Securities Exchange Act of 1934. YES NO
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files)**. ; YES NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer Small reporting company
follow**:
Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court**.
USE OF PROCEEDS
PURCHASERS
“Company”). Pursuant to Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
the information for the Harmony 2015 Form 20-F set out below is being incorporated by reference from the Harmony
Integrated Annual Report 2015 included as exhibit 15.1 to the Harmony 2015 Form 20-F (“Integrated Annual Report
2015”).
cautionary statement concerning forward-looking statements on the inside cover and (iii) the Exhibits, shall be deemed to
be filed with the Securities and Exchange Commission (“SEC”) for any purpose. Any information herein which is not
referenced in the Harmony 2015 Form 20-F or the Exhibits themselves, shall not be deemed to be so incorporated by
reference. References in these documents to the Harmony website are included as an aid to their location and, unless
otherwise expressly stated, are not incorporated by reference into this document.
requires, the terms “Harmony” and “Company” refer to Harmony Gold Mining Company Limited; the term “South
Africa” refers to the Republic of South Africa; the terms “we”, “us” and “our” refer to Harmony and, as applicable, its
direct and indirect subsidiaries as a “Group”.
Guinean Kina and references to “$”, “US$” and “US dollars” are to United States dollars.
to be incorrect. See Item 3: “Key Information—Risk Factors—Estimations of Harmony’s gold reserves are based on a
number of assumptions, including mining and recovery factors, future cash costs of production and the price of gold. As
a result, quantities of gold produced may differ from current estimates.”
included in this annual report. This glossary may assist you in understanding these terms.
in accordance with International Financial Reporting Standards as issued by the International Accounting Standards
Board (“IFRS”). This annual report includes our consolidated financial statements prepared in accordance with IFRS,
translated into US dollars. All financial information, except as otherwise noted, is stated in accordance with IFRS.
as alternatives to production costs, cost of sales or any other measure of financial performance presented in accordance
with IFRS. The calculation of cash costs, cash costs per ounce, all-in sustaining costs and all-in sustaining costs per
ounce may vary significantly among gold mining companies and, by themselves, do not necessarily provide a basis for
comparison with other gold mining companies. For further information, see Item 5:“Operating and Financial Review
and Prospects—Costs—Reconciliation of Non-GAAP Measures”.
business day of the period (R12.16 per US$1.00 as at June 30, 2015 and R10.61 per US$1.00 as at June 30, 2014),
(ii) acquisitions, disposals and specific items such as impairments at the rate prevailing at the dates applicable to such
transactions and (iii) income statement items at the average rate for the year (R11.45 per US$1.00 for fiscal 2015, R10.35
per US$1.00 for fiscal 2014 and R8.82 per US$1.00 for fiscal 2013). Profit from discontinued operations included in the
income statement in fiscal 2013 is translated from Rand to US dollars at the average exchange rate for the eight month
period (R8.55 per US$1.00 for the period July 1, 2012 to February 28, 2013). Capital expenditures for fiscal 2016 have
been translated at an exchange rate of R12.50 per US$1.00. By including these US dollar equivalents in this annual
report, we are not representing that the Rand, Kina and A$ amounts actually represent the US dollar amounts, as the case
may be, or that these amounts could be converted at the rates indicated. For further information, see Item 3:“Key
Information—Selected Financial Data—Exchange Rates”.
respect to our financial condition, results of operations, business strategies, operating efficiencies, competitive positions,
growth opportunities for existing services, plans and objectives of management, markets for stock and other matters.
These include all statements other than statements of historical fact, including, without limitation, any statements
preceded by, followed by, or that include the words “targets”, “believes”, “expects”, “aims” , “intends” , “will”, “may”,
“anticipates”, “would”, “should”, “could”, “estimates”, “forecast”, “predict”, “continue” or similar expressions or the
negative thereof.
estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties that
could cause actual results to differ materially from those suggested by the forward-looking statements. As a consequence,
these forward-looking statements should be considered in light of various important factors, including those set forth in
this annual report. Important factors that could cause actual results to differ materially from estimates or projections
contained in the forward-looking statements include, without limitation:
acquisitions;
deployment of capital;
which we operate.
except as required by law.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
and with Item 3:“Key Information—Risk Factors” and Item 5: “Operating and Financial Review and Prospects”.
Historical results are not necessarily indicative of results to be expected for any future period.
in accordance with IFRS. This annual report includes our consolidated financial statements prepared in accordance with
IFRS, translated into US dollars. The selected historical consolidated income statement and balance sheet data for the last
five fiscal years are, unless otherwise noted, stated in accordance with IFRS, and has been extracted from the more
detailed information and financial statements prepared in accordance with IFRS, including our audited consolidated
financial statements as of June 30, 2015 and 2014 and for each of the years in the three years ended June 30, 2015 and the
related notes, set forth beginning on page F-1.
in fiscal 2012 following the signing of a sale of shares and claims agreement with Pan African Resources plc (“Pan
African”). The results of this operation have been presented as a discontinued operation. In fiscal 2010, Australia’s
Mount Magnet operations were classified as held for sale and the results of the Mount Magnet operation presented as
discontinued operations when an agreement for its disposal to Ramelius Resources Limited (“Ramelius”) was concluded
in fiscal 2011. The reclassifications in respect of discontinued operations were done in terms of IFRS 5 — Non-Current
Assets Held for Sale and Discontinued Operations. See Item 4: “Information on the Company—Discontinued Operations
and Operations Recently Placed on Care and Maintenance—Discontinued Operations: Evander” and note 12 “Disposal
Groups Classified as Held for Sale and Discontinued Operations” of our consolidated financial
statements, set forth beginning on page F-1.
Revenue ..............................................
cents) .............................................
(loss)/earnings per share................
(loss)/earnings per share................
Cash costs per ounce of gold from
($/oz)(2)
Assets
Property, plant and equipment ............
Share capital .......................................
in sustaining cost per ounce have been calculated on a consistent basis for all periods presented. Changes in cash
costs per ounce and all-in sustaining costs per ounce are affected by operational performance, as well as changes
in the currency exchange rate between the Rand and the US dollar. Because cash cost per ounce and all-in
investors in isolation or as an alternative to production costs, cost of sales, or any other measure of financial
performance calculated in accordance with IFRS. The calculation of cash costs, cash costs per ounce, all-in
sustaining costs and all-in sustaining costs per ounce may vary from company to company and may not be
comparable to other similarly titled measures of other companies. For further information, see Item 5:“Operating
and Financial Review and Prospects—Costs—Reconciliation of Non-GAAP measures”.
30 June, 2014), except for acquisitions, disposals and specific items such as impairments that are converted at the
exchange rate prevailing on the dates of the transactions and income statement item amounts that are translated from
Rand to US dollars at the average exchange rate for the period (R11.45 per US$1.00 for fiscal 2015, R10.35 per US$1.00
for fiscal 2014 and R8.82 per US$1.00 for fiscal 2013). During the year, the Rand/dollar closing exchange rate ranged
between R10.50 and R12.58 per US$1.00. Profit from discontinued operations included in the income statement in fiscal
2013 is translated from Rand to US dollars at the average exchange rate for the eight month period (R8.55 per US$1.00
for the period July 1, 2012 to February 28, 2013).
Depositary Shares (“ADSs”) evidenced by American Depositary Receipts (“ADRs”) on the New York Stock Exchange
(“NYSE”). These fluctuations will also affect the dollar amounts received by owners of ADSs on the conversion of any
dividends on ordinary shares paid in Rand.
currently know of or that we currently deem immaterial based on information currently available to us. Although
Harmony has a formal risk policy framework in place, the maintenance and development of which is undertaken on an
ongoing basis so as to help management address systematic categories of risk associated with its business operations,
any of these risks could have a material adverse effect on our business, financial condition or results of operations,
leading to a decline in the trading price of our ordinary shares or our ADSs. The risks described below may, in
and uncertainties not presently known to us or that we now believe are immaterial (and have therefore not been
included), could also adversely affect our business, 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.
require Harmony to curtail or suspend certain operations.
currencies;
holders or dealers; and
States and Australia.
demand and supply affect the prices of other commodities. Historically, gold has retained its value in relative terms
against basic goods in times of inflation and monetary crisis. As a result, central banks, financial institutions and
individuals hold large amounts of gold as a store of value and production in any given year constitutes a very small
portion of the total potential supply of gold. Since the potential supply of gold is large relative to mine production in any
given year, normal variations in current production will not necessarily have a significant effect on the supply of gold or
its price. Uncertainty on global economic conditions has impacted the price of gold significantly since fiscal 2013 and
continued to do so in fiscal 2014 and in fiscal 2015 and may continue to do so in the future.
period, Harmony may record losses and be forced to curtail or suspend some or all of its operations. In addition,
Harmony would also have to assess the economic impact of low gold prices on its ability to recover any losses that may
be incurred during that period and on its ability to maintain adequate reserves.
sold was US$1,246 in fiscal 2015, US$1,242 in fiscal 2014 and US$1,522 in fiscal 2013.
condition.
Any significant and sustained appreciation of the Rand and other non-US currencies against the dollar will materially
reduce Harmony’s Rand revenues and overall net income.
gold production, it is exposed to the impact of any significant decreases in the gold price.
commodity derivative or hedging arrangements to establish a price in advance for the sale of future gold production,
although Harmony may do so in future. As a result, Harmony may realize the benefit of any short-term increase in the
gold price, but is not protected against decreases; if the gold price should decrease significantly, Harmony’s revenues
may be materially adversely affected.
its operations and capital expenditure or make financing more expensive.
shutdowns and divestments. Further, sudden changes in a life-of-mine plan or the accelerated closure of a mine may give
rise to the recognition of liabilities that are not anticipated.
factors, future cash costs of production and the price of gold. As a result, quantities of gold produced may differ from
current estimates.
and sold at prices sufficient to recover its estimated future cash costs of production, remaining investment and anticipated
additional capital expenditures. Harmony’s mineral reserves are estimated based on a number of factors, which have been
stated in accordance with the South African Code for the Reporting of Exploration Results, Mineral Resources and
Mineral Reserves (“SAMREC Code”) and the Australian Code for the Reporting of Mineral Resources and Mineral
Reserves (“JORC”) and the SEC's Industry Guide 7. Calculations of Harmony’s mineral reserves are based on estimates
of:
and other precious metal deposits or the future profitability of operations.
uneconomical. This will lead, in turn, to a reduction in estimated reserves.
speculative in nature, may be unsuccessful and involves many risks.
need to successfully complete development projects, including extensions to existing mines and, possibly, new mines.
Development projects would also be required to access any new mineralization discovered by exploration activities
around the world. Harmony typically uses feasibility studies to determine whether to undertake significant development
projects. Feasibility studies include estimates of expected or anticipated economic returns, which are based on
assumptions about:
prospects.
anticipated by feasibility studies for new development projects.
developing and constructing an extension to an existing mine or any new mine, including:
molybdenum.
of mining assets also impact existing operations and potential new developments. Competitors may have greater financial
resources, operational experience and technical capabilities – all which could negatively affect the anticipated costs and
economic returns.
2013, the bulk of exploration expenditure was allocated to activities in PNG. However, there is no assurance that any
mining operations.
Harmony’s operational results.
include the ingress of underground water when pumping operations at the closed mine are suspended. This can result in
damage to property, operational disruptions and additional pumping costs, which would adversely affect any one of our
adjacent mining operations.
operations and affect capital and operating costs. These infrastructures and services are often provided by third parties
whose operational activities are outside the control of the company.
planned maintenance. Although Harmony has implemented a comprehensive maintenance strategy, incidents resulting in
production delays, increased costs or industrial accidents may occur. Such incidents may have an adverse effect on
Harmony’s operating results and financial condition.
and financial condition.
expenditure of a mining company. Harmony has no control over the costs of these consumables, many of which are
linked to some degree to the price of oil and steel.
for new mining projects or render certain projects non-viable.
financial condition.
capacity, South Africa has been subject to disruptions in electrical power supply. In fiscal 2008, electricity supply was
interrupted by Eskom, halting production at certain of our mines. This led to management restructuring operating
processes to control and reduce our consumption of electricity at all our operations. During November 2014, Eskom
reintroduced a schedule of rolling blackouts, or “load shedding”. Eskom cannot guarantee that there will be no power
interruptions and is again facing very tight supply reserve margins in 2015, which can be expected to continue in the
medium term. An insufficient supply of electricity may affect our operational results and financial condition.
Regulator of South Africa (“NERSA”). The first increase was implemented on 1 April 2013. During October 2014
NERSA granted a 12.69% increase in electricity prices – effective from April 2015. There can be no assurance as to the
existence or nature of any government intervention with respect to tariff increases in the future. During the 2015 budget
speech it was announced that draft carbon tax legislation will be published during 2015 for public consultation – with a
view that such taxes will become law during 2016. Whilst details on the determination of quantum of such tax are not
available, increases will have a negative impact on our results of operations going forward.
changes in the oil price.
existing operations.
difficulties relating to operating in countries in which we have not previously operated.
share price.
other assets on our balance sheet.
prepared in order to determine the recoverable amounts of each group of assets. These estimates are prepared at the
lowest level at which identifiable cash flows are considered as being independent of the cash flows of other mining assets
and liabilities. Expected future cash flows are inherently uncertain, and could materially change over time. Such cash
flows are significantly affected by reserve and production estimates, together with economic factors such as spot and
forward gold prices, discount rates, currency exchange rates, estimates of costs to produce reserves and future capital
expenditures.
recorded in fiscal 2015 and if any one or a combination of these uncertainties should occur, management may be required
to recognize further impairment charges, which could affect Harmony’s financial results and condition. See Item 5:
“Operating and Financial Review and Prospects—Critical Accounting Estimates—Impairment of Property, Plant and
Equipment” and “—Carrying Value of Goodwill.”
increased cash costs of production from environmental and industrial accidents and pollution.
level mine.
even in situations where no injuries occur, can have a material adverse effect on Harmony’s operations and production.
See Item 4: “Information on the Company—Business Overview—Regulation—Health and Safety – South Africa” and
“Integrated Annual Report 2015 – Harmony in Action – Safety and health” on pages 58 to 75.
threat to the safety of employees, result in damage to property and could expose the company to liability.
held responsible. Illegal mining could result in the depletion of mineral deposits, potentially making the future mining of
such deposits uneconomic.
which we have not insured or cannot insure, including those for past mining activities. Harmony also maintains property
and liability insurance consistent with industry practice, but this insurance contains exclusions and limitations on
coverage. In addition, there can be no assurance that insurance will be available at economically acceptable premiums.
As a result, Harmony’s insurance coverage may not cover the claims against it for environmental or industrial accidents
or pollution, which could have a material adverse effect on Harmony’s financial condition.
South African Reserve Bank. At the end of fiscal 2014 and fiscal 2015, inflation was 6.6% and 4.7%, respectively.
However, working costs, in particular wages, have increased in recent years, resulting in significant cost pressures for the
mining industry. In addition, electricity prices rose by 25% in fiscal 2010 and fiscal 2011, 16% in fiscal 2012 and 9.6% in
2013. An average annual increase of 8% was affected in fiscal 2014, with an additional increase of 12.69% from April
2015. There is a risk that further high tariff increases in fiscal 2016 and in the future will have a negative effect on the
profitability of our operations.
operations and profits.
could include terrorism, civil unrest, nationalization, renegotiation or nullification of existing contracts, leases, permits or
other agreements, restrictions on repatriation of earnings or capital and changes in laws and policy, as well as other
unforeseeable risks.
Act 1997, Mineral Policy and sector policies including offshore mining policy, sustainable development policy,
involuntary relocation policy and mine closure policy. The Chamber of Mines and Petroleum of PNG, as the
representative industry body, has been collating information from industry participants regarding the review of current
legislation and policy as part of the response to the governments mining legislation review.
consumables may result from shortages as well as long lead times to deliver, which could result in production delays and
production shortfalls. These shortages and delayed deliveries may be experienced where industrial action affects
Harmony’s suppliers. These issues could also affect the pricing of the consumables, especially if shortages are
experienced. The price of consumables may be substantially affected by changes in global supply and demand, along
with weather conditions, governmental controls and other factors. A sustained interruption to the supply of any of these
consumables would require Harmony to find acceptable substitute suppliers and could require it to pay higher prices for
such materials. Any significant increase in the prices of these consumables would increase operating costs and affect
production considerations.
other factors may result in an increase in Harmony’s indebtedness, which could adversely affect the company in several
respects, including:
or
make all required debt payments.
business. The need to recruit, develop and retain skilled employees is particularly critical with historically disadvantaged
South Africans (“HDSAs”), women in mining in South Africa, and recruiting and training local landowners in PNG. The
global shortage of key mining specialists, including geologists, mining engineers, metallurgists and skilled artisans has
been exacerbated by increased mining activity across the globe. There can be no assurance that Harmony will attract and
retain skilled and experienced employees. Should Harmony lose any of its key personnel, its business may be harmed and
its operational results and financial condition could be affected. See Item 4: “Information on the Company—Business
Overview—Regulation—Employees” and “Integrated Annual Report 2015 – Harmony in Action – Employees and
communities” on pages 76 to 99.
labor disputes and non-procedural industrial action.
intensity, then become unavoidable. Due to the high level of union membership among our employees, we are at risk of
production stoppages for indefinite periods due to strikes and other disputes, especially wildcat strikes. During fiscal
2013, Harmony’s Kusasalethu operation was severely affected by unlawful strike action, which had a significant impact
on our financial results. During September 2013, there was a four day strike relating to the wage negotiations. We are not
able to predict whether we will experience significant labor disputes in future, or what the financial impact of any such
disputes may be. See Item 4: “Information on the Company—Business Overview—Regulation—Employees”, “Integrated
Annual Report 2015—Harmony in Action—Employees and communities” on pages 76 to 99 and “Integrated Annual
Report 2015—Understanding Harmony—Managing our risks and opportunities” on page 44. South African
employment law sets out minimum terms and conditions of employment for employees. Although these may be
improved by agreements between us and the trade unions, prescribed minimum terms and conditions form the benchmark
for all employment contracts. See “Integrated Annual Report 2015 – Understanding Harmony – Stakeholder
engagement” on pages 52 to 56.
and financial condition.
and costs.
related diseases among the workforce over the next several years, this may have an adverse impact on our operations,
projects and financial condition. See “Integrated Annual Report 2015 – Harmony in Action – Safety and health” on
pages 58 to 75.
increase in future.
authorities broad powers to, among others, close unsafe mines and order corrective action on health and safety matters.
Operations in PNG are subject to the following laws and regulations: PNG Mining Act 1992, PNG Mining Safety Act
1997, PNG Mining Safety Regulation 1935 (updated 2006) and PNG Environment Act 2000.
transpire, is currently indeterminate.
ancillary to mining are conducted. The principles of compensation under ODIMWA were tested in the Mr. Thembekekile
Mankayi v AngloGold Ashanti court case. The Constitutional Court held that the compensation Mr Mankayi received
under the ODIMWA was inferior to the compensation one would receive under the Compensation for Occupational
Injuries and Diseases Act 130 of 1993. As a result, the Constitutional Court decided that an employee, who was awarded
compensation in terms of ODIMWA, is not precluded from claiming common law damages from an employer.
Following a decision by the Constitutional Court, applications were filed at the South African High Court for a
certification of a class of current and former employees who suffer from silicosis against a number of current and former
gold mining companies in South Africa, including Harmony. See “Item 8: Financial Information—Consolidated
Statements and Other Financial Information—Legal Proceedings” and “Integrated Annual Report 2015—Harmony in
Action—Safety and health” on pages 69 to 71 for further information. It is uncertain as to whether the Company will
incur any costs related to silicosis claims in the future and due to the limited information available on any claims and
potential claims and the uncertainty of the outcome of these claims, no estimation can be made for the possible
obligation. Should Harmony be unsuccessful in defending any claims that may be lodged, it would have an adverse
impact on the Company’s financial condition. See note 34 “Commitments and Contingencies” to our consolidated
financial statements set forth beginning on page F-1.
indigenous people. The presence of those stakeholders may therefore have an impact on Harmony’s ability to develop or
operate its mining interests.
—Business Overview—Regulation—Mineral Rights - South Africa” for a description of the principal objectives set out in
the MPRDA.
approved by the National Assembly and required the President of South Africa’s approval. Subsequently, in January
2015 the bill was referred back to the National Assembly by the President of South Africa for reconsideration. As a result
of the uncertainties surrounding the bill, many changes are expected and we cannot yet determine the full impact that the
draft bill may have on our business.
operations within five years of May 1, 2004 or before the existing right expires, whichever was the earlier date and fulfill
requirements specified in the MPRDA and the Broad-Based Socio-Economic Empowerment Charter for the South
African mining industry (“Mining Charter”). The licenses for all of our South African operations have been granted.
We will be eligible to apply for new licenses over existing operations when they expire, provided we comply with the
MPRDA. Failure to comply with the conditions of the mining licenses could have a material adverse effect on our
operations and financial condition.
promotion of value-added production (beneficiation) in South Africa. In particular, targets are set out for broad-based
black economic empowerment in the areas of human resources and skills development; employment equity; procurement
and beneficiation. In addition, the Mining Charter addresses socio-economic issues, such as migrant labor, mine
community and rural development and housing and living conditions. It also includes a requirement for mining entities to
achieve a minimum of 26% HDSA ownership of mining assets by 2014. In order to measure progress in meeting the
requirements of the Mining Charter, companies are required to complete a scorecard, in which the levels of compliance
with the objectives of the Mining Charter can be “ticked off” after every year.
ownership of mining assets by 2014. See “Integrated Annual Report 2015—Harmony in Action—Mining Charter
Compliance” on pages 168 to 170.
South Africa for a declaratory order. Should the DMR, based on the declaratory order, find that Harmony is not in
compliance with the Revised Mining Charter in relation to the ownership requirement, the Company may challenge the
decision in court. The outcome of such court action is uncertain.
Minister of Mineral Resources. It may also influence the Company’s ability to obtain any new mining rights. Any such
suspension or cancellation could have a material adverse effect on the results of operations as well as the Company’s
financial condition.
according to a formula based on gross sales and EBIT, as defined under the MPRRA, after the deduction of capital
expenditure. This rate is then applied to revenue to calculate the royalty amount due, with a minimum of 0.5% and a
maximum of 5% for gold mining companies. For fiscal 2015, the average royalty rate for our South African operations
was 0.5% of gross sales. If the maximum royalty rate of 5% for gold mining companies is applied, it could have a
material adverse effect on the financial condition of the Company.
in mining development projects at historical cost. The government then administers mining tenements under the relevant
mining legislation, and mining companies must pay royalties to the government based on production. The types of
purpose; and mining easement.
existing exploration licenses prior to the start of mining and that process could require landowner title approval. There
can be no assurance that any approval would be received.
suspension, cancellation, termination or lapsing of a prospecting permit or mining authorization, Harmony will remain
liable for compliance with the provisions of various relevant regulations, including any rehabilitation obligations until a
closure certificate is issued by the DMR. This liability will continue until the appropriate authorities have 1) certified that
the Company has complied with such provisions or 2) authorized the transfer of liability to a competent party.
probable and can be reasonably estimated based on industry good practice. In future, Harmony may incur significant
costs for compliance with increasingly stringent requirements being imposed under new legislation. This may include the
need to increase and accelerate expenditure on environmental rehabilitation and to alter environmental provisions, which
could have a material effect on its results and financial condition. Harmony may also face increased environmental costs
should other mines in the vicinity fail to meet their obligations on the pumping or treatment of water.
number of environmental legislative reform processes have been initiated. Legislation passed as a result of these
initiatives has tended to be materially more onerous than previous laws in South Africa. Examples of such legislation
include the MPRDA, the National Nuclear Regulator Act 1999, the National Water Act of 1998 and the National
Environmental Management Act 1998, which include stringent ‘polluter pays’ provisions. The adoption of these or
additional or more comprehensive and stringent requirements, particularly for the management of hazardous waste,
pollution of ground and groundwater systems and duty to rehabilitate closed mines, may result in additional costs and
liabilities.
permitting and regulatory aspects of mining projects. An environmental impact statement is required when projects are
likely to have a significant adverse impact on the environment. This statement must be lodged with the Department of
Environmental Conservation where, for large projects, it may be forwarded to Environment Council for review. Public
consultation is an integral part of this review.
benefits to, the communities and countries in which they operate.
countries in which they operate, also benefit from their commercial activities. Such pressures tend to be particularly
focused on companies whose activities are perceived to have a high impact on their social and physical environment. The
potential consequences of these pressures include reputational damage, legal suits and social spending obligations.
such communities and the environment. Specifically at our PNG operations, cognizance of landowner rights may require
measures that could include agreed levels of compensation for any adverse impact the mining operation may continue to
have on the community. The cost of these measures could increase capital expenditure and operating costs and therefore
impact Harmony’s operational results and financial condition.
change may present physical risks to our operations.
operations. There are currently a number of international and national measures to address or limit GHG emissions,
including the Kyoto Protocol and the Copenhagen Accord, in various phases of discussion or implementation.
plateau for a decade and then decline by 40% by 2050.
reflects government’s acceptance of the relative energy and carbon intensity of the economy and the need to create the
setting required for industries to make the transition to a more carbon-constrained environment.
socio-economic imperatives, especially creating and preserving jobs, as well as the need to manage climate change
impacts and contribute to global efforts to stabilize GHG concentrations.
at this stage, a carbon tax of US$10/t (South African R120/t) of CO
another five years. Implementation of Carbon Tax has been delayed to 2016 confirmed in the 2015 budget speech given
by the South African Minister of Finance. This was done in order to align the design of the carbon tax to the desired
emissions reductions outcomes being developed by the Department of Environmental Affairs. Following extensive public
consultation on the proposed tax during 2013, a number of adjustments to the policy proposal would also be made, and
this includes, amongst others, using some of the revenue generated from the carbon tax to fund an energy efficiency tax
incentive scheme.
for all Harmony’s extensions and acquisitions. All new greenfield and brownfields projects are required by company
policy to consider the impact of climate change in their design and planning.
actions to date are very limited. The implications of the climate change policy on Harmony’s operations in PNG have
not yet been established but are not expected to have significant impacts.
production and health and safety. GHG emissions regulations, which would increase the price of energy, will affect
Harmony significantly, as will regulation that stipulates emission thresholds, or sets technology standards that may result
in insecure energy supply. Already certain compliance costs from power suppliers are being passed on to the Group in the
form of price increases. For instance, in South Africa since 2009, Harmony has paid a levy of R0.02 - R0.035 per
kilowatt hour for electricity generated by fossil fuels. In the recent budget speech the Minister of Finance proposed an
increase in the electricity levy by an additional R0.02 per kilowatt hour. The implementation of the proposed increase in the electricity levy is still to be determined. These levies may increase over time and additional levies may be introduced in
water quality limits for all water discharges, where these apply. The majority of our South African operations are lawful
users with existing water permits in terms of the Water Act of 1954. Nevertheless, the South African operations have
applied to the relevant regional directors for water use licenses in terms of the National Water Act, 1998. Submissions
few operations have been issued with draft licenses for review and iteration.
achieve or maintain compliance with the requirements of these licenses for any of its operations may result in Harmony
being subject to penalties, fees and expenses or business interruption due to revoked water licenses. Any of these could
have a material effect on our business, operating results and financial condition.
contamination that may exist where we have operated or continue to operate.
in the event of legacy issues. As a result, the DMR and affected mining companies are involved in developing a regional
mine closure strategy. In view of limited current information, no reliable estimate can be made for any possible
obligations or liabilities for the Company, which could be material and have an adverse impact on Harmony’s financial
condition. No provision for any potential liability has been made in the financial statements.
and our executive officers based on the civil liabilities provisions of the federal securities laws or other laws of the
United States or any state thereof.
all our assets are located outside the United States. As a result, it may not be possible for investors to enforce a judgment
against these persons or ourselves obtained in a court of the United States predicated upon the civil liability provisions of
the federal securities or other laws of the United States or any state thereof. A foreign judgment is not directly
enforceable in South Africa, but constitutes a cause of action which will be enforced by South African courts provided
that:
recognized by South African law with reference to the jurisdiction of foreign courts;
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;
Act 99 of 1978, as amended, of the Republic of South Africa.
compliance policies and increases our costs of compliance.
change and can create uncertainty for companies like us. New or changed laws, regulations and standards could lack
specificity or be subject to varying interpretations. Their application in practice may evolve over time as new guidance is
provided by regulatory and governing bodies. This could result in continuing uncertainty on compliance matters and
higher costs of compliance as a result of ongoing revisions to such governance standards.
among other matters, an assessment of the effectiveness of our internal control over financial reporting as of the end of
fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude on an ongoing
basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act. The
requirement to evaluate and report on our internal controls also applies to companies that we may acquire and therefore,
this assessment may be complicated by any future acquisitions. While we continue to dedicate resources and
management time to ensuring that we have effective controls over financial reporting, failure to achieve and maintain an
effective internal control environment could have a material adverse effect on the market’s perception of our business
and our stock price. See Item 15: “Controls and Procedures” for management’s assessment as of June 30, 2015. In
addition to management’s assessment of internal controls over financial reporting, we are required to have our
independent registered public accounting firm publicly disclose their conclusions regarding the effectiveness of
Harmony’s internal controls over financial reporting.
in, increased general and administrative expenses.
in governance processes or fraud, bribery and corruption may lead to regulatory penalties, loss of licenses or permits,
negative effects on our reported financial results, and adversely affect our reputation.
prevent potential breaches of law, accounting principles or other governance practices.
regulatory requirements, and breaches may not be detected by management.
operating licenses or permits, suspensions of operations, negative effects on Harmony’s reported financial results and
may damage the company’s reputation. Such sanctions could have a material adverse impact on the company’s financial
condition and results of operations.
of our ordinary shares on the JSE in a timely manner, especially in a large block trade, may be restricted by this limited
liquidity. See Item 9: “The Offer and Listing—Listing Details—The Securities Exchange in South Africa.”
adversely affect the prevailing market price of such securities.
securities laws, holders of our ordinary shares or ADSs may decide to sell them at any time. The market price of our
ordinary shares or ADSs could also fall as a result of any future offerings it makes of ordinary shares, ADSs or securities
exchangeable or exercisable for its ordinary shares or ADSs, or the perception in the marketplace that these sales might
occur. We may make such offerings of additional ADS rights, letters of allocation or similar securities from time to time
in the future.
shares) carried out by or on behalf of Harmony.
Harmony securities who are located in the United States (including those who hold ordinary shares or ADSs) may not be
able to participate in securities offerings by or on behalf of Harmony unless a registration statement under the Securities
Act is effective with respect to such securities or an exemption from the registration requirements of the Securities Act is
available thereunder. Securities laws of certain other jurisdictions may also restrict Harmony’s ability to allow the
participation of all holders in such jurisdictions in future issues of securities carried out by Harmony. Holders who have a
registered address or are resident in, or who are citizens of, countries other than South Africa should consult their
professional advisors as to whether they require any governmental or other consents or approvals or need to observe any
other formalities to enable them to participate in any offering of Harmony securities.
delisted from the NYSE and by the measures that we take to address non-compliance with the NYSE continued listing
standards.
the delisting of our ADRs from the NYSE. On September 8, 2015, we received notice that we are not in compliance with
the continued listing standard requiring a listed security to maintain a minimum average closing price of $1.00 per ADR
over a consecutive 30-trading-day period. Under the NYSE’s rules, we have a period of six months from the date of the
NYSE notice to bring the 30-trading-day average closing price of our ADRs above $1.00. During this period, our ADRS
will continue to be traded on the NYSE, subject to the Company’s compliance with other NYSE listing requirements. In
the event we are not able to meet the requirements necessary for continued listing on the NYSE, our ADRs could be
subject to delisting from the NYSE.
ratio could significantly reduce the total number of ADSs outstanding and also potentially reduce the number of public
holders, which may reduce the liquidity of our ADSs and could adversely affect price at which our ADSs trade. In
addition, if our ADSs cease to be listed for trading on the NYSE for any reason, the liquidity of our ADSs may be
materially reduced and result in a corresponding material reduction in the price of our ADSs. Furthermore, any such
delisting could harm our ability to raise capital on terms acceptable to us, or at all, and may result in the potential loss of
confidence by investors, suppliers, business partners, licensees, customers and employees. Such consequences may
materially and adversely affect our business, financial condition and results of operations.
Tlhakanelo Employee Share Trust (“Tlhakanelo Trust”) for employees other than management were made in August
2012 and in March of each subsequent year. Shares were issued to the trust on August 31, 2012. Our shareholders have
authorized up to 60,011,669 of the issued share capital to be used for these plans. As a result, shareholders’ equity
interests in us are subject to dilution to the extent of the potential future exercises of the options through share schemes.
requirements existing at the time. Under South African law, we are only entitled to pay a dividend or similar payment to
shareholders if we meet the solvency and liquidity tests set out in the Companies Act 71 of 2008 (as amended) including
its Regulations (the “Companies Act”) and our current Memorandum of Incorporation. Cash dividends or other similar
payments may not be paid in the future.
Secondary Tax on Companies. Although the substitution of Secondary Tax on Companies with Dividends Tax may
reduce the tax payable on our South African operations, thereby increasing distributable earnings, the withholding tax
will generally reduce the amount of dividends or other distributions received by shareholders.
mining activities and increases in mining costs.
operating costs of these operations and the company does not own all of the mining equipment.
an existing contractor and its operating equipment to meet business needs at expected cost levels. Increases in contract
mining rates, in the absence of associated productivity increases, will also have an adverse impact on the company’s
results of operations and financial condition.
workforce or provide high quality services or a high level of productivity could adversely affect Harmony’s reputation,
actions of contractors.
impact the conduct of our business activities.
adversely impact the conduct of our business activities. IT security processes protecting Harmony’s IT infrastructure and
network may not prevent future malicious action or fraud by individuals, groups or organizations resulting in the
corruption of operating systems, theft of commercially sensitive data, including commercial price outlooks, mergers and
acquisitions and divestment transactions, misappropriation of funds and disruptions to our business operations.
and note 21 “Investments in Joint Operations” of our consolidated financial statements, set forth beginning on page F-1.
BBEE Trust loan due to Nedbank Limited. The fair value of the guarantee is US$1.1 million at 30 September 2015.
officials to 10.4% for category 4 employees. Miners, artisans and officials will receive an increase in their standard rate
of pay of 6% back-dated to 1 July 2015. Increases in the second and third years of the agreement will be guaranteed at
6%. Regrettably, the Association of Mineworkers and Construction Union (AMCU) has rejected the offers made by the
company. Since agreement has been reached with unions representing the majority of employees at Harmony, the
agreement will be extended to all employees.
expenditure at PNG accounted for 9% of the total, with Kusasalethu accounting for 19%, Phakisa accounting for 16%
and Tshepong accounting for 13% of the total. During fiscal 2014, capital expenditure at PNG accounted for 5% of the
total, with Kusasalethu accounting for 20% and Phakisa and Target 1 each accounting for 14% and 11% respectively of
the total. During fiscal 2013, capital expenditure at PNG accounted for 28% of the total, with Kusasalethu accounting for
11% and Phakisa and Target 1 each accounting for 9% of the total.
capacity, has started from these areas at all our current growth projects. During fiscal 2015, the capital expenditure was
funded from the Company’s cash reserves, as well as by borrowings under its loan facilities. See Item 5: “Operating and
Financial Review and Prospects—Liquidity and Capital Resources” and “Integrated Annual Report 2015 —Harmony in
Action—Operational performance” on pages 123 and 124.
Operational performance” on page 124. We currently expect that our planned operating capital expenditures will be
financed from operations and new borrowings as needed.
where individual deposits may contain multiple valuable commodities with a reasonable expectation of being recovered
(for example gold and copper in a single deposit) Harmony computes a gold equivalent to more easily assess the value of
the deposit against gold-only mines. Harmony does this by calculating the value of each of the deposits commodities,
then dividing the product by the price of gold. For example, the gold equivalent of a gold and copper deposit would be
calculated as follows: ((gold ounces x gold price per ounce) + (copper pounds x copper price per pound)) / gold price per
ounce. All calculations are done using metal prices as stipulated in the discussion below. Harmony assumes a 100%
metallurgical recovery in its calculations unless otherwise stated. The year-on-year negative variance in mineral reserves
is due to the following reasons:
“ore reserves”, as defined in the SAMREC Code. Our reporting of the PNG Mineral Reserves complies with the 2012
JORC code. This code is materially the same as the SAMREC Code. In reporting of reserves, we have complied with the
SEC's Industry Guide 7.
US$1,250/oz gold (“Au”), US$20/oz silver (“Ag”), US$10/lb molybdenum (“Mo”) and US$3.10/lb copper
(“Cu”) at an exchange rate of US$0.85 per A$.
with 100% recovery for all metals. These assumptions are based on those used in the 2012 pre-feasibility
study; and
resources/reserves classifications divided by the price of gold. All calculations are done using metal prices as
stipulated.
lowest grade at which an orebody can be mined such that the total profits, under a specified set of mining parameters, are
maximized. The cut-off grade is determined using our Optimizer computer program which requires the following as
input:
price of US$1,230 per ounce and an exchange rate of R11.38 per US dollar);
recovery factor; and
economic, marketing, legal, environmental, social and governmental factors. A range of disciplines which includes
geology, survey, planning, mining engineering, rock engineering, metallurgy, financial management, human resources
management and environmental management have been involved at each mine in the life-of-mine planning process and
the conversion of resources into reserves. The oreflow-related modifying factors used to convert the mineral resources to
mineral reserves through the life-of-mine planning process are stated for each individual operation. For these factors,
historical information is used, except if there is a valid reason to do otherwise. Owing to depth and rock engineering
requirements at our underground mines, some mines design stope support pillars into their mining layouts which
accounts for approximately 7% to 10% discounting. Further discounting relates to the life-of-mine extraction to provide
for geological losses.
spacing on development ends is at 2 meter intervals in development areas. For the massive mining at the Target 1
operation, our standard for sampling with respect to both proved and probable reserves are fan drilling with “B” sized
diamond drill holes (43mm core) sited at 50 meter spaced sections along twin access drives. The Kalgold opencast
operations are sampled on diamond drill and reverse circulation drill spacing of no more than 25 meters on average.
Surface mining at South African operations other than Kalgold involves recovering gold from areas previously involved
in mining and processing, such as metallurgical plants, waste rock dumps and tailing dams (slimes and sand) for which
random sampling is used.
intervals and the other half stored in designated core storage facilities. Drill spacing at our Hidden Valley operations is
typically on less than 20 meter centers for measured category, 20 to 40 meter centers for the Indicated category and
greater than 40 meters for Inferred category material. Due to the nature of the Golpu porphyry mineralization, drill
spacing is increased to 100 to 200 meters for indicated and greater for inferred. Assaying for gold is by fire assay and
various methods are used for copper and other elements. All assays informing the resource calculation are analyzed at a
National Association of Testing Authorities (“NATA”) accredited commercial laboratory. Extensive Quality
Assurance/Quality Control work is undertaken and data is stored in an electronic database.
Bambanani.............................
Kalgold ...............................
recovery factors have not been applied to the reserve figures.
Note: 1 ton = 907 kg = 2,000 lbs.
US$23.00/oz for silver with 100% recovery for all metals.
(millions)
Equivalents
(oz)(1)
(millions)
Equivalents
(oz)(1)
(millions)
Equivalents
(oz)(1)
(millions)
Equivalents
(oz)(1)
(millions)
Equivalents
(oz)(1)
(millions)
Equivalents
(oz)(1)
equivalents
recovery factors have not been applied to the reserve figures.
operation are as follows.
Bambanani ...................................................
Kalgold.........................................................
Hidden Valley ..............................................
Papua New Guinea
Hidden Valley............................................
Papua New Guinea
Golpu.........................................................
content within the Reef Channel).
Cut-off cost refers to the cost in R/Tonne or A$/Tonne to mine and process a tonne of ore.
Notes on Copper:
Cut-off is stated in % Cu.
Notes on Golpu:
Cut-off is based on 0.2% copper; molybdenum and gold mined as by-product.
northeast-southwest direction and approximately 100 kilometers in a northwest-southeast direction. It is an Archean
sedimentary basin containing a six kilometer thick stratigraphic sequence consisting mainly of quartzites and shales with
minor volcanic units. The majority of production is derived from auriferous placer reefs situated at different stratigraphic
positions and at varying depths below the surface in three of the seven defined goldfields of the Witwatersrand Basin.
Granodiorite (locally a coarse grained monzogranite) is flanked by fine metasediments of the Owen Stanley
Metamorphics. Both are cut by dykes of Pliocene porphyry ranging from hornblende-biotite to feldspar-quartz
porphyries. A number of commonly argillic altered and gold anomalous breccias are known, including both hydrothermal
and over printing structural breccias. The Hidden Valley deposit is hosted in the Moribe Granodiorite, dominated by a
series of post-Miocene faults, both north and north-west trending, control the gold mineralization.
sulphidation epithermal alteration overprinting porphyry mineralization and epithermal style vein-hosted and replacement
gold mineralization with associated wall-rock alteration. The Golpu Copper-Gold project is located about one kilometer
northeast of the Wafi gold orebody. It is a porphyry (diorite) copper-gold deposit. The host lithology is a diorite that
exhibits a typical zoned porphyry copper alteration halo together with mineralization in the surrounding metasediment.
partially overprints the upper levels of the Golpu porphyry copper-gold mineralization.
additional adjacent prospecting rights comprising 19,933 hectares. Ore is treated at the Kinross plant. On February 28,
2013, the conditions precedent for the sale of Harmony’s 100% interest in Evander Gold Mines Limited (“Evander”) to
Pan African were fulfilled and the transaction was completed. Prior to completion of the transaction, Harmony received a
distribution of US$23 million from Evander. The final purchase consideration amounted to US$144 million.
Gold Mines Limited. In August 1998, Harmony acquired Evander as a wholly-owned subsidiary.
Kimberley Reef, is mined at Evander. In addition to the faulting of the reef horizon, there are numerous dykes and sills
that complicate the mining layouts, the most significant of which is an extensively developed dolerite footwall sill that
occasionally intersects the Kimberley Reef, causing displacements within it.
Therefore no discussion has been included.
Tons (‘000)........................................................................................
Product sales (‘000)...........................................................................
Per ounce of gold ($).........................................................................
Allanridge in the Free State Province, some 270 kilometers southwest of Johannesburg. Located on the northern limit of
the Welkom Goldfields, the site is accessed via the R30 motorway situated between the towns of Bothaville and
Welkom.
potential to exploit zone 3 in the Freddies 9 Shaft area.
(Eldorado Formation). Synclinal fold forms the major structural feature and is manifested as an asymmetric syncline
whose axis trends N 15° W, with a general plunge of 10—12° north.
mine.
Tons (‘000) ......................................................................................
Product sales (‘000).........................................................................
Per ounce of gold produced ($)........................................................
Per ounce of gold sold ($)................................................................
necessitating many unplanned crew moves. The erratic grades in secondary reefs in which more than 70% of mining on
Target 3 and hanging wall / footwall conditions in Basal and B-Reefs resulted in the decrease in recovery grade from
0.147 ounces per ton in fiscal 2013 to 0.137 ounces per ton in fiscal 2014. In fiscal 2014 ounces produced decreased by
13% to 45,429 ounces, primarily as a result of a decrease in recovered grade and tons generated. The average tons milled
in fiscal 2014 was 27,580 tons per month, compared with 29,583 tons per month in fiscal 2013.
production. Cash costs for Target 3 was US$53.9 million in fiscal 2014, compared with US$58.3 million in fiscal 2013.
Cash costs in Rand terms increased by 10% this increase was primarily attributed to an increase in electricity costs of 8%
as well as an increase in contractor cost to rehabilitate the second escape to comply with safety standards and procedures,
but was however negated in dollar terms due to the weakening of the Rand in fiscal 2014.
vested in the South African State. The principal objectives of the Act are:
sovereignty over all the mineral and petroleum resources within South Africa;
Africa;
and petroleum industry and to benefit from the exploitation of South Africa’s mineral and petroleum
resources;
petroleum resources are developed in an orderly and ecologically sustainable manner while promoting
justifiable social and economic development; and
areas in which they are operating.
over existing operations within five years of May 1, 2004, or before the existing right expired, whichever was the earlier
date and fulfilled requirements specified in the MPRDA, its Regulations and the Mining Charter.
the MPRRA, after the deduction of capital expenditure. This rate is then applied to revenue to calculate the royalty
amount due, with a minimum of 0.5% and a maximum of 5% for gold mining companies. For fiscal 2015, the average
royalty rate for our South African operations was 0.5% of gross sales.
published in December 2012 for comment. On March 12, 2014 the bill was approved by the National Assembly and
required the President of South Africa’s approval. Subsequently, in January 2015 the bill has been referred back to the
National Assembly by the President of South Africa for reconsideration.
right or an exploration right if this will result in a concentration of rights under the control of the applicant.
Bill purports to amend the MPRDA so as to render historic tailings subject to regulation under the MPRDA,
resulting in the South African State gaining custodianship of historic tailings.
beneficiation of minerals and petroleum resources in the Republic of South Africa”. The MPRDA Bill
affords the Minister broad discretion over beneficiation, without providing any criteria under which such
discretion should be exercised.
caused by prospecting and mining operations, even after (and notwithstanding) the issue of a closure
certificate by the Minister. This means that a rights holder will no longer be indemnified from liability after
the issue of a closure certificate.
production) to HDSAs, as defined in the Mining Charter. In order to measure progress in meeting the requirements of the
Mining Charter, companies are required to complete a “Scorecard”, in which the levels of compliance with the Mining
Charter can be ticked-off every year. The Mining Charter and Scorecard require programs for black economic
empowerment and the promotion of value-added production (beneficiation) in South Africa. In particular, targets are set
out for broad-based black economic empowerment in the areas of human resource and skills development; employment
equity; procurement beneficiation and direct ownership. In addition, the Mining Charter addresses socio-economic issues
such as migrant labor, mine community and rural development, and housing and living conditions.
ownership of mining assets by the year 2014 has been retained in the new Revised Mining Charter. Harmony believes
that it had complied with this requirement. In addition, in terms of the Revised Mining Charter, mining companies must,
inter alia:
suppliers (i.e. suppliers of which a minimum of 25% + 1 vote of their share capital must be owned by
HDSAs) by 2014. These targets will however be exclusive of non-discretionary procurement expenditure;
senior management (EXCO) level, core and critical skills, middle management level and junior management
level;
converting or upgrading mineworkers’ hostels into family units, attaining an occupancy rate of one person
per room and facilitating home ownership options for all mineworkers in consultation with organized labor.
Harmony in Action—Mining Charter Compliance” on pages 168 to 170. In addition, mining companies are required to
monitor and evaluate their compliance with the Revised Mining Charter, and must submit annual compliance reports to
the DMR. The Scorecard makes provision for a phased-in approach for compliance with the above targets over the five
year period ended in 2014. For measurement purposes, the Scorecard allocates various weightings to the different
elements of the Revised Mining Charter. Failure to comply with the provisions of the Revised Mining Charter will
amount to a breach of the MPRDA and may result in the cancellation or suspension of a mining company’s existing
mining rights.
granted the conversion of all of our old-order mining rights into mining rights in terms of the MPRDA. We now have to
comply with the required annual and bi-annual reporting to the DMR on the Social and Labor Plans, Environmental
Management Programs, and Progress Reports on our prospecting rights.
how some black economic empowerment (“BEE”) transactions are recognized. To this end, the DMR and the mining
industry have agreed to jointly seek a ‘declaratory order’ from a South African court to ensure the correct interpretation
of the rules governing the BEE component of the Charter. This is a proactive and necessary step to promote regulatory
certainty for the mining industry.
and validated existing mining authorizations. Our strategy has been to secure all strategic mining rights on a region-by-
region basis. The conversion of mining rights for our operations was granted and all of our mining areas are
secured/supported by new-order mining rights.
which royalties became payable was deferred to March 1, 2010. Royalties are payable to the government according to
formula based on earnings before interest and tax. This rate is then applied to revenue to calculate the royalty amount
due, with a minimum of 0.5% and a maximum of 5% for gold. For fiscal 2015, the average royalty rate for our South
African operations was 0.5% of gross sales.
obtained.
ownership may arise from both contract and inheritance, and because of the absence of a formal written registration
system.
matters.
obligations under a memorandum of agreement with the state, local government and the landowners.
of its exploration licenses.
the Milne Bay Province for which a tenement application was submitted.
Act 1997, Mineral Policy and sector policies including offshore mining policy, sustainable development policy,
involuntary relocation policy and mine closure policy. The Chamber of Mines and Petroleum of PNG as the
representative industry body has been collating information from industry participants regarding the review of current
legislation and policy as part of the response to the government’s mining legislation review. Harmony is represented on
the chamber’s sub-committee and is actively participating in discussions.
The Minerals Act of 1991 has subsequently been repealed and the MPRDA promulgated. The Mine Health and Safety
Act has since been amended by the Mine Health and Safety Amendment Act, Act 74 of 2008. The objectives of the Mine
Health and Safety Act (“MHSA”) are:
to health and safety at mines;
mines;
representatives and the health and safety committees at mines;
their representatives.
to work in dangerous conditions. Key amendments to the MHSA include the following:
minimum safety and reporting requirements. Other legislation and regulations also apply. The PNG Mining (Safety) Act
and Regulations are currently under review as part of the overall review of mining legislation in PNG.
and their corresponding representation were as follows, namely the National Union of Mineworkers (at 66%); the
Association of Mineworkers and Construction Union (at 15%); the United Association of South Africa (at 10%) and
Solidarity (at 2%). About 93% of our South African workforce is unionised, with the balance not belonging to a union.
See“Integrated Annual Report 2015—Harmony in Action—Employees and communities” at page 80.
2009 and the National Employment Standards. Our Australian workforce is not unionized.
employees via the Employee Relations Committee. Employees at PNG are not unionized, however, Hidden Valley Mine
employment is guided by an MOA between the Landowner Association, the Company and the government. The MOA
governance process requires that, when qualifications and experience are equivalent, employment preference is given to
local and landowner candidates before individuals from other provinces or countries. Compliance with this agreement is
a critical issue in maintaining Hidden Valley Mine’s license to operate.
“Consolidation” of our consolidated financial statements, set forth beginning on page F-1.
Equipment” and note 30 “Cash Generated by Operations” of our consolidated financial statements, set forth beginning on
page F-1.
Capital Expenditures” and Item 5: “Operating and Financial Review and Prospects—Tabular Disclosure of Contractual
Obligations”.
total proved and probable reserves of approximately 42.6 million gold equivalent ounces and in fiscal 2015 we processed
approximately 19.9 million tons of ore.
segment.
suspended and placed on care and maintenance during the December 2014 quarter), Tshepong, Unisel and
Hidden Valley;
tailings dams, are grouped together under “Other — Underground” and “Other — Surface”.
potential for impact on the consolidated financial statements, are described in note 2 “Accounting Policies” to our
consolidated financial statements set forth beginning on page F-1.
identified the most critical accounting policies upon which our financial results depend. Some of our accounting policies
require the application of significant judgment and estimates by management in selecting the appropriate assumptions for
calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty and are
based on our historical experience, terms of existing contracts, management’s view on trends in the gold mining industry
and information from outside sources.
financial statements set forth beginning on page F-1. This discussion and analysis should be read in conjunction with
such consolidated financial statements and the relevant notes. Management has identified the following as critical
accounting policies because estimates used in applying these policies are subject to material risks and uncertainties.
Management believes the following critical accounting policies, together with the other significant accounting policies
discussed in the notes to our consolidated financial statements, affect its more significant judgments and estimates used
in the preparation of our consolidated financial statements and could potentially impact our financial results and future
financial performance.
range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates,
production costs, commodity prices and exchange rates.
accordance with the SAMREC Code, JORC and SEC Industry Guide 7.
change from year to year. Changes in the proved and probable reserves may affect the Group’s financial results and
financial position in a number of ways, for example depreciation and amortization charged in the income statement may
change as they are calculated on the units-of-production method.
mined in the future. See Item 3:“Key Information—Risk Factors—Estimations of Harmony’s gold reserves are based on
a number of assumptions, including mining and recovery factors, future cash costs of production and the price of gold.
As a result, quantities of gold produced may differ from current estimates”
future from known mineral deposits.
base that best reflects the useful life of the operation. In most instances, management considers the use of proved and
probable reserves for the calculation of depreciation and amortization expense to be the best estimate of the life of the
respective mining operation. Therefore, for most of the Company’s operations, we use proved and probable reserves
only, excluding all inferred resources as well as any indicated and measured resources that have not yet been deemed
economically recoverable.
be classified as measured and indicated resources, and if economically recoverable, they will be included in proved and
probable reserves. Management is approaching economic decisions affecting the mine on this basis, but has not yet done
the necessary development and geological drill work to improve the confidence to the required levels to designate them
formally as reserves. In these cases, management, in addition to proved and probable reserves, may also include certain,
but not all, of the inferred resources associated with these properties as the best estimate of the pattern in which the
asset’s future economic benefits are expected to be consumed by the entity.
management, which means that the resource can be economically mined and is therefore commercially viable. This
consistent systematic method for inclusion in the life-of-mine plan takes management’s view of the gold price, exchange
rates as well as cost inflation into account. The board of directors and management approach economic decisions
affecting these operations based on the life-of-mine plans that include such resources. In declaring the resource,
management would have had to obtain a specified level of confidence of the existence of the resource through drilling as
required by the SAMREC Code or JORC. For further discussion on mineral reserves, see “—Gold mineral reserves”
above.
depreciation calculation for all other operations was done using only the proved and probable reserves. At these two
and indicated resources that are then classified as reserves if economically viable. In addition, there have been no
instances during the periods presented where subsequent drilling or underground development indicated instances of
inappropriate inclusion of inferred resources in such life-of-mine plans. As such, management is confident that the
inclusion of the inferred resources included in the life-of-mine plan in calculating the depreciation charge is a better
reflection of the pattern of consumption of the future economic benefits of these assets than would be achieved by
excluding them.
Doornkop South Reef and Masimong have indicated that the portion of the inferred resources included in the life-of-mine
plan exist and can be economically mined with a high level of confidence in the orebodies. The surface boreholes have
been used to determine the existence of the orebodies as well as the location of major geological structures and the
mineralogy of the orebodies. However, since further drilling and underground development necessary to classify the
inferred resources as measured and/or indicated resources and then as reserves, if economically recoverable, has not been
done yet, they remain in the inferred resource category. Geological drilling can only be done as and when the
underground infrastructure is advanced.
same reefs that these mined-out operations exploited. At Masimong and Doornkop South Reef, the geological setting of
the orebodies are such that there is an even distribution of the mineralized content, and reliance can be placed on the
comparable results of the surrounding mines. As these results are already known, simulations and extrapolations of the
expected formations can be done with a reasonable degree of accuracy. Although this information will not allow the
classification of inferred resources to measured and indicated resources and then as a reserve if economically viable, it
does provide management with valuable information and increases the level of confidence in existence and grade
expectation.
determining the pattern of depreciation charge for these operations.
of the resources and proved and probable reserves may change from year to year. Changes in the proved and probable
reserves and the inferred resource base used in the life-of-mine plan may affect the calculation of depreciation and
amortization. The change is recognized prospectively.
(Tons million)
million)
(Tons million)
(US$ million)
of mine has been shortened to three years in order to improve profitability by reducing costs and improving margins. At
Doornkop, the new life-of-mine plan, with a lower rate of production has been shortened to 15 years and will focus on
mining higher grade areas. The impact of the revised life-of-mine plans for Masimong and Doornkop are expected to
only have an impact on the depreciation computations from fiscal 2016.
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash generating units). Each operating shaft, along with allocated common assets
such as plants and administrative offices, is considered to be a cash generating unit as each shaft is largely independent of
the cash flows of other shafts and assets.
production, capital and reclamation costs, all based on detailed life-of-mine plans. The significant assumptions in
determining the future cash flows for each individual operating mine at June 30, 2015, apart from production cost and
capitalized expenditure assumptions unique to each operation, included a gold price, silver price and exchange rate
assumptions as follows:
Greenfields exploration potential discussed separately below, after taking into account losses during ore processing and
treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on
management’s relative confidence in such materials. 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,
involving sales of similar properties.
requirements and reclamation costs could differ from the assumptions used in the cash flow models used to assess
impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral
interests involves further risks in addition to those factors applicable to mineral interests where proved and probable
reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately
be mined economically. Assets classified as other mine-related exploration potential and Greenfields exploration
potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower
level of geological confidence and economic modeling.
in fiscal 2013. Material changes to any of these factors or assumptions discussed above could result in future impairment
charges, particularly around future commodity price assumptions. A 10% decrease in commodity price assumptions at
June 30, 2015 would have resulted in an additional impairment at Phakisa of US$103 million, Doornkop of US$76
million and Hidden Valley of US$38 million. The decreases noted would have resulted in impairments at Target 1 of
US$77 million, Target 3 of US$3 million, Tshepong of US$57 million (of which US$48 million is goodwill), Unisel of
US$1 million and other Harmony assets of US$32.3 million.
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating
units). Each operating shaft, along with allocated common assets such as plants and administrative offices, is considered
to be a cash generating unit as each shaft is largely independent of the cash flows of other shafts and assets. To
accomplish this, we compare the recoverable amounts of our cash generating units to their carrying amounts. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. If the carrying value of a cash
generating unit were to exceed its recoverable amount at the time of the evaluation, an impairment loss is recognized by
first reducing goodwill, and then the other assets in the cash generating unit on a pro rata basis. Assumptions underlying
fair value estimates are subject to risks and uncertainties. If these assumptions change in the future, we may need to
record impairment charges on goodwill not previously recorded.
US$48 million at Tshepong. An impairment of US$123 million on goodwill relating to Phakisa was recorded in fiscal
2014. No impairment on goodwill was recorded during fiscal 2015 or fiscal 2013.
closure, are based on the Group’s environmental management plans. Annual changes in the provision consist of finance
costs relating to the change in the present value of the provision and inflationary increases in the provision estimate, as
well as changes in estimates. The present value of environmental disturbances created is capitalized to mining assets
against an increase in the rehabilitation provision. The rehabilitation asset is depreciated as discussed above.
Rehabilitation projects undertaken, included in the estimates are charged to the provision as incurred. The cost of
ongoing current programs to prevent and control pollution is charged against income as incurred.
fiscal 2015, fiscal 2014 and fiscal 2013. Taxable income is determined after the deduction of qualifying mining capital
expenditure to the extent that it does not result in an assessed loss. Excess capital expenditure is carried forward as
unredeemed capital expenditure and is eligible for deduction in future periods, taking the assessed loss criteria into
account. Further to this, mines are ring-fenced and are treated separately for tax purposes, with deductions only being
available to be claimed against the mining income of the relevant ring-fenced mine.
such average tax rates are directly impacted by the profitability of the relevant ring-fenced mine. The deferred tax rate is
based on tax rates and tax laws that have been enacted at balance sheet date.
and the Rand/US$ exchange rate, as well as the reserves declared for the operation. As some of these parameters are
based on market indicators, they differ from one year to the next. In addition, the reserves may also increase or decrease
based on updated or new geological information.
of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations,
reversals of deferred tax liabilities and the application of existing tax laws in each jurisdiction. To the extent that future
taxable income differs significantly from estimates, our ability to realize the net deferred tax assets recorded at the
balance sheet date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which we operate
could limit our ability to obtain the future tax benefits represented by deferred tax assets recorded at the balance date.
tax asset to the extent which future taxable profits were no longer probable. The full amount related to Australia of US$5
million was derecognized. Subsequent increases in the deferred tax asset will be recognized when future taxable profits
are probable.
which we do not have control. See Item 3:“Key Information—Risk Factors—The profitability of our operations, and cash
flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash
cost of production for any sustained period may lead to losses and require Harmony to curtail or suspend certain
operations”. As a general rule, we sell our gold produced at market prices to obtain the maximum benefit from increases
in the prevailing gold price and do not enter into hedging arrangements such as forward sales or derivatives that establish
a price in advance for the sale of our future gold production.
factors over which we have no control. See Item 3:“Key Information—Risk Factors—The profitability of our operations,
and cash flows generated by those operations, are affected by changes in the price of gold. A fall in the gold price below
our cash cost of production for any sustained period may lead to losses and require Harmony to curtail or suspend
certain operations”.
expenditure, and depreciation and amortization. Our cash costs consist primarily of production costs exclusive of
depreciation and amortization. Production costs are incurred on labor, equipment, consumables and utilities. Labor costs
are the largest component and typically comprise between 50% and 55% of our production costs.
against the US dollar in fiscal 2015. This weakening of the Rand resulted in the Rand amounts being translated at a
higher rate of R11.45 compared to R10.35 in fiscal 2014. The increase in gold ounces sold and decrease in capital
expenditure were offset by the impact of increased labor and energy costs, as well as inflationary pressures on supply
contracts.
in production volumes. Management continuously review costs at all operations, to ensure that costs are properly
managed and within budget.
other non-US currencies against the US dollar increases working costs at our operations when those costs are translated
into US dollars. See Item 3:“Key Information—Risk Factors—Foreign exchange fluctuations could have a material
adverse effect on Harmony’s operational results and financial condition”.
against the US dollar in fiscal 2015, while the Kina depreciated by 2% against the US dollar in fiscal 2015.
result in production being negatively affected while certain costs would still be incurred. This is discussed in more detail
in “Risk Factors—Given the nature of mining and the type of gold mines we operate, we face a material risk of liability,
delays and increased cash costs of production from environmental and industrial accidents and pollution” and “—The
nature of our mining operations presents safety risks”.
associated with producing gold. Although Harmony is not a member of the WGC, we started disclosing all-in sustaining
costs in the 2014 fiscal year (only for continuing operations). The all-in sustaining cost measure is an extension of the
existing cash cost measure (refer below) and incorporates costs related to sustaining production.
environmental rehabilitation costs, transfers for stripping activities and costs associated with royalties. Employee
termination costs are included, however employee termination costs associated with major restructuring and shaft
closures are excluded. The following costs are also included: local economic development (“LED”) expenditure for
continuing operations, share-based payments for continuing operations, corporate costs, sustaining exploration costs and
sustaining capital expenditure including ongoing capital development (“OCD”) expenditure and rehabilitation accretion
and amortization for continuing operations. Gold ounces sold are used as the denominator in the all-in sustaining costs
per ounce calculation.
allow access to the orebody for future mining operations and are capitalized and amortized when the relevant reserves are
mined.
costs associated with royalties. Employee termination cost is included, however employee termination costs associated
with major restructuring and shaft closures are excluded. The costs associated with movements in production inventories
calculation.
Guinean operations, the Kina. All-in sustaining costs, all-in sustaining costs per ounce, total cash costs and total cash
costs per ounce are non-GAAP measures. All-in sustaining costs, all-in sustaining costs per ounce, total cash costs and
total cash costs per ounce should not be considered by investors in isolation or as an alternative to production costs, cost
of sales, or any other measure of financial performance calculated in accordance with IFRS. In addition, the calculation
of all-in sustaining costs, all-in sustaining costs per ounce, total cash costs and total cash costs per ounce may vary from
company to company and may not be comparable to other similarly titled measures of other companies. However, we
believe that all-in sustaining costs per ounce and cash costs per ounce are useful indicators to investors and management
of a mining company’s performance as they provide (1) an indication of the cash generating capacities of our mining
operations, (2) the trends in all-in sustaining costs and 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.
ounce produced by maintaining our low total cost structure at our existing operations. We have been able to reduce total
costs by implementing a management structure and philosophy that is focused on reducing management and
administrative costs.
Ounces sold ..........................................................
Ounces produced .......................................................
Ounces produced ..................................................................
Ounces produced ............................................................
price received by us during fiscal 2015 decreased by US$77 per ounce to US$1,222 per ounce from US$1,299 per ounce
during fiscal 2014. Appreciation of the Rand against the US dollar increases our US dollar working costs at our South
African operations when those costs are translated into US dollars, which serves to reduce operating margins and net
income from our South African operations. Depreciation of the Rand against the US dollar reduces these costs when they
are translated into US dollars, which serves to increase operating margins and net income from our South African
operations. Accordingly, strengthening of the Rand generally results in poorer earnings for us if there is not a similar
increase in the gold price.
except for specific items within equity that are converted at the exchange rate prevailing on the date the transaction was
entered into. This compares with a conversion rate of R10.61 per US$1.00 as at June 30, 2014, reflecting a depreciation
of 15% of the Rand against the US dollar. Income statement items were converted at the average exchange rate for fiscal
2015 of R11.45 per US$1.00, reflecting a depreciation of 11% of the Rand against the US dollar when compared with
fiscal 2014. Profit from discontinued operations included in the income statement in fiscal 2013 is translated from Rand
to US dollars at the average exchange rate for the eight month period (R8.55 per US$1.00 for the period 1 July 2012 to
28 February 2013).
costs as well as inflationary pressures on our consumables and energy costs, which served to decrease operating margins
and net income reflected in our consolidated income statement for fiscal 2015. Appreciation of the Rand against the US
dollar would cause an increase in our costs in US dollar terms. Similarly, at our International operations, appreciation of
the Australia dollar or Kina against the US dollar would cause an increase in our costs in US dollar terms. See Item 3:
“Key Information—Risk Factors—Foreign exchange fluctuations could have a material adverse effect on Harmony’s
operational results and financial condition”.
had the effect of strengthening the Kina by approximately 10% and the US$ equivalent of Kina denominated costs
higher. The Bank of Papua New Guinea has weakened the Kina against the US$ by approximately 40 basis points per
month in fiscal 2015. Since the introduction of the trading band the Kina has weakened by 13% against the US$ as at 30
June 2015. Should the trading band continue and depending on the level the exchange rate is set at, it could have a
negative impact on the results of the Hidden Valley operation, as well as the cost of development at Golpu and other
PNG exploration sites.
considerably over the past several years resulting in significant cost pressures for the mining industry. In addition, the
effect on inflation of the increase in electricity tariffs of 9.6% in fiscal 2013, 8% in fiscal 2014 and 12.7% in fiscal 2015
together with an estimated increase of approximately 12.7% in fiscal 2016, will have a negative effect on the profitability
of our operations.
Information—Risk Factors—Our operations may be negatively impacted by inflation”.
See Item 3: “Key Information—Risk Factors—The socio-economic framework in the regions in which Harmony operates
may have an adverse effect on its operations and profits”.
Southern African Common Monetary Area. See Item 10: “Additional Information—Exchange Controls”.
will have a responsibility in respect of human resource development, procurement and local economic development. We
are unable, however, to provide a specific amount of what the estimated cost of compliance will be but we will continue
to monitor these costs on an ongoing basis.
which provides perhaps the simplest available measure of system security.
shortages experienced in 2008. Eskom has increased the planned maintenance on its existing generating capacity which
also contributes to the smaller reserve margin. South Africa’s electricity supply constraint has worsened, largely owing to
inadequate maintenance of existing generating capacity and the absence of new project and plants to address increased
consumer and industrial demand.
periods. Various load clipping and load shifting projects were implemented by the South African operations to reduce the
electricity demand during evening peaks. Load shifting is generally achieved by rescheduling the pumping to pumps
water mainly outside of the evening peaks. Load clipping is achieved by reducing the compressed air demand during
evening peak periods. Harmony also benefits financially from this as the Eskom tariffs are more expensive during that
period. The risk of having power outages will be mainly limited to the evening peak periods in the current situation. This
could change during summer months as the demand profile does not have the same evening peaks as during winter
months, additional maintenance is scheduled for summer months hence reducing the reserve margin. Should there be
major unplanned outages of Eskom generation capacity, it will be a country or sector problem and municipalities should
be the first to have power outages.
open-cycle gas turbines from diesel to natural gas.
decision is due in March 2016.
average increase of 22% in each of fiscal 2010, fiscal 2011 and fiscal 2012, tariffs rose by a further 9.6% in fiscal 2013
and 8% in fiscal 2014 and 12.69% in fiscal 2015. On October 3, 2014, NERSA announced the approval of the
implementation plan of the Regulatory Clearing Account (“RCA”) balance for Eskom. This is a once-off recovery from
standard tariff customers and other Eskom customer categories. The implementation of the second Multi-Year
Determination RCA in 2015/2016 will result in an average tariff increase of 12.69% from the 8% approved in the third
Multi-Year Determination decision of February 2013.
consumption in peak periods; timing our pumping to coincide with cheaper off-peak periods, making more efficient use
of Eskom tariffs that reward load-shifting, and improving the efficiency of pumping operations.
average evening peak load reduction will be 12MW and the anticipated energy savings will the 3,602MWh per month.
grid;
24 and “Integrated Annual Report 2015—Harmony in Action—Environmental performance—” on pages 100 to 119.
to US$1,299 per ounce for fiscal 2014 and a decrease in gold sold. Our gold sales decreased by 5%, from 1,166,682
ounces in 2014 to 1,103,793 ounces in 2015. The decrease in ounces can be attributed mainly to numerous production
stoppages at Kusasalethu, lower-than-expected recovered grade at Target 1 and a breakdown in the overland conveyor
care and maintenance during fiscal 2015.
2% and 11% to 0.370 ounce per ton and 253,000 tons respectively in fiscal 2015 following the development and mining
of the high grade shaft pillar.
operation continues to build up production.
significant capital expenditure required to sustain the operation.
0.149 ounces per ton in fiscal 2015. The grade in fiscal 2015 normalized following the higher recovered grade in fiscal
2014 and is in line with the life-of-mine recovery grade.
Hidden Valley’s operations were adversely impacted by breakdowns in the overland conveyor, a safety stoppage due to
the fatality in December 2014 and scheduled maintenance at the metallurgical plant. Hidden Valley’s poor operational
performance and the impact of low commodity prices and high input costs resulted in the restructuring of the operation.
fiscal 2015. To address the poor performance of the operation, Masimong was restructured in fiscal 2015 to improve
profitability. Orebody development at Masimong has been significantly reduced and greater focus has been placed on
mining higher grade areas.
fiscal 2015, the life-of-mine of the operation was optimized by ensuring greater focus on profitable and higher grade
areas. The optimization resulted in the abandonment of the unprofitable and lower grade areas of the mine. Levels 78 to
95, four of the existing 11 levels at Kusasalethu were abandoned. Volumes decreased by 21% to 1,001,000 tons, ounces
produced decreased by 16% to 127,092 ounces, however, recovered grade increased by 6% to 0.127 ounce per ton in
fiscal 2015.
and weighted average all-in sustaining costs per ounce for fiscal 2014 and fiscal 2015:
Kusasalethu .......
Hidden Valley
operations .....
number of tons processed) and grade of ore processed. Cash costs expressed in US dollars per ounce also vary with
fluctuations in the Rand-US dollar exchange rate, because most of our working costs are incurred in Rand. Offsetting the
depreciation of the Rand against the dollar in fiscal 2015 is the decrease in ounces produced and sold by 8% and 5%
respectively (increase in the denominator in the per ounce calculation). Operating costs in Rand terms increased by 6%.
The South African Rand depreciated by 11% against the US dollar when compared to fiscal 2014. Operating costs in
Rand terms were affected mainly by an increase in costs on Kusasalethu, Tshepong, Target 1 and Hidden Valley where
costs increased by 14%, 18%, 13% and 4%, respectively, year on year. Annual increases in labor costs as well as
inflationary pressures on our consumables and increase in electricity tariffs also contributed towards higher operating
costs in fiscal 2015.
US$1,382 per ounce in fiscal 2015. The decrease was mainly due to the increase in gold produced and ounces sold at
Doornkop as production in fiscal 2014 was severely impacted by the safety stoppages in fiscal 2014 due to the
underground fire in February 2014.
US$1,364 per ounce in fiscal 2015. This was primarily due to an increase in ounces produced and sold as production
continues to ramp up.
US$752 per ounce in fiscal 2015. This was due to an increase in ounces produced and ounces sold as result of higher
recovered grades at Bambanani as the production from mining the high grade pillar continues to ramp up.
per ounce in fiscal 2015. The increase in the cash cost per ounce and all-in sustaining cost per ounce was mainly due to
the decrease in gold produced and gold sold as the recovered grade reduced by 12% to 0.149 ounce per ton in fiscal 2015.
was severely impacted by several stoppages during fiscal 2015.
per ounce in fiscal 2015. The increase was mainly due to the decrease in gold produced and gold sold. Operations were
impacted by a fatality in April 2015.
to US$1,395 per ounce in fiscal 2015. The increase was primarily due to the decrease in gold production owing to
operational and safety stoppages during fiscal 2015.
Rand terms, there was an increase in depreciation and amortization expense of 15%. The increase in the depreciation and
amortization in fiscal 2015 is mainly due to the revised useful lives and residual values of most of Harmony’s operations.
The estimated quantities of economically recoverable proved and probable reserves reduced year-on-year from fiscal
2014 to fiscal 2015 following the annual life-of-mine reassessment conducted in fiscal 2014.`
Valley. Target 3 was placed on care and maintenance and voluntary severance packages were offered to management in
September 2014. For fiscal 2014, the costs relate to the completion of the restructuring programmes embarked on by the
group’s South African operations and at Hidden Valley, both having started during fiscal 2013.
was recognized following a change in the life-of-mine plan during the annual planning process. Low US$ commodity
prices and high operating costs resulted in the shortening of the life-of-mine of the operation. Stripping activities in the
new plan have been significantly reduced, resulting in a decrease in the reserves to be mined and the lower recoverable
amount at 30 June 2015. An impairment of US$85 million was recognized for Doornkop following the decision to
restructure Doornkop and the completion of the revised life-of-mine for the operation. The revised life-of-mine plan
includes lower production levels and focuses on higher grade areas. The new plan resulted in a lower recoverable
amount. In addition, an impairment of US$23 million for Phakisa following the annual life-of-mine reassessment and
US$4 million for Freddies 9 was recognized as plans to develop the project further at this stage have been stopped.
The charge in fiscal 2014 relates primarily to Phakisa, where a charge of US$130 million was
recognized.
Golpu prefeasibility study in December 2014. The approval and progression to the final feasibility study stage, together
with the reserves previously declared demonstrates the technical and commercial viability of the Golpu project.
and therefore resulted in the abandonment of lower grade and unprofitable areas from the life-of-mine plan for certain of
the operations.
their use or disposal and a loss on scrapping of property, plant and equipment amounting to US$20 million and
US$20 million was recorded for Kusasalethu and Masimong each. A loss of US$2 million was also recorded for
Tshepong.
Rand from US$15 million in fiscal 2014 to US$33 million in fiscal 2015. The Rand weakened by 15% from a closing
rate of R10.61 in fiscal 2014 to R12.16 in fiscal 2015.
Rand Refinery for its share of the loss. The inventory discrepancy arose from the implementation of a new Enterprise
Resource Planning System by Rand Refinery. Harmony recognized a loss of US$12 million in fiscal 2014 to account for
its share of this discrepancy.
The gain recognized on the ELDs in fiscal 2014 was US$16 million. The decrease in fiscal 2015 compared to fiscal 2014
is mainly due to the maturity of the existing ELDs.
statutory tax rate were there are no tax consequences relating to the impairment recorded on Hidden Valley, deferred tax
assets not recognized which relates primarily to the Hidden Valley operation and the deferred tax credit resulting from
the reduction in the average deferred tax rates at the South African operations mainly due to lower estimated profitability
following the completion of the updated life-of-mine plans.
is determined by reference to the life-of-mine plan for that operation, which is based on parameters such as the Group’s
long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation.
As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the
reserves may also increase or decrease based on updated or new geological information. Changes in the future
profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these
operations. See “— Critical Accounting Policies and Estimates—Deferred taxes” above. The decrease in deferred tax on
temporary differences due to changes in estimated effective tax rates results primarily from a decrease in the effective
deferred tax rate at Freegold (includes the Bambanani, Joel, Phakisa and Tshepong operations) and Randfontein Estates
(includes the Doornkop and Kusasalethu operations) . The deferred tax rate at Freegold decreased from 20.3% in fiscal
2014 to 16.7% in fiscal 2015 and Randfontein Estates decreased from 18.9% to 14.3%, both decreases mainly due to the
lower estimated profitability.
from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation
in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is
calculated by deducting qualifying capital expenditures from taxable mining income. The amount by which taxable
mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries each make our
own calculation of taxable income.
treated as divisions of the Head Company, Harmony Gold Australia. As a result inter-company transactions between
without any tax consequences, and deems all tax losses to have been incurred by the Head Company of the group.
payments to non-residents, a 30% withholding tax applies. However, where the recipient of the dividend is a resident of a
country with which Australia has concluded a double taxation agreement, the rate of withholding tax is generally limited
to 15% (or in the case of South Africa 5% where the dividend is paid to a company which controls at least 10% of the
Australian dividend paying company). Where dividends are fully franked, no withholding tax applies as an effective
credit is allowed against any withholding tax otherwise payable, regardless of whether a double taxation agreement is in
place. However, due to the tax profile of Harmony Gold Australia it is not expected to have any franking credits in the
foreseeable future.
transfer the tax benefit obtained through exploration expenditure between projects and wholly-owned companies. Tax
losses are generally quarantined and cannot be transferred between projects.
limited to the lesser of 25% of the diminished value or the income of the project for the year.
non-resident lenders from withholding tax where the PNG company is engaged in mining operations in PNG. These rates
only apply once an entity has commenced mining and do not apply to entities at the exploration stage.
compared to US$1,603 per ounce for fiscal 2013.
an increase in production at Hidden Valley due to the commissioning of the crusher.
by labor unrest during fiscal 2013. As a result both volumes and recovered grade increased by 61% and 7% respectively.
development and mining of the high grade shaft pillar.
fiscal 2014. The restructuring and operational improvements, including the commissioning of the new crusher, aided the
turn-around at Hidden Valley.
13% from 565,000 tons in fiscal 2013 to 636,000 tons in fiscal 2014.
ton in fiscal 2014. Volumes milled increased by 8% from 790,000 tons in fiscal 2013 to 851,000 tons in fiscal 2014.
fiscal 2013 to 0.124 ounces per ton in fiscal 2014. Volumes milled decreased by 10% from 674,000 tons in fiscal 2013 to
604,000 tons in fiscal 2014.
1,112,000 tons in fiscal 2013 to 812,000 tons in fiscal 2014.
grade decreased by 2% from 0.121 ounces per ton in fiscal 2013 to 0.118 ounces per ton in fiscal 2014.
volumes milled from 355,000 tons in fiscal 2013 to 331,000 tons in fiscal 2014.
and weighted average all-in sustaining costs per ounce for fiscal 2013 and fiscal 2014:
Kusasalethu...............
Hidden Valley
US$25 million) or US$192 per ounce produced, US$191 per ounce sold (2013: US$294 per ounce produced,
US$297 per ounce sold) not been taken into account.
dollars per ounce also vary with fluctuations in the Rand-US dollar exchange rate, because most of our working costs are
incurred in Rand. The reduction in cash cost per ounce and all-in sustaining cost per ounce was largely due to the
depreciation of the Rand against the dollar in fiscal 2014 and the increase in ounces produced and sold by 3% and 4%
respectively (increase in the denominator in the per ounce calculation). Operating costs in Rand terms increased by 5%.
The South African Rand depreciated by 17% against the US dollar when compared to fiscal 2013. Operating costs in
Rand terms were affected mainly by an increase in costs on Kusasalethu, Target 1, Bambanani and Phakisa where costs
rose by 18%, 12%, 15% and 8%, respectively, year-on-year as production increased. Annual increases in labor cost of
6% and 8% as well as inflationary pressures on our consumables and energy costs of 7% and 8% respectively were also
contributors towards a higher operating cost.
to US$1,570 per ounce in fiscal 2014. This was mainly due to the shaft returning to normal production levels during the
second half of fiscal 2014 after production was severely affected by labor unrest during fiscal 2013.
to US$1,244 per ounce in fiscal 2014. The decrease was primarily due to the completion of the project to upgrade the
crusher and the over-land conveyor in fiscal 2014, which resulted in a decrease in total cash costs and increase in
production.
US$797 per ounce in fiscal 2014. This was due to an increase in ounces produced and ounces sold as result of higher
recovered grades at Bambanani as the production from mining the high grade pillar continues to ramp up.
US$1,463 per ounce in fiscal 2014. This was primarily due to an increase in ounces produced and sold as production
continues to ramp up and the ventilation issues that halted production in fiscal 2013 was resolved in fiscal 2014.
US$1,574 per ounce in fiscal 2014. The increase was mainly due to the decrease in production as a result of safety
stoppages following the underground fire in February 2014 and delays relating to blockages caused by the fire in the
higher grade areas.
per ounce in fiscal 2014. The increase was mainly due to the decrease in production as a result of stoppages relating to
the flooding of the shaft bottom in fiscal 2014.
US$1,353 per ounce in fiscal 2014. The increase was mainly due to the decrease in production at the shaft.
2014. This weakening of the Rand resulted in the Rand amounts being translated at a higher rate of R10.35 compared to
R8.82 in fiscal 2013. In Rand terms, there was an increase in depreciation and amortization expense of 7%. Tons milled
increased by 2% from 20,259,000 tons in fiscal 2013 to 20,713,000 tons in fiscal 2014. Depreciation at Kusasalethu
increased by US$3 million or 10% in fiscal 2014, primarily due to the increase in tons milled from 784,000 in fiscal 2013
to 1,260,000 in fiscal 2014. Depreciation increased at Tshepong by US$5 million, at Phakisa by US$6 million and at
Hidden Valley by US$7 million due to the increase in tons mined.
severance package program in South Africa which was conducted in fiscal 2014 in order to reduce costs. This program
was concluded in June 2014.
recognized following a change in the life-of-mine plan during the annual planning process. The change resulted after the
completion of a feasibility study in the current year on the proposed decline shaft, which showed significant additional
capital requirements. It was therefore decided not to proceed with the sinking of the decline shaft. The exclusion of the
decline shaft from the life-of-mine plan resulted in a decrease in the reserves of Phakisa of two million ounces. In
addition, an impairment of US$3 million for Steyn 2 (included in the Bambanani segment) and US$2 million for St
Helena was recognized following the decision not to mine these operations in future. The charge in fiscal 2013 relates
primarily to Hidden Valley, where a charge of US$268 million was recognized.
reduced foreign exchange translation loss relating to the translation of the US$ syndicated revolving credit facility into
Rand from US$40 million in fiscal 2013 to US$15 million in fiscal 2014.
System by Rand Refinery. Harmony has recognized a loss of US$12 million in fiscal 2014 to account for its share of this
discrepancy.
the income statement, offsetting the impairment recognized during the year, resulting in a profit on disposal. During
fiscal 2013, an impairment of US$10 million was recognized on the investment in Wits Gold, following the assessment
by management at June 30, 2012 that the investment had suffered a permanent decline.
ELDs in fiscal 2013 was US$20 million.
statutory tax rate were there are no tax consequences relating to the impairment of goodwill recorded on Phakisa,
deferred tax assets not recognized which relates primarily to the Hidden Valley operation and the deferred tax credit
resulting from the reduction in the average deferred tax rates at the South African operations mainly due to lower
estimated profitability.
is determined by reference to the life-of-mine plan for that operation, which is based on parameters such as the Group’s
long term view of the US$ gold price and the Rand/US$ exchange rate, as well as the reserves declared for the operation.
As some of these parameters are based on market indicators, they differ from one year to the next. In addition, the
reserves may also increase or decrease based on updated or new geological information. Changes in the future
profitability of each ring-fenced mine impact the deferred tax rates used to recognize temporary differences at these
operations. See “— Critical Accounting Policies and Estimates—Deferred taxes” above. The decrease in deferred tax on
temporary differences due to changes in estimated effective tax rates results primarily from a decrease in the effective
deferred tax rate at Freegold (includes the Bambanani, Joel, Phakisa and Tshepong operations) and Harmony (includes
2013 to 20.3% in fiscal 2014 and Harmony decreased from 26.4% to 13.4%, both decreases mainly due to the lower
estimated profitability.
from, and capital expenditure for, mining operations in South Africa. 5% of total mining revenue is exempt from taxation
in South Africa as a result of the application of the gold mining formula. The amount of revenue subject to taxation is
calculated by deducting qualifying capital expenditures from taxable mining income. The amount by which taxable
mining income exceeds 5% of mining revenue constitutes taxable mining income. We and our subsidiaries each make our
own calculation of taxable income.
treated as divisions of the Head Company, Harmony Gold Australia. As a result inter-company transactions between
group members are generally ignored for tax purposes. This allows the group to transfer assets between group members
without any tax consequences, and deems all tax losses to have been incurred by the Head Company of the group.
payments to non-residents, a 30% withholding tax applies. However, where the recipient of the dividend is a resident of a
country with which Australia has concluded a double taxation agreement, the rate of withholding tax is generally limited
to 15% (or in the case of South Africa 5% where the dividend is paid to a company which controls at least 10% of the
Australian dividend paying company). Where dividends are fully franked, no withholding tax applies as an effective
credit is allowed against any withholding tax otherwise payable, regardless of whether a double taxation agreement is in
place. However, due to the tax profile of Harmony Gold Australia it is not expected to have any franking credits in the
foreseeable future.
transfer the tax benefit obtained through exploration expenditure between projects and wholly-owned companies. Tax
losses are generally quarantined and cannot be transferred between projects.
limited to the lesser of 25% of the diminished value or the income of the project for the year.
non-resident lenders from withholding tax where the PNG company is engaged in mining operations in PNG. These rates
only apply once an entity has commenced mining and do not apply to entities at the exploration stage.
2015. All of our gold produced in PNG in those periods was sold to The Perth Mint Australia, a Perth-based refinery.
liquidity requirements from: (i) cash generated from operations; (ii) credit facilities and other borrowings; and (iii) sales
of equity securities.
versus US dollar exchange rate. A significant adverse change in one or more of these parameters could materially reduce
cash provided by operations as a source of liquidity.
in production costs due to increases in labor, materials and electricity and other inflationary pressures in fiscal 2015.
million in fiscal 2014.
amounted to US$65 million (2014: US$44 million). No dividends were paid in fiscal 2014 and 2015.
rate. In January 2015, R400 million (US$35 million) was drawn down. At June 30, 2015, the remaining R900 million
(US$74 million) on this facility is available until December 2016.
met during February 2015 and US$205 million was drawn down to repay the syndicated revolving credit facility,
resulting in a net cash outflow of US$65 million. The remaining US$45 million was drawn down during May 2015.
Interest accrues on a day-to-day basis over the term of the loan at a variable interest rate. The facility is repayable on
maturity during February 2018.
facility. The facility was utilized to fund exploration project in PNG. Interest at LIBOR plus 260 basis points, was paid
quarterly. The syndicated revolving credit facility was repayable after three years. The outstanding amount on the
syndicated revolving credit facility was settled in February 2016 by drawing against the new facility entered into on
December 22, 2014.
performance” on page 124. We currently expect that our planned operating capital expenditures will be financed from
operations, including use of our current facilities, as described in “—Outstanding Credit Facilities and Other
Borrowings” above, and new borrowings as needed.
generally expected to fund their capital internally. The Golpu project in PNG is, however, expected to require additional
capital expenditure over the next three to six years to complete construction, most of which will be funded from cash
generated by operations and the balance by debt which. We may also consider other options or structures to finance
Golpu. For more information on our planned capital expenditures, see “—Capital Expenditure” above. Also see “Item 3:
“Risk Factors—To maintain gold production beyond the expected lives of Harmony’s existing mines or to increase
production materially above projected levels, Harmony will need to access additional reserves through exploration or
discovery”. Our board believes that we will have access to adequate financing on reasonable terms given our cash-based
operations and modest leverage. Our ability to generate cash from operations could, however, be materially adversely
affected by increases in cash costs, decreases in production, decreases in the price of gold and appreciation of the Rand
and other non-US$ currencies against the US dollar. In addition, South African companies are subject to significant
entered into by overseas subsidiaries. See Item 10: “Additional Information—Exchange Controls”.
PNG amount to US$57 million at June 30, 2015.
Credit Facilities and Other Borrowings”.
financial statements set forth beginning on page F-1.
for former employees who retired prior to December 31, 1996 and is based on actuarial valuations conducted
during fiscal 2015.
interpretations of current environmental and regulatory requirements. See Item 5: “Operating and Financial
Review and Prospects—Critical Accounting Policies—Provision for environmental rehabilitation”.
has been approved by the board for capital expenditures.
owned or controlled: (i) by another corporation; or (ii) by any foreign government, and (B) there are no arrangements
(including any announced or expected takeover bid), the operation of which may at a subsequent date result in a change
in our control.
ADSs evidenced by ADRs as of October 10, 2011 . Holding disclosed represents outstanding ADRs on
October 16, 2015.
note 21 “Investment in Joint Operations” of our consolidated financial statements, set forth beginning on page F-1.
below.
Act (ODIMWA). The judgment allows claimants, such as Mr Mankayi, to institute action against their current and
former employers for damages suffered as a result of them contracting occupational diseases which result from their
exposure to harmful quantities of dust whilst they were employed at a controlled mine as referred to in ODIMWA. In this
regard, should anyone bring similar claims against Harmony in future, those claimants would need to prove that silicosis,
as an example, was contracted whilst in the employ of the company and that it was contracted due to negligence on the
company’s part to provide a safe and healthy working environment. The link between the cause (negligence by the
company in exposing the claimant to harmful quantities of dust whilst in its employ) and the effect (the silicosis) will be
an essential part of any case.
of instituting a class action against the Harmony group. In essence, the applicants want the court to declare them as
suitable members to represent a class of current and former mineworkers for purposes of instituting a class action for
certain relief and to obtain directions from the court as to what procedure to follow in pursuing the relief required against
the Harmony group.
of current and former mine workers who work or have worked on gold mines owned and/or controlled by the respondents
and who allegedly contracted silicosis and/or other occupational lung diseases, and another class of dependents of mine
workers who have died of silicosis and who worked on gold mines owned and/or controlled by the respondents. The
Harmony group opposed both applications and instructed its attorneys to defend the application.
the respondents’ attorneys and the applicants’ attorneys, it was resolved that the applicants’ attorneys will consolidate the
two applications, together with three other similar applications. The applicants' attorneys delivered an amended
application for consideration by the respondents. On October 17, 2013, the five certification applications were
consolidated by order of court. It was agreed between the parties that the respondents have until May 30, 2014 to answer
the allegations made in the consolidated class certification application, and to state reasons why a class or classes should
not be certified.
affidavit. The applicants’ attorneys have also joined further applicants to the present proceedings and amended the relief
sought against the gold mining companies on a number of occasions.
as amici curiae (i.e. friends of the court). On August 28, 2015, the applicants were admitted as amici curiae. However, at
the certification application enrolled for hearing between October 12, 2015 and October 23, 2015, they may only present
legal submissions as to whether a certification of a class action should be granted or not.
subsidiaries, and another gold mining group of companies. The plaintiff alleges to have contracted silicosis with
progressive massive fibrosis during the course of his employment. At this stage, and in the absence of a court decision on
claim.
outcome of the consolidated class certification application, no costs estimation can as yet be made for the possible
obligation.
overburden run-off from the mine. The damages sought by the plaintiffs were not specified. The defendants intend to
defend the claims. No active steps have been taken by the plaintiffs in this proceeding for more than two years. It is not
practicable to make any reasonable assessment of the prospects of the plaintiffs succeeding should they proceed with
these claims, nor the potential liability of the defendants if the plaintiffs were to succeed. As a result, no provision has
been recognized in the financial statements for this matter.
and sellers of Harmony’s American Depositary Receipts (ADRs) and options with regards to certain of its business
practices. Harmony retained legal counsel. The company reached a mutually acceptable settlement with the plaintiff class
and this settlement was found to be fair and reasonable and was approved by the United States District Court in
November 2011. A single class member filed an appeal of the District Court’s order approving the settlement. That
appeal resulted in the United States Court of Appeals for the Second Circuit affirming the decision of the District Court
on more than one occasion. The objecting plaintiff requested that the United States Supreme Court review the decision of
the Second Circuit. Following the denial of the request for review of the case by the Supreme Court in May 2014, the
case has been concluded. The distribution of the settlement amount, held in escrow, to the plaintiff class of the lawsuit
filed in the United States of America was completed during the 2015 financial year. From both legal and accounting
perspectives, the matter is now concluded.
leading exchange in the global resources sector.
rate instruments. The JSE is one of the top 20 exchanges in the world in terms of market capitalization. The market
capitalization of the JSE equities market was R11,925 billion (US$982 billion) at June 30, 2015. The mining market
capitalization was R1,920 billion (US$158 billion) at June 30, 2015, 16% of the overall JSE market capitalization and
constituted 13% in terms of value traded.
shares are held in custody at the broker’s chosen Custodian Bank, the CSD Participant (“CSDP”). A non-controlled
client is one who appoints his own CSDP to act as custodian on his behalf. Equity settlements take place on a contractual
T+5 (where T= trade date) settlement cycle. Securities and funds become due for settlement five business days after the
trade. Contractual settlement is a market convention embodied in the rules of the JSE which states that a client has a
contractual obligation to cause a JSE trade to settle on settlement day. The JSE, in its capacity as Settlement Authority,
ensures that all on-market trades entered into by two JSE member firms settle five days after the trade date. There is
currently a market-wide project underway to reduce the settlement cycle to three days after the trade date.
and is incorporated herein by reference.
document.
Lesotho and Swaziland. Transactions between South African residents (including corporations) and foreigners are subject
to these exchange controls, which are administered by the Financial Surveillance Department of the South African
Reserve Bank (“SARB”).
macroprudential risk based approach to the management of foreign exchange. The reforms are being made to, among
other things, enable international firms to make investments through South Africa to the rest of Africa and to further
enhance opportunities for offshore portfolio diversification for resident investors. In addition, the relaxations have also
significantly raised the size of the discretionary allowances available to residents for overseas transactions.
authorized dealers.
It is not possible to predict whether existing exchange controls will be changed by the South African government in the
future. Even though the trend in recent years has been the continued gradual relaxation of the exchange controls, this may
change given the current volatility in international markets.
foreign investor may also sell his or her share investment in a South African company and transfer the proceeds out of
South Africa without restriction. However, when the company is not listed on the JSE, the SARB must be satisfied that
the sale price of any shares reflects fair market value.
required for the transfer of proceeds to South Africa, in respect of shares listed on the JSE, provided these funds enter the
country through the normal banking channels. In addition, the proceeds from the sale of ordinary shares on the JSE on
behalf of those holders of ordinary shares who are not residents of the Common Monetary Area are freely remittable to
those holders. Share certificates and warrant certificates held by non-residents will be endorsed with the words “non-
resident.”
the SARB. If a foreign investor wishes to lend capital to a South African company, the prior approval of the SARB must
be sought mainly in respect of the interest rate and terms of repayment applicable to such loan.
taxation treaty.
SARB to non-resident shareholders. However, this rate may be reduced depending on the applicability of a double
taxation treaty.
restrictions are placed on its ability to obtain local financial assistance. We are not, and have never been, designated an
“affected person” by the SARB.
declare dividends out of current profits unless and until such time that the affected entity’s local borrowings do not
exceed the local borrowing limit.
changes may possibly occur on a retrospective basis. The following summary is not a comprehensive description of all of
the tax considerations that may be relevant to a decision to purchase, own or dispose of our ordinary shares or ADSs, and
does not cover the tax consequences that depend upon your particular tax circumstances. In particular, the following
summary addresses tax consequences for holders of ordinary shares or ADSs who are not residents of South Africa for
tax purposes from a South African perspective. It specifically excludes the tax consequences for persons who are not
residents of South Africa for tax purposes whose holding of shares or ADSs is effectively connected with a permanent
establishment in South Africa through which the holder carries on business activities, or who is not the beneficial
recipient of the dividends, or where the source of the transaction or dividends is deemed to be in South Africa. In
addition, it does not cover the tax consequences for a holder that is not entitled to the benefits of the double taxation
agreement concluded between the Republic of South Africa and the United States of America signed on February 17,
1997 (“US Treaty”). It also assumes that the holders hold the ordinary shares or ADSs on capital account (that is, for
investment purposes) as opposed to on revenue account (that is for speculative purposes, as trading stock). We
recommend that you consult your own tax adviser concerning the consequences of holding our ordinary shares or ADSs,
as applicable, in your particular situation.
tax on companies (“STC”) at the rate of 10% on dividends declared by a South African company. It is important to
appreciate that STC was not a withholding tax on dividends borne by the shareholder, but a tax on profits of a company
borne by the company. The rate at which Dividends Tax is levied is 15%. Dividends Tax is imposed on, amongst others,
non-resident shareholders, and it is withheld by the company declaring and paying the dividend to its shareholders or the
regulatory intermediary, as the case may be, as a withholding agent.
that such a dividend may also be taxed in South Africa. However, the tax charged in South Africa may not exceed 5% of
the gross amount of the dividends if the beneficial owner is a company that holds directly at least 10% of the voting stock
of the South African company paying the dividends. In all other cases, the US Treaty provides for a withholding tax of
15% of the gross amount of the dividends.
individual pay tax at the marginal rate). In the case of a corporate entity or trust, 66.6% of such gain is included in its
taxable income (effectively a rate of 18.6% for a corporate entity and 27.3% for a trust). CGT is only applicable to non-
residents if the proceeds from the sale are attributable to a permanent establishment of the non-resident shareholder. The
US Treaty (which will prevail in the event of a conflict) provides that the US holder of ordinary shares or ADSs will not
be subject to CGT if the assets have been held as capital assets, unless they are linked to a permanent establishment of
such non-resident shareholder in South Africa. To the extent that shares or ADSs are held on revenue account, a similar
principle applies with reference to the payment of income tax. Accordingly, income tax is only payable to the extent that
the gain is attributable to the carrying on of a business in South Africa through a permanent establishment situated in
South Africa. The current corporate rate is equal to 28%. Any gains realized on the disposal of equity shares are
automatically deemed to be of a capital nature if the equity shares have been held for a continuous period of at least three
years. Such provision applies automatically and is not elective. However, this deeming provision does not include an
ADS.
person to or in intellectual property where that property is situated in South Africa is deemed to have been sourced in
South Africa and be subject to South African tax. It includes the disposal of any equity shares held by a person in a
company if:
the case may be, at the time of disposal thereof is attributable directly or indirectly to immovable property
held otherwise than as trading stock; and
to ownership of the other entity.
South Africa, which concept includes the equivalent of a US real property interest, even if held through shares.
A security is defined to include a depository receipt in a company, in addition to shares in a company. STT is not payable
on the issue of any security.
ADSs. In addition, the process of depositing shares listed on the JSE in return for ADSs, or withdrawing such shares
from the deposit facility, may attract STT as and when the shares are transferred to or from the depository institution.
instances, STT is payable by the person acquiring beneficial ownership.
the rate of 15% with effect from March 1, 2015. In terms of the US Treaty this rate is reduced to zero. However, the rate
may change to 5% or 10% once the US Treaty is renegotiated.
having been received by or accrued to that foreign person from a source within South Africa. The concept of service fees
is defined very widely and includes an amount that is received or accrued in respect of technical services, managerial
services and consultancy services.
shares (for purposes of this summary, references to the ordinary shares include the ADSs, unless the context otherwise
requires).
the laws of the United States, any state thereof, or the District of Columbia;
persons are authorized to control all substantial decisions of the trust or (ii) it has a valid election in effect
under applicable US Treasury regulations to be treated as a US person.
now in effect, any and all of which are subject to differing interpretations and which could be materially and adversely
changed. Any such change could apply retroactively and could affect the continued validity of this summary. This
summary does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if
enacted, could be applied, possibly on a retroactive basis, at any time.
hold the ordinary shares as capital assets within the meaning of Section 1221 of the Code. It does not address
considerations that may be relevant to you if you are an investor that is subject to special tax rules, such as a bank, real
estate investment trust, regulated investment company, insurance company, dealer in securities or currencies, trader in
securities or commodities that elects mark-to-market treatment, person that will hold the ordinary shares as a hedge
against currency risk or as a position in a “straddle” or conversion transaction, tax-exempt organization, person whose
“functional currency” is not the US dollar, person liable for alternative minimum tax, or a person who owns directly,
indirectly or by attribution, at least 10% of our stock. This summary also does not address any aspect of US federal non-
income tax laws, such as gift or estate tax laws, or state, local, or non-US tax laws, or, except as discussed below, any tax
reporting obligations of a holder of our ordinary shares.
will depend on the status of the partner and the activities of the partnership. A holder of the ordinary shares that is a
partnership and partners in such a partnership should consult their own tax advisors about the US federal income tax
consequences of acquiring, holding, and disposing of the ordinary shares.
current or future years. The determination whether or not we are a PFIC is a factual determination that is based on the
types of income we earn and the value of our assets and cannot be made until the close of the applicable tax year. If we
were currently or were to become a PFIC, US holders of ordinary shares would be subject to special rules and a variety of
potentially adverse tax consequences under the Code.
any shareholder has the right to receive in cash) in respect of the ordinary shares generally will be subject to US federal
income taxation as dividend income to the extent paid out of our current or accumulated earnings and profits (as
determined for US federal income tax purposes). You must include the amount of any South African tax withheld from
the dividend payment in this gross amount even though you do not in fact receive it. Dividends received by certain non-
corporate US holders will generally be taxed at a maximum rate of 20%, where certain holding period and other
requirements are satisfied, if such dividends constitute qualified dividend income. Qualified dividend income includes
dividends paid by a “qualified foreign corporation”, and we believe that we are, and will continue to be, a “qualified
foreign corporation” for US federal income tax purposes. Holders of ordinary shares should consult their own tax
advisors regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.
Dividends will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of
dividends received from certain US corporations.
dividend, regardless of whether the payment is in fact converted into US dollars. If the foreign currency received as a
dividend is not converted into US dollars on the date of receipt, a US holder will have a basis in the foreign currency
equal to its US dollar value on the date of receipt. Generally, any gain or loss resulting from currency exchange
payment into US dollars will be treated as ordinary income or loss. The gain or loss generally will be income or loss from
sources within the United States for foreign tax credit limitations. You should generally not be required to recognize any
foreign currency gain or loss to the extent such dividends paid in South African Rand are converted into US dollars
immediately upon receipt by the applicable party. If we distribute non-cash property as a dividend, you generally will
include in income an amount equal to the fair market value of the property, in US dollars, on the date that it is distributed.
Subject to certain limitations, a US holder may be entitled to a credit or deduction against its US federal income taxes for
the amount of any South African taxes that are withheld from dividend distributions made to such US holders. The
decision to claim either a credit or deduction must be made annually and will apply to all foreign taxes paid by the US
holder to any foreign country or US possession with respect to the applicable tax year.
complex. You should consult your own tax advisor to determine the foreign tax credit implications of owning ordinary
shares.
extent in excess of such basis, will be treated thereafter as capital gain from the sale or exchange of such ordinary shares.
difference between the US dollar value of the amount you receive on the sale and your adjusted tax basis in the ordinary
shares, determined in U.S dollars. Such gain or loss generally will be long-term capital gain or loss if you held the
ordinary shares for more than one year. After January 1, 2013, long-term capital gain recognized by a non-corporate US
holder is generally subject to a maximum tax rate of 15% but may be as high as 20%. In general, any capital gain or loss
recognized upon the sale or exchange of ordinary shares will be treated as US source income or loss, as the case may be,
for US foreign tax credit purposes. Your ability to offset capital losses against income is subject to limitations.
securities transfer tax will not be a creditable tax for US foreign tax credit purposes.
from the sale or other disposition of ordinary shares. US holders that are individuals, estates, or trusts should consult their
tax advisors regarding the effect, if any, of this tax on their ownership and disposition of our ordinary shares.
conduct of a trade or business in the United States, and the dividends are attributable to a permanent establishment (or in
the case of an individual, a fixed place of business) that you maintain in the United States, if that is required by an
applicable income tax treaty as a condition for subjecting you to US federal income taxation on a net income basis. In
such cases, you generally will be taxed in the same manner as a US holder and will not be subject to US federal income
tax withholding. If you are a corporate non-US holder, “effectively connected” dividends may, under certain
circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate if you are eligible for the
benefits of an applicable income tax treaty that provides for a lower rate.
connected with your conduct of a trade or business in the United States, and the gain is attributable to a permanent
establishment (or in the case of an individual, a fixed place of business) that you maintain in the United States, if that is
required by an applicable income tax treaty as a condition for subjecting you to US federal income taxation on a net
income basis or (ii) in the case of gain realized by an individual non-US holder, you are present in the United States for
183 days or more in the taxable year of the sale or other disposition and certain other conditions are met. In the first case,
the non-US holder will be taxed in the same manner as a US holder. In the second case, the non-US holder will be subject
to US federal income tax at a rate of 30% on the amount by which such non-US holder’s US-source capital gains exceed
under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate or a lower rate if you are
eligible for the benefits of an applicable income tax treaty that provides for a lower rate.
until the close of the applicable tax year and that is based on the types of income we earn and the value of our assets
(including goodwill), both of which are subject to change. In calculating goodwill for this purpose, we will value our
total assets based on the total market value, determined with reference to the then-market price of the ordinary shares,
and will make determinations regarding the amount of this value allocable to goodwill. Because the determination of
goodwill will be based on the market price of the ordinary shares, it is subject to change. It is possible that the US
Internal Revenue Service may challenge our valuation of our assets (including goodwill), which may result in us being
classified as a PFIC. Thus, it is possible that we may be or become a PFIC in the current or any future taxable year, and
we cannot assure you that we will not be considered a PFIC in any such tax year.
that produce or are held for the production of passive income.
commodities, annuities, and gains from assets that produce passive income. If a foreign corporation owns at least 25% by
value of the stock of another corporation, the foreign corporation is treated for purposes of the PFIC tests as owning its
proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other
corporation’s income.
that are greater than 125% of the average annual distributions received by you in respect of the ordinary
shares during the three preceding taxable years or, if shorter, your holding period for the ordinary shares).
will be taxed as ordinary income;
applicable to you in effect for that year; and
attributable to each such year.
your ordinary shares. Instead, in general, you will include as ordinary income each year the excess, if any, of the fair
market value of your ordinary shares at the end of your taxable year over your adjusted basis in your ordinary shares.
You will also be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of your ordinary
shares over the fair market value at the end of your taxable year (but only to the extent of the net amount of previously
included income as a result of the mark-to-market election). Your basis in the ordinary shares will be adjusted to reflect
any such income or loss amounts, and any further gain on a sale or other disposition of the ordinary shares will be treated
as ordinary income.
and the gain realized on the disposition of the ordinary shares. The reduced tax rate for dividend income, discussed above
in “Taxation of Distributions Paid on Ordinary Shares,” is not applicable to dividends paid by a PFIC.
the PFIC rules to your ordinary shares under your particular circumstances.
of 28%, unless the holder: (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number
and certifies that no loss of exemption from backup withholding has occurred. Backup withholding is not an additional
tax, and the amount of any backup withholding from a payment will be allowed as a credit against the US holder’s or the
non-US holder’s US federal income tax liability provided that the appropriate returns are filed. A non-US holder
generally may eliminate the requirement for information reporting and backup withholding by providing certification of
its foreign status to the payor, under penalties of perjury, on Internal Revenue Service Forms W-8BEN or W-8BEN-E, as
applicable.
their tax returns. “Specified foreign financial assets” may include financial accounts maintained by foreign financial
institutions, as well as the following, but only if they are not held in accounts maintained by financial institutions:
(i) stocks and securities issued by non-United States persons, (ii) financial instruments and contracts held for investment
that have non-United States issuers or counterparties and (iii) interests in foreign entities. Holders are urged to consult
their tax advisors regarding the application of this reporting requirement to their ownership of the ordinary shares.
CONSEQUENCES IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE
TAX ADVICE. ACCORDINGLY, EACH INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR AS TO
PARTICULAR TAX CONSEQUENCES TO IT OF PURCHASING, HOLDING, AND DISPOSING OF THE
ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR
FOREIGN LAWS, AND PROPOSED CHANGES IN APPLICABLE LAWS.
documents it files are available on the website maintained by the SEC at www.sec.gov.
may inspect any reports, statements or other information that Harmony files with the SEC.
exposures, we may enter into derivative financial instruments to manage these exposures. We have policies in areas such
as counterparty exposure and hedging practices, which have been approved by our audit committee. We do not hold or
issue derivative financial instruments for trading or speculative purposes.
occur.
and PNG Kina from time to time. As a result, we are subject to transaction and translation exposure from fluctuations in
foreign currency exchange rates. We do not generally hedge our exposure to foreign currency exchange rates.
Rand and other non-US currencies. Appreciation of the Rand and other non-US currencies against the US dollar increases
working costs at our operations when those costs are translated into US dollars, which reduces operating margins and net
income from our operations. Depreciation of the Rand and other non-US currencies against the US dollar reduces these
costs when they are translated into US dollars, which increases operating margins and net income from our operations.
See Item 3:“Key Information—Exchange Rates” and “Key Information—Risk Factors—Foreign exchange fluctuations
could have a material adverse effect on Harmony’s operational results and financial condition”.
generated by those operations, are affected by changes in the price of gold. A fall in the gold price below our cash cost of
production for any sustained period may lead to losses and require Harmony to curtail or suspend certain operations”.
The aggregate effect of these factors, all of which are beyond our control, is impossible for us to predict.
although we may do so in the future.
cash, restricted cash and restricted investments held at variable rates.
remain constant.
remain constant.
agreement (the “Deposit Agreement”) among the Depositary, owners and beneficial owners of ADRs and Harmony was
filed with the SEC as an exhibit to our Form F-6 filed on September 30, 2009.
making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of the
distributable property to pay the fees.
securities distributed to you had been shares and the
shares had been deposited for issuance of ADSs
deposited securities which are distributed by the
depositary to ADR holders
share register to or from the name of the depositary
or its agent when you deposit or withdraw shares
expressly provided in the Deposit Agreement)
the custodian have to pay on any ADR or share
underlying an ADR, for example, stock transfer taxes,
stamp duty or withholding taxes
servicing the deposited securities
depositary may:
governmental charge. The ADR holder remains liable for any shortfall.
annual stock exchange listing fees. The Depositary has also agreed to pay the standard out-of-pocket maintenance costs
for the ADRs, which consist of the expenses of postage and envelopes for mailing annual and interim financial reports,
printing and distributing dividend checks, electronic filing of US federal tax information, mailing required tax forms,
stationery, postage, facsimile, and telephone calls. It has also agreed to reimburse Harmony annually for certain investor
relationship programs or special investor relations promotional activities. In certain instances, the Depositary has agreed
to provide additional payments to Harmony based on any applicable performance indicators relating to the ADR facility.
The amount of reimbursement available to Harmony is not necessarily tied to the amount of fees the Depositary collects from investors.
the effectiveness of our “disclosure controls and procedures”. Based on the foregoing, our management, including the
CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 2015.
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Harmony’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the Company’s assets that could have a material effect on the financial statements.
become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Organizations of the Treadway Commission (“COSO”). Management has assessed the effectiveness of internal control
over financial reporting, as of June 30, 2015, and has concluded that such internal control over financial reporting was
effective based upon those criteria.
Harmony’s internal control over financial reporting as of June 30, 2015.
See report of PricewaterhouseCoopers Inc., an independent registered public accounting firm, which is included on page F-2 of exhibit 99.1. The consolidated financial statements, together with the auditors' report of PricewaterhouseCoopers Inc., are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2015 Form 20-F.
reporting.
directors and officers of numerous public companies and have over the years developed a strong knowledge and
understanding of IFRS, overseeing the preparation, audit and evaluation of financial statements. We believe that the
combined knowledge, skills and experience of the Audit Committee, and their authority to engage outside experts as they
deem appropriate to provide them with advice on matters related to their responsibilities, enable them, as a group and
under the guidance of Mr. Wetton, to act effectively in the fulfillment of their tasks and responsibilities required under
the Sarbanes-Oxley Act.
in connection with statutory and regulatory filings or engagements for those fiscal years.
review of the financial statements:
company’s delegation of authority framework and the audit committee’s policy on non-audit services.
domestic companies under the listing standards of the NYSE.
Set out below is a brief summary of the significant differences.
committee, and stipulate that all members of this committee must be nonexecutive directors, the majority of whom must
be independent. Harmony has a Nomination Committee comprised of five non-executive board members. The lead
independent non-executive director serves as chairman of the Nomination Committee. For US domestic companies, the
chairperson of this committee is required to be the chairperson of the board of directors. The current chairman of our
board of directors, Patrice Motsepe, is chairman of one of Harmony’s largest shareholders, African Rainbow Minerals
Limited, and is thus not independent. He is, however, in terms of South African governance practices, a member of the
Nomination Committee. The lead independent non-executive director was re-appointed in August 2015.
executive and six of whom are independent.
executives after each board meeting. The board also has unrestricted access to all company information, records,
documents and property. Directors may, if necessary, take independent professional advice at the Company’s expense
and non-executive directors have access to management and may meet separately with management, without the
attendance of executive directors.
well as ongoing environmental rehabilitation costs as well as transfers for stripping activities and costs associated
with royalties. Employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. The following costs are also included: LED expenditure for
continuing operations, share-based payments for continuing operations, corporate costs, sustaining exploration
costs and sustaining capital expenditure including OCD expenditure and rehabilitation accretion and amortization
for continuing operations. Depreciation costs are excluded. All-in sustaining costs per ounce are attributable all-in
sustaining costs divided by attributable ounces of gold sold.
onto the carbon. Granules are separated from the slurry and treated to remove gold.
stages where the solution comes into contact with the activated carbon granules.
administration, retrenchment, capital and exploration costs are excluded. Total cash costs per ounce are
attributable total cash costs divided by attributable ounces of gold produced.
cemented by calcium carbonate, iron oxide, silica or hardened clay.
and testing information using appropriate techniques from outcrops, trenches, pits, workings and drill holes. The
locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but close enough
for continuity to be assumed.
grade continuity. It is based on information gathered through appropriate techniques from outcrops, trenches, pits,
workings and drill holes that may be limited or of uncertain quality and reliability.
exploration, sampling and testing information using appropriate techniques from outcrops, trenches, pits,
workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.
deposit does not qualify as a reserve until a comprehensive evaluation based upon unit cost, grade, recoveries, and
other material factors conclude legal and economic feasibility.
materials. Changes in reserves generally reflect:
characteristics and grade of ore processed. Neither reserves nor projections of future operations should be
interpreted as assurances of the economic life-of-mineralized material nor of the profitability of future operations.
less adequately spaced. The degree of assurance, although lower than that for proved reserves, is high enough to
assume continuity between points of observation.
inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that
size, shape, depth and mineral content of reserves are well-established.
that lowers and raises conveyances for men, materials and ore in the shaft. A shaft generally has more than one
conveyancing compartment.
ITEM 17 FINANCIAL STATEMENTS
The following consolidated financial statements, together with the auditors' report of PricewaterhouseCoopers Inc., are incorporated by reference to exhibit 99.1 and shall be deemed filed as part of the Harmony 2015 Form 20-F:
· Index to Financial Statements;
· Report of Independent Registered Public Accounting Firm; and
· Consolidated Financial Statements.
Association) (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2014, filed on October 23, 2014)
November 23, 2015
and holders of American Depositary Receipts, dated as of October 7, 2011 (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2011, filed on October 24, 2011)
F for the fiscal year ended June 30, 2011, filed on October 24, 2011)
Report on Form 20-F for the fiscal year ended June 30, 2005, filed on November 3, 2005)
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2009, filed on
October 26, 2009
Limited, Newcrest PNG 1 Limited and Hidden Valley Services Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2009, filed on October 26, 2009)
Wafi-Golpu Services Limited, Morobe Exploration Services Limited, Harmony Gold (PNG Services) Pty
Limited and Newcrest Mining Limited (incorporated by reference to Harmony’s Annual Report on Form 20-
F for the fiscal year ended June 30, 2009, filed on October 26, 2009)
Harmony Gold Mining Company, Taung Gold Secunda (Proprietary) Limited, Taung Gold Limited, Clidet
No. 790 (Proprietary) Limited and Clidet No. 791 (Proprietary) Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2012, filed on October 29, 2012)
Gold Mining Company, Emerald Panther Investments 91 (Proprietary) Limited, Pan African Resources Plc
and Evander Gold Mines Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for
the fiscal year ended June 30, 2012, filed on October 29, 2012)
Evander Gold Mines Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the
fiscal year ended June 30, 2012, filed on October 29, 2012)
Evander Gold Mines Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the
fiscal year ended June 30, 2012, filed on October 29, 2012)
Gold Mines Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal
year ended June 30, 2012, filed on October 29, 2012)
Business Venture Investments No. 1692 Proprietary Limited (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Company Limited and Business Venture Investments No. 1692 Proprietary Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
Company Limited and Business Venture Investments No. 1692 Proprietary Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary
Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No.
1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary Limited and the Trustees for
the time being of the Harmony Gold Community Trust (incorporated by reference to Harmony’s Annual
Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited,
Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business
Venture Investments No. 1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary
Limited and the Trustees for the time being of the Harmony Gold Community Trust (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
Harmony Gold Mining Company Limited, Business Venture Investments No. 1692 Proprietary Limited,
Histopath Proprietary Limited, Business Venture Investments No. 1677 Proprietary Limited, Business
Venture Investments No. 1687 Proprietary Limited, Business Venture Investments No. 1688 Proprietary
Limited and the Trustees for the time being of the Harmony Gold Community Trust (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
Trustees for the time being of the Malibongwe Women Development Trust (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Venture Investments No. 1692 Proprietary Limited and ARMGold/Harmony Freegold Joint Venture
Company (Proprietary) Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for
the fiscal year ended June 30, 2013, filed on October 25, 2013)
Venture Investments No. 1692 Proprietary Limited (incorporated by reference to Harmony’s Annual Report
on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Company (Proprietary) Limited and Business Venture Investments No. 1692 Proprietary Limited
(incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30,
2013, filed on October 25, 2013)
(Proprietary) Limited and Harmony Gold Mining Company Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form
20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary Limited, Business
Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No. 1687 Proprietary
Limited and Business Venture Investments No. 1688 Proprietary Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Company Limited, Business Venture Investments No. 1692 Proprietary Limited, Histopath Proprietary
Limited, Business Venture Investments No. 1677 Proprietary Limited, Business Venture Investments No.
1687 Proprietary Limited and Business Venture Investments No. 1688 Proprietary Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2013, filed on October 25, 2013)
between Business Venture Investments No. 1677 Proprietary Limited and Harmony Gold Mining Company
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2013, filed on October 25, 2013)
Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2013, filed on October 25, 2013)
between Business Venture Investments No. 1687 Proprietary Limited and Harmony Gold Mining Company
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2013, filed on October 25, 2013)
Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company
Limited
between Business Venture Investments No. 1688 Proprietary Limited and Harmony Gold Mining Company
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2013, filed on October 25, 2013)
the fiscal year ended June 30, 2013, filed on October 25, 2013)
Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s Annual
Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
between Histopath Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by
reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on
October 25, 2013)
2012 between Harmony Gold Mining Company Limited, Emerald Panther Investments 91 Proprietary
Limited, Pan African Resources plc and Evander Gold Mines Limited (incorporated by reference to
Harmony’s Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
2012 between Harmony Gold Mining Company Limited, Emerald Panther Investments 91 Proprietary
Limited, Pan African Resources plc, Evander Gold Mines Limited, Randfontein Estates Limited and Firefly
Investments 251 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F
for the fiscal year ended June 30, 2013, filed on October 25, 2013)
2013 between Harmony Gold Mining Company Limited, Emerald Panther Investments 91 Proprietary
Limited, Pan African Resources plc, Evander Gold Mines Limited, Randfontein Estates Limited and Firefly
Investments 251 Proprietary Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F
for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Limited and Evander Gold Mines Limited (incorporated by reference to Harmony’s Annual Report on Form
20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Proprietary Limited and Harmony Gold Mining Company Limited (incorporated by reference to Harmony’s
Annual Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
Gold Mining Company Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for
the fiscal year ended June 30, 2013, filed on October 25, 2013)
Report on Form 20-F for the fiscal year ended June 30, 2013, filed on October 25, 2013)
between Armgold/Harmony Freegold Joint Venture Company Proprietary Limited and Sibanye Gold
Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year ended
June 30, 2014, filed on October 23, 2014)
May 6, 2014 between Armgold/Harmony Freegold Joint Venture Company Proprietary Limited and Sibanye
Gold Limited (incorporated by reference to Harmony’s Annual Report on Form 20-F for the fiscal year
ended June 30, 2014, filed on October 23, 2014)
Limited and Riana Bisschoff, dated March 14, 2014 (incorporated by reference to Harmony’s Annual Report
on Form 20-F for the fiscal year ended June 30, 2014, filed on October 23, 2014)
shareholders for approval at the annual general meeting to be held on November 23, 2015
Mining Company Limited arranged by ABSA Bank Limited and Nedbank Limited (acting through its
Nedbank Capital Division) with Nedbank Limited (acting through its Nedbank Capital Division) acting as
Facility Agent
Guarantors listed in Schedule 1 hereto, Nedbank Limited (acting through its Nedbank Capital and Nedbank
Corporate divisions) (as Arranger and Original Lender) and Nedbank Limited (acting through its Nedbank
Capital division) (as Facility Agent), dated February 5, 2015
Section 302 of the Sarbanes-Oxley Act of 2002
Section 302 of the Sarbanes-Oxley Act of 2002
undersigned, thereunto duly authorized.