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 14 August
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.)
Registration
number 1950/038232/06
Incorporated in
the Republic of South Africa
ISIN:
ZAE000015228
JSE share code:
HAR
(“Harmony” or
“the company”)
Trading
statement for the year ended 30 June 2017
Johannesburg, Monday, 14 August 2017.
In terms of paragraph 3.4(b) of the Listings Requirements of the
JSE Limited (JSE), a company listed on the JSE is required to
publish a trading statement as soon as they are satisfied that a
reasonable degree of certainty exists that the financial results
for the period to be reported upon next will differ by at least 20%
from the financial results for the previous corresponding
period.
Shareholders of
Harmony are advised that a reasonable degree of certainty exists
that earnings for the year ended 30 June 2017 will be lower than
for the year ended 30 June 2016 (“the previous comparable
period”), primarily due to:
●
an impairment of
approximately R1.7 billion (US$131 million) recorded following the
annual life-of-mine planning process (added back to headline
earnings), and
●
a provision raised for a
possible silicosis class action settlement of R917 million (US$70
million) pre–tax (post-tax: R762 million (US$58 million))
(not added back to headline earnings);
which will
reduce the net profit of the company, but will not have an impact
on reported cash balances and free cash flow.
Harmony’s
year-on-year financial performance and cash flow was strengthened
by gains recognised on the gold and currency hedges (included in
headline earnings).
Headline
earnings per share (“HEPS”) are expected to increase to
between 276 and 320 South African cents per share, which is between
25% and 45% higher than the headline earnings of 221 South African
cents per share reported for the previous comparable period. In US
dollar terms, HEPS are expected to be between 20 and 23 US cents
per share, which is between 35% and 55% higher than the headline
earnings of 15 US cents per share reported for the previous
comparable period.
Earnings per
share (“EPS”) are expected to decrease to between 65
and 109 South African cents per share, which is between 70% and 50%
lower than the 218 South African cents per share reported for the
previous comparable period, due to the impairment and the provision
for silicosis. In US dollar terms, EPS are expected to be between 5
and 8 US cents per share, which is between 70% and 50% lower than
the earnings of 15 US cents per share reported for the previous
comparable period.
The financial
information on which this trading statement has been based has not
been reviewed or reported on by Harmony’s external
auditors.
Harmony will
publish its financial results for the year ended 30 June 2017 on
Thursday,
17 August
2017.
Further details
on the impairment and silicosis provision are as
follow:
Impairment
The life-of-mine
plans form the basis for assessing whether any impairment against
the carrying value of an asset is required. These values are
informed by a number of factors, including estimates of future gold
prices and exchange rates and operating and capital cost
estimates.
Impairments have
been recorded on:
●
Target 1, following the
reduction in the life of mine from ten years to seven
years;
●
a lower recoverable amount
for Kusasalethu following a reduction in declared resources as a
result of the decision to not develop another decline during FY17,
and
●
additional capital
expenditure on improving environmental conditions at Tshepong(which
now includes Phakisa) .
Silicosis
class action provision
Harmony expects
to record a provision of R917million (US$70 million) at 30 June
2017, representing the company’s share of the estimated cost
of a possible settlement of the silicosis class action litigation
and related costs. The ultimate outcome of the silicosis class
action litigation remains uncertain, with a possible failure to
reach settlement with the claimants or to obtain the requisite
court approval for a potential settlement. The provision to be
recorded in the financial statements is consequently subject to
adjustment or reversal in the future, depending on the progress of
the working group discussions and stakeholder consultations, and
the ongoing legal proceedings.
In November
2014, a gold mining industry working group was formed to address
issues relating to the compensation and medical care for
occupational lung diseases in the gold mining industry in South
Africa. The working group comprises Harmony, African Rainbow
Minerals Limited, Anglo American South Africa Limited, AngloGold
Ashanti Limited, Gold Fields Limited and Sibanye Gold Limited
(collectively “the working group”).
The working
group engaged all stakeholders including government, organised
labour, other mining companies and legal representatives of
claimants who have filed legal suits against the companies. These
engagements have sought a comprehensive solution to address legacy
compensation issues and future legal frameworks that is fair to
past and current employees and enables companies to continue to be
sustainable over the long term.
As a consequence
of the progress of negotiations between the working group and
affected stakeholders, an estimate of the cost to the companies of
a potential settlement of the class action claims and related costs
can be determined. The companies in the working group continue to
defend the legal proceedings filed against them. Harmony and the
other respondents are appealing the ruling which has been set down
for hearing from 19 to 23 March 2018. The negotiations with the
claimants’ lawyers are confidential and the working group
companies are accordingly not able to provide any details of the
negotiations.
For more details
contact:
Lauren
Fourie
Investor
Relations Manager
+27 (0)
071 607 1498 (mobile)
Or
Marian van der
Walt
Executive:
Corporate and Investor Relations
+27 (0) 082 888
1242 (mobile)
14 August
2017
Sponsor:
J.P. Morgan
Equities South Africa Proprietary Limited.
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:
August 14,
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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