HARMONY GOLD MINING COMPANY LIMITED - Interim results for the six months ended 31 December 2018

2019-02-12 07:05:00

HAR 201902120001A
Interim results for the six months ended 31 December 2018

Harmony Gold Mining Company Limited
('Harmony' or 'Company')
Incorporated in the Republic of South Africa
Registration number 1950/038232/06
JSE share code: HAR
NYSE share code: HMY
ISIN: ZAE000015228

FY19 INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2018


HALF YEAR ACHIEVEMENTS

-  Improved safety performance - best ever, quarterly lost time injury
   frequency rate of 4.84 achieved by the South African operations in the
   December 2018 quarter

-  7% increase in underground recovered grade to 5.65g/t

-  34% increase in production - boosted by full six months of
   Moab Khotsong and Hidden Valley

-  R1.1 billion (US$81 million) operational free cash flow generated by
   operations (more than 100% increase)

-  Net debt reduced by R333 million (US$39 million) to R4.6 billion
   (US$317 million)

-  Wafi-Golpu memorandum of understanding agreement signed - key to
   progressing the grant of the special mining lease


OPERATING RESULTS
                                      Six       Six
                                   months    months                 Six
                                    ended     ended              months
                                 December  December Variance      ended     Variance*
                                     2018      2017        %  June 2018             %
Gold produced        kg            23 359    17 418       34     20 775            12
                     oz           751 008   560 003       34    667 931            12
Underground grade    g/t             5.65      5.26        7       5.69            (1)
Gold price received  R/kg         572 898   580 672       (1)   561 689             2
                     US$/oz         1 258     1 348       (7)     1 418           (11)
Cash operating       R/kg         429 860   419 440       (2)   422 880            (2)
costs                US$/oz           944       974        3      1 068            12
Total costs and      R/kg         525 674   494 369       (6)   503 178            (4)
capital(1)           US$/oz         1 154     1 148       (1)     1 270             9
All-in sustaining    R/kg         528 265   500 248       (6)   516 865            (2)
costs(2)             US$/oz         1 160     1 161        -      1 307            11
Production profit    R million      3 385     2 712       25      2 644            28
                     US$ million      239       203       18        214            12
Exchange rate        R/US$          14.17     13.40        6      12.30            15

* December 2018 six months and June 2018 six months comparison
(1) Excludes investment capital for Hidden Valley
(2) Excludes share-based payment charge


FINANCIAL RESULTS
                                                                   Six         Six
                                                               months       months
                                                                ended        ended
                                                             December     December   Variance
                                                                 2018         2017          %
Basic earnings per share              SA cents                     15          203        (93)
                                      US cents                      1           15        (93)
Headline earnings                     R million                    73          990        (93)
                                      US$ million                   5           74        (93)
Headline earnings per share           SA cents                     14          224        (94)
                                      US cents                      1           17        (94)


HARMONY'S ANNUAL REPORTS

Harmony's Integrated Annual Report, Financial Report, Mineral Reserves and
Resource Report and its annual report filed on a Form 20F with the United States'
Securities and Exchange Commission for the financial year ended 30 June 2018 is
available on our website (www.harmony.co.za/invest)


SHAREHOLDER INFORMATION

Issued ordinary share capital at 31 December 2018           532 281 170

Issued ordinary share capital at 30 June 2018               500 251 751

Issued ordinary share capital at 31 December 2017           444 724 878

MARKET CAPITALISATION

At 31 December 2018 (ZARm)                                       13 413

At 31 December 2018 (US$m)                                          932

At 30 June 2018 (ZARm)                                           10 615

At 30 June 2018 (US$m)                                              774

At 31 December 2017 (ZARm)                                       10 627

At 31 December 2017 (US$m)                                          858

HARMONY ORDINARY SHARES AND ADR PRICES

12-month high (1 January 2018 - 31 December 2018)                R31.50
for ordinary shares

12-month low (1 January 2018 - 31 December 2018)                 R19.00
for ordinary shares

12-month high (1 January 2018 - 31 December                     US$2.53
2018) for ADRs

12-month low (1 January 2018 - 31 December 2018)                US$1.43
for ADRs

FREE FLOAT                                                         100%

ADR RATIO                                                           1:1

JSE LIMITED                                                         HAR

Range for six months (1 July 2018 -                     R20.63 - R31.27
31 December 2018 closing prices)

Average daily volume for the six months (1 July 2018          1 765 694
- 31 December 2018)

Range for previous six months (1 January 2018           R19.24 - R28.80
- 30 June 2018 closing prices)

Average daily volume for the previous six months              1 799 874
(1 January 2018 - 30 June 2018)

NEW YORK STOCK EXCHANGE                                             HMY
including other US trading platforms

Range for six months (1 July 2018                      U$1.44 - US$2.12
- 31 December 2018 closing prices)

Average daily volume for the six months (1 July 2018          3 071 356
- 31 December 2018)

Range for previous six months (1 January 2018         US$1.52 - US$2.50
- 30 June 2018 closing prices)

Average daily volume for the previous six months              5 016 078
(1 January 2018 - 30 June 2018)

Investors' calendar

H2 FY19 live presentation from Johannesburg              20 August 2019

Annual General Meeting                                 22 November 2019


FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the safe harbor
provided by Section 21E of the Exchange Act and Section 27A of the Securities Act of
1933, as amended (the 'Securities Act'), with 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 forward-looking statements, including, among others, those relating to our
future business prospects, revenues, and the potential benefit of acquisitions (including
statements regarding growth and cost savings) wherever they may occur in this report
and the exhibits, are necessarily 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 report. Important factors that could
cause actual results to differ materially from estimates or projections contained in the
forward-looking statements include, without limitation: overall economic and business
conditions in South Africa, Papua New Guinea, Australia and elsewhere; estimates of
future earnings, and the sensitivity of earnings to gold and other metals prices; estimates
of future gold and other metals production and sales; estimates of future cash costs;
estimates of future cash flows, and the sensitivity of cash flows to the gold and other
metals prices; estimates of provision for silicosis settlement; statements regarding future
debt repayments; estimates of future capital expenditures; the success of our business
strategy, development activities and other initiatives; future financial position, plans,
strategies, objectives, capital expenditures, projected costs and anticipated cost savings
and financing plans; estimates of reserves statements regarding future exploration
results and the replacement of reserves; the ability to achieve anticipated efficiencies and
other cost savings in connection with past and future acquisitions, as well as at existing
operations; fluctuations in the market price of gold; the occurrence of hazards associated
with underground and surface gold mining; the occurrence of labor disruptions; power
cost increases as well as power stoppages, fluctuations and usage constraints; supply
chain shortages and increases in the prices of production imports and the availability,
terms and deployment of capital; changes in government regulation and the political
environment, particularly tax, mining rights, environmental regulation and business
ownership including any interpretation thereof; fluctuations in exchange rates and
currency devaluations and other macroeconomic monetary policies; the adequacy of the
Group's insurance coverage; and socio-economic or political instability in South Africa,
Papua New Guinea, Australia and other countries in which we operate.

For a more detailed discussion of such risks and other factors (such as availability of
credit or other sources of financing), see the Company's latest Integrated Annual Report
and Form 20-F which is on file with the Securities and Exchange Commission, as well
as the Company's other Securities and Exchange Commission filings. The Company
undertakes no obligation to update publicly or release any revisions to these forward-
looking statements to reflect events or circumstances after the date of this report or to
reflect the occurrence of unanticipated events, except as required by law. The foregoing
factors and others described under 'Risk Factors' should not be construed as exhaustive.


COMPETENT PERSON'S DECLARATION

In South Africa, Harmony employs an ore reserve manager at each of its
operations who takes responsibility for the compilation and reporting
of mineral resources and mineral reserves at their operations. In
Papua New Guinea, competent persons are appointed for the mineral
resources and mineral reserves for specific projects and operations.
The mineral resources and mineral reserves in this report are based on
information compiled by the following competent persons:

Resources and reserves of South Africa:

Jaco Boshoff, BSc (Hons), MSc, MBA, Pr. Sci. Nat, MSAIMM, MGSSA,
who has 23 years' relevant experience and is registered with the South
African Council for Natural Scientific Professions (SACNASP) and a
member of the South African Institute of Mining and Metallurgy
(SAIMM).

Mr Boshoff is Harmony's Lead Competent Person.

Jaco Boshoff
Physical address:                                Postal address:
Randfontein Office park                          PO Box 2
Corner of Main Reef Road and Ward Avenue         Randfontein
Randfontein                                      1760
South Africa                                     South Africa

Resources and reserves of Papua New Guinea:

Gregory Job, BSc, MSc, who has 30 years' relevant experience and is a
member of the Australian Institute of Mining and Metallurgy (AusIMM).

Greg Job

Physical address:                                Postal address:
Level 2                                          PO Box 1562
189 Coronation Drive                             Milton, Queensland
Milton, Queensland 4064                          4064
Australia                                        Australia

Both these competent persons, who are full-time employees of
Harmony Gold Mining Company Limited, consent to the inclusion in
the report of the matters based on the information in the form and
context in which it appears.


MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

The inclusion of Moab Khotsong and Hidden Valley in our asset
portfolio has boosted Harmony's production and cash flow in the first
half of the 2019 financial year (FY19), demonstrating the quality of
these assets in line with our investment strategy.

We remain committed to our strategy of producing safe, profitable
ounces and increasing our margins to ensure our operations benefit
from the positive sentiment in the gold market.


SAFETY

Sadly, the South African operations had four fatalities. The employees
who lost their lives were Michael Plaatjies (team leader at Kusasalethu),
Tsepo Libate (scraper winch operator at Tshepong), Tsietsi Manoto
(artisan at Kusasalethu) and Mvuyisi Mayekiso (locomotive operator
at Moab Khotsong). Our heartfelt condolences go to their families,
friends and colleagues.

Harmony's risk management approach enables our people to
understand and appropriately manage hazards, risks and controls.
Critical control management, positive safety behaviour reinforcement
and pro-active risk management are key components of our safety
approach.

The group achieved a notable improvement in its safety performance
measure of the lost time injury frequency rate (LTIFR) of 5.52 (per
1 million hours) (12% improvement compared to 6.26 in the previous
comparative period).

As part of the Minerals Council of South Africa's campaign to
recommit to the shared goal of zero harm, safety days were held at
each South African operation during October 2018. This successful
industry initiative reinforced Harmony's approach to safe behaviour
and the rights and responsibilities that all employees have in ensuring
a safe workplace.


OPERATIONAL RESULTS - H1FY18 TO H1FY19

Gold production for the group for the six months ended 31 December
2018 increased by 5 941kg (34%) to 23 359kg (751 008oz), compared
to 17 418kg (560 003oz) for the six months ended 31 December 2017.
Gold production in the first half of FY19 was significantly boosted by
the acquisition of Moab Khotsong (effective 1 March 2018 in FY18)
and Hidden Valley (which achieved commercial levels of production in
June 2018).

The performance from our operations is summarised below:

-  Moab Khotsong: the first full six month inclusion of Moab Khotsong
   in our portfolio resulted in gold production of 4 418kg (142 042oz),
   achieving a recovered grade of 8.30g/t. Safety enhancements
   in the middle mine during the first half of FY19 resulted in lower
   production from this section. The planned upgrade to split reef and
   waste to the plant will improve future grade recoveries;

-  Hidden Valley: safety, good operational momentum and disciplined
   cost management contributed to Hidden Valley achieving gold
   production of 3 111kg (100 021oz) and generating operational free
   cash flow of R196 million (US$14 million) (at a margin of 11%).
   The mine is on track to achieve production guidance of 200 000oz.
   Stripping of the cutbacks will continue for the next two and a half
   years to deliver an average life of mine all-in sustaining cost of below
   US$950/oz;

-  Kusasalethu: gold production increased by 8%, as a result of a 10%
   increase in tonnes milled to 358 000t, offsetting the 2% decrease in
   recovered grade to 6.74g/t. The operation has achieved operational
   free cash flow for the fifth consecutive six month period;

-  Doornkop: achieved 3.75 million fatality free shifts in December 2018
   (achievement of more than 4 years). Gold production increased by
   7% to 1 766kg (56 778oz), as a result of a 12% increase in tonnes
   milled offsetting the 4% decrease in recovered grade 4.54g/t;

-  Unisel: the operation was successfully restructured in the second half
   of FY18 where mining is focused on targeted high grade areas of
   the shaft pillar. Operational free cash flow increased by 197% to
   R77 million (183% to US$5 million) as a result of the 61% increase
   in recovered grade to 5.12g/t. Gold production decreased by 7% to
   665kg (21 380oz);

-  Waste rock dumps: gold production increased by 80%, as a result
   of a 116% increase in tonnes milled to 2.2 Mt. Higher production
   is mainly due to the treatment of Moab Khotsong rock dumps (not
   included in Harmony's portfolio in the comparative six month period)
   and increased production from processing of the Doornkop waste
   rock dumps which only commenced in November 2017;

-  Central plant reclamation: gold production increased by 16%
   to 283kg (9 098oz), due to a 14% increase in grade recovered
   to 0.146g/t and 2% increase in tonnes processed to 1 936 000t;

-  Kalgold: gold production increased by 4% to 630kg (20 255oz), due
   to a 7% increase in tonnes milled, offsetting the 4% decrease in
   grade recovered;

-  Phoenix (tailings retreatment): gold production increased by 2% to
   393kg (12 635oz), due to a 3% increase in tonnes processed to
   3 151 000t;

-  Target 1: gold production decreased by 4%, due to a 16% decrease
   in tonnes milled, offsetting the 14% increase in recovered grade to
   4.81g/t;

-  Tshepong operations: gold production decreased by 17%, due to
   a 11% decrease in recovered grade to 5.04g/t and a 7% decrease
   in tonnes milled. The performance and the momentum of the
   Tshepong Operations have been impacted by a lack of flexibility due
   to a reduction in the availability of stoping panels to mine, safety
   related stoppages and measures taken to deal with the spate of
   illegal mining incidents. The management team are working on
   improving the performance of the mine, focusing on speeding up
   development and improving overall mining and grade discipline;

-  Joel: In line with Joel's operational plan, gold production decreased
   by 18%, as a result of a 9% decrease in recovered grade to 3.28g/t,
   and a 10% decrease in tonnes milled. The Joel decline project is
   nearing completion and development in the footwall areas is
   continuing. Grades are expected to improve towards the end of
   FY19;

-  Masimong: gold production decreased by 23% to 1 152kg
   (37 038oz), mainly due to the 19% decrease in recovered grade to
   3.69g/t as mining of the higher grade B reef was impacted by an
   underground fire. Tonnes milled decreased by 5%.

The December six month period for our South African operations is
seasonally impacted by two months of higher winter electricity tariffs
and annual wage (bargaining unit) increases. The production from
Moab Khotsong aided in managing unit costs. Cash operating unit costs
increased by 2% to R429 860/kg in the six months ended 31 December
2018 (R419 440/kg for the six months ended 31 December 2017).
In US dollar terms, cash operating unit costs were impacted by the
weaker average Rand/US$ exchange rate, resulting in a decrease of
3% to US$944/oz.

All-in sustaining unit costs for the group increased by 6% to R528 265/kg
in the six months ended 31 December 2018 when compared to the
previous comparable period of 31 December 2017. Lower production
at Tshepong, deferred stripping at Hidden Valley and increased
capital development expenditure at Tshepong, Joel, Doornkop and
Target 1 increased all-in sustaining unit cost for the December 2018
six months. In US dollar terms all-in sustaining unit costs remained flat
at US$1 160/oz, mainly due to the weakening of the Rand against the
US dollar in the six months ended 31 December 2018.

Total capital expenditure decreased by 6% to R2.24 billion (11% to
US$158 million). The comparative December 2017 six month period
included R1.1 billion (US$82 million) related to the Hidden Valley
reinvestment.


FINANCIAL RESULTS - H1FY18 TO H1FY19

Revenue

Revenue increased by R3.9 billion or 40% (US$237 million or 32%)
mainly due to the inclusion of the Moab Khotsong operations
(R2.7 billion (US$190 million)) and Hidden Valley's production
(R1.7 billion (US$123 million) increase) for the full six month period to
31 December 2018. The average gold price received declined by 1%
to R572 898/kg from R580 672/kg in December 2017.

Forward gold sale contracts of 3 577kg (115 000oz) with an average
price of R654 245/kg matured during the period.

Production costs

Production costs increased by R3.2 billion or 45% (US$200 million or
37%) during the December 2018 six months mainly due to the addition
of Moab Khotsong (R1.8 billion (US$125 million)) and Hidden Valley's
return to full production (R836 million (US$59 million)).

Amortisation and depreciation

Depreciation is higher in the December 2018 six months owing
mainly to Hidden Valley's return to full production which contributed
R896 million (US$63 million) of the increase.

Net profit

The net profit for the six months ended 31 December 2018 was
R75 million (US$5 million), compared to a profit of R897 million
(US$65 million) for the comparative period. Headline earnings
amounted to 14 SA cents per share (1 US cents per share) compared to
224 SA cents per share (17 US cents) for the December 2017 period.

Borrowings

During November 2018, Harmony concluded a new four-year
R2.0 billion term and revolving credit facility with Nedbank Limited
(Nedbank) and ABSA Bank Limited, to replace the Nedbank R1 billion
revolving credit facility. The debt covenants remained unchanged
except for the tangible net worth to total debt covenant ratio, which
shall not be less than 4.5 times to June 2019, thereafter, not less than
5 times.

Net debt decreased to R4 575 million (US$317 million) at the end
of December 2018 from R4 908 million (US$356 million) at the end
of June 2018.

For further details refer to note 11 below.

Hedging activity

The hedging programmes realised gains from all hedging programmes
of R480 million for the December 2018 period. Management continues
to top-up these programmes when the market presents attractive
opportunities to do so.

Refer to note 9 below for further detail.


WAFI-GOLPU UPDATE

As announced on 11 December 2018, the Wafi-Golpu Joint Venture
(WGJV) signed a Memorandum of Understanding (MOU) with the
Independent State of Papua New Guinea (PNG) which affirmed the
parties' intent to proceed with the Wafi-Golpu Project, subject to
finalisation of the permitting process and Harmony and Newcrest
Mining Limited board approvals. The MOU also re-affirmed the
intention of the parties to complete the permitting process and achieve
the grant of a Special Mining Lease (SML) by 30 June 2019.

The WGJV is completing an approval process with the relevant PNG
authorities to commence a substantial work program, including
establishment of underground access for further drilling of the Golpu
deposit and the construction of a bridge over the Markham River,
which is an integral feature of the proposed new Northern Access road
from the Highlands Highway to the mine site.

Golpu continues to be a potential game-changer for Harmony.


ORGANIC GROWTH OPPORTUNITIES

Exploration and project studies continued and R234 million
(US$17 million) was spent in H1FY19. We recognise that disciplined
capital allocation is essential in generating shareholder return.

Key components of our capital allocation approach include:

-  Safety - safety and surface projects are prioritised. Mining rates and
   technical aspects of pillar mining are intensely scrutinised.

-  Projects to generate high returns - project internal rates of return
   (IRR) to exceed 15%.

-  Affordability - project cash flows and capital intensity is weighed
   against group and operational cash flow projections and
   requirements. Ounce replacement and growth are aimed at securing
   healthy margins.

-  Project management - focused project management is crucial to
   enhancing project return and ensuring operational momentum.
   Most recently, excellent project management was fundamental
   to the Hidden Valley re-investment project and Central Plant
   Reclamation tailings plant conversion - both projects delivered safely,
   below budget and on schedule.

Summary of Harmony's pipeline of organic growth opportunities:

                                                        Concept/
Permitting                           Pre-               exploration
phase              Feasibility       feasibility        phase

Wafi-Golpu         Central Plant     Mispah Tailings    Kalgold
                   Reclamation
-  Copper-gold     -  Tailings       -  Tailings        -  Near mine
   project            expansion         retreatment        brownfields
                                                           exploration
-  PNG,            -  SA, surface    -  SA, surface     -  SA, open pit
   mechanised                             
   block-caving    Great Noligwa     Hidden Valley      Target North
                   -  High grade     -  Extension       -  Greenfields
                      pillar         -  PNG, open          exploration
                      extraction        pit             -  SA,
                   -  SA,                                  underground
                      underground
                                     Zaaiplaats
                                     -  High grade
                                        mine
                                        extension
                                     -  SA,
                                        underground


An update on the various studies will be provided in the second half
of FY19.


SILICOSIS CLASS ACTION UPDATE

The Gold Working Group (of which Harmony is a member) continue
to focus on a comprehensive and sustainable solution for the
compensation of occupational lung diseases in the mining industry.

On 13 December 2018, the High Court of South Africa (High Court)
heard the Gold Mineworkers' Class Action Settlement Agreement
(Settlement Agreement) signed on 3 May 2018.

A court order was granted setting out the process the Working Group
should follow in which the settlement will be made a final order of the
High Court.

The return date hearing for objections to a final order has been set for
29 May 2019 to 31 May 2019. Should there be no objections to the
settlement, the High Court will sit on 3 April 2019.

Previous gold mine workers and their families are encouraged to visit
www.silicosissettlement.co.za or www.harmonyreconnecting.co.za or
contacting 0801 000 240 for more details.


CONCLUSION

Continuous focus on safety, production and cost management - inputs
within our control - are critical to generating operational free cash flow.
We have seen significant improvements at our mines in terms of safety,
with the best ever LTIFR being recorded in Harmony's history. Capital
allocation that supports our strategy remains a priority.

The group is on track to achieving production guidance of 1.45 million
ounces. The first half performance from certain South African
operations has resulted in revising our all-in sustaining unit cost
guidance for FY19 to range between R520 000/kg and R530 000/kg,
instead of R515 000/kg previously guided.


OPERATING RESULTS - SIX MONTHLY (RAND/METRIC)


                                                                                                                                                    South Africa
                                                                                                                 Underground production                                                            Surface production
                                   Six                                                                                                                             Total                    Central                                             Total
                                   months      Tshepong       Moab                                                                                                Under-                      plant                                 Total       South        Hidden       Total
                                   ended     operations   Khotsong  Bambanani           Joel   Doornkop       Target 1  Kusasalethu  Masimong     Unisel          ground     Phoenix    reclamation        Dumps    Kalgold       Surface      Africa      Valley(1)    Harmony
Ore milled               - t'000   Dec-18           838        532        118            226        389            312          358       312        130           3 215       3 151          1 936        2 222        827         8 136      11 351         2 037      13 388
                                   Dec-17           897          -        122            251        347            371          325       330        225           2 868       3 073          1 900        1 030        770         6 773       9 641           723      10 364
Yield                    - g/tonne Dec-18          5.04       8.30      10.82           3.28       4.54           4.81         6.74      3.69       5.12            5.65       0.125          0.146        0.354       0.76          0.26        1.78          1.53        1.74
                                   Dec-17          5.68          -      11.56           3.62       4.74           4.22         6.91      4.56       3.18            5.26       0.125          0.128        0.423       0.79          0.25        1.74          1.12        1.72
Gold produced            - kg      Dec-18         4 222      4 418      1 277            742      1 766          1 500        2 414     1 152        665          18 156         393            283          786        630         2 092      20 248         3 111      23 359
                                   Dec-17         5 093          -      1 410            908      1 646          1 564        2 245     1 504        715          15 085         384            243          436        608         1 671      16 756           662      17 418
Gold sold                - kg      Dec-18         4 250      4 449      1 284            756      1 774          1 513        2 506     1 157        672          18 361         387            286          772        647         2 092      20 453         3 062      23 515
                                   Dec-17         5 087          -      1 412            936      1 570          1 580        2 200     1 502        715          15 002         388            247          437        572         1 644      16 646           551      17 197
Gold price received      - R/kg    Dec-18       580 735    556 383    581 450        581 413    583 439        581 461      579 209   581 584    580 263         575 061     560 845        582 175      574 679    582 329       575 511     575 107       558 142     572 898
                                   Dec-17       581 912          -    582 493        580 839    585 845        580 493      581 545   580 936    580 827         581 958     550 634        583 619      579 410    586 521       575 725     581 343       543 805     580 672
Gold revenue             (R'000)   Dec-18     2 468 125  2 475 349    746 582        439 548  1 035 020        879 751    1 451 499   672 893    389 937      10 558 704     217 047        166 502      443 652    376 767     1 203 968  11 762 672     1 709 032  13 471 704
                                   Dec-17     2 960 184          -    822 480        543 665    919 777        917 179    1 279 398   872 566    415 291       8 730 540     213 646        144 154      253 202    335 490       946 492   9 677 032       164 773   9 841 805
Cash operating cost (net (R'000)   Dec-18     2 016 856  1 587 279    488 266        485 507    803 536        769 217    1 193 581   621 814    291 049       8 257 105     174 677        115 754      354 949    346 315       991 695   9 248 800       792 289  10 041 089
of by-product credits)*            Dec-17     1 970 594          -    452 451        464 715    687 247        674 980    1 049 926   591 135    437 507       6 328 555     163 428         93 354      174 170    275 605       706 557   7 035 112       104 184   7 139 296
Inventory movement       (R'000)   Dec-18        11 327     (6 367)     3 453          7 038     (1 884)         4 782       43 247     3 071     (1 516)         63 151      (2 881)         1 889       (6 434)     6 670          (756)     62 395       (16 467)     45 928
                                   Dec-17          (348)         -     (1 038)        15 302    (33 780)         8 792      (21 736)      234       (272)        (32 846)      1 171          3 024          122    (18 195)      (13 878)    (46 724)       37 694      (9 030)
Operating costs          (R'000)   Dec-18     2 028 183  1 580 912    491 719        492 545    801 652        773 999    1 236 828   624 885    289 533       8 320 256     171 796        117 643      348 515    352 985       990 939   9 311 195       775 822  10 087 017
                                   Dec-17     1 970 246          -    451 413        480 017    653 467        683 772    1 028 190   591 369    437 235       6 295 709     164 599         96 378      174 292    257 410       692 679   6 988 388       141 878   7 130 266
Production profit        (R'000)   Dec-18       439 942    894 437    254 863        (52 997)   233 368        105 752      214 671    48 008    100 404       2 238 448      45 251         48 859       95 137     23 782       213 029   2 451 477       933 210   3 384 687
                                   Dec-17       989 938          -    371 067         63 648    266 310        233 407      251 208   281 197    (21 944)      2 434 831      49 047         47 776       78 910     78 080       253 813   2 688 644        22 895   2 711 539
Capital expenditure      (R'000)   Dec-18       583 574    286 019     32 030         97 021    144 407        152 287      157 953    54 052     22 388       1 529 731       1 667          2 622        5 334     28 265        37 888   1 567 619       670 515   2 238 134
                                   Dec-17       476 946          -     33 326        128 194    126 919        166 571      150 025    62 563     56 984       1 201 528       1 000          7 672            -     57 040        65 712   1 267 240     1 107 987   2 375 227
Cash operating costs     - R/kg    Dec-18       477 702    359 275    382 354        654 322    455 003        512 811      494 441   539 769    437 668         454 787     444 471        409 025      451 589    549 706       474 042     456 776       254 673     429 860
                                   Dec-17       386 922          -    320 887        511 801    417 526        431 573      467 673   393 042    611 898         419 526     425 594        384 173      399 472    453 298       422 835     419 856       393 147     419 440
Cash operating costs     - R/tonne Dec-18         2 407      2 984      4 138          2 148      2 066          2 465        3 334     1 993      2 239           2 568          55             60          160        419           122         815           389         750
                                   Dec-17         2 197          -      3 709          1 851      1 981          1 819        3 231     1 791      1 944           2 207          53             49          169        358           104         730           440         723
Cash operating cost      - R/kg    Dec-18       615 924    424 015    407 436        785 078    536 774        614 336      559 873   586 689    471 334         539 041     448 712        418 290      458 375    594 571       492 152     534 197       470 204     525 674
and Capital(2)                     Dec-17       480 569          -    344 523        652 983    494 633        538 076      534 499   434 640    691 596         499 177     428 198        415 745      399 472    547 113       462 160     495 485       423 804     494 369
All-in sustaining cost   - R/kg    Dec-18       601 206    424 491    424 467        757 922    537 394        605 434      573 049   602 209    478 444         538 390     448 225        417 000      458 354    606 924       496 775     533 241       495 022     528 265
                                   Dec-17       483 982          -    359 282        590 571    510 253        539 615      550 625   450 373    691 636         503 809     426 802        405 814      398 838    565 847       464 593     499 900       519 338     500 248
Operating free cash flow %         Dec-18            (5)        24         30            (33)         8             (5)           7         -         20               7          19             29           19          -            14           8            11           8
margin(3)                          Dec-17            17          -         41             (9)        11              8            6        25        (19)             14          23             30           31          -            18          14           (89)         12

(1) No production for Hidden Valley was capitalised during the six months ending December 2018. Ore milled for the six month ended December 2017 includes
    486 000 tonnes that was capitalised as part of the pre-stripping of stages 5 and 6. Gold produced for the six months ended December 2017 includes 397 kilograms
    and gold sold 248 kilograms that was capitalised.
(2) Excludes investment capital for Hidden Valley included in the June 2018 quarter of R1 100 million.
(3) Excludes run of mine costs for Kalgold (Dec-18: R-1.288 million, Dec-17: R-4.333 million) and Hidden Valley (Dec-18: R-50.59 million, Dec-17: R10.016 million)
    as well as Hidden Valley's investment capital as per note 2.
*Reconciliation of revenue and production cost to the Income Statement is performed in reconciliation of segment information note in the financial statements.:


CONDENSED CONSOLIDATED INCOME STATEMENTS (RAND)


                                                                                                  Six months ended           Year ended
                                                                                            31 December     31 December         30 June
                                                                                                   2018            2017            2018
                                                                                              (Reviewed)      (Reviewed)       (Audited)
Figures in million                                                              Notes                          Restated*       Restated*

Revenue                                                                           2              13 789           9 875          20 452
Cost of sales                                                                     3             (12 919)         (8 838)        (23 596)
  Production costs                                                                              (10 404)         (7 163)        (15 084)
  Amortisation and depreciation                                                                  (2 119)         (1 253)         (2 570)
  Impairment of assets                                                                                -            (116)         (5 336)
  Other items                                                                                      (396)           (306)           (606)

Gross profit/(loss)                                                                                 870           1 037          (3 144)
Corporate, administration and other expenditure                                                    (388)           (303)           (813)
Exploration expenditure                                                                             (72)            (81)           (135)
Gains on derivatives                                                              4                  20             337              99
Other operating income/(expenses)                                                 5                (264)            208            (667)

Operating profit/(loss)                                                                             166           1 198          (4 660)
Acquisition related costs                                                                             -             (44)            (98)
Share of profits from associates                                                                     24              33              38
Investment income                                                                                   141             226             343
Finance costs                                                                                      (208)           (157)           (330)

Profit/(loss) before taxation                                                                       123           1 256          (4 707)
Taxation                                                                          6                 (48)           (359)            234
 Current taxation                                                                                   (31)           (335)           (204)
 Deferred taxation                                                                                  (17)            (24)            438

Net profit/(loss) for the period                                                                     75             897          (4 473)

Attributable to:
Owners of the parent                                                                                 75             897          (4 473)

Earnings per ordinary share (cents)                                               7
Basic earnings                                                                                       15             203          (1 003)
Diluted earnings                                                                                     13             197          (1 004)

*Refer to note 1 for detail. The restated amounts are unaudited

The accompanying notes are an integral part of these condensed consolidated financial statements.

The condensed consolidated financial statements for the six months ended 31 December 2018 have been prepared by Harmony Gold Mining
Company Limited's corporate reporting team headed by Boipelo Lekubo CA(SA). This process was supervised by the financial director, Frank
Abbott CA(SA) and approved by the board of Harmony Gold Mining Company Limited on 12 February 2019. These condensed consolidated
financials have been reviewed by the group's external auditors, PricewaterhouseCoopers Incorporated (see note 20).


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(RAND)

                                                                                             Six months ended          Year ended
                                                                                       31 December    31 December         30 June
                                                                                              2018           2017            2018
Figures in million                                                                       (Reviewed)     (Reviewed)       (Audited)

Net profit/(loss) for the period                                                                75            897          (4 473)
Other comprehensive income for the period, net of income tax                                  (207)          (475)           (660)
Items that may be reclassified subsequently to profit or loss:                                (207)          (475)           (647)
  Foreign exchange translation gain/(loss)                                                      81           (400)             83
  Remeasurement of rand gold hedging contracts
   Unrealised gain on Rand gold contracts                                                        3            407             273
   Released to revenue                                                                        (365)          (503)         (1 197)
   Deferred taxation thereon                                                                    74             21             194
Items that will not be reclassified to profit or loss:                                           -              -             (13)
  Remeasurement of retirement benefit obligation
   Actuarial loss recognised during the period                                                   -              -             (11)
   Deferred taxation thereon                                                                     -              -              (2)

Total comprehensive income for the period                                                     (132)           422          (5 133)

Attributable to:
Owners of the parent                                                                          (132)           422          (5 133)


The accompanying notes are an integral part of these condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (RAND)
FOR THE SIX MONTHS ENDED 31 DECEMBER 2018 (REVIEWED)

                                                                              Accumulated             Other
Figures in million                                          Share capital            loss          reserves            Total

Balance - 30 June 2018                                             29 340          (9 103)            5 145           25 382
Impact of adopting IFRS 9 (refer to note 1)                             -               -                82               82
Restated opening balance - 1 July 2018                             29 340          (9 103)            5 227           25 464
Issue of shares                                                       211               -                 -              211
Share-based payments                                                    -               -               143              143
Net profit for the period                                               -              75                 -               75
Other comprehensive income for the period                               -               -              (207)            (207)

Balance - 31 December 2018                                         29 551          (9 028)            5 163           25 686

Balance - 30 June 2017                                             28 336          (4 486)            5 441           29 291
Share-based payments                                                    1               -               190              191
Net profit for the period                                               -             897                 -              897
Other comprehensive income for the period                               -               -              (475)            (475)
Dividends paid(1)                                                       -            (154)                -             (154)

Balance - 31 December 2017                                         28 337          (3 743)            5 156           29 750

(1) Dividend of 35 SA cents declared on 13 August 2017.

The accompanying notes are an integral part of these condensed consolidated financial statements.


CONDENSED CONSOLIDATED BALANCE SHEETS (RAND)


                                                                                           At          At             At
                                                                                  31 December     30 June    31 December
                                                                                         2018        2018           2017
Figures in million                                                         Notes    (Reviewed)   (Audited)     (Reviewed)

ASSETS

Non-current assets
Property, plant and equipment                                                          31 538      31 001         30 954
Intangible assets                                                                         515         515            600
Restricted cash                                                                            85          77             70
Restricted investments                                                                  3 359       3 271          2 822
Investments in associates                                                                  75          84             79
Inventories                                                                                46          46             38
Trade and other receivables                                                               259         253            240
Derivative financial assets                                                  9            123          84            258
Other non-current assets                                                                   61          11              5

Total non-current assets                                                               36 061      35 342         35 066

Current assets
Inventories                                                                             1 795       1 759          1 370
Restricted cash                                                                            41          38             36
Trade and other receivables                                                             1 188       1 139            993
Derivative financial assets                                                  9            206         539          1 595
Cash and cash equivalents                                                               1 388         706          1 055

Total current assets                                                                    4 618       4 181          5 049
Total assets                                                                           40 679      39 523         40 115


EQUITY AND LIABILITIES

Share capital and reserves
Share capital                                                                12        29 551      29 340         28 337
Other reserves                                                                          5 163       5 145          5 156
Accumulated loss                                                                       (9 028)     (9 103)        (3 743)

Total equity                                                                           25 686      25 382         29 750

Non-current liabilities
Deferred tax liabilities                                                                1 093       1 147          1 704
Provision for environmental rehabilitation                                              3 436       3 309          2 661
Provision for silicosis settlement                                           10           964         925            953
Retirement benefit obligation                                                             191         186            183
Borrowings                                                                   11         5 871       4 924          2 566
Other non-current liabilities                                                              41          41              9
Derivative financial liabilities                                             9             55          10              5

Total non-current liabilities                                                          11 651      10 542          8 081

Current liabilities
Borrowings                                                                   11            92         690             -
Trade and other payables                                                                2 947       2 704          2 258
Derivative financial liabilities                                             9            303         205             26

Total current liabilities                                                               3 342       3 599          2 284
Total equity and liabilities                                                           40 679      39 523         40 115

The accompanying notes are an integral part of these condensed financial statements.


CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (RAND)


                                                                                          Six months ended           Year ended
                                                                                     31 December     31 December        30 June
                                                                                            2018            2017           2018
Figures in million                                                         Notes       (Reviewed)      (Reviewed)      (Audited)

CASH FLOW FROM OPERATING ACTIVITIES

Cash generated by operations                                                               2 810           2 044          4 289
Interest received                                                                             34              44             82
Interest paid                                                                               (190)            (60)          (180)
Income and mining taxes paid                                                                  (4)           (196)          (307)

Cash generated from operating activities                                                   2 650           1 832          3 884

CASH FLOW FROM INVESTING ACTIVITIES

Increase in restricted cash                                                                   (8)            (22)           (32)
Decrease in amounts invested in restricted investments                                         3               2              -
Consideration paid for the acquisition of Moab Khotsong operations           8                 -               -         (3 474)
Redemption of preference shares from associates                                               32               -              -
Capital distributions from investments                                                        30               -              -
Proceeds from disposal of property, plant and equipment                                        2               1              2
Additions to property, plant and equipment                                   14           (2 400)         (2 565)        (4 571)
Cash utilised by investing activities                                                     (2 341)         (2 584)        (8 075)

CASH FLOW FROM FINANCING ACTIVITIES

Borrowings raised                                                            11            1 122           2 856          6 937
Borrowings repaid                                                            11             (982)         (2 147)        (4 063)
Proceeds from the issue of shares                                            12              211               -          1 003
Dividends paid                                                                                -             (154)          (154)

Cash generated from financing activities                                                     351             555          3 723
Foreign currency translation adjustments                                                      22               6            (72)

Net increase/(decrease) in cash and cash equivalents                                         682            (191)          (540)
Cash and cash equivalents - beginning of year                                                706           1 246          1 246

Cash and cash equivalents - end of year                                                    1 388           1 055            706


The accompanying notes are an integral part of these condensed consolidated financial statements.


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 31 December 2018 (Rand)

1. ACCOUNTING POLICIES

  Basis of accounting

  The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting
  Standards, IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
  Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the
  Companies Act of South Africa. The accounting policies applied in the preparation of these interim financial statements are in terms
  of International Financial Reporting Standards (IFRS) and are consistent with those applied in the previous consolidated annual
  financial statements except for the changes discussed below.

  The group adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments on 1 July 2018. The group
  has also changed its accounting policy in respect of by-product income. The impact of the changes are disclosed below.

  Impact of the adoption of IFRS 15 ? Revenue from Contracts with Customers

  Scope of IFRS 15

  The group's contracts that are in scope of the new revenue standard include gold, silver and uranium contracts. Income derived from
  all of these products are presented in revenue.

  Revenue measurement

  Under IAS 18 revenue was measured at the fair value of the consideration received and discounted to the present value of
  consideration due if payment extended beyond normal credit terms. Historically payments have not extended beyond normal credit
  terms and the amount of revenue recognised equated to the transaction price.

  Under IFRS 15, revenue is measured at the amount of consideration to which an entity expects to be entitled in exchange for
  transferring goods to a customer. The group's contracts do not contain elements of variable consideration, non-cash consideration or
  significant financing components and therefore the amount of revenue recognised equates to the transaction price.

  Revenue recognition

  Under IAS 18, revenue was recognised for the South African operations when the goods were delivered and a certificate of sale for
  gold and confirmation of transfer for uranium was issued. At Hidden Valley, the point of recognition was when the metal account was
  credited. This was taken to be the point in time at which the customer accepted the goods and the related risks and rewards of
  ownership transfered.

  IFRS 15 requires revenue to be recognised when a customer obtains control of the goods. The group has assessed that the drivers
  for revenue recognition are unchanged as this is the point when control of the goods effectively transfers to the customer.

  Hedge accounting

  The effective portion of gains or losses on the derivatives designated as cash flow hedging items (forecast sales transactions) are
  recognised in revenue when the forecast sales transactions occur. The adoption of IFRS 15 Revenue from Contracts with Customers
  and IFRS 9 Financial Instruments did not have an impact on the amount or timing of the hedging gains or losses recognised in
  revenue.

  Change in accounting policy - accounting for by-products

  Previously, income from silver and uranium sales were considered by-product revenue and were recorded as a credit to cost of sales.
  The increasing significance of by-product income warrants the by-products to be considered an output of the group's ordinary
  activities and therefore income from these products are considered to be part of the group's revenue.

  The change in accounting policy results in an increase in revenue and a consequential increase in costs of sales and therefore does
  not have an impact on previously reported gross profit or loss.

  The group has applied the change retrospectively to each prior reporting period presented in accordance with IAS 8 Accounting
  Policies, Changes in Accounting Estimates and Errors.

                                                                                                            Six months
                                                                                                                 ended      Year ended
                                                                                                           31 December         30 June
   Figures in million                                                                                             2017            2018

   Revenue as previously reported                                                                                9 842          20 359
   By-product revenue                                                                                               33              93
   Revenue (restated)                                                                                            9 875          20 452

   Cost of sales as previously reported                                                                          8 805          23 503
   By-product revenue                                                                                               33              93
   Cost of sales (restated)                                                                                      8 838          23 596


  Impact of the adoption of IFRS 9 ? Financial Instruments

  Classification and measurement

  This standard replaces IAS 39, Financial Instruments: Recognition and Measurement. In terms of IFRS 9 financial instruments are
  measured either at amortised cost or at fair value. Movements in fair value are presented in either profit or loss or other
  comprehensive income (OCI), subject to certain criteria being met.

  The new guidance did not have a significant impact on the classification and measurement of the group's financial assets for the
  following reasons:

  ? An election was made to classify the equity instruments previously classified as available-for-sale as at fair value through other
    comprehensive income (FVOCI);

  ? Equity investments previously measured at fair value through profit or loss (FVTPL) are classified and measured on the same
    basis under IFRS 9;

  ? Debt instruments previously classified as held-to-maturity and measured at amortised cost are classified and measured at
    amortised cost under IFRS 9;

  ? Derivative financial instruments continue to be classified and measured at FVTPL and

  ? Loans and other receivables previously classified as at amortised cost continue to be classified as at amortised cost as the
    group's business model is to hold these instruments in order to collect contractual cash flows, which is solely payments of principal
    and interest.

  There was no impact on the group's accounting for financial liabilities as the new requirements only affected the accounting for
  financial liabilities that are designated at FVTPL and currently the group's does not have any such liabilities.

  Impairment

  The change from the 'incurred loss' model to the 'expected credit loss' model did not have a material impact on the measurement of
  financial assets.

  Hedge accounting

  Except for assessing hedge effectiveness, accounting for the group's defined hedge relationships remained unchanged under
  IFRS 9. The new requirements will be applied prospectively.

  Transition

  On 1 July 2018 management classified its financial instruments into the appropriate IFRS 9 categories. In line with the transitional
  provisions of IFRS 9, the group has applied the standard retrospectively without restating any comparative figures. IFRS 9 eliminates
  the exemption provided under IAS 39 where unquoted equity investments were measured at cost when fair value could not be
  reliably measured. This change resulted in revaluing one of our unlisted investments from cost of R0 milion to fair value of
  R82 million. The difference between the carrying amounts of financial instruments before the adoption of IFRS 9 and the new
  carrying amount calculated in accordance with the standard at 1 July 2018 was recognised directly in the opening balance of equity.
  Refer to the statements of changes in equity.

  Impact of IFRS 16 ? Leases (issued but not yet adopted)

  The new standard on leases, effective for financial periods beginning on or after 1 January 2019, requires lessees to recognise a
  lease liability reflecting future lease payments and a ?right-of-use asset' for virtually all lease contracts (with limited exceptions),
  whereas previously, lessees were required to make a distinction between a finance lease (on-balance sheet) and an operating lease
  (off-balance sheet).

  The guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts) has been
  updated, affecting both lessees and lessors, although the accounting requirements by lessors remain largely unchanged.

  The group is still assessing the impact of the new standard. In general, it is expected that assets and liabilities will increase as right of
  use assets and lease liabilities will be recognised for most of the group's operating leases where the group is the lessee. This is
  expected to lead to an increase in depreciation and finance costs and a change in the classification of cash flows. The group will
  adopt the standard on 1 July 2019.

  No other standards, amendmen