Blueprint
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 6-K
REPORT OF FOREIGN
PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR
15d-16 UNDER THE SECURITIES
EXCHANGE ACT OF
1934
For December 7,
2017
Harmony Gold Mining Company
Limited
Randfontein
Office Park
Corner Main Reef
Road and Ward Avenue
Randfontein,
1759
South
Africa
(Address of principal executive
offices)
*-
(Indicate by
check mark whether the registrant files or will file annual reports
under cover of Form 20- F or Form 40-F.)
(Indicate by
check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.)
Harmony Gold
Mining Company Limited
Registration
number 1950/038232/06
Incorporated in
the Republic of South Africa
ISIN:
ZAE000015228
JSE share code:
HAR
(“Harmony”
or "the Company")
Availability and posting of circular and further details in
relation to the proposed acquisition of the Moab Khotsong
operations
Johannesburg. Thursday 7 December 2017.
Harmony advises that further to the announcement of the proposed
acquisition of the Moab Khotsong operations, which incorporates the
Great Noligwa underground mine and related infrastructure (the
"Target Assets") on 19 October 2017, Harmony has made available to
download on its website, www.harmony.co.za/investors, today, a
circular to Harmony shareholders. The circular will be posted on or
about Friday, 8 December 2017. Defined terms used but not defined
in this announcement have the meaning set out in the
circular.
The circular
provides further information in relation to:
●
The acquisition of the
underground mine Moab Khotsong, which incorporates the Great
Noligwa underground mine and related infrastructure from AngloGold
Ashanti Limited for a consideration of US$300 million in
cash;
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Proposed amendments to
Harmony's memorandum of incorporation;
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The specific authority for
the issue of Ordinary Shares to the ESOP Trust to facilitate a
Black Economic Empowerment transaction;
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The specific authority for
the issue of Preference Shares and Conversion Shares to the Harmony
Community Trust to facilitate a Black Economic Empowerment
transaction;
●
Salient details pertaining to
the establishment of an empowerment partner equal to an equity
interest of 3% in the Harmony SPV and funding related to this
specific BEE transaction. No shareholder authorisation required;
and
●
A potential capital raising
to refinance the acquisition bridge facility.
Further information on Target Assets
By acquiring the
Moab Khotsong underground mine, which incorporates the Great
Noligwa underground mine and related infrastructure, Harmony
believes it will significantly improve its overall operating cash
flows, increase its average overall underground recovered grade and
significantly grow its South African underground Mineral Resource
base.
Harmony believes
that there is the potential to increase the Moab Khotsong and Great
Noligwa Mines’ Life of Mine (as understood in the context of
the SAMREC Code) by mining additional high grade Isolated Blocks of
Ground (IBGs), extraction of the high grade Great Noligwa shaft
pillar, as well as optimising the current plant facilities to treat
the Mispah Tailings Facilities. Harmony believes that there is also
further optionality in the Zaaiplaats project.
Relating to the
foregoing, the underground Mineral Reserves above infrastructure
totalled approximately 1.7 million ounces at 8.8 g/t as at 31
December 2016, while the underground Mineral Resources above
infrastructure at the Moab Khotsong and Great Noligwa mines as at
31 December 2016 were approximately 4.98 million ounces at 18.5
g/t.
Harmony believes
that Moab Khotsong is a high quality, cash generating gold mine
with well-invested and maintained infrastructure which can underpin
near term cash flows and support the creation of value. Harmony's
assessment of the value is broadly in-line with the preferred value
of US$260 million recommended by the independent competent valuator
as part of the Competent Persons Report.
The Great Noligwa
Mine, which has been placed on care and maintenance in recent years
by AngloGold Ashanti has existing infrastructure utilised to
service the Moab Khotsong mining operations. The Mineral Reserve of
the Great Noligwa Mine is currently being extracted through the
Moab Khotsong Mine.
Harmony has
performed due diligence on Great Noligwa and believes that
additional value can be extracted by mining additional high grade
IBGs as well as the high grade shaft pillar.
Extraction of the
shaft pillar is technically similar to what Harmony has
successfully achieved at its Bambanani operation in or around the
city of Welkom in the Free State, where since February 2010,
Harmony has been able to extract 479 252 oz of gold at an average
recovered grade of 9.89 g/t, and extend the Life of Mine (as
understood in the context of the SAMREC Code) to 2022. Total
project capital to mine the Bambanani shaft pillar was ZAR610
million.
Harmony believes
that the extraction of the Great Noligwa shaft pillar will yield a
similarly positive outcome. The technical nature of the mining is
similar and Harmony has proven expertise in this area.
Further to the
above and based on its experience in mining IBGs, Harmony believes
that it will be able to extend the life of the Moab Khotsong and
Great Noligwa Mines from 5 to at least 10 years subject to the
outcome of the necessary studies after completion of the
Acquisition.
Harmony estimates
that the net present value from extracting the shaft pillar and
mining the IBGs has the potential to be substantial, based on a set
of macroeconomic, technical and operational assumptions consistent
with Harmony’s customary planning assumptions.
Harmony’s
internal assessment of the value of mining additional high grade
IBGs as well as the high grade shaft pillar at Great Noligwa Mine
is broadly in line with the valuation of the Moab Khotsong
Mine.
c)
Mispah
Tailings Retreatment
The Mispah 1
tailings facility specifically, contains a Mineral Resource of over
70 million tonnes of surface tailings with an average gold grade of
0.30 g/t. With the current installed plant excess capacity and the
treatment and processing of waste rock nearing the end of its life,
Harmony believes that there is considerable scope to convert these
facilities to a surface tailings re-treatment operation, similar to
those currently operated by Harmony at the Phoenix plant and the
Central plant operations situated in or around the city of Welkom
in the Free State.
Harmony believes
that optimisation of current plant facilities would have minimal
capital requirements and low technical risk, and would create a
relatively low cost, long life operation.
The necessary
studies, including obtaining the necessary permissions, still have
to be completed to ensure value can be unlocked after completion of
the Acquisition. Harmony estimates a potential net present value of
approximately US$20-40 million based on its prior experience of
developing similar plants and on a set of macroeconomic, technical
and operational assumptions that are consistent with its customary
planning assumptions.
The Zaaiplaats
project is potentially an extension of the Moab Khotsong Mine which
contained a Mineral Resource base of 6.8 Moz with an average gold
grade of 17.2 g/t as at 31 December 2016. It is currently in
pre-feasibility stage and Harmony will assess its attractiveness
after completion of the Acquisition. Zaaiplaats is expected to
provide Harmony with optionality, particularly in a rising Rand
gold price environment. Harmony has attributed no value to
Zaaiplaats. It is currently viewed as a potential future expansion
opportunity.
Further studies
will be conducted, after completion of the Acquisition and the
appropriate decision will be made subject to the outcome of those
studies.
Through its
analysis and due diligence investigation, and in applying the
“Harmony Operational Excellence and Operating Model” to
Moab Khotsong Mine's operations, Harmony believes that it will be
able to realise substantial cost savings. These are reflected in
its operating model and valuation.
Harmony believes
that the main source of these cost savings will be through a
reduction in central support services costs allocated to the Mine
i.e. incorporating the Moab Khotsong Mine into its existing
centralised management structures and support services. Alongside
these savings, Harmony has also identified certain procurement and
metallurgy-related savings which it believes can be
achieved.
In estimating
these cost opportunities, Harmony has been cognisant of the
environment in which it operates and its social responsibilities
and these factors have been factored into Harmony's
estimates.
Harmony believes
the Acquisition is value accretive and will enhance its position as
a higher-grade producer and cash-generative gold mining company.
Harmony anticipates that the Acquisition will boost Harmony's
operational cash flows by more than 60%, and increase its average
overall underground recovered grade by 11% and grow its South
African underground Mineral Resource base by 38%, in each case as
compared to performance in FY17.
Furthermore,
Harmony’s assessment of value of the Target Operations is
based on what Harmony believes is a conservative set of
macroeconomic, technical and operational assumptions that are
consistent with its customary planning assumptions indicates
significant upside to the Purchase Price.
1.
Notice of
General Meeting
Notice is hereby
given to the Shareholders that a General Meeting of the
Shareholders will be held at the Hilton Hotel, 138 Rivonia Road,
Sandton, Johannesburg, South Africa at 11:00 (South African
Standard Time) on Thursday, 01 February 2018.
2.
Salient
dates and times
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Posting Record
Date to be eligible to receive the Circular and Notice of General
Meeting
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Friday, 01
December 2017
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Posting Circular
to Shareholders
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Friday, 08
December 2017
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Last Day to Trade
in order to be eligible to participate and vote at the General
Meeting
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Tuesday, 23
January 2018
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Voting Record
Date to participate in and vote at the General Meeting
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Friday, 26
January 2018
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Last Day and time
to give notice to Transfer Secretaries to participate in the
General Meeting electronically by 11:00 on
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Monday, 29
January 2018
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Last day and time
to lodge Forms of Proxy with the Transfer Secretaries, by 11:00
on
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Tuesday, 30
January 2018
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General Meeting
of Shareholders at 11:00 on
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Thursday, 01
February 2018
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Results of
General Meeting released on SENS
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Thursday, 01
February 2018
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Notes:
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(1) All
dates and times above are South African local times unless
otherwise stated.
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(2) The
above dates and times are subject to amendments. Any such material
amendment will be released on SENS and published in the South
African press.
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07 December
2017
Transaction
sponsor: UBS
JSE Sponsor: J.P.
Morgan Equities South Africa Proprietary Limited
South African
Legal Advisor: Bowmans
For more details
contact:
Lauren
Fourie
Investor
Relations Manager
+27 (0) 71 607
1498 (mobile)
or
Marian van der
Walt
Executive:
Corporate and Investor Relations
+27 (0) 82 888
1242 (mobile)
Disclaimers
The release,
publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in
such jurisdictions into which this announcement is released,
published or distributed should inform themselves about and observe
such restrictions. This announcement is for information purposes
only and does not constitute or form part of an offer to sell or
the solicitation of an offer to buy or subscribe to any securities
of Harmony. The securities referred to herein have not been and
will not be registered under the United States Securities Act of
1933 (the "Securities Act") or with any securities regulatory
authority of any state or other jurisdiction of the United States
and may not be offered, sold, resold, transferred or delivered,
directly or indirectly, in the United States except pursuant to
registration under, or an exemption from the registration
requirements of, the Securities Act.
The financial
information of the Target Assets disclosed in this announcement has
been extracted from the historical combined financial information
of the Target Assets, which historical combined financial
information had been derived from the consolidated financial
statements of AngloGold Ashanti using the historical results of
operations, assets and liabilities attributable to the Target
Assets. Having relied
on the fact that the historical combined financial information of
the Target Assets has been derived from the consolidated financial
statements of AngloGold Ashanti, that are free from material
misstatement, whether due to fraud or error, and that AngloGold
Ashanti’s directors were responsible for the compilation of
AngloGold Ashanti’s consolidated financial statements and the
internal controls as they determined is necessary to enable the
preparation and presentation of their consolidated interim
financial statements, Harmony is satisfied as to the quality of the
historical combined financial information of the Target
Assets.
The reserves and
resources information disclosed in relation to the Target Assets
have been extracted from the Mineral Resources and Ore Reserve
Report for 2016 of AngloGold Ashanti. The report states that VA
Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology), MGSSA,
FAusIMM, an employee of AngloGold Ashanti, assumes responsibility
for the Mineral Resource and Ore Reserve processes for AngloGold
Ashanti and is satisfied that the Competent Person have fulfilled
his responsibilities and has consented to the information to be
included in the announcement and for his name to be disclosed in
this announcement.
Forward looking
statements
Certain
statements included in this announcement, as well as oral
statements that may be made by Harmony, or by officers, directors
or employees acting on its behalf related to the subject matter
hereof, constitute or are based on forward-looking statements.
Forward-looking statements are preceded by, followed by or include
the words “may”, “will”,
“should”, “expect”, “envisage”,
“intend”, “plan”, “project”,
“estimate”, “anticipate”,
“believe”, “hope”, “can”,
“is designed to”, “confident” or similar
phrases.
These
forward-looking statements involve a number of known and unknown
risks, uncertainties and other factors, many of which are difficult
to predict and generally beyond the control of Harmony, that could
cause Harmony’s actual results and outcomes to be materially
different from historical results or from any future results
expressed or implied by such forward-looking statements. Such
risks, uncertainties and other factors include, among others,
Harmony’s ability to complete the Transaction,
Harmony’s ability to successfully integrate the acquired
assets with its existing operations, Harmony’s ability to
achieve anticipated efficiencies and other cost savings in
connection with the Transaction, Harmony’s ability to
increase production, the success of exploration and development
activities and other risks. Harmony 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 announcement or to reflect any change in Harmony’s
expectations with regard thereto.
This release
includes mineral reserves and resources information prepared in
accordance with the South African Code for the Reporting of
Exploration Results, Mineral Resources and Mineral
Reserves.
Although Harmony
believes that the expectations reflected in any such
forward-looking statements (or this announcement) relating to the
Transaction are reasonable, the information has not been reviewed
or reported on by the reporting accountants and auditors and no
assurance can be given by Harmony that such expectations will prove
to be correct. Harmony does not undertake any obligation to
publicly update or revise any of the information given in this
announcement that may be deemed to be forward-looking.
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
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Harmony Gold Mining
Company Limited
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Date:
December 7, 2017
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By:
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/s/ Frank Abbott
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Name
Frank
Abbott
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Title
Financial
Director
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