Companys Board of
directors, Patrice Motsepe, is also a member of the ARM board of directors. Frank Abbott was also a
director of Village, at the time that Harmony purchased ARMs 37.8% holding in Village. (See note
26) Following the resignation of ARM as the Village company secretary, Harmony Gold Mining Company
Limited was appointed as from October 2, 2006.The Group acquired 37.37 million of the 44.99 million shares held in Western Areas Limited
from Allan Gray Ltd on March 9, 2006. As at June 30, 2006 Allan Gray Ltd was one of the Groups
largest shareholders, by holding 15% of Harmonys total shares. (See note 26)During the 2005 financial year Harmony entered into a number of transactions to dispose of the
19.5% investment held in ARM. Harmony dispose of the remaining portion of the investment in ARM of
16% to the ARM Empowerment Trust. As part of the various agreements put in place to arrange the
sale of the shares to the Trust Harmony has accepted terms which resulted in the majority of the
risk not being transferred away from Harmony. This relates mainly to a guarantee to the value of
US$56 million (R367 million) as at May 27, 2006, plus interest accrued at the applicable funding
rate. An indemnity from ARM Limited to the value of 50% of Harmonys liability under the guarantee
has been received. This guarantee is subject to a maximum amount of R107 million, as at May 27
2006, plus interest thereon at the applicable rate, and further reduces Harmonys obligation.At the time of these transactions, the Chairman of the Companys Board of directors, Patrice
Motsepe, was Chief Executive Officer of ARM. Frank Abbott and Nomfundo Qangule, directors of the
Company, were also trustees of the ARM Empowerment Trust at the time.On the 28 September 2007, the guarantee was cancelled by the Bank and Harmony has no further
obligation. ( Refer note 29)African Rainbow Minerals Limited (ARM) currently holds 16% of Harmonys shares. Patrice
Motsepe, Andre Wilkens and Frank Abbott are directors of ARM.
 F-49




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 Key management personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the company, directly or indirectly, including any
director, (whether executive or otherwise) of the company. For the fiscal year 2007 total directors
remuneration amounted to $1.1 million and senior managements remuneration to $5.9 million.None of the directors or major shareholders of Harmony or, to the knowledge of Harmony, their
families, had any interest, direct or indirect, in any transaction concluded in the 2007, 2006 and
2005 fiscal years, or in any proposed transaction that has affected or will materially affect
Harmony or its investment interests or subsidiaries, other than stated above.None of the directors or members of senior management of Harmony or any associate of such
director or member of senior management is currently or has been at any time during the past three
fiscal years indebted to Harmony and /or its subsidiaries.40
    
    SUBSEQUENT EVENTS(a)
    
    On August 24, 2007 the Group entered into an agreement with RMB to sell 7,348,079 of its Gold
Fields ordinary shares, including 5,747,000 shares pledged as collateral for the financing obtained
in March 2007, at R100.00 per ordinary shares, resulting in a realized loss of R35.02 per share.
The proceeds were used to settle the Randfontein redeemable preference shares issued to RMB on
April 5, 2007.(b)
    
    On August 24, 2007 the Group repaid the financing from RMB that was collateralized by a portion
of its Gold Fields shares (5,747,000 shares) at R 100.00 per ordinary share.(c)
    
    On September 28, 2007, Harmony announced that it intends raising a debt facility of R2 billion
(US$283.9 million) from Nedbank in order to finance the Hidden Valley project in Papua New Guinea.d)
    
    In July 2007 Harmony entered into an agreement with Dioro Exploration NL (Dioro) to acquire
Harmonys South Kal assets in Western Australia. The total selling price is AU$45 million, which
consists of a cash component and a share component. The share component entails the issuance of
160 million Dioro shares and a cash component of AU$25 million. The transaction will require a
minimum capital raising by Dioro of $AU35 million by the completion date. The completion of the
agreement is subject to shareholder and regulatory approvals.e)
    
    A smaller tenement in Location 45 and two mining tenements are also being divested to Australian
Mines (ASX listed company). The terms of the agreement have been finalised and the document was
signed in July 2007. This package has been sold for AU$3 million cash, payable over three tranches.
Completion of this agreement is expected before December 2007.f)
    
    On September 4, 2007 Harmony announced that it had signed formal agreements with Pamodzi Gold
Limited (Pamodzi Gold) for the sale to all rights, title and interest of Harmonys Orkney shafts
located near Orkney in the North West province.In terms of a contracting agreement, Pamodzi Gold has engaged Harmony in order to take
management control of the Orkney operations under a contracting agreement by October 1, 2007, prior
to all conditions precedent being met. Harmony has agreed in principle to this arrangement and both
parties will be signing a formal agreement by the end of December.The initial purchase consideration payable to Harmony by Pamodzi Gold for the Orkney shafts is
equal to R550 million ($78.1 million), and a secondary consideration is calculated as follows:- 3% of the net smelter revenues in respect of the first one million ounces of gold produced
by Orkney after the effective date of the transaction; and- 1.75% of the net smelter revenue in respect of all gold produced by the Orkney thereafter
subject to an maximum aggregate amount of R450 million ($63.9 million).The initial Orkney purchase consideration will be settled by Pamodzi Gold through:- the payment of a cash amount of R350 million ($49.7 million); and- issue of 9,272,903 ordinary consideration shares to Harmony.The number of Pamodzi Gold ordinary shares to be issued to Harmony has been calculated based
on the 30 day VWAP of the Pamodzi Gold ordinary share price on the JSE up to the business day
immediately preceding the date upon which the detailed cautionary was announced, being April 24,
2007, which VWAP is equal to R21.57.g)
    
    On September 28, 2007, the ARM Trust guarantee was cancelled by Nedbank. Harmony will evaluate
the impact of the cancellation of the guarantee on its accounting for the transaction.
 F-50




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 h)
    
    On September 29, 2007 the senior bridge loan from RMB of R500 million ($68.6 million) was
settled.i)
    
    On November 8, 2007, the Company announced that it had signed a letter of intent to sell its Mt
Magnet operations for $A65 million to Monarch Gold Mining Company. Cash amounting to A$30 million
would be received, with the balance of the consideration receivable in shares and a convertible
note.
 F-51




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##### Table of Contents



Harmony Gold Mining Company Limited
Notes to the Consolidated Financial Statements
For the years ended June 30
 41
    
    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 (IRFS) 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 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 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 longer life which form
the core of the groups production;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
 Management believes that the categorization above is in line with its shafts strategic roles and
the different skill sets, which are currently used to manage them. While the leveraged operations
generally require a more short-term, flexible and lean approach, the quality assets require
investment over the longer time horizon. This grouping has also enabled increased focus on the
completion of the growth projects and in turning them into mines.
 Year ended June 30, 2007
 CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)South Africa operations
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Freestate operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsMasimong
    
    
    94,534
    
    
    
    82,815
    
    
    
    11,719
    
    
    
    78,657
    
    
    
    
    
    
    
    78,657
    
    
    
    
    
    
    
    15,141
    
    
    
    147,958
    
    
    
    1,074Leveraged assetsHarmony 2
    
    
    29,936
    
    
    
    29,887
    
    
    
    49
    
    
    
    10,305
    
    
    
    
    
    
    
    10,305
    
    
    
    
    
    
    
    4,905
    
    
    
    46,274
    
    
    
    516Merriespruit 1
    
    
    32,520
    
    
    
    26,507
    
    
    
    6,013
    
    
    
    14,283
    
    
    
    
    
    
    
    14,283
    
    
    
    
    
    
    
    3,509
    
    
    
    50,612
    
    
    
    476Merriespruit 3
    
    
    27,933
    
    
    
    25,035
    
    
    
    2,898
    
    
    
    9,545
    
    
    
    
    
    
    
    9,545
    
    
    
    
    
    
    
    3,420
    
    
    
    43,541
    
    
    
    444Unisel
    
    
    51,142
    
    
    
    35,013
    
    
    
    16,129
    
    
    
    29,759
    
    
    
    
    
    
    
    29,759
    
    
    
    
    
    
    
    5,436
    
    
    
    79,992
    
    
    
    614Brand 3
    
    
    29,174
    
    
    
    27,771
    
    
    
    1,403
    
    
    
    3,246
    
    
    
    
    
    
    
    3,246
    
    
    
    
    
    
    
    1,590
    
    
    
    45,611
    
    
    
    444Brand 5
    
    
    592
    
    
    
    1,526
    
    
    
    (934
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    918
    
    
    
    12Saaiplaas 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    Surface
    
    
    13,628
    
    
    
    6,448
    
    
    
    7,180
    
    
    
    31,014
    
    
    
    
    
    
    
    31,014
    
    
    
    
    
    
    
    4,711
    
    
    
    21,346
    
    
    
    2,369Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,846
    
    
    
    213,380
    
    
    
    277,226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Freestate
    
    
    279,459
    
    
    
    235,002
    
    
    
    44,457
    
    
    
    240,655
    
    
    
    213,380
    
    
    
    454,035
    
    
    
    465,771
    
    
    
    38,755
    
    
    
    436,252
    
    
    
    5,949Evander operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsEvander 5
    
    
    35,673
    
    
    
    28,923
    
    
    
    6,750
    
    
    
    36,901
    
    
    
    
    
    
    
    36,901
    
    
    
    
    
    
    
    5,451
    
    
    
    55,643
    
    
    
    377Evander 7
    
    
    39,242
    
    
    
    38,633
    
    
    
    609
    
    
    
    56,246
    
    
    
    
    
    
    
    56,246
    
    
    
    
    
    
    
    11,899
    
    
    
    61,044
    
    
    
    447Evander 8
    
    
    76,124
    
    
    
    45,792
    
    
    
    30,332
    
    
    
    49,476
    
    
    
    
    
    
    
    49,476
    
    
    
    
    
    
    
    11,039
    
    
    
    118,692
    
    
    
    842Leveraged assetsEvander 9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    660
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,689
    
    
    
    47,903
    
    
    
    90,592
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Evander
    
    
    151,039
    
    
    
    113,348
    
    
    
    37,691
    
    
    
    185,312
    
    
    
    47,903
    
    
    
    233,215
    
    
    
    79,129
    
    
    
    29,049
    
    
    
    235,379
    
    
    
    1,666Randfontein operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsCooke 1
    
    
    48,311
    
    
    
    32,852
    
    
    
    15,459
    
    
    
    9,058
    
    
    
    
    
    
    
    9,058
    
    
    
    
    
    
    
    1,967
    
    
    
    75,698
    
    
    
    426Cooke 2
    
    
    36,290
    
    
    
    34,880
    
    
    
    1,410
    
    
    
    12,316
    
    
    
    
    
    
    
    12,316
    
    
    
    
    
    
    
    3,682
    
    
    
    57,215
    
    
    
    385Cooke 3
    
    
    57,870
    
    
    
    44,081
    
    
    
    13,789
    
    
    
    40,496
    
    
    
    
    
    
    
    40,496
    
    
    
    
    
    
    
    13,582
    
    
    
    91,332
    
    
    
    622Growth assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Doornkop
    
    
    36,503
    
    
    
    25,210
    
    
    
    11,293
    
    
    
    242,368
    
    
    
    
    
    
    
    242,368
    
    
    
    
    
    
    
    37,557
    
    
    
    57,364
    
    
    
    597Surface
    
    
    12,239
    
    
    
    5,791
    
    
    
    6,448
    
    
    
    9,976
    
    
    
    
    
    
    
    9,976
    
    
    
    
    
    
    
    7,263
    
    
    
    18,974
    
    
    
    894Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167,174
    
    
    
    167,174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Randfontein
    
    
    191,213
    
    
    
    142,814
    
    
    
    48,399
    
    
    
    314,214
    
    
    
    167,174
    
    
    
    481,388
    
    
    
    333,944
    
    
    
    64,051
    
    
    
    300,583
    
    
    
    2,924Elandsrand operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelGrowth assetsElandsrand
    
    
    124,347
    
    
    
    102,534
    
    
    
    21,813
    
    
    
    293,220
    
    
    
    
    
    
    
    293,220
    
    
    
    
    
    
    
    33,094
    
    
    
    194,710
    
    
    
    1,117Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    908
    
    
    
    
    
    
    
    908
    
    
    
    
    
    
    
    810
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,589
    
    
    
    28,589
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Elandsrand
    
    
    124,347
    
    
    
    102,534
    
    
    
    21,813
    
    
    
    294,128
    
    
    
    28,589
    
    
    
    322,717
    
    
    
    30,629
    
    
    
    33,904
    
    
    
    194,710
    
    
    
    1,117
 F-52




---



##### Table of Contents



CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)South Africa operations
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Freegold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality operationsTshepong
    
    
    202,757
    
    
    
    112,043
    
    
    
    90,714
    
    
    
    440,912
    
    
    
    
    
    
    
    440,912
    
    
    
    
    
    
    
    26,072
    
    
    
    318,887
    
    
    
    1,824Growth assetsPhakisa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    298,034
    
    
    
    
    
    
    
    298,034
    
    
    
    
    
    
    
    31,593
    
    
    
    
    
    
    
    Leveraged assetsBambanani
    
    
    120,733
    
    
    
    107,539
    
    
    
    13,194
    
    
    
    101,604
    
    
    
    
    
    
    
    101,604
    
    
    
    
    
    
    
    16,639
    
    
    
    189,683
    
    
    
    1,191Joel
    
    
    50,839
    
    
    
    33,412
    
    
    
    17,427
    
    
    
    14,211
    
    
    
    
    
    
    
    14,211
    
    
    
    
    
    
    
    3,911
    
    
    
    79,923
    
    
    
    504Eland
    
    
    1,505
    
    
    
    
    
    
    
    1,505
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    2,420
    
    
    
    11Kudu/Sable
    
    
    553
    
    
    
    189
    
    
    
    364
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    845
    
    
    
    15West shaft
    
    
    4,592
    
    
    
    7,929
    
    
    
    (3,337
    )
    
    
    3,028
    
    
    
    
    
    
    
    3,028
    
    
    
    
    
    
    
    666
    
    
    
    7,377
    
    
    
    93Nyala
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    St Helena
    
    
    13,650
    
    
    
    17,909
    
    
    
    (4,259
    )
    
    
    13,785
    
    
    
    
    
    
    
    13,785
    
    
    
    
    
    
    
    1,440
    
    
    
    21,319
    
    
    
    240Surface
    
    
    2,848
    
    
    
    302
    
    
    
    2,546
    
    
    
    2,076
    
    
    
    
    
    
    
    2,076
    
    
    
    
    
    
    
    913
    
    
    
    3,035
    
    
    
    300Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185,744
    
    
    
    610,233
    
    
    
    795,977
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Freegold
    
    
    397,477
    
    
    
    279,323
    
    
    
    118,154
    
    
    
    1,059,394
    
    
    
    610,233
    
    
    
    1,669,627
    
    
    
    472,341
    
    
    
    81,313
    
    
    
    623,489
    
    
    
    4,178ARMgold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelLeveraged assetsOrkney 2
    
    
    33,048
    
    
    
    26,262
    
    
    
    6,786
    
    
    
    13,437
    
    
    
    
    
    
    
    13,437
    
    
    
    
    
    
    
    4,273
    
    
    
    52,275
    
    
    
    311Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    28,960
    
    
    
    26,317
    
    
    
    2,643
    
    
    
    15,991
    
    
    
    
    
    
    
    15,991
    
    
    
    
    
    
    
    5,101
    
    
    
    46,041
    
    
    
    397Orkney 7
    
    
    13,133
    
    
    
    11,942
    
    
    
    1,191
    
    
    
    7,601
    
    
    
    
    
    
    
    7,601
    
    
    
    
    
    
    
    5,768
    
    
    
    20,668
    
    
    
    239Welkom 1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    80
    
    
    
    3
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    (23
    )
    
    
    125
    
    
    
    1Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (646
    )
    
    
    29,653
    
    
    
    29,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total ARMgold
    
    
    75,221
    
    
    
    64,524
    
    
    
    10,697
    
    
    
    36,383
    
    
    
    29,653
    
    
    
    66,036
    
    
    
    29,518
    
    
    
    15,119
    
    
    
    119,109
    
    
    
    948Avgold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsTarget
    
    
    91,228
    
    
    
    52,730
    
    
    
    38,498
    
    
    
    287,236
    
    
    
    
    
    
    
    287,236
    
    
    
    
    
    
    
    16,745
    
    
    
    142,433
    
    
    
    904Surface
    
    
    869
    
    
    
    1,028
    
    
    
    (159
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,707
    
    
    
    1,316
    
    
    
    147Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    732,886
    
    
    
    22,768
    
    
    
    755,654
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Avgold
    
    
    92,097
    
    
    
    53,758
    
    
    
    38,339
    
    
    
    1,020,122
    
    
    
    22,768
    
    
    
    1,042,890
    
    
    
    12,243
    
    
    
    18,452
    
    
    
    143,749
    
    
    
    1,051Kalgold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelSurface
    
    
    35,743
    
    
    
    27,218
    
    
    
    8,525
    
    
    
    32,308
    
    
    
    
    
    
    
    32,308
    
    
    
    
    
    
    
    376
    
    
    
    56,129
    
    
    
    1,740Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,954
    
    
    
    15,954
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Kalgold
    
    
    35,743
    
    
    
    27,218
    
    
    
    8,525
    
    
    
    32,308
    
    
    
    15,954
    
    
    
    48,262
    
    
    
    7,674
    
    
    
    376
    
    
    
    56,129
    
    
    
    1,740Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,471
    
    
    
    418,180
    
    
    
    419,651
    
    
    
    266,649
    
    
    
    
    
    
    
    
    
    
    
    Total South Africa
    
    
    1,346,596
    
    
    
    1,018,521
    
    
    
    328,075
    
    
    
    3,183,987
    
    
    
    1,553,834
    
    
    
    4,737,821
    
    
    
    1,697,898
    
    
    
    281,019
    
    
    
    2,109,400
    
    
    
    19,573AustraliaMt Magnet
    
    
    85,760
    
    
    
    70,626
    
    
    
    15,134
    
    
    
    29,388
    
    
    
    16,118
    
    
    
    45,506
    
    
    
    66,125
    
    
    
    20,199
    
    
    
    136,428
    
    
    
    1,875South Kal
    
    
    56,114
    
    
    
    44,567
    
    
    
    11,547
    
    
    
    16,573
    
    
    
    12,117
    
    
    
    28,690
    
    
    
    48,580
    
    
    
    6,720
    
    
    
    88,371
    
    
    
    1,391Papua New Guinea
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    314,124
    
    
    
    60,688
    
    
    
    374,812
    
    
    
    376,637
    
    
    
    73,055
    
    
    
    
    
    
    
    Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,236
    
    
    
    15,400
    
    
    
    58,636
    
    
    
    (294,854
    )
    
    
    29
    
    
    
    
    
    
    
    Total Australia
    
    
    141,874
    
    
    
    115,193
    
    
    
    26,681
    
    
    
    403,321
    
    
    
    104,323
    
    
    
    507,644
    
    
    
    196,488
    
    
    
    100,003
    
    
    
    224,799
    
    
    
    3,266Total Harmony
    
    
    1,488,470
    
    
    
    1,133,714
    
    
    
    354,756
    
    
    
    3,587,308
    
    
    
    1,658,157
    
    
    
    5,245,465
    
    
    
    1,894,386
    
    
    
    381,022
    
    
    
    2,334,199
    
    
    
    22,839Reconciliation of segment data to consolidated financial statements
    
    
    (141,874
    )
    
    
    36,606
    
    
    
    
    
    
    
    (220,230
    )
    
    
    88,682
    
    
    
    (131,548
    )
    
    
    157,1051,346,596
    
    
    
    1,170,320
    
    
    
    
    
    
    
    3,367,078
    
    
    
    1,746,839
    
    
    
    5,113,917
    
    
    
    2,051,491Included in the above are the following operations whose assets have been classified as held for sale and results as discontinued operations for management reporting purposes (a):South Africa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelOrkney 2
    
    
    33,048
    
    
    
    26,262
    
    
    
    6,786
    
    
    
    13,437
    
    
    
    
    
    
    
    13,437
    
    
    
    
    
    
    
    4,273
    
    
    
    52,275
    
    
    
    311Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    28,960
    
    
    
    26,317
    
    
    
    2,643
    
    
    
    15,991
    
    
    
    
    
    
    
    15,991
    
    
    
    
    
    
    
    5,101
    
    
    
    46,041
    
    
    
    397Orkney 6
    
    
    13,133
    
    
    
    11,942
    
    
    
    1,191
    
    
    
    7,601
    
    
    
    
    
    
    
    7,601
    
    
    
    
    
    
    
    5,768
    
    
    
    20,668
    
    
    
    239Welkom 1
    
    
    
    
    
    
    
    
    
    
    ARM surface
    
    
    80
    
    
    
    3
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23
    )
    
    
    125
    
    
    
    1ARM other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (646
    )
    
    
    29,653
    
    
    
    29,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kudu/Sable
    
    
    75,221
    
    
    
    64,524
    
    
    
    10,697
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    845
    
    
    
    15Total SA operations that have been classified as discontinued operations for management reporting purposes, but not for U.S. GAAP purposes (a)
    
    
    150,442
    
    
    
    129,048
    
    
    
    21,394
    
    
    
    36,383
    
    
    
    29,653
    
    
    
    66,036
    
    
    
    29,518
    
    
    
    15,119
    
    
    
    119,954
    
    
    
    963AustraliaMt Magnet
    
    
    85,760
    
    
    
    70,626
    
    
    
    15,134
    
    
    
    29,388
    
    
    
    16,118
    
    
    
    45,506
    
    
    
    66,125
    
    
    
    20,199
    
    
    
    136,428
    
    
    
    1,875South Kal
    
    
    56,114
    
    
    
    44,567
    
    
    
    11,547
    
    
    
    16,573
    
    
    
    12,117
    
    
    
    28,690
    
    
    
    12,153
    
    
    
    6,720
    
    
    
    88,371
    
    
    
    1,391Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,982
    
    
    
    261
    
    
    
    42,243
    
    
    
    (30,182
    )
    
    
    29
    
    
    
    
    
    
    
    Total Australia operations that have been classified as discontinued operations for management reporting and U.S. GAAP 
purposes (a)
    
    
    141,874
    
    
    
    115,193
    
    
    
    26,681
    
    
    
    87,943
    
    
    
    28,496
    
    
    
    116,439
    
    
    
    48,096
    
    
    
    26,948
    
    
    
    224,799
    
    
    
    3,266Total Harmony discontinued operations for management reporting purposes (a)
    
    
    292,316
    
    
    
    244,241
    
    
    
    48,075
    
    
    
    124,326
    
    
    
    58,149
    
    
    
    182,475
    
    
    
    77,614
    
    
    
    42,067
    
    
    
    344,753
    
    
    
    4,229
 *
    
    Production statistics are unaudited. F-53




---



##### Table of Contents



Year ended June 30, 2006
 CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)South Africa operations
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Freestate operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality 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
    
    
    
    
    
    
    
    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
    
    
    
    (739
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    469
    
    
    
    3Saaiplaas 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    8,614
    
    
    
    6,427
    
    
    
    2,187
    
    
    
    33,666
    
    
    
    
    
    
    
    33,666
    
    
    
    
    
    
    
    3,818
    
    
    
    15,902
    
    
    
    897Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,711
    
    
    
    126,700
    
    
    
    188,411
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Freestate
    
    
    227,502
    
    
    
    207,802
    
    
    
    19,700
    
    
    
    211,706
    
    
    
    126,700
    
    
    
    338,406
    
    
    
    506,639
    
    
    
    31,424
    
    
    
    428,340
    
    
    
    4,285Evander operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsEvander 5
    
    
    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
    
    
    
    815Leveraged assetsEvander 9
    
    
    
    
    
    
    21
    
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality 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
    
    
    
    652Growth assets
    
    
    
    
    
    
    
    
    
    
    Doornkop
    
    
    23,294
    
    
    
    24,322
    
    
    
    (1,028
    )
    
    
    200,096
    
    
    
    
    
    
    
    200,096
    
    
    
    
    
    
    
    26,031
    
    
    
    43,593
    
    
    
    515Surface
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelGrowth assetsElandsrand
    
    
    90,097
    
    
    
    89,349
    
    
    
    748
    
    
    
    259,500
    
    
    
    
    
    
    
    259,500
    
    
    
    
    
    
    
    30,523
    
    
    
    170,867
    
    
    
    987Leveraged assetsDeelkraal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    987Freegold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality operationsTshepong
    
    
    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
    
    
    
    436Eland
    
    
    2,026
    
    
    
    1,066
    
    
    
    960
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,058
    
    
    
    21Kudu/Sable
    
    
    890
    
    
    
    895
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelLeveraged assetsOrkney 2
    
    
    36,589
    
    
    
    29,716
    
    
    
    6,873
    
    
    
    9,231
    
    
    
    
    
    
    
    9,231
    
    
    
    
    
    
    
    2,380
    
    
    
    69,877
    
    
    
    347Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    31,117
    
    
    
    29,273
    
    
    
    1,844
    
    
    
    11,690
    
    
    
    
    
    
    
    11,690
    
    
    
    
    
    
    
    4,759
    
    
    
    58,897
    
    
    
    406Orkney 7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Welkom 1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsTarget
    
    
    81,178
    
    
    
    51,904
    
    
    
    29,274
    
    
    
    279,852
    
    
    
    
    
    
    
    279,852
    
    
    
    
    
    
    
    9,644
    
    
    
    150,196
    
    
    
    813Surface
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelSurface
    
    
    39,342
    
    
    
    31,740
    
    
    
    7,602
    
    
    
    12,190
    
    
    
    
    
    
    
    12,190
    
    
    
    
    
    
    
    389
    
    
    
    77,071
    
    
    
    2,008Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,402
    
    
    
    5,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Kalgold
    
    
    39,342
    
    
    
    31,740
    
    
    
    7,602
    
    
    
    12,190
    
    
    
    5,402
    
    
    
    17,592
    
    
    
    1,933
    
    
    
    389
    
    
    
    77,071
    
    
    
    2,008Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,450
    
    
    
    429,445
    
    
    
    430,895
    
    
    
    133,631
    
    
    
    
    
    
    
    
    
    
    
    
 F-54




---



##### Table of Contents



CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)$000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Total South Africa
    
    
    1,140,838
    
    
    
    937,102
    
    
    
    203,736
    
    
    
    2,897,005
    
    
    
    1,409,887
    
    
    
    4,306,892
    
    
    
    1,326,717
    
    
    
    222,027
    
    
    
    2,155,464
    
    
    
    17,422AustraliaMt 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 entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,367
    
    
    
    93,253
    
    
    
    114,620
    
    
    
    162,640
    
    
    
    104
    
    
    
    
    
    
    
    Total Australia
    
    
    122,496
    
    
    
    96,950
    
    
    
    25,546
    
    
    
    348,067
    
    
    
    111,872
    
    
    
    459,939
    
    
    
    201,686
    
    
    
    43,296
    
    
    
    231,461
    
    
    
    3,398Total Harmony
    
    
    1,263,334
    
    
    
    1,034,052
    
    
    
    229,282
    
    
    
    3,245,072
    
    
    
    1,521,759
    
    
    
    4,766,831
    
    
    
    1,528,403
    
    
    
    265,323
    
    
    
    2,386,925
    
    
    
    20,820Reconciliation of segment data to consolidated financial statements
    
    
    (122,496
    )
    
    
    89,101
    
    
    
    
    
    
    
    51,141
    
    
    
    (355,773
    )
    
    
    (304,632
    )
    
    
    8,4321,140,838
    
    
    
    1,123,153
    
    
    
    
    
    
    
    3,296,213
    
    
    
    1,165,986
    
    
    
    4,462,199
    
    
    
    1,536,835Included in the above are the
following operations whose assets have been classified as held
for sale and results as discontinued operations for management reporting purposes (a):South Africa
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelOrkney 2
    
    
    36,589
    
    
    
    29,716
    
    
    
    6,873
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,380
    
    
    
    69,877
    
    
    
    347Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    31,117
    
    
    
    29,273
    
    
    
    1,844
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,759
    
    
    
    58,897
    
    
    
    406Orkney 6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Welkom 1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ARM surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ARM other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Kudu/Sable
    
    
    67,706
    
    
    
    58,989
    
    
    
    8,717
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,024
    
    
    
    13Total SA operations that have been classified as discontinued operations for management reporting purposes, but not for U.S. GAAP purposes (a)
    
    
    135,412
    
    
    
    117,978
    
    
    
    17,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,139
    
    
    
    130,798
    
    
    
    766AustraliaMt Magnet
    
    
    80,090
    
    
    
    59,427
    
    
    
    20,663
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,651
    
    
    
    148,822
    
    
    
    1,918South Kal
    
    
    42,406
    
    
    
    37,523
    
    
    
    4,883
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,320
    
    
    
    82,639
    
    
    
    1,480Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Australia operations that have been classified as discontinued operations for management reporting and U.S. GAAP purposes (a)
    
    
    122,496
    
    
    
    96,950
    
    
    
    25,546
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,971
    
    
    
    231,461
    
    
    
    3,398Total Harmony discontinued operations for management reporting purposes (a)
    
    
    257,908
    
    
    
    214,928
    
    
    
    42,980
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,110
    
    
    
    362,259
    
    
    
    4,164
 
 *
    
    Production statistics are unaudited. F-55




---



##### Table of Contents



Year ended June 30, 2005
 CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)South Africa operations
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Freestate operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality 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
    
    
    
    
    
    
    
    3,556
    
    
    
    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
    
    
    
    
    
    
    
    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
    
    
    3,720
    
    
    
    3,318
    
    
    
    402
    
    
    
    37,481
    
    
    
    
    
    
    
    37,481
    
    
    
    
    
    
    
    1,589
    
    
    
    9,542
    
    
    
    467Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,795
    
    
    
    604,336
    
    
    
    671,131
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    Total Freestate
    
    
    192,749
    
    
    
    205,714
    
    
    
    (12,965
    )
    
    
    194,508
    
    
    
    604,336
    
    
    
    798,844
    
    
    
    539,519
    
    
    
    25,752
    
    
    
    452,203
    
    
    
    4,006Evander operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality 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
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,573
    
    
    
    31Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    1,908Randfontein operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality 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
    
    
    
    740Growth assetsDoornkop
    
    
    22,478
    
    
    
    23,573
    
    
    
    (1,095
    )
    
    
    192,666
    
    
    
    
    
    
    
    192,666
    
    
    
    
    
    
    
    28,621
    
    
    
    52,695
    
    
    
    526Surface
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelGrowth 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
    
    
    
    1Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality operationsTshepong
    
    
    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
    
    
    
    498Eland
    
    
    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
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelLeveraged assetsOrkney 2
    
    
    33,279
    
    
    
    31,495
    
    
    
    1,784
    
    
    
    9,666
    
    
    
    
    
    
    
    9,666
    
    
    
    
    
    
    
    1,443
    
    
    
    78,449
    
    
    
    413Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    32,720
    
    
    
    29,616
    
    
    
    3,104
    
    
    
    10,321
    
    
    
    
    
    
    
    10,321
    
    
    
    
    
    
    
    915
    
    
    
    76,971
    
    
    
    455Orkney 7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Welkom 1
    
    
    1,164
    
    
    
    1,604
    
    
    
    (440
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    21Surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    889Avgold operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelQuality assetsTarget
    
    
    89,233
    
    
    
    54,391
    
    
    
    34,842
    
    
    
    303,491
    
    
    
    
    
    
    
    303,491
    
    
    
    
    
    
    
    10,818
    
    
    
    209,847
    
    
    
    1,178Surface
    
    
    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 operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities not calculated at shaft levelSurface
    
    
    46,331
    
    
    
    40,341
    
    
    
    5,990
    
    
    
    20,442
    
    
    
    
    
    
    
    20,442
    
    
    
    
    
    
    
    (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
    
    
    
    172,202
    
    
    
    173,102
    
    
    
    122,657
    
    
    
    2,035
    
    
    
    
    
    
    
    Total South Africa
    
    
    1,139,531
    
    
    
    1,024,564
    
    
    
    114,967
    
    
    
    2,992,790
    
    
    
    1,617,261
    
    
    
    4,610,051
    
    
    
    1,408,230
    
    
    
    196,276
    
    
    
    2,668,417
    
    
    
    21,527AustraliaMt 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 entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,265
    
    
    
    103,357
    
    
    
    127,622
    
    
    
    51,541
    
    
    
    2,178
    
    
    
    
    
    
    
    Total Australia
    
    
    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
    
    
    
    1,720,618
    
    
    
    5,071,883
    
    
    
    1,589,260
    
    
    
    236,318
    
    
    
    2,965,265
    
    
    
    25,675
 F-56




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##### Table of Contents



CashProduction
    
    operating
    
    Mining
    
    Unallocated
    
    Total
    
    Total
    
    Capital
    
    Ounces
    
    TonsRevenue
    
    cost
    
    profit/(loss)
    
    assets
    
    assets
    
    assets
    
    liabilities
    
    expenditure
    
    produced (*)
    
    milled (*)South Africa operations
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    $000
    
    oz
    
    000Reconciliation of segment data to consolidated financial statements
    
    
    (125,669
    )
    
    
    70,437
    
    
    
    
    
    
    
    85,334
    
    
    
    (420,399
    )
    
    
    (335,065
    )
    
    
    2,7241,139,531
    
    
    
    1,195,179
    
    
    
    
    
    
    
    3,436,599
    
    
    
    1,300,219
    
    
    
    4,736,818
    
    
    
    1,591,984Included in the above are the following operations whose assets have been
classified as held for sale and results as discontinued operations for
management reporting purposes (a):Total liabilities not calculated at shaft levelSouth AfricaOrkney 2
    
    
    33,279
    
    
    
    31,495
    
    
    
    1,784
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,443
    
    
    
    78,449
    
    
    
    413Orkney 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Orkney 4
    
    
    32,720
    
    
    
    29,616
    
    
    
    3,104
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    915
    
    
    
    76,971
    
    
    
    455Orkney 6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Welkom 1
    
    
    1,164
    
    
    
    1,604
    
    
    
    (440
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,734
    
    
    
    21ARM surface
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ARM other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    394
    
    
    
    
    
    
    
    Kudu/Sable
    
    
    67,163
    
    
    
    62,715
    
    
    
    4,448
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,175
    
    
    
    194Total SA operations that have been classified as discontinued operations
for management reporting purposes, but not for U.S. GAAP purposes (a)Total SA
    
    
    134,326
    
    
    
    125,430
    
    
    
    8,896
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,752
    
    
    
    183,329
    
    
    
    1,083AustraliaMt Magnet
    
    
    77,242
    
    
    
    60,915
    
    
    
    16,327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,652
    
    
    
    181,233
    
    
    
    2,743South Kal
    
    
    48,427
    
    
    
    39,263
    
    
    
    9,164
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,161
    
    
    
    115,615
    
    
    
    1,405Other entities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Australia operations that have been classified as discontinued
operations for management reporting and U.S. GAAP purposes (a)
    
    
    125,669
    
    
    
    100,178
    
    
    
    25,491
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,813
    
    
    
    296,848
    
    
    
    4,148Total Harmony discontinued operations for management reporting purposes (a)
    
    
    259,995
    
    
    
    225,608
    
    
    
    34,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,565
    
    
    
    480,177
    
    
    
    5,231
 *
    
    Production statistics are unaudited. F-57




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##### Table of Contents



Reconciliation of segment informatiion to consolidated statements of income and balance sheets
  2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Revenue from continuing operationsDiscontinued operations under U.S. GAAP (a)
    
    
    (141,874
    )
    
    
    (122,496
    )
    
    
    (125,669
    )(141,874
    )
    
    
    (122,496
    )
    
    
    (125,669
    )Production cost of continuing operationsDiscontinued operations under U.S. GAAP (a)
    
    
    (115,193
    )
    
    
    (96,950
    )
    
    
    (100,178
    )Depreciation and amortization expense (excluding depreciation
on non-mining assets) (b)
    
    
    120,795
    
    
    
    147,344
    
    
    
    141,354Share-based compensation (b)
    
    
    5,113
    
    
    
    15,726
    
    
    
    15,618Corporate costs and decrease in rehabilitation costs (b)
    
    
    25,967
    
    
    
    17,255
    
    
    
    17,045Reversal of proportionate consolidation (c)
    
    
    779
    
    
    
    2,968
    
    
    
    Other items
    
    
    (855
    )
    
    
    2,758
    
    
    
    (3,402
    )36,606
    
    
    
    89,101
    
    
    
    70,437Reconciliation of cash operating profit to consolidated loss
before income taxes, equity income of joint venture, equity
(loss)/income of associated companies, impairment of
investment in associate and the cumulative effect of change
in accounting principle:Total segment revenue
    
    
    1,488,470
    
    
    
    1,263,334
    
    
    
    1,265,200Total segment production costs
    
    
    (1,133,714
    )
    
    
    (1,034,052
    )
    
    
    (1,124,742
    )Cash operating profit  all operations
    
    
    354,756
    
    
    
    229,282
    
    
    
    140,458Discontinued operations under U.S. GAAP (a)
    
    
    (26,681
    )
    
    
    (25,546
    )
    
    
    (25,491
    )Depreciation and amortization expense (excluding depreciation
on non-mining assets) (b)
    
    
    (120,795
    )
    
    
    (147,344
    )
    
    
    (141,354
    )Share-based compensation (b)
    
    
    (5,113
    )
    
    
    (15,726
    )
    
    
    (15,618
    )Corporate costs and decrease in rehabilitation costs (b)
    
    
    (25,967
    )
    
    
    (17,255
    )
    
    
    (17,045
    )Reversal of proportionate consolidation (c)
    
    
    (779
    )
    
    
    (2,968
    )
    
    
    Other items
    
    
    855
    
    
    
    (2,758
    )
    
    
    3,402176,276
    
    
    
    17,685
    
    
    
    (55,648
    )Depreciation and amortization expenses on non-mining assets
    
    
    (1,735
    )
    
    
    (6,687
    )
    
    
    (6,642
    )Impairment of assets
    
    
    (10,243
    )
    
    
    (15,951
    )
    
    
    (122,819
    )Employment termination and restructuring costs
    
    
    
    
    
    
    12,289
    
    
    
    (73,215
    )Care and maintenance cost of restructured shafts
    
    
    (9,184
    )
    
    
    (26,837
    )
    
    
    (29,975
    )Exploration expenditure
    
    
    (26,864
    )
    
    
    (11,090
    )
    
    
    (4,672
    )Marketing and new business expenditure
    
    
    (8,987
    )
    
    
    (9,171
    )
    
    
    (15,310
    )Profit on sale of property, plant and equipment
    
    
    25,346
    
    
    
    10,148
    
    
    
    13,594Post retirement benefits expense
    
    
    1,844
    
    
    
    (1,175
    )
    
    
    (9,137
    )Operating loss
    
    
    146,453
    
    
    
    (30,789
    )
    
    
    (303,824
    )Total other (expenses)/income
    
    
    (334,425
    )
    
    
    (50,535
    )
    
    
    (232,442
    )Loss before income taxes, equity income of joint venture,
equity (loss)/income of associated companies, impairment of
investment in associate and the cumulative effect of change
in accounting principle
    
    
    (187,972
    )
    
    
    (81,324
    )
    
    
    (536,266
    )
 F-58




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##### Table of Contents



2007
    
    
    2006
    
    
    2005$000
    
    
    $000
    
    
    $000Total assetsReversal of proportionate consolidation (c)
    
    
    (1,574
    )
    
    
    (1,155
    )
    
    
    Exploration costs (d)
    
    
    (10,802
    )
    
    
    (10,577
    )
    
    
    (11,367
    )Business combinations  goodwill (e)
    
    
    14,856
    
    
    
    14,605
    
    
    
    15,696Business combinations  acquisition date (f)
    
    
    (289,158
    )
    
    
    (284,274
    )
    
    
    (305,509
    )Business combinations  purchase price (g)
    
    
    78,603
    
    
    
    78,544
    
    
    
    85,906Impairment of assets (h)
    
    
    (78,145
    )
    
    
    (76,421
    )
    
    
    (32,022
    )Provision for environmental rehabilitation (i)
    
    
    9,349
    
    
    
    10,881
    
    
    
    11,330Deferred taxation (j)
    
    
    (263,572
    )
    
    
    (133,578
    )
    
    
    (133,076
    )Borrowings (k)
    
    
    2,398
    
    
    
    3,605
    
    
    
    5,733Transfer of ARM shares to ARM Trust (l)
    
    
    353,344
    
    
    
    61,358
    
    
    
    18,858Other items
    
    
    53,154
    
    
    
    32,381
    
    
    
    9,386(131,548
    )
    
    
    (304,631
    )
    
    
    (335,065
    )Total liabilitiesReversal of proportionate consolidation (a)
    
    
    (3,767
    )
    
    
    (1,154
    )
    
    
    Business combinations  purchase price (f)
    
    
    55,859
    
    
    
    56,033
    
    
    
    61,556Impairment of assets (g)
    
    
    (19,007
    )
    
    
    (19,499
    )
    
    
    (10,977
    )Provision for environmental rehabilitation (h)
    
    
    (16,300
    )
    
    
    (5,940
    )
    
    
    (2,313
    )Deferred taxation (i)
    
    
    (265,661
    )
    
    
    (133,578
    )
    
    
    (133,076
    )Borrowings (j)
    
    
    19,209
    
    
    
    28,294
    
    
    
    40,432Transfer of ARM shares to ARM Trust (k)
    
    
    353,344
    
    
    
    61,358
    
    
    
    18,858Other items
    
    
    33,428
    
    
    
    22,918
    
    
    
    28,244157,105
    
    
    
    8,432
    
    
    
    2,724
 
 a)
    
    Discontinued operationsAs described in note 17, Harmony has classified the assets and liabilities of certain of its South
African and all of its Australian operations as held for sale. In connection with this
determination, Harmony has also presented the results of its Australia operations for all periods
as discontinued operations under U.S. GAAP. This is because the operations and cash flows of the
Australian operations will be eliminated from the ongoing operations of Harmony as a result of the
proposed disposal transactions, and the fact that Harmony will not have any significant continuing
involvement in the Australian operations. In contrast, since Harmony continues to produce and sell
gold within South Africa, the results associated with certain of its South African assets that has
been classified as held for sale, continues to be presented within continuing operations.For management reporting purposes however, Harmony has classified both its South African and
Australian operations as discontinued operations.The adjustments to revenue, production costs and cash operating profits from continuing operations
therefore removes the results of Harmonys Australian operations that have been classified as
discontinued operations.b)
    
    Difference in calculation of production costsProduction costs for management reporting purposes excludes depreciation and amortization of mining
assets, share-based compensation, certain corporate costs and decrease in rehabilitation costs.
Under U.S. GAAP, all these items would be included in production costs. The items appearing in the
reconciliation of production costs in the table above includes the impact of the other differences
between IFRS and U.S. GAAP, such as those relating to exploration costs, business combinations and
provision for environmental rehabilitation, discussed further below.c)
    
    Reversal of proportionate consolidationFor management reporting purposes, the Company account for its investments in joint ventures using
the proportional consolidation method. Under U.S. GAAP, the equity method of accounting is applied
in accounting for all incorporated joint ventures.d)
    
    Exploration costsFor management reporting purposes, certain exploration costs are capitalized. U.S. GAAP does not
permit the capitalization of exploration and evaluation expenditure prior to the establishment of a
bankable feasibility study.e)
    
    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 U.S. GAAP, goodwill is not subject to
amortization. Instead, the Company evaluates, on at least an annual basis, the carrying amount of F-59




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##### Table of Contents



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.f)
    
    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 U.S. 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. F-60




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##### Table of Contents



g)
    
    Business combinations  purchase priceFor 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 U.S. 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.In addition, for management reporting purposes, traded equity securities issued as consideration in
a business combination are valued on the date they are issued. Under U.S. GAAP, traded equity
securities issued as consideration in a business combination are valued a few days before and after
the terms of the transaction are announced.h)
    
    Impairment of assetsFor management reporting purposes, impairment is assessed on discounted cash flows. If impairment
is indicated, assets are written down to higher of fair value less costs to sell and value in use
based on discounted cash flows. Reversal of impairment losses is required in certain circumstances,
except for goodwill. Under U.S. GAAP, impairment is assessed on undiscounted cash flows for assets
to be held and used. If less than carrying amount, impairment loss is measured using market value
or discounted cash flows. The reversal of previously recognized impairments is also not permitted.i)
    
    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 U.S. GAAP.In addition, the current discount rate is applied to measure the retirement obligation for
management reporting purposes. Under U.S. 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.(ii)
    
    Amortization of rehabilitation assetThe rehabilitation assets carrying value for management reporting purposes is different to that
under U.S. 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.j)
    
    Deferred taxationFor management reporting purposes, deferred tax assets and liabilities are classified net as
non-current on the balance sheet. Under U.S. GAAP, deferred tax assets and liabilities are either
classified as current or non-current, based on the classification of the related non-tax asset or
liability for financial reporting purposes. Deferred tax assets not associated with an underlying
asset or liability are classified based on the expected reversal period.k)
    
    BorrowingsFor management reporting purposes, the international unsecured fix rate convertible bond totaling
R1,700 million is split between a debt component and an equity component. Under U.S. GAAP the
entire loan is classified as debt. In addition, for management reporting purposes, debt issuance
cost is set off against debt. Under U.S. GAAP debt issuance cost is recorded as a deferred cost
within accounts receivable.l)
    
    Transfer of ARM shares to the ARM TrustAlthough the transfer of the ARM shares to the ARM Trust was also not recognized 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 U.S. 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 U.S. 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-61