Edgar Filing: HARMONY GOLD MINING CO LTD

Page 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO

RULE 13a-16 OR 15d-16 UNDER THE SECURITIES

EXCHANGE ACT OF 1934

For the Month of

November

2005

Harmony Gold Mining Company

Limited

Suite No. 1

Private Bag X1

Melrose Arch, 2076

South Africa

(Address of principal executive offices)

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F

or Form 40-F.)

Form 20-F X Form 40-F

(Indicate by check mark whether the registrant by

furnishing the information contained in this form

is also thereby furnishing the information to the

Commission pursuant to Rule 12g3-2(b) under the

Securities Exchange Act of 1934.)

Yes No X

REVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2005

QUARTERLY FINANCIAL HIGHLIGHTS

30 September 2005

30 June 2005

(restated)

Cash operating profit
– Rand

119 million

185 million

– US$

18 million

29 million

Cash earnings
– SA cents per share

– US cents per share

Basic loss
– SA cents per share

(82)

(283)

– US cents per share

(13)

(44)

Headline loss
– SA cents per share

(86)

(94)

– US cents per share

(13)

(15)

Fully diluted loss
– SA cents per share

(82)

(283)

– US cents per share

(13)

(44)

Gold produced
– kg

19 219

19 886

– oz

617 902

639 346

Cash costs
– R/kg

85 718

80 444

– $/oz

410

390

QUARTERLY HIGHLIGHTS

■

Free State restructuring mostly complete.

■

National Union of Mineworkers and management agree to re-establish co- operative relationships.

■

Decrease in cash operating profit to R119 million from R185 million in the June Quarter.

■

Cash operating costs increase to R85 718/kg versus R80 444/kg in June 2005.

■

Construction of access road to Hidden Valley underway.

■

Two year wage agreement reached after five day gold industry strike.

TABLE OF CONTENTS

Chief Executive’s Review – September 2005

Safety report

Capitalising our mine development cost

Focus on our growth projects remains

– Capital expenditure

– Cash position – investing in our future

– Progress on growth projects

The past quarter in review

Quarterly operational review

– Quality ounces

– Growth projects

– Leveraged operations

– SA surface operations

– Australian operations

Operating and financial results (Rand/metric)

Total operations – quarterly financial results (Rand/metric)

Abridged balance sheet (Rand)

Operating and financial results (US$/imperial)

Total operations – quarterly financial results (US$/imperial)

Abridged balance sheet (US$)

Condensed statement of changes in equity for the three months ended 30 September 2005

Summarised cash flow statement for the three months ended 30 September 2005

Reconciliation between cash operating profit and cash utilised by operations –
quarter ended 30 September 2005

Notes to the consolidated financial statements for the quarter ended 30 September 2005

Developmental results

Contact details

CHIEF EXECUTIVE’S REVIEW – SEPTEMBER 2005

Dear shareholder

We continue to make good progress in all areas of our business, although it might not reflect in the
operational performance of the company at this time. The past 18 months has been a difficult period, during
which we undertook a number of initiatives:

●

initiating the restructuring of our operations to deal with a low R/kg gold price environment.This process,
which started in April 2004, has had its hiccups and the time required for the conclusion thereof went
way beyond what was anticipated at the commencement of the process. During August 2005,
we managed to conclude the process, and for the first time in more than a year, we are looking forward
to a normalised operating environment. We have always valued our relationship with the various unions
and have initiated processes to re-establish a co-operative relationship.

●

the placing of a number of shafts on care and maintenance as part of our restructuring initiatives,
has also been completed. We have significantly reduced the number of our employees and stopped
the mining of unprofitable reserves to enhance our cashflows. To date we have not seen the planned
higher volumes and recovery grades. The benefit of being able to increase the volumes from our
profitable shafts, through CONOPS and the higher gold price, will begin to show during the
December 2005 quarter.

●

our focus on delivering our growth projects remains. Some shareholders and analysts have expressed
their concern regarding our ability to fund our growth plans, and we have noted them. We do however
recognise the value and contribution that these projects will make to our future cost structure and
production profile. Harmony is in a transformation phase, from a previously marginal producer to one
with high margin, quality assets. These assets will provide a solid phase from which we will continue to
create value for our shareholders.

●

the company was ideally structured to facilitate the restructuring phase, which is now completed.
The management structure has now been streamlined for the recovery phase. All of our South African
operations are consolidated under the focus of one integrated management team.

The future of Harmony is dependent upon our ability to deliver on projects and a comprehensive
and professional structure has been put in place company wide under the guidance of our most
experienced engineers and managers.

As your management team we have never blamed external factors for underperformance. We have now
addressed the impact of the external factors and remain committed to deliver on our promise to make
Harmony a high margin, quality operation!

Bernard

SAFETY REPORT

Safety achievements during this quarter:

Mine

Fatality free shifts achieved

Date

Bambanani

500 000

1 August 2005

Masimong 5

500 000

20 August 2005

Kalgold

1 000 000

31 August 2005

Joel Mine was awarded the Department of Mineral and Energy’s Mine Health and Safety Council’s Safety
Achievement Flag.

Despite the retrenchment environment impacting on the work and safety environment, our teams remain
focused on reaching their safety objectives. Our LTIFR increased marginally from 16,53 in June 2005 to
16,99 in September 2005. SLIFR at 30 September 2005 was 379 compared to 395 reported in June 2005,
a 4% improvement.

Fatality injury rate (per million hours worked)

Five employees lost their lives in five separate incidents during the past quarter at our South African
operations. Harmony Australia had no fatalities or serious incidents during the period under review.

CAPITALISING OUR MINE DEVELOPMENT COST

Harmony has changed its accounting policy on the capitalisation of mine development costs.

This change has the following benefits:
•   Harmony better aligns its policy with those of its global industry peers.
•   It allows for a more direct link between revenue and associated expenditure.
•   Harmony would be able to institute systems that would allow the shaft teams to make better business
    decisions.

•   All development that provides access to proven and probable reserves is capitalised.
•   Development, which is purely for exploration purposes, is considered to be a working cost.
•   Development that previously qualified as capital is still regarded as capital.

Effect of the change
• There is a direct impact on the operating cost profile of the company. The operating cost of Harmony was

reduced by R136 million for the September 2005 quarter. This equates to 8% of total cost or R7 075 per
kilogram. Capital expenditure has increased with a similar amount, as indicated in the capital expenditure
table on page 6 (June 2005: R140 million/ R7 017 per kg).

• The capitalised cost will be amortised over the estimated life of the proven and probable reserve to which

it gives access.

• Information on the restatement of our financial results for the quarter ending June 2005 as well as the

corresponding period, i.e. September 2004 has been included in the financial section.

FOCUS ON OUR GROWTH PROJECTS REMAINS

Despite the harsh financial and operating conditions encountered, the company has remained focused to
complete and implement its growth strategy. Accordingly expenditure on the local and international growth
projects continue as planned. In the past quarter R140 million was spent on project capital and a further
R226 million on operational capital. Good progress continues to be made at our Phakisa, Masimong,
Tshepong, Elandsrand New Mine and Doornkop South Reef projects locally. Construction of our Hidden Valley
open pit mine in PNG got underway during the quarter with the main access road being upgraded to allow
project activity to increase.

Capital expenditure

Capital expenditure (R million)

Actual

Forecast

September

December

OPERATIONAL CAPEX

2005

South African operations

163

165

Australasian operations

Total operational Capex

226

217

PROJECT CAPEX

Doornkop South Reef

Elandsrand New Mine

Tshepong North Decline

Phakisa Shaft

Target Shaft

PNG

Total Project Capex

140

145

Total Capex

366

362

Harmony remains the only local gold mining company that continues to develop several new mines in the
country. At the time of our June 2005 quarterly results presentation, a budget for R1 552 million for the
financial year 2005/2006 was presented. We do not anticipate that the budget will be exceeded.

Cash position – investing in our future
Harmony continues to invest in its growth projects in South Africa and PNG. In the past quarter our cash
balance declined from R1 830 million to R971 million. Our operating contribution of R119 million was offset
by R938 million spent on capex, corporate overheads and exploration, financing charges and working capital
movements.
Harmony cash reconciliation for the three-month period July 2005 to September 2005

Cash and equivalents on 30 June 2005 (R million)

1 830,4

Operational

(560,1)

Operating profit

118,8

Capex

(229,5)

Development cost capitalised

(136,5)

Corporate/exploration expenditure

(74,0)

Interest paid

(96,4)

Employment termination, restructuring and care and maintenance cost

12,9

Other items

5,5

Movement in working capital

(160,9)

Other

(299,5)

Net sundry revenue

33,2

Foreign exchange profits

20,0

Avgold hedge payments (last payments due in December 2005)

(58,1)

Partial repayment of 2001 bonds

(294,6)

Cash and equivalents on 30 September 2005

970,8

At 30 September 2005 Harmony had investments of R4.7 billion, which includes its investments in trust
funds (R1,2 billion), listed investments (R3.4 billion), including Gold Fields (R2.5 billion) and African Rainbow
Minerals (R0.9 billion) and unlisted investments of R0.1 billion. The R535 million difference in valuation of
the listed investment, quarter on quarter, has been reflected in the fair value reserve, which is included in
equity.

Progress on Growth Projects

The detail of the South African brownfields growth projects are discussed under the various shaft sections.
As the projects in PNG are greenfields in nature and do not contribute to current production ounces, they are
discussed under this section.

Hidden Valley Project

Regulatory approvals
All the required statutory approvals to commence with the Hidden Valley project in PNG have now been
obtained. At an official signing ceremony in Wau on 5 August 2005 the Mining Lease, Memorandum of
Agreement and various compensation agreements for the project and road were signed. An Environment
Management Plan is to be submitted to the Department of Environment in the December quarter.
(The submission of an EMP is a requirement of the Mining Lease and needs to be approved by the
Department of Environment prior to the commencement of site work.)

Access road to mine site
Work has commenced on the construction of the Hidden Valley access road to site from the town of Bulolo.
Harmony has contracted a road construction manager and a core of operators with extensive PNG road
building experience. The total cost of building the road is estimated to be A$16.4 million. Should all the road
building equipment be disposed of after road construction and the buy back option utilised, the net outflow
will be A$8.8 million.

The route which was chosen accesses the proposed mine site from the town of Bulolo and makes use of old
logging roads for a large portion of the way.

Road building will consist of four phases, namely pioneering, bulk out, finishing and crushing. The pioneering
crew will push out ahead and locate suitable routes through heavily forested areas and steep areas. Currently
it is scheduled that the pioneering crew reaches the proposed mine site by March 2006. At that stage the site
should be accessible to other construction equipment and major construction earthworks will be able
to commence.

The bulk out crew will follow the pioneering crew and do the majority of earth moving for the road. After the
bulk earthworks for the road has been completed the finishing crew will do the culverts and drainage that is
required, before the crushing crew completes road construction. The current estimates indicate that total
road construction will take 11 months to complete up to final design specifications, and require the
movement of 1.7 million cubic metres of earth.

Feasibility update and execution plan
The process of updating the feasibility document and compiling the project execution plan is progressing well.
Senior staff members from Australia and South Africa have been dedicated to the process, and where required,
consultants appointed to ensure that the appropriate level of detail and engineering is incorporated in the final
feasibility document and execution plan. This document will include updated cost estimates, as well as a
realistic construction timeline. Work to date has not indicated any significant changes to the project, or cost
increases.

Various options and initiatives are currently being considered to further optimise the economics of the
project and to reduce the construction time line.

Regional exploration on the Mining Lease
Additional exploration is being carried out on the granted mining lease area. Detailed geological mapping of
the Yafo prospect has been completed, which indicates that mineralisation extends over 1 kilometre in a low
angle northeast trending southeast dipping shear zone, with widths ranging from 1.5 to 10 metres. We are
awaiting the analytical assay results on these samples.

The necessary fieldwork has also been completed before drill target generation on the Bulldog prospect,
where five trenches totalling 510 metres were completed and 372 samples taken, the analytical assay results
which are still outstanding.

During the next quarter a grade control program will be implemented over the Hamata pit area. The aim is
to potentially establish the amount of ore feed from the oxide zone, refine the geological model and in doing
so increase the Hamata ore reserves.

Project funding and financing structures
Commercial terms were obtained from various South African and Australian banks to potentially fund the
mining fleet. The submitted terms proposed as well as the financial impact of these proposals will be
considered during the December quarter, when a recommendation will be made to the board on which
options to pursue.

The potential equity funding structure by Harmony for the project was investigated to ensure that this is
structured in such a way that it optimises cash flow for Harmony and is tax efficient in the various tax
jurisdictions. Once the various tax advisors have signed off on the proposed structure it will be submitted to
the board for approval.

Future Activities
A component of critical economic importance to the project is the ability to obtain power from PNG’s
national power supplier, PNG Power Limited. Discussions will continue with the aim of implementing a Heads
of Agreement that sets out the key commercial terms of the contract.

The results of various technical studies and reports will be incorporated into the feasibility document during the
December quarter, and the final mining schedule will be compiled based on the signed off geological model,
plant specifications and throughput rates as well as physical constraints imposed by the terrain.

Wafi-Golpu Pre-Feasibility Study

Detailed planning for the commencement of the pre-feasibility study at a cost of A$8 million commenced
late in July 2005. The study scope was defined and split into major category areas including geology,
geotechnical, mining, metallurgy, environmental, infrastructure, community and external relations and
marketing. The study is due for completion in December 2006, however this date is depending on data and
information collected and analysed as the study progresses. It is likely that the direction of the study, and
subsequently the final mining plans, will change as more detailed project information is collected.

The pre-feasibility study will investigate all aspects of construction and operation of a mine at Wafi to
a ±15 – 20% level of confidence, with much of the study work reliant on the completion of the drilling
program. The Golpu Copper Gold porphyry deposit, and the high grade Wafi Link zone gold deposits will be
the major focus of the study, however the viability of the Wafi A and B zone ore bodies will also be considered.
Part of the early studies will be to identify additional drilling data requirements in the Wafi link zone area and
additional holes will be planned if necessary.

At present, Wafi with a gold mineral resource of 6,0 Moz(69,5 Mt at 2,70 g/t) consists of the following
identified ore zones:
• Golpu

– 95Mt at 1.45% Cu, 0.65g/t Au

• Wafi Link Zone – 6Mt at 7g/t Au
• Wafi B Zone

– 39.8Mt at 2.45g/t Au

• Wafi A Zone

– 18.9Mt at 1.72g/t Au

Contracts for diamond drilling, geotechnical consulting, environmental studies and road upgrade have been
awarded and work associated with all of these contracts has commenced. A brief description of the work to
be completed under these contracts is given below:

Golpu mining considerations
A scoping study concerning the mining of the Golpu Cu/Au resource was completed early in 2004 and the
major mining risk was identified as being geotechnical risk. The most likely mining method for Golpu is block
caving, and as such, detailed understanding of the rock mass in terms of geotechnical properties is critical.
Block cave mining involves large capital investment for mine development prior to production and as such a
high level of confidence in the feasibility of the method is required.

Golpu drilling program
The primary benefit from the drilling will be the collection of geotechnical and hydrological data for the
Golpu resource. The data will be utilised for assessment of rock mass capability, as well as construction of
geotechnical domain models, preliminary hydrological models and three dimensional structural models. All of
the data collected will assist in mine design for the resource. In addition to collection of geotechnical data,
core collected during drilling will be assayed so that resource model confidence is increased (holes have been
designed to maximise the possibility of expansion of the resource) and samples will be utilised for
metallurgical test work.

The Golpu drilling will give a pre-feasibility level of confidence for the geotechnical aspects of the resource,
however it is likely that additional infill drilling will be required if the project proceeds to full feasibility.
The drill program will be continuously reviewed and modified to minimise the effect of any issue that arises
and is planned to be completed by the end of May 2006.

Golpu Geotechnical Consultancy Agreement
Mining consultancy SRK Consulting has been awarded the contract to oversee the geotechnical data
collection and to assist in creating structural, geotechnical domain and lithological models. The models and
other data produced by SRK during this phase of the work will be utilised in the mining studies to be
undertaken once drilling is completed.

Environmental Consulting Agreement
Environmental works for the project have been awarded to Enesar Consulting. Enesar was responsible for
the completion of the Hidden Valley Environmental Impact Statement (EIS) and also have ongoing work at
Hidden Valley.

Environmental Work Programme
Initial work, to commence in the current quarter, will involve the setting up of stream monitoring stations
and standard measuring procedures and production of an Environmental Inception Report (EIR). The EIR is
required to meet PNG environmental department’s requirements for new projects.

All data to be collected for environmental studies is required for the completion of the EIS, which must be
completed and approved prior to granting of a mining lease. It is planned to prepare the EIS if the project is
advanced to full feasibility level. A pre-feasibility level environmental study document will be prepared and
included with the final pre-feasibility study document.

Wafi site infrastructure
A road upgrading contract has been awarded. Road works are required to ensure that the transport of drilling
consumables and personnel is possible under most weather conditions. While work on the road is estimated
to cost up to A$200,000, it is expected that savings in helicopter costs, well in excess of that figure, will be
made over the life of the project. Road works will assist Wafi regional exploration drilling as well as the pre-
feasibility study. With a number of regional targets in the area, the benefits of the road works will be realised
for a considerable time to come.

Metallurgical test work
As Wafi gold ore is highly refractory, one of the major challenges of the project will be to identify economical
ore oxidation/extraction methods.

The use of Bio Oxidation techniques is being investigated, and initial test work has begun. There are several
alternative oxidation methods available, all of which will be investigated, and if suitable, tested for use with
Wafi ore. Petrological work further identifying gold associated pyrite minerals with the aim of improving
flotation recovery will also be undertaken.

Additional work will also be completed for Golpu ore, with the emphasis being on confirmation of
results produced by previous project owners, improvement of flotation recovery, exclusion of arsenic from
concentrate and improvement of Gold recovery. Golpu metallurgical testing is due to commence in
January 2006.

Regional exploration

A successful drilling program at Nabonga returned the following results:
•   5m at 6,54 g/t Au from 11m
•   7m at 2,30 g/t Au from 143m
•   3m at 3,99 g/t Au from 185m

Drilling has commenced this quarter at Moa Creek and Wafi extensions.

Australia – disposing of our 50% stake in the Burnside Joint Venture

Harmony announced that we had reached agreement with Northern Gold NL on the divestment of its 50%
stake in the Burnside Joint Venture for a consideration of A$24 million or R117 million. In terms of the
agreement Northern Gold will purchase Harmony’s sole purpose subsidiary which holds Harmony’s interest
in the Burnside JV and the management entity thereof.

The purchase consideration of A$24 million (plus replacement of a A$1 million performance bond) is payable
in tranches comprising:
•   a non-refundable deposit of A$0.25 million;
•   a cash payment of A$4.0 million and an issue of A$5.0 million of shares (20 million Northern Gold shares)
    on completion (within six months) and the replacement of a A$1.0 million performance bond;
•   a cash payment of A$5.0 million and the issue of shares to the value of A$4.4 million (at an issue price
    equal to the higher of A$0.25/share and the prevailing 30-day volume weighted average market price)
    six months after completion; and
•   a cash payment of A$5.35 million payable 18 months after the completion date.

The transaction is subject to normal regulatory approvals that accompany such transactions.

THE PAST QUARTER IN REVIEW

Harmony’s cash operating profit decreased by R66,1 million from R184,9 million in June 2005 to R118,8 million
in the September period. Production declined by 3% to 617 902 oz quarter on quarter mainly due to five shifts
being lost during the industry wage strike and cash operating costs increased by 7% to R85 718/kg. In US$
terms, cash costs increased by 5% to US$410/oz. Unit revenues increased by 2% from R89 711/kg to
R91 888/kg in September as a result of both the weaker Rand and the higher gold price.

The performance of the company is best highlighted in the following table:

30 September

30 June

Percentage

2005

variance

(restated)

Production

– kg

19 219

19 886

(3)

Production

– oz

617 902

639 346

(3)

Revenue

– R/kg

91 888

89 711

Revenue

– US$/oz

440

435

Cash cost

– R/kg

85 718

80 444

(7)

Cash cost

– US$/oz

410

390

(5)

Exchange rate – US$/ZAR

6,50

6,41

Operationally the quarter was characterised by the impact of the five-day industry strike and the ongoing
restructuring of the Free State region. From an operational perspective the December quarter is expected to
be the first normalised quarter in more than a year.

Impact of the four-day gold industry strike by the National Union of Mineworkers
The net cost of the strike, that took place over the four days from 8 to 12 August 2005, totalled R60,5 million.
The breakdown was as follows:

Impact on production

mined

35 170

Tonnes milled

176 487

Recovery grade

g/t

5,86

Kilograms lost

1 034

Revenue loss

R million

94,1

Cost savings

R million

33,6

Net cost of strike R million

60,5

Due to a different wage agreement being in place, our Target operations were not affected. The operations
most affected were Elandsrand, Tshepong and Evander 7 Shaft, which lost R14,1 million, R12,6 million and
R6,3 million, respectively.

Following the implementation of our restructuring initiatives throughout the company and more especially
the Free State over the past 18 months, both the National Union of Mineworkers and management concluded
that there was a need to re-establish co-operative relationships.

At a bosberaad held between the parties a newly constituted “Harmony Leadership Forum” was formed.
It was agreed that four working groups would be created to look at the issues which were identified as
undermining relationships between the two parties and attempt to resolve them.

The task of the working groups would be to analyse problems and generate solutions which will be taken back
to the Harmony Leadership Council for negotiation and agreement.

Month by month operational analysis

The impact of the gold industry strike and implementation of the restructuring initiative at our Free State
operations is best reflected in the month by month analysis of the company’s performance:

Month ended

30 September

31 August

31 July

2005

Tonnes milled (’000)

1 626

1 427

1 547

Kg’s

7 154

5 743

6 322

R/kg costs

77 734

93 952

87 258

R/tonne costs

342

378

357

US$/oz costs

372

450

418

During September 2005, the company managed to decrease working costs in R/kg terms to below
R78 000/kg. This trend is expected to continue as operations normalise during the December quarter.

Restoring our operating profit margins

September 2005

June 2005

(restated)

Cash operating profit (R million)

118,8

184,9

Cash operating profit margin (%)

6,7

10,0

South African underground working costs increased from R1 340 million in the June 2005 quarter to
R1 391 million in the September 2005 period.
On a group basis, working costs increased by 3% or R47,7 million from R1 599,7 million to R1 647,4 million.

A quarter on quarter cash operating profit variance analysis

Cash operating profit – June 2005

R184,9 million

– volume change (tonnes)

(R42,9) million

– working cost change (%)

(R47,7) million

– recovery grade change (g/t)

(R16,1) million

– Rand gold price change (R/kg)

R40,6 million

Net variance

(R66,1) million

Cash operating profit – September 2005

R118,8 million

Analysis of earnings per share

Quarter ended

Earnings per share (SA cents)

30 September 2005

30 June 2005

(restated)

Cash earnings

Basic loss

(82)

(283)

Headline loss

(86)

(94)

Fully diluted loss

(82)

(283)

Adjusted headline loss*

(63)

(94)

* Excludes all unrealised gains/(losses) in financial instruments as well as the tax implications

Reconciliation between basic and headline loss

Quarter ended

Headline earnings in cents per share (SA cents)

September 2005

Basic loss

(82)

Profit on sale of mining assets

(4)

Headline loss

(86)

Cash earnings for the year to date total 30 cents per share. Fully diluted loss per share for the financial year
to date totals 82 cents per share.

QUARTERLY OPERATIONAL REVIEW

Operational highlights were as follows:
• Tshepong continues to perform well, with benefits from CONOPS expected in the December quarter.
• Randfontein’s Cooke shafts recovery is underway.
• Leveraged operations deliver increased production.

A quarter on quarter operating profit analysis of the various operations is as follows:

Operations

30 September 2005

30 June 2005

Variance

(R million)

(restated)

Quality ounces

127,7

186,9

(59,2)

Growth projects

1,8

2,5

(0,7)

Leveraged ounces

(45,8)

(71,9)

26,1

Surface operations

5,5

27,0

(21,5)

Total South Africa

89,2

144,5

(55,3)

Australasian operations

29,6

40,4

(10,8)

Total

118,8

184,9

(66,1)

A detailed analysis of the operations is as follows:

Quality ounces – turnaround at Target underway

Includes the following shafts: Target, Tshepong, Masimong, Evander and Randfontein’s Cooke Shafts

30 September 2005

30 June 2005

(restated)

U/g tonnes milled

(’000)

1 464

1 508

U/g recovery grade

(g/t)

5,96

6,02

U/g kilograms produced (kg)

8 719

9 073

U/g working costs

(R/kg)

76 896

69 419

U/g working costs

(R/tonne)

458

418

Operating profits at these operations decreased from R186,9 million to R127,7 million in the September
quarter. Volumes were negatively affected in part due to the industry wage strike and to lower underground
volumes at Target. Total working costs increased by 6% to R670,5 million compared to the R629,8 million
reported in the June 2005 period.

As part of the National Union of Mineworkers agreement signed on 19 July 2005, CONOPS was
re-implemented at Tshepong and Bambanani mines which will increase volumes at these operations.
The implementation of CONOPS at Masimong 5 is planned to commence during the December 2005 quarter.

Target continued to battle with flexibility, machine availability and grade issues in the September quarter.
Although tonnage milled decreased from 203 000 tonnes in the June quarter to 168 000 tonnes in September
the recovered grade increased from 4,5 g/t to 6,6 g/t. Operating costs decreased by 3% from R75 608/kg
to R73 168/kg.

The situation at Target has improved significantly. The mine is in a good position with grade flexibility in the
short to medium term. This enabled the increase in production in the higher grade stopes to compensate for
the current lack of volume. Higher than expected grades have been achieved from the MOS1 footwall drive
and reef development.

Target is in the position to produce at levels of 70 000 to 80 000 tonnes per month for the next nine months.
Critical production vehicle availability is the main factor that is causing the operation to underperform in
respect of volumes. To address this in a more sustainable way it has been decided to do the maintenance of
these vehicles in-house in order to exercise better control over a key performance area of the business.

CONOPS was successfully re-implemented at Tshepong on 5 September 2005. These benefits will further
reflect in the December quarter. Despite the strike, Tshepong reported a 6% or 21 000 tonne increase in
tonnage milled, up to 371 000 tonnes. At a lower recovery grade of 6,42 g/t (June 2005 – 7,15 g/t), net gold
recovery was 5% lower at 2 380 kgs. Working costs in R/t terms increased by 6% to R444/tonne (June 2005:
R418/tonne).

Tshepong Decline Project review

Access development
A total of 4 117m of 6 281m development of the project has been completed. The team managed to develop 666m during the quarter. This is an 18% improvement over the June 2005 period. This excludes 45m done by the project crews diverted to other mine development, while delayed by the rehabilitation process on 69 Level haulage south.

Chair lift decline (143m actual vs 150m planned)
72% of the 900m required development has been completed. Delays occurred in this development end due to flooding caused by newly installed pipes bursting. The temporary dirty pump columns system has been improved to stop blockages by introducing a pipe-flushing system.

Material decline (62m actual vs 120m planned)
70% of the 1 000m required development has been completed. Poor ground conditions in the decline and subsequent FOG forced the use of new support solutions and blasting technique to be investigated and implemented. The implementation of long anchor supports over the total length of the decline from the box hole up to the face delayed the face advance while big rocks dislodged from the poor ground conditions resulted in slow cleaning cycles. The effects of the changed support system and the new blasting technique has resulted in a two-month delay. This has resulted in a significant reduction of risk during excavation and for the duration of the operational life of the decline.

69 Level (460m actual vs 722m planned)
Development on the 69 level station is 54% complete. The rehabilitation of a fall of ground of 23m has delayed South haulage development by 90 days (equivalent of 180m). The process of installing long anchors and then loading rubble where it is safe will take longer and all development to the south has been delayed. This delay is directly in the critical path of the project as the development of the ore passes have been affected. The crews have been diverted to continue development to the north and a total of 45m has been done on working costs, as this falls outside the scope of the project. A bypass haulage is being developed around the effected area. In cross-cut 95, with exploration holes now completed the geographic layout of reef impacted on the holing date for the raise. Multiple down throw and up throw fault combinations will make this raise difficult to mine and the estimated completion period of seven months has been extended to 12 months.

Project Schedule
Project start date 23 April 2003
Schedule sinking to production 64% actual vs. 74% planned Completion August 2006.
Schedule including production built up 46% actual vs. 53% planned.
Financial schedule 54% actual vs. 56% planned.
(Additional cost for cleaning operation, additional support and delays is the difference between 46% work complete and 54% money spent.)
Production commences December 2007 – will be reviewed in October 2005.
Project completion February 2008 – will be reviewed in October 2005.

Capital cost update

R million

Approved capital

280,2

Final estimated cost

280,8

Sunk capital

151,5

Remaining capital

129,3

The spending profile has been curtailed while delays occurred due to strikes and poor ground conditions.

Annual capital expenditure profile

Table (R million)

2002/3

2003/4

2004/5

2005/6

2006/7

2007/8

Total

Plan 2003

37.4

78.5

62.6

66.7

35.6

280.8

Plan 2004

32.8

66.6

44.9

102.9

33.1

280.3

Plan 2005

32.8

66.6

40.6

92.6

29.0

18.7

280.3

New Plan 2005

32.8

66.6

40.6

80.6

41.0

18.7

280.3

Financial evaluation update

Gold price

(R/kg)

92 000

NPV at 7.5% (Rm)

738

IRR

(%)

32,4

Masimong had an improved quarter. Production increased by 4% to 1 036 kg from 998 kg in the June period. Operating costs decreased by 3% to R88 092/kg. Tonnes milled increased by 11% to 207 000 tonnes from 186 000 tonnes in the June period. Masimong reported a cash operating profit of R3,8 million in the September quarter compared to a loss of R0,7 million in the June period.

Masimong expansion project
During the quarter, R5.5 million was spent on capital and a total of 1 060m capital development was achieved, which was 540m less than planned. The underachievement was due to an underground fire, strike action and the unexpected intersection of water fissures. This will not have a material impact on the scheduling of the project.

Capital cost update

R million

Final estimated cost

314.0

Sunk capital

116.2

Remaining capital

197.8

We have applied for an extension of this capital project until 2010, which is in line with the vision of
Masimong 5 to increase its production profile up to 135 tons per month in five years. This application for extension is still in the “evaluation and approval” process.

Annual capital expenditure profile
Table (R million)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total

Actual
sunk

26.4 38.7 24.5 21.1 5.5

116.2

Forecast

24.3 39.4 44.0 44.2 45.9

197.8

Total

26.4 38.7 24.5 21.1 29.8 39.4 44.0 44.2 45.9

314.0

Financial evaluation update

Gold price

(R/kg)

92 000

NPV at 7.5% (Rm)

314

IRR

(%)

250

Evander’s performance was affected by both the industry wage strike and the expected decrease in recovery
grade at Evander 7 Shaft. Production in the period decreased by 19,0% from 2 868 kgs to 2 326 kgs in the
September quarter. Overall, underground tonnage decreased from 403 000 tonnes to 374 000 tonnes, mainly
as a result of the strike. During the June quarter the operations of Evander 2 and 5 were combined with all
production from the two shafts being hoisted from Evander 5, realising cost synergies. This combined
operation treated 100 000 tonnes at a grade of 4,7 g/t, recovering 473 kgs of gold. During the September
quarter 592 kgs were recovered.

Evander 7 Shaft continued with its good performance, milling 103 000 tonnes, compared to the
105 000 tonnes for the previous quarter. As expected, at a lower recovery grade of 8,04 g/t (June 2005:
10,52 g/t), gold recovered decreased by 25% to 826 kgs (June 2005: 1 102 kgs). Rand/kg costs increased from
R47 027/kg, to R59 709/kg.

Evander 8 Shaft saw a large drop in tonnage, decreasing by 8% from 186 000 tonnes to 172 000 tonnes,
quarter on quarter. At a slightly lower recovery grade of 5,98 g/t, gold recovery was lower at 1 027 kgs (June
2005 – 1 174 kgs), resulting in working costs in R/kg terms increasing by 13% to R66 697/kg (June 2005:
R58 829/kg).

The Cooke section of Randfontein improved on its good performance levels established in the June 2005
quarter. The majority of production parameters showed improvement in the September quarter. Although
volumes decreased by 6% to 345 000 tonnes milled, grades further improved by 11% to 5,43 g/t, resulting
in a net 4% increase in production to 1 873 kg. These shafts, which reported a profit of R19,1 million for the
June quarter, returned a cash operating profit of R11,3 million.

Growth projects – Elandsrand, Doornkop and Phakisa

30 September 2005

30 June 2005

(restated)

U/g tonnes milled

(’000)

315

331

U/g recovery grade

(g/t)

6,33

5,84

U/g kilograms produced (kg)

1 995

1 933

U/g working costs

(R/kg)

91 253

88 210

U/g working costs

(R/tonne)

578

515

Good progress continues to be made on the delivery of our growth projects. Production increased by
3% to 1 995 kg (June 2005: 1 933 kg) and operating costs increased by 3% to R91 253/kg, due to a
R11,5 million increase in total cost.

Elandsrand remains focused on the completion and commissioning of the New Mine Project, but in the interim produces from the upper, older section of the mine. The operation made an operating profit of R8,7 million in the September quarter compared to an operating profit of R5,8 million in June. Production increased by 4% to 1 629 kg driven by a 10% increase in grade to 8,39g/t. Operating costs increased by 1% to R86 880/kg.

In the longer term the commissioning of Elandrand New Mine will alleviate the continuously experienced flexibility problems and allow the operation to achieve its full potential. We remain very excited about the future of Elandsrand.

Elandsrand New Mine Project

Infrastructure
Sub projects that were completed, delayed or progressed in the past quarter include:
•   Installation and commissioning of 113 L main substation will start in October.
•   102 L Booster fan installation complete and fan commissioned. The conversion of 105 L RAW
     into an intake airway will commence during the next quarter.
•   Sinking No. 2 Service Shaft is progressing well. An additional shift is to be started in October,
    so as to increase the amount of backfill pipes installed. This shaft is currently sunk to 86m
    below 98 L. There are 28m left until 102 L is reached.
•   Raise boring of the 92 L turbine dam centre hole will be completed during October/November.
    Sinking of the dam is to start in December 2005.
•   The joining of the ore pass system at 100 L was not completed during the quarter. This was
    due to problems experienced with ore pass scaling at 100 L. An additional ore pass of 30m is
    to be developed away from the affected area, before joining of the ore passes can take place.

Access Development
102 Level
The vent raise bore holes between 102 L and 105 L were completed during the quarter.

105 Level
No access development took place on this level.

109 Level
Excellent metres have been recorded on 109 L. This is mainly due to having added a development crew and introducing multi blast conditions on both the development ends.

Development metres

Plan

Actual

(m)

July 2005

120

165

August 2005

130

133

September 2005

140

186

113 Level
On 23 June 2005, a high pressure flammable gas intersection took place in the 113 L RAW, whilst drilling at the face during normal development operations. All work was stopped on 113 L to allow the gas to drain.

One of the crews from 113 L has been moved to 109 L to help with multi-blast operations. The rest of the crews were moved to 105 L to increase the reserve access development.

Capital cost update

R million

Final estimated cost

798.1

Sunk capital

478.4

Remaining capital

319.7

Annual capital expenditure profile

Table (R million)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010 Total

Actual sunk

107

106

105

478

Forecast

106

126

320

Total

107

106

105

134

126

798

Financial evaluation update

Gold price

(R/kg)

92 000

NPV at 7.5% (Rm)

1 513

IRR

(%)

The Doornkop South Reef Project is similar to the situation at Elandsrand, where mining continues in the old,
upper areas of the mine, whilst the project will exploit the higher grade South Reef pay shoot from a new
shaft currently being developed.

Tonnages from the Kimberley reefs were 5% lower at 121 000 tonnes (June 2005: 127 000 tonnes). A higher
recovery grade of 3,0 g/t resulted in a net gold recovery of 366 kgs, down from 374 kgs in the previous
quarter.

Working costs were 10% higher at R40,5 million and combined with the lower volumes costs in R/kg terms
were 12% higher.

Doornkop South Reef Capital Project

Project progress
Station development continues on 202 and 212 Levels with preparations underway to start up station work on 207 Level as well. Access development continues on 192 and 197 Levels. Three reef raises are also being developed on 192 Level.

Shaft sinking operations are underway. The first blast took place on 28 July 2005 from the original shaft bottom position at –1 340m below collar. 40m have been sunk since July including rock breaking, cleaning, shaft lining and equipping. The rate of sink is increasing steadily with 25m being sunk in September alone.

Sliping of the shaft to final diameter from 197 Level has progressed to 205 Level. It is planned that the portion of shaft between 197 Level to 40m below 212 Level will be sliped to final diameter by the time the sinking operation above reaches 192 Level in March 2006.

The updated schedule provides for the main shaft to be partially commissioned (excluding the additional rock winder) by the end of 2006. Production will ramp-up over the next three years to 135 000 tonnes per month.

Capital cost update

R million

Final estimated cost

959

Sunk capital

260

Remaining capital

699

Annual capital expenditure profile
Table (R million)

2003

2004

2005

2006

2007

2008

2009

2010

2011

Total

Actual sunk

114

260

Forecast

127

183

167

124

699

Total

114

162

183

167

124

959

Financial evaluation update

Gold price

(R/Kg)

92 000

NPV at 7.5% (Rm)

412

IRR

(%)

Sensitivity table (NPV at 7.5%) – gold price R92 000/kg

–10%

–5%

Base

10%

Gold price or grade

183

297

412

522

632

Working cost

565

488

412

333

250

Capex

451

432

412

393

373

Phakisa Capital Project

No mining is currently undertaken at this shaft.

Shaft Equipping
•   Headgear equipping after starting on 2 July 2005 was completed on 1 August 2005.
•   Shaft equipping from surface to 54 Level, started on 2 August 2005 and was completed seven
    days ahead of schedule on 4 October 2005.
•   Installation of the Koepe Winder headgear started on 5 October 2005 with the planned
    completion date being 15 November 2005.

Start

Completion

Critical activity

date

Surface headgear equipping

2 July 2005

1 August 2005

Shaft equipping surface to 54 Level

2 August 2005

4 October 2005

Koepe headgear installation 54 to 55 Levels

5 October 2005

15 November 2005

Rail-veyor pilot plant at Nyala

21 June 05

31 October 2005

Development at 55 Level refrigeration site

15 August 2005

30 January 2006

Development at 55 Level Rail-veyor x/cut

5 September 2005

15 December 2005

Critical Path Activities schedule and milestones

Completion
date

Current Activities
In-circle development 75 Level and 77 Level

14 December 2004

Sinking and line to shaft bottom

7 April 2005

Equipping spillage compartment below 77 Level

19 May 2005

Stripping, sinking equipment in shaft to surface

2 July 2005

Surface headgear change over

1 August 2005

Equipping shaft buntons and guides surface to 54 Level

4 October 2005

Koepe headgear installation 54 to 55 Levels

15 November 2005

Future Activities
Schedule equip shaft buntons and guides 55 to 77 Levels

28 February 2006

Schedule rail-veyor installation, u/g 55 Level

31 May 2006

Access development 69, 71, 73 and 75 Levels

23 November 2007

Open face length of 88 panels for production

31 May 2008

Project completion

29 February 2008

Sinking and equipping of Phakisa Shaft

HEADGEAR CHANGEOVER TO PERMANENT
CONDITION COMPLETED

Cold water dam – preparatory work,
concrete floor, shotcrete sidewalls, slot for dam wall completed

Koepe mechanicals – completed
Koepe electrical – commissioned
21 October 2005

Waste pass
completed

Ore pass
completed

Sink to 2426.783 BC – completed

Equipping shaft bottom steel – completed

77 L in-circle completed
Settler access completed
Crusher and belt level
completed

77 L in-circle completed
12 metres of decline
terminus completed

318 x 3.1 diameter
vent shaft completed

ORE RESERVE 21’ DIP

Nyala Mine

55 Level Silo – in progress

4.6 diameter Vent Pass at 98

– complete

Secondary support and tunnel guard in progress

EQUIPPING OF KOEPE HEADGEAR ON 64 LEVEL IN PROGRESS –
EXTENSIVE MOILING IN LINER TO ACCOMMODATE BEAMS MIGHT
DELAY THIS PORTION OF THE PROJECT

EQUIPPING OF BUNTONS AND GUIDES BETWEEN SURFACE AND
64 LEVEL COMPLETE – PROJECT 8 DAYS AHEAD OF SCHEDULE

Capital cost update

R million

Approved capital

612,9

Final estimated cost

612,9

Sunk capital

278,4

Remaining capital

334,5

Table (R million)

Annual capital expenditure profile 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9

Total

Plan 2004

117.4

119.2

177.8

141.4

41.3

15.8

612.9

Plan 2005

117.4

107.6

182.7

100.0

93.6

11.7

612.9

Cost of Nyala Services

–

8.4

7.3

4.9

30.2

Actual

117.4

116.0

45.1

278.4

Financial evaluation update

Gold price

(R/kg)

92 000

NPV at 7.5% (Rm)

1 327

IRR

(%)

Leveraged Operations – significant operational turnaround at most shafts

Shafts included under this section are Bambanani, Joel, Eland, Kudu/Sable, West Shaft, Nyala, St Helena,
Harmony 2, Merriespruit 1 and 3 Shafts, Unisel, Brand 3 and 5 Shafts, Saaiplaas 3 and Orkney 2 and 4 Shafts.

30 September 2005

30 June 2005

(restated)

U/g tonnes milled

(’000)

1 218

1 095

U/g recovery grade

(g/t)

4,42

4,73

U/g kilograms produced (kg)

5 380

5 181

U/g working costs

(R/kg)

100 158

104 320

U/g working costs

(R/tonne)

442

494

Our restructuring initiatives of our leveraged shafts are starting to deliver the planned benefits. These
operations returned a cash operating loss of R45,8 million versus the loss recorded in the June period of
R71,9 million. Gold production increased by 4% to 5 380 kg driven largely by a 11% increase in tonnage
milled. Total operating costs decreased marginally to R538,9 million from R540,5 million in the June period.
Unit operating costs continued to fall, down from R494/tonne to R442/tonne for the September quarter.
Overall working costs decreased from R104 320/kg to R100 158/kg.

The shafts that improved most were: Merriespruit 1 with 25% higher production and 3% lower cost per kg.
Unisel with 20% higher production and 2% higher cost per kg, Bambanani with 22% higher production and
15% lower cost per kg, and West Shaft with 58% higher production and 27% lower cost per kg.

SA Surface Operations (includes Kalgold)

30 September 2005

30 June 2005

(restated)

Surface tonnes milled

(’000)

838

1 415

Surface recovery grade

(g/t)

1,47

1,09

Kilograms produced

(kg)

1 228

1 536

Working costs

(R/kg)

87 029

70 815

Working costs

(R/tonne)

128

Kalgold reported a cash operating profit of R15,0 million compared to a cash operating profit of R24,8 million
in the June 2005 quarter. Tonnages decreased from 454 000 tonnes to 452 000 tonnes, quarter on quarter.
Recovery grade decreased by 2% to 1,99 g/t (June 2005: 2,03 g/t) as a result of slightly lower mining grades.
Production decrease by 3% to 897 kg.

Plant throughput increased to a record tonnage of 162 000 tonnes during September 2005. The higher
tonnage is important as it will assist the viability of the A-Zone pit.

Trail mining was started at A-Zone during September 2005 with the view of augmenting reef tonnages
from D-Zone.

AUSTRALIAN OPERATIONS

Highlights
•   Mt Marion underground resumes normal production for quarter after repairs to blocked escape way.
•   Continued good exploration drill results for open pit resource at South Kal Mines.
•   Achieved six years’ Lost Time Injury (LTI) free at Checkers plant at Mt Magnet.

Australian Operations

30 September 2005

30 June 2005

(restated)

Tonnes milled

(‘000)

765

849

Recovery grade

(g/t)

2,48

2,55

Kilograms produced (kg)

1 897

2 163

Working costs

(R/kg)

78 643

69 398

Working costs

(R/tonne)

195

177

The Australian Operations had a tough quarter, producing an operating profit of A$6.0 million compared to
A$8.2 million in the previous quarter, with significant capital expenditure on the development of the new
St George underground mine at Mt Magnet affecting cash flow. Production decreased to 60 990 ounces
(in line with budget) for the region compared to 69 542 ounces in the previous quarter, mainly as a result of
lower production from Mt Magnet underground sources. (In the previous quarter the closed Star underground
mine produced 8 250 oz.)

With production commencing at St George in the middle of the December quarter it is anticipated that
production in December for the Australian region will return to previous levels of approximately
70 000 ounces per quarter.

During the quarter 20 000 ounces of calls were closed out when they became due at a spot price of A$552 per
ounce, as well as a 8 000 ounce forward position with a spot price of A$518 per ounce. These hedges,
which were inherited with the acquisition of Hill 50 and New Hampton were closed out at a cost of
A$887 600. Another 35 000 ounces of calls and forwards are due to be closed out in the December quarter.

Mount Magnet
Mt Magnet produced 34 466 oz of gold from the processing of 422 843 tonnes of ore and low grade
stockpiles.

Mount Magnet reported a working profit of A$4.5 million (June A$7.2 million) for the quarter, the decrease
primarily attributable to lower production from underground with the closure of Star in the previous quarter.
Production from the St George underground is expected to commence in November, which will replace the
Star underground ounces. Currently development is focused on 2 Level, while drill results are being collated
from lower levels and a program of niche sampling done to ensure the optimal positioning of development
drives for future stoping. These results will be incorporated into a new mine plan.

The potential of the accessing the Water tank Hill underground lodes from the St George decline is currently
the subject of a scoping study, as they may be economical in the current gold price environment and add
25 000 ounces to production. An amount of A$5.1 million capital was spend in the quarter on the
development of St George. Higher levels of capital mine development at both Hill 50 and St George have
positioned both mines well for stope production in the December quarter.

Open pits had a tough quarter with delays and additional operating costs incurred with the completion of
the Chester pits due to heavy water inflow and transitional clay material on pit floors. Several failures in the
Rheingold cutback required additional waste mining to remediate wall angles to a safe working angle.

The resource development program around the Cue region has been successful with 20 000 ounces added to
the indicated mineral resource category at the Never Can Tell deposit, as well as 13 500 ounces at the Yellow
Taxi deposit. These deposits are currently being optimised, and if successful, will be added to the open pit
mining schedule. Various other targets are also being followed up.

The Checkers plant recorded 6 years’ LTI free on 19 September 2005, a remarkable achievement.
The conversion of the diesel power station at the plant to gas commenced during the quarter and is
progressing well. It is anticipated that the conversion will be completed by the end of December 2005, and
will result in a saving of A$8 million annually on power generation costs at current diesel prices.

South Kal Mines
South Kal Mines produced 26 524 oz of gold in the September quarter compared to 24 903 ounces in the
previous quarter from the milling of 341 945 tonnes of ore. Mt Marion underground returned to its normal
levels of production during the quarter and contributed 16 694 ounces, which was offset by lower production
from open pits and low grade stockpiles.

High grade ore from Mt Marion was blended with ore from low grade stockpiles as all high grade open pit
stocks were depleted during the previous quarter. Mill feed included 10 208 tonnes of high grade purchased
ore, which contributed 4 025 ounces.

Improved mill performance late in the quarter has resulted from the installation of a ‘Knelson Concentrator’
enabling the gravity circuit to produce in excess of 40% of the recovered gold compared to the previous
performance of around 11%. This should contribute to lower milling costs in future.

Lower than planned underground production at Mt Marion was mainly caused by low underground haul truck
availability. This was the result of the underground mining contractor operating with reduced trucking.
This issue has now been resolved. Negotiations have started on an exclusive basis with the underground
contractor currently mining at Mt Marion, as the current contract expires in December. Current indications
are that they are proposing a significant increase in contract rates. We are looking at ways of mitigating
proposed increases.

No open pit mining activity was conducted in the quarter with all pits now placed in a state of suspension
or abandonment. Low grade stockpiled ore from various completed open pit mine areas is trucked to the
Jubilee mill to provide blending options with the underground Mt Marion ore.

Continued good drill results were returned from the Shirl prospect. The results indicate the mineralisation is
open to the North and the East. Some exceptional results include:
05BSAC044               8m @ 5.59 g/t, from 18m
05BSAC050           10m @ 20.99 g/t, from 20m
05BSAC050             6m @ 22.37 g/t, from 38m
05BSAC056             4m @ 47.93 g/t, from 54m

Follow up work during the December quarter will concentrate on defining continuity before a resource may
be calculated.

The site showed a profit for the quarter of A$1.5 million compared with A$1.0 million in the June quarter.

OPERATING AND FINANCIAL RESULTS

(Rand/metric) (unaudited)

Underground production – South Africa

Leve-

Quality

Growth

raged

Ounces

Projects

Ounces

Sub total

Ore milled – t’000

Sep-05

1 464

315

1 218

2 997

Jun-05

1 508

331

1 095

2 934

Gold produced – kg

Sep-05

8 719

1 995

5 380

16 094

Jun-05

9 073

1 933

5 181

16 187

Yield – g/tonne

Sep-05

5.96

6.33

4.42

5.37

Jun-05

6.02 5.84 4.73

5.52

Cash operating costs – R/kg

Sep-05

76 896

91 253

100 158

86 453

Jun-05

69 419

88 210

104 320

82 833

Cash operating costs–R/tonne

Sep-05

458

578

442

464

Jun-05

418

515

494

457

Working revenue (R’000)

Sep-05

798 188

183 850

492 960

1 474 998

Jun-05

816 768

172 999

468 577

1 458 344

Cash operating costs (R’000)

Sep-05

670 457

182 050

538 852

1 391 359

Jun-05

629 835

170 510

540 480

1 340 825

Cash operating profit (R’000)

Sep-05

127 731

1 800

(45 892)

83 639

Jun-05

186 933

2 489

(71 903)

117 519

Capital expenditure (R’000)

Sep-05

108 833

140 184

45 597

294 614

Jun-05

119 288

117 099

40 157

276 544

Quality Ounces – Evander Shafts, Randfontein Cooke Shafts, Target, Tshepong, Masimong

Growth Projects – Doornkop shaft & South Reef Project, Elandsrand shaft and New Mine Project, Phakisa shaft,
Tshepong Decline Project

Leveraged Ounces – Deelkraal, Bambanani, Joel, Eland, Kudu/Sable, West, Nyala, St Helena, Harmony 2, Merriespruit 1
and 3, Unisel, Brand 3 and 5, Saaiplaas 3, Evander 9, Orkney 2 and 4, Welkom 1

OPERATING AND FINANCIAL RESULTS

(Rand/metric) (unaudited)

South
Africa

Australia

Harmony

Surface

Total

Ore milled – t’000

Sep-05

838

3 835

765

4 600

Jun-05

1 415

4 349

849

5 198

Gold produced – kg

Sep-05

1 228

17 322

1 897

19 219

Jun-05

1 536

17 723

2 163

19 886

Yield

–

g/tonne

Sep-05

1.47 4.52 2.48 4.18

Jun-05

1.09 4.08 2.55 3.83

Cash operating

Sep-05

87 029

86 493

78 643

85 718

costs – R/kg

Jun-05

70 815

81 792

69 398

80 444

Cash operating

Sep-05

128 391

195 358

costs – R/tonne

Jun-05

77 333

177 308

Working revenue

Sep-05

112 361

1 587 359

178 821

1 766 180

(R’000)

Jun-05

135 789

1 594 133

190 463

1 784 596

Cash operating

Sep-05

106 872

1 498 231

149 186

1 647 417

costs (R’000)

Jun-05

108 773

1 449 598

150 108

1 599 706

Cash operating

Sep-05

5 489

89 128

29 635

118 763

profit (R’000)

Jun-05

27 016

144 535

40 355

184 890

Capital expenditure

Sep-05

294 614

71 389

366 003

(R’000)

Jun-05

0 276 544

514 342 058

TOTAL OPERATIONS – QUARTERLY FINANCIAL RESULTS

(Rand/metric) (unaudited)

Quarter ended Quarter ended Quarter ended

30 September

30 June 30 September

2005

2005

2004

(restated)

Ore milled

t’000

4 600

5 198

6 564

Gold produced

19 219

19 886

25 822

Gold price received

R/kg

91 888

89 711

83 023

Cash operating costs

R/kg

85 718

80 444

71 722

R million

R million

Revenue

1 766

1 784

2 144

Cash operating costs

(1)

1 647

1 599

1 852

Cash operating profit

119

185

292

Amortisation and depreciation of mining properties,

mine development costs and mine plant facilities

(1)

(244)

(233)

(2860)

Corporate, administration and other expenditure

(56)

(81)

(38)

Provision for rehabilitation costs

(3)

(6)

(14)

Operating loss

(184)

(135)

(46)

Amortisation and depreciation other than mining properties,

mine development costs and mine plant facilities

(11)

(10)

(9)

Employment termination and restructuring costs

(217)

(154)

Share-based compensation

(33)

(30)

(11)

Exploration expenditure

(18)

(16)

(24)

Loss on sale of investment in Goldfields

–

(372)

–

Mark-to-market of listed investments

13 –

Interest paid

(96)

(134)

(100)

Interest received

45 36

Other (expenses)/income – net

(20)

9 1

(Loss)/gain on financial instruments

(115)

(7)

Gain/(loss) on foreign exchange

(18)

(1)

Loss on sale of listed investments and subsidiaries

–

(73)

–

Profit on Australian-listed investments

–

– 4

Permanent diminution in carrying value of ARM investment

–

(337)

–

Provision for post-retirement benefits

–

(57)

–

Loss before tax

(371)

(1 339)

(303)

Current tax – expense

–

(110)

(17)

Deferred tax – benefit

(1)

338

Net loss

(323)

(1 111)

(267)

(1) The change accounting policy on capitalisation of mine

development costs had the following effect:
– Cash operating costs – decrease

137

140

159

– Amortisation and depreciation of mining properties,

mine development costs and mine plant facilities

(71)

(66)

(56)

– Deferred tax – expenses

(13)

(14)

(19)

– Net effect of change in accounting policy

The effects of the change in policy are in the process of being audited. The company does not expect

any material change to arise from the audit.

TOTAL OPERATIONS – QUARTERLY FINANCIAL RESULTS

(Rand/metric) (unaudited)

Quarter ended Quarter ended Quarter ended

30 September

30 June 30 September

2005

2005

2004

(restated)

Loss per share – cents *
– Basic loss

(82)

(283)

(83)

– Headline loss

(86)

(94)

(88)

– Fully diluted loss ** ***

(82)

(283)

(83)

Dividends per share – (cents)
– Interim

–

– –

– Proposed final

–

– –

* Calculated on weighted average number of shares in issue at quarter end September 2005: 392.3 million

(June 2005: 392.2 million) (September 2004: 320.8 million).

** Calculated on weighted average number of diluted shares in issue at quarter end September 2005:

392.3 million (June 2005: 392.2 million) (September 2004: 320.9 million).

*** The effect of the share options is anti-dilutive.

Reconciliation of headline loss:
Net loss

(323)

(1 111)

(267)

Adjustments:
– Profit on sale of assets

(15)

(26)

(10)

– Mark-to-market of listed investments

–

4 –

– Profit on Australian-listed investments

–

– (4)

– Loss on sale and dilution of investment in ARM Limited

–

103 –

– Profit on disposal of investment Bendigo NL

–

(30)

–

– Loss on disposal of investment in Goldfields

–

372 –

– Loss on disposal of subsidiaries

–

1 –

– Impairment of fixed assets – net of tax

–

(19)

–

– Diminution in carrying value of listed investments

–

337 –

Headline loss

(338)

(369)

(281)

ABRIDGED BALANCE SHEET AT 30 SEPTEMBER 2005

(Rand) (unaudited)

At 30 September

At 30 June At 30 September

2005

2005

2004

R million

R million

(restated)

ASSETS

Non-current assets

Property, plant and equipment

22 633

22 626

23 519

Intangible assets

2 268

2 268

Investments

4 709

4 154

2 795

29 610

29 048

28 582

Current assets

Inventories

552

578 518

Receivables

597

632 401

Income and mining taxes

27 –

Cash and cash equivalents

971

1 830

1 013

2 147

3 067

1 932

Total assets

31 757

32 115

30 514

EQUITY AND LIABILITIES

Share capital and reserves

Issued capital

25 645

25 645

21 076

Fair value and other reserves

(257)

(670)

(963)

Deferred share-based compensation

(215)

(248)

(147)

(Accumulated loss)/retained earnings

(1 729)

(1 406)

1 438

23 444

23 321

21 404

Non-current liabilities

Long-term borrowings

2 464

2 422

2 801

Net deferred taxation liabilities

2 128

2 192

2 842

Net deferred financial liabilities

436

386 573

Long-term provisions

938

939

817

5 966

5 939

7 033

Current liabilities

Payables and accrued liabilities

1 293

1 514

1 448

Short-term portion of long-term borrowings

1 046

1 333

595

Income and mining taxes

–

– 26

Shareholders for dividends

8 8

2 347

2 855

2 077

Total equity and liabilities

31 757

32 115

30 514

Number of ordinary shares in issue

393 341 194

393 341 194

320 819 739

Net asset value per share (cents)

5 960

5 929

6 672

The balance sheet at 30 June 2005 is in accordance with the audited balance sheet except for the effects of

the adoption of IFRS 2, share-based payments, and the change in the accounting policy relating to the

capitalisation of mine development cost.

OPERATING AND FINANCIAL RESULTS

(US$/imperial) (unaudited)

Underground production – South Africa

Leve-

Quality

Growth

raged

Ounces

Projects

Ounces

Sub total

Ore milled – t’000

Sep-05

1,614

347

1,343

3,304

Jun-05

1,663 365 1,207 3,235

Gold produced – oz

Sep-05

280,321

64,140

172,970

517,431

Jun-05

291,702 62,147 166,572 520,421

Yield –

oz/t

Sep-05

0.17 0.18 0.13 0.16

Jun-05

0.18 0.17 0.14 0.16

Cash operating costs – $/oz

Sep-05

368

437

479

414

Jun-05

337

428

506

402

Cash operating costs – $/t

Sep-05

Jun-05

Working revenue ($’000)

Sep-05

122,809 28,287 75,847 226,943

Jun-05

127,413 26,987 73,096 227,496

Cash operating costs ($’000)

Sep-05

103,157

28,010

82,908

214,075

Jun-05

98 252

26 599

84 313

209 164

Cash operating profit ($’000)

Sep-05

19,652

277

(7,061)

12,868

Jun-05

29 161

388

(11 217)

18 332

Capital expenditure ($’000)

Sep-05

16,745 21,569 7,016 45,330

Jun-05

18 609

18 267

6 264

43 140

OPERATING AND FINANCIAL RESULTS

(US$/imperial) (unaudited)

South
Africa

Australia

Harmony

Surface

Total

Ore milled – t’000

Sep-05

924

4,228

844

5,072

Jun-05

1,560 4,795 936 5,731

Gold

produced –

Sep-05

39,481 556,912 60,990 617,902

Jun-05

49,383 569,804 69,542 639,346

Yield

–

oz/t

Sep-05

0.04 0.13 0.07 0.12

Jun-05

0.03 0.12 0.07 0.11

Cash

operating

Sep-05

416 414

376 410

costs – $/oz

Jun-05

344 397

337 390

Cash

operating

Sep-05

18 55

27 50

costs – $/t

Jun-05

11 47

25 44

Working

revenue

Sep-05

17,288 244,231 27,513 271,744

($’000)

Jun-05

21,183 248,679 29,712 278,391

Cash

operating

Sep-05

16,443 230,518

22,954 253,472

costs ($’000)

Jun-05

16,968

226 132

23 416

249 548

Cash operating

Sep-05

845

13,713

4,559

18,272

profit ($’000)

Jun-05

4,215

32 547

6 296

28 843

Capital

expenditure

Sep-05

0 45,330 10,984 56,314

($’000)

Jun-05

43 140

10 220

53 360

TOTAL OPERATIONS – QUARTERLY FINANCIAL RESULTS

(US$/imperial) (unaudited)

Quarter ended Quarter ended Quarter ended

30 September

30 June 30 September

2005

2005

2004

(restated)

Ore milled

t’000

5,072

5,731 7,238

Gold produced

617,902

639,346 830,193

Gold price received

$/oz

440

435 405

Cash operating costs

$/oz

410

390

349

$ million

$ million

Revenue

272

278 336

Cash operating costs

(1)

254

249

290

Cash operating profit

Amortisation and depreciation of mining properties,

mine development costs and mine plant facilities

(1)

(38)

(36)

(45)

Corporate, administration and other expenditure

(9)

(13)

(6)

Provision for rehabilitation costs

–

(1)

(2)

Operating loss

(29)

(21)

(7)

Amortisation and depreciation other than mining properties,

mine development costs and mine plant facilities

(2)

(2)

(1)

Employment termination and restructuring costs

(34)

(24)

Share-based compensation

(5)

(5)

(2)

Exploration expenditure

(3)

(2)

(4)

Loss on sale of investment in Goldfields

–

(58)

–

Mark-to-market of listed investments

2 –

Interest paid

(15)

(21)

(16)

Interest received

7 6

Other (expenses)/income – net

(3)

– (1)

(Loss)/gain on financial instruments

(18)

(1)

–

Gain/(loss) on foreign exchange

(3)

–

Loss on sale of listed investments and subsidiaries

–

(11)

–

Profit on Australian-listed investments

–

– 1

Permanent diminution in carrying value of ARM investment

–

(53)

–

Provision for post-retirement benefits

–

(9)

–

Loss before tax

(59)

(211)

(48)

Current tax – expense

–

(17)

(3)

Deferred tax – benefit

(1)

Net loss

(52)

(175)

(43)

(1) The change in accounting policy on capitalisation of

mine development costs had the following effect:
– Cash operating costs – decrease

– Amortisation and depreciation of mining properties,

mine development costs and mine plant facilities

(11)

(10)

(9)

– Deferred tax – expenses

(2)

(2)

(3)

– Net effect of change in accounting policy

The effects of the change in policy are in the process of being audited. The company does not expect

any material change to arise from the audit.

TOTAL OPERATIONS – QUARTERLY FINANCIAL RESULTS

(US$/imperial) (unaudited)

Quarter ended Quarter ended Quarter ended

30 September

30 June 30 September

2005

2005

2004

(restated)

Loss per share – cents *
– Basic loss

(13)

(44)

(13)

– Headline loss

(13)

(15)

(14)

– Fully diluted loss ** ***

(13)

(44)

(13)

Dividends per share – (cents)
– Interim

–

– –

– Proposed final

–

– –

Currency conversion rates average for the quarter: September 2005: US$1= R6.50 (June 2005: US$1= R6.41)
(September 2004: US$1=R6.38).

* Calculated on weighted average number of shares in issue at quarter end September 2005: 392.3 million

(June 2005: 392.2 million) (September 2004: 320.8 million).

** Calculated on weighted average number of diluted shares in issue at quarter end September 2005:

392.3 million (June 2005: 392.2 million) (September 2004: 320.9 million).

*** The effect of the share options is anti-dilutive.

Reconciliation of headline loss:
Net loss

(52)

(175)

(43)

Adjustments:
– Profit on sale of assets

(2)

(4)

(1)

– Mark-to-market of listed investments

–

1 –

– Profit on Australian-listed investments

–

– (1)

– Loss on sale and dilution of investment in ARM Limited

–

16 –

– Profit on disposal of investment Bendigo NL

–

(5)

–

– Loss on disposal of investment in Goldfields

–

58 –

– Impairment of fixed assets – net of tax

–

(3)

–

– Diminution in carrying value of listed investments

–

53 –

Headline loss

(54)

(59)

ABRIDGED BALANCE SHEET AT 30 SEPTEMBER 2005

(US$) (unaudited)

At 30 September

At 30 June At 30 September

2005

2004

US$ million

(restated)

ASSETS

Non-current assets

Property, plant and equipment

3,564

3,394

3,631

Intangible assets

357

340 350

Investments

742

623 431

4,663

4,357

4,412

Current assets

Inventories

87 80

Receivables

95 62

Income and mining taxes

4 –

Cash and cash equivalents

153

275 156

338

461 298

Total assets

5,001

4,818 4,710

EQUITY AND LIABILITIES

Share capital and reserves

Issued capital

4,039

3,847

3,254

Fair value and other reserves

(41)

(101)

(149)

Deferred share-based compensation

(34)

(37)

(23)

(Accumulated loss)/retained earnings

(272)

(211)

222

3,692

3,498

3,304

Non-current liabilities

Long-term borrowings

388

363 432

Net deferred taxation liabilities

335

329

439

Net deferred financial liabilities

58 88

Long-term provisions

148

141 126

940

891

1,085

Current liabilities

Payables and accrued liabilities

203

228 224

Short-term portion of long-term borrowings

165

200 92

Income and mining taxes

–

– 4

Shareholders for dividends

1 1

369

429 321

Total equity and liabilities

5,001

4,600

4,710

Number of ordinary shares in issue

393,341,194

393,341,194 320,819,739

Net asset value per share (US cents)

939

889

1,030

Balance sheet converted at conversion rate of US$ 1 = R6.35 (June 2005: R6.67) (September 2004: R6.48).
The balance sheet at 30 June 2005 is in accordance with the audited balance sheet except for the effects of

the adoption of IFRS 2, share-based payments, and the change in accounting policy relating to the
capitalisation of mine development cost.

CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005 (unaudited)

Issued

Fair value

Deferred

share

and other

share-based

Retained

capital

reserves compensation

earnings

Total

R million

Balance at 1 July 2005

25 645

(670)

(248)

(1 406)

23 321

Currency translation

adjustment and other

–

413

–

413

Adoption of IFRS 2,

share-based payments

–

Net earnings

–

(323)

Balance at 30 September 2005

25 645

(257)

(215)

(1 729)

23 444

Balance at 1 July 2004

20 945

(1 186)

(27)

1 801

21 533

Currency translation

adjustment and other

–

223

–

223

Adoption of IFRS 2,

share-based payments

131

–

(120)

–

Net

earnings

– – –

(32)

Dividends

paid

– – –

(395)

Balance at

30 September 2004 (restated)

21 076

(963)

147

1 438

21 404

Issued Fair value

Deferred

share

and other share-based

Retained

capital

reserves compensation

earnings

Total

US$ million

Balance at 1 July 2005

4 039

(106)

(39)

(221)

3 673

Currency translation

adjustment and other

–

Adoption of IFRS 2,

share-based payments

–

Net

earnings

– – –

(51)

Balance at 30 September 2005

4,039 (41) (34)

(272)

692

Balance as 1 July 2004

3 233

(183)

(4)

278

3 324

Currency translation

adjustment and other

–

Adoption of IFRS2,

share-based payments

–

(19)

–

Net earnings

–

Dividends paid

–

(61)

Balance at

30 September 2004 (restated)

3 254

(149)

(23)

222

3 304

Balances translated at closing rates of: September 2005: US$1 = R6.35 (September 2004: US$1 = R6.48).

SUMMARISED CASH FLOW STATEMENT
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005 (unaudited)

Three Three

Three

months

ended

30 September 30 September

2004

2005

2004

US$ million

R million

Cash flow from operating activities

(28) Cash (utilised)/generated by operations

(184)

115

8 Interest and dividends received

(9)

(7) Interest paid

(47)

(56)

–

– Income and mining taxes paid

–

(27) Cash (utilised)/generated by operations

(179)

Cash flow from investing activities
Net additions to property, plant and

(60)

(54) equipment

(350)

(383)

– – Other investing activities

–

(60)

(54) Cash utilised by investing activities

(350)

(382)

Cash flow from financing activities

–

(45) Long-term loans repaid

(295)

–

– Ordinary shares issued – net of expenses

–

(15)

– Dividends paid

–

(96)

(15)

(45) Cash utilised by financing activities

(295)

(96)

Foreign currency translation

(1)

4 adjustments

(35)

(17)

(61)

(122) Net decrease in cash and equivalents

(859)

(400)

217

275 Cash and equivalents – 1 July

1 830

1 413

156

153 Cash and equivalents – 30 September

971

1 013

Operating activities translated at average rates of: September 2005: US$1 = R6.50 (September 2004:
US$1 = R6.38).
Closing balance translated at closing rates of: September 2005: US$1 = R6.35 (September 2004:
US$1 = R6.48).

SUMMARISED CASH FLOW STATEMENT
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2005 (unaudited)

Three Three Three

Three

months

ended

30 June 30 September

30 September

30 June

2005

US$ million

R million

Cash flow from operating activities

(16)

(28) Cash utilised by operations

(184)

(97)

8 Interest and dividends received

(12)

(7) Interest paid

(47)

(77)

(1)

– Income and mining taxes paid

–

(4)

(22)

(27) Cash utilised by operating activities

(179)

(133)

Cash flow from investing activities

– Cash held by subsidiaries at acquisition

–

382

– Net proceeds on disposal of listed investments

–

2 362

(44)

(54) Net additions to property, plant and equipment

(350)

(276)

(2)

– Other investing activities

–

(13)

337

(54) Cash (utilised)/generated by investing activities

(350)

2 078

Cash flow from financing activities

(45) Long-term loans repaid

(295)

110

(4)

– Ordinary shares issued – net of expenses

–

(24)

– –

Dividends paid

– (2)

14 (45) Cash (utilised)/generated by financing activities

(295)

(16)

4 Foreign currency translation adjustments

(35)

313

(122) Net (decrease)/increase in cash and equivalents

(859)

2 063

(38)

275 Cash and equivalents – beginning of quarter

1 830

(233)

275

153 Cash and equivalents – end of quarter

971

1 830

Operating activities translated at average rates of: September 2005 quarter: US$1 = R6.50 (June 2005
quarter: US$1 = R6.41).
Closing balance translated at closing rates of: September 2005: US$1 = R6.35 (June 2005: US$1 = R6.67).

RECONCILIATION BETWEEN CASH OPERATING PROFIT AND
CASH UTILISED BY OPERATIONS – QUARTER ENDED
30 SEPTEMBER 2005

Quarter Quarter

Quarter

ended

30 September

30 June 30 September

2005

2004

R million

Cash operating profit

119

185

292

Other cash items per income statement:

Other income

Employment termination, restructuring and care
and maintenance costs

(217)

(154)

Corporate, administration and other expenditure

(56)

(81)

(38)

Exploration expenditure

(18)

(16)

(24)

Provision for rehabilitation costs

(3)

(2)

(1)

Cash flow statement adjustments:

Cost of Avgold currency hedge and close out of hedges

(62)

(66)

(45)

Profit on sale of mining assets

(15)

(26)

(9)

Interest and dividends received

(52)

(45)

(36)

Other non-cash items

(1)

(20)

Effect of changes in operating working capital items:

Receivables

35 (11)

458

Inventories

26 (5)

Accounts payable and accrued liabilities

(222)

150

(357)

Cash (utilised)/generated by operations

(184)

(97)

115

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED 30 SEPTEMBER 2005

1. Basis of accounting

The unaudited results for the quarter have been prepared using accounting policies that comply with
International Financial Reporting Standards (IFRS). These consolidated quarterly statements are prepared
in accordance with IFRS 34, Interim Financial Reporting.The accounting policies are consistent with those
applied in the previous financial year, except for the adoption of the revised international accounting
standards forthcoming from the IAS improvements project and the changes which are described in
Note 2 and 3.

2. New accounting policies adopted

(a) Share-based payments (IFRS 2)

On 1 July 2005, the company adopted the requirements of IFRS 2, Share-based Payments.
In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity-settled
payments after 7 November 2002 that were unvested as at 1 January 2005. The company issues
equity-settled instruments to certain qualifying employees under an Employee Share Option Scheme
to purchase shares in the company’s authorised but unissued ordinary shares. Equity share-based
payments are measured at the fair value of the equity instruments at the date of the grant. The total
fair value of the options granted is recorded as deferred share-based compensation as a separate
component of shareholders’ equity with a corresponding amount recorded as share premium.
The deferred share-based compensation is expensed over the vesting period, based on the company’s
estimate of the shares that are expected to eventually vest. The company used the binominal option
pricing model in determining the fair value of the options granted.
The impact of this adjustment on the net loss is an expense of R33 million for the September 2005
quarter (June 2005 quarter: R30 million) (September 2004 quarter: R11 million).

(b) Determining whether an arrangement contains a lease (IFRIC 4)

On 1 July 2005, the company applied the requirements of IFRIC 4, Determining whether an
arrangement contains a lease. The objective of the interpretation is to determine whether an
arrangement contains a lease that falls within the scope of IAS 17, Leases. The lease is then accounted
in accordance with IAS 17. The application of the interpretation had no impact on the results of the
quarter or any prior reporting period.

3. Change in accounting policy

Capitalisation of mine development cost
Previously mine development costs were capitalised when the reef horizon was intersected. Expenditure
for all development that will give access to proven and probable ore reserves will now be capitalised.
Capitalised costs are amortised over the estimated life of the proven and probable reserves to which the
costs give access.

The impact of this adjustment on the net loss is as follows:

– A decrease in the cash operating costs of R136 million for the September 2005 quarter (June 2005
quarter: R140 million) (September 2004 quarter: R159 million).

– Additional amortisation charges of R71 million for the September 2005 quarter (June 2005 quarter:

R66 million) (September 2004 quarter: R56 million).

– Taxation effect of the capitalised development costs and additional amortisation charges of

R13 million for the September 2005 quarter (June 2005 quarter: R14 million) (September 2004
quarter: R19 million).

4. Derivative financial instruments

Commodity contracts
The Harmony Group’s outstanding commodity contracts against future production, by type at
30 September 2005 are indicated below. The total net Delta of the hedge book at 30 September 2005
was 462,822 oz (14,395 kg).

30 June

2006

2007

2008

2009

Total

AUSTRALIAN DOLLAR GOLD
Forward contracts Kilograms

3,110 4,572 3,110 3,110 13,903

Ounces

100,000 147,000 100,000 100,000 447,000

A$ per oz

509 515 518 518 515

Call options sold Kilograms

311

–

622

Ounces

10,000

10,000 – –

20,000

A$ per oz

552

562

–

557

Total commodity
contracts

Kilograms

3,421 4,883 3,110 3,110 14,525

Ounces

110,000 157,000 100,000 100,000 467,000

Total net gold ** Delta (kg)

3,418 4,831 3,085 3,060 14,395

Delta (oz)

109,904 155,329 99,201 98,388 462,822

These contracts are classified as speculative and the marked-to-market movement is reflected in the
income statement.

The marked-to-market of these contracts was a negative R345 million (negative US$54 million) at
30 September 2005 (at 30 June 2005: R252 million or US$38 million). The values at 30 September 2005
were based on a gold price of US$474 (A$624) per ounce, exchange rates of US$1/R6.35 and
A$1/US$0.76 and prevailing market interest rates and volatilities at that date. These valuations were
provided by independent risk and treasury management experts.

During the quarter Harmony has closed out 20 000 oz call options at a cost of R1,8 million
(US$0.3 million) and 8 000 oz forward contracts at a cost of R2.5 million (US$0.4 million).

At 18 October 2005, the marked-to-market value of the hedge book was a negative R369 million
(negative US$58 million), based on a gold price of US$474 (A$634) per ounce, exchange rates of
US$1/R6.57 and A$1/US$0.7479 and prevailing market interest rates and volatilities at that time.

These marked-to-market valuations are not predictive of the future value of the hedge position, nor of
the future impact on the revenue of the company. The valuation represents the cost of buying all hedge
contracts at the time of the valuation, at market prices and rates available at the time.

** The Delta of the hedge position indicated above, is the equivalent gold position that would have the

same marked-to-market sensitivity for a small change in the gold price. This is calculated using the Black-Scholes option formula with the ruling market prices, interest rates and volatilities at
30 September 2005.

Interest rate swaps

The Group has interest rate swap agreements to convert R600 million of its R1.2 billion fixed rate bond to variable rate debt. The interest rate swap runs over the term of the bond, interest is received at a fixed rate of 13% and the company pays floating rate based on JIBAR plus a spread ranging from 1.8% to 2.2%.

These transactions which mature in June 2006 are designated as fair value hedges. The marked-to-market value of the transactions was a negative R36 million (US$6 million) at 30 September 2005, based on the prevailing interest rates and volatilities at the time.

Currency contracts

30 June

2006

Total

Forward exchange contracts

US$ million

(Buy US$, sell ZAR at the
agreed exchange rate)

Average strike ZAR/US$

9.61

Forward exchange call contracts sold

US$ million

(Sell US$, buy ZAR at the agreed
exchange rate)

Average strike ZAR/US$

9.61

Harmony inherited these contracts with the acquisition of Avgold. The contracts are classified as speculative and the marked-to-market movement is reflected in the income statement.

The marked-to-market of these contracts was a negative R64 million (US$10 million) at 30 September 2005. These values were based upon an exchange rate of US$1/R6.35 and prevailing market interest rates at the time. Independent risk and treasury management experts provided these valuations.

Z B Swanepoel

N V Qangule

Chief Executive

Financial Director

Virginia
28 October 2005

DEVELOPMENT RESULTS (metric)

Quarter ended 30 June 2005

Quarter ended 30 September 2005

Channel Channel

Reef Sampled

width

value

Gold

Reef Sampled

width

value

Gold

metres metres

(cm’s)

(g/t) (cmg/t) metres metres

(cm’s)

(g/t) (cmg/t)

Randfontein

VCR Reef

1,293

1,047

43.66

2,956

1,822

1,368

15.41

1,437

UE1A

1,155

1,083

122

16.24

1,981

820

730

144

9.81

1,412

E8 Reef

140

187

6.30

1,178

283

264

198

3.44

683

Kimberley Reef

455

451

164

5.59

915

108

24.81

1,042

South Reef

0.00

All Reefs

3,043

2,721

111

19.20

2,138

3,021

2,470

117

11.36

1,332

Free State

Basal

999

814

112

11.20

1,257

1,117

1,007

12.37

1,029

Leader

586

460

185

3.61

668

867

646

168

5.12

863

A Reef

570

538

113

2.87

324

741

606

3.90

344

Middle

211

140

127

19.12

2,425

141

118

232

11.00

2,555

B Reef

383

377

20.27

1,561

396

484

19.11

1,567

All Reefs

2,749

2,329

122

8.56

1,045

3,262

2,861

109

9.14

1,000

Evander

Kimberley Reef

2,022

1,869

10.59

860

1,660

1,674

12.33

766

Elandskraal

VCR Reef

395

394

16.05

1,425

149

116

119

10.18

1,209

Orkney

Vaal Reef

111

20.38

2,266

0.00

VCR

0.00

All Reefs

111

20.38

2,266

0.00

Target

Elsburg

727

513

211

6.86

1,445

350

338

360

8.35

3,006

Freegold JV

Basal

973

977

33.49

1,424

1,170

1,124

24.99

1,291

Beatrix

260

246

140

9.14

1,282

302

291

116

11.88

1,381

Leader

0.00

B Reef

0.00

All Reefs

1,233

1,223

22.44

1,396

1,472

1,415

20.16

1,310

DEVELOPMENT RESULTS

(imperial)

Quarter ended 30 June 2005

Quarter ended 30 September 2005

Channel Channel

Reef Sampled

width

value

Gold

Reef Sampled

width

value

Gold

feet

feet (inches)

(oz/t) (in.oz/t)

feet

feet (inches)

(oz/t) (in.oz/t)

Randfontein

VCR Reef

4,243

3,435

1.26

5,976

4,488

0.45

UE1A

3,790

3,553

0.48

2,691

2,395

0.28

E8 Reef

460

459

0.19

929

866

0.10

Kimberley Reef

1,494

1,480

0.17

316

354

0.71

South Reef

0.00

All Reefs

9,987

8,927

0.57

9,912

8,103

0.33

Free State

Basal

3,276

2,671

0.33

3,664

3,304

0.36

Leader

1,923

1,509

0.11

2,844

2,119

0.15

A Reef

1,871

1,765

0.08

2,429

1,988

0.11

Middle

692

459

0.56

463

387

0.32

B Reef

1,258

1,237

0.60

1,300

1,588

0.56

All Reefs

9,020

7,641

0.25

12 10,700

9,386

0.27

Evander

Kimberley Reef

6,634

6,132

0.31

5,446

5,492

0.37

Elandskraal

VCR Reef

1,297

1,293

0.47

489

381

0.30

Orkney

Vaal Reef

299

223

0.59

154

0.00

VCR

0.00

All Reefs

299

223

0.59

154

0.00

Target

Elsburg

2,385

1,683

0.20

1,148

1,109

142

0.24

Freegold JV

Basal

3,193

3,205

0.96

3,837

3,688

0.74

Beatrix

853

807

0.27

991

955

0.34

Leader

0.00

B Reef

0.00

All Reefs

4,046

4,012

0.67

4,828

4,643

0.58

CONTACT DETAILS

Harmony Gold Mining Company Limited

Corporate Office
Suite No. 1
Private Bag X1
Melrose Arch, 2076
South Africa
First Floor
4 The High Street
Melrose Arch, 2196
Johannesburg
South Africa
Telephone: +27 11 684 0140
Fax: +27 11 684 0188

Website: http://www.harmony.co.za

Directors
P T Motsepe (Chairman)*
Z B Swanepoel (Chief Executive)
F Abbott*, J A Chissano*

†

, F Dippenaar, V N Fakude*

T S A Grobicki, Dr D S Lushaba*, R P Menell*
M Motloba*, N V Qangule, C M L Savage*
(*non-executive) (

†

Mozambique)

Investor Relations
Ferdi Dippenaar
Director: Corporate Affairs
Telephone: +27 11 684 0140

Fax:

+27 11 684 0188

Cell:

+27 (0) 82 807 3684

E-mail:

ferdi.dippenaar@harmony.co.za

Vusi Magadana
Investor Relations Officer
Telephone:

+27 11 684 0149

Fax:

+27 11 684 0188

Cell:

+27 (0) 72 157 5986

E-mail:

vusi.magadana@harmony.co.za

Marian van der Walt
Company Secretary
Telephone:

+27 11 411 2037

Fax:

+27 11 411 2398

Cell:

+27 (0) 82 888 1242

E-mail:

mvanderwalt@harmony.co.za

South African Share Transfer Secretaries
Ultra Registrars (Pty) Ltd
PO Box 4844
Johannesburg, 2000
Telephone: +27 11 832 2652

Fax:

+27 11 834 4398

United Kingdom Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Telephone: +44 870 162 3100

Fax:

+44 208 639 2342

ADR Depositary
The Bank of New York
101 Barclay Street
New York, NY 10286
United States of America
Telephone: +1888-BNY ADRS

Fax:

+1 212 571 3050

Trading Symbols
JSE Limited

HAR

New York Stock Exchange, Inc.

HMY

London Stock Exchange plc

HRM

Euronext Paris

Euronext Brussels

HMY

Berlin Stock Exchange

HAM1

Registration number 1950/038232/06

Incorporated in the Republic of South Africa

ISIN: ZAE000015228

NOTES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:

11 November,

2005

Harmony Gold Mining Company Limited

By:

/s/ Frank Abbott

Name: Frank Abbott
Title: Chief Financial Officer