Harmony Gold Mining Company Limited ('Harmony' or the 'Company') announces its intention to conduct a placing of authorised but unissued ordinary shares in the Company (the 'Placing Shares') (pursuant to a general authority to issue ordinary shares for cash) to qualifying investors who have agreed to subscribe therefor (the 'Placing') to raise approximately US$200 million (ZAR 3.466 billion) of gross subscription proceeds (the 'Proceeds').
The Placing is being executed in terms of the authorities granted at the extraordinary general meeting of the shareholders of the Company held on 11 June 2020.
The Placing is being conducted through an accelerated bookbuilding process (the 'Bookbuild') which will be launched immediately following the release of this Announcement.
Use of proceeds
As announced on 12 February 2020, Harmony has entered into a definitive agreement with AngloGold Ashanti Limited ('AngloGold Ashanti') to acquire AngloGold Ashanti's South African assets Mponeng and Mine Waste Solutions (the 'Acquisition'). If the last of the conditions precedent to the Acquisition is fulfilled on or before the 20th calendar day in any calendar month, then the Acquisition will become effective and closing will take place on the last business day of that month. If the last of the conditions precedent is fulfilled after the 20th calendar day in any month, then the Acquisition will become effective and closing will take place on the last business day of the following month. The only remaining condition precedent is to secure Section 11 approval from the Department of Mineral Resources and Energy.
The Proceeds will be used by the Company in order to discharge part of the initial acquisition consideration which becomes payable on the closing date of the Acquisition.
Details of the Placing
The Placing will be conducted through the Bookbuild and the book will open with immediate effect following the release of this Announcement. J.P. Morgan Securities plc is acting as Sole Global Coordinator and Joint Bookrunner (the 'Sole Global Coordinator') and Absa Bank Limited (acting through its Corporate and Investment Banking division) is acting as Joint Bookrunner (together with J.P. Morgan, the 'Joint Bookrunners') in connection with the Placing.
The Placing will be carried out through a general authority to issue ordinary shares for cash, subject to the restrictions set out in the Listings Requirements of the JSE Limited ('JSE Listings Requirements').
The Bookbuild is being offered to qualifying investors only (as set out in greater detail under 'Important Notice' below) and is not an offer to the public in any jurisdiction.
The price per ordinary share at which the Placing Shares are to be placed (the 'Placing Price') will be determined at the close of the Bookbuild. The timing of the closing of the Bookbuild, the Placing Price and allocations are at the discretion of Harmony and the Joint Bookrunners. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable following the closing of the Bookbuild. It is expected that listing and trading (the 'Admission') of the Placing Shares on the JSE will commence on or around 25 June 2020 (or such later date as may be agreed between the Company and the Joint Bookrunners) and that dealings in the Placing Shares will commence at the same time. The Placing is conditional upon, amongst other things, the Admission becoming effective and the agreement between the Company and the Joint Bookrunners in respect of the Placing not being terminated in accordance with its terms prior to the Admission. The Placing is not conditional on the conditions precedent to the Acquisition being fulfilled.
The Placing Shares, when issued, will rank pari passu in all respects with the existing Harmony ordinary shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue of the Placing Shares.
Harmony has agreed, subject to certain exclusions, to a lock-up of 90 days from settlement of the Placing.
Update on Harmony's operations and balance sheet
Harmony's swift and decisive COVID-19 mitigating measures, combined with a supportive gold price environment, have supported the Company's viability and the livelihoods of many stakeholders dependent on the Company.
The build-up of the Company's South African underground mines to the permitted 50% of labour capacity from mid-April 2020 through May 2020 resulted in an increase in gold sales from the South African operations from approximately 1 tonne in April 2020 to approximately 1.7 tonnes in May 2020. The Hidden Valley mine in Papua New Guinea continued to operate at close to normal levels during this period. Management is expecting a return to 100% of production by mid-July 2020, assuming no further negative impacts due to COVID-19 lockdown provisions.
The Company's net debt position through May 2020 increased by approximately R400 million (approximately US$28 million) from the R5.0 billion (US$280 million) reported at the end of March 2020 to R5.4 billion (US$308 million) at the end of May 2020.
Harmony has engaged and reached agreement with its lenders that the Tangible Net Worth to Net Debt covenant would be relaxed and maintained at above two times (from four times previously) until December 2020. The Company continues to comply with all debt covenants.
The impact of COVID-19 on Harmony's employees continues to be rigorously managed through application of both the Company's Standard Operating Procedure and the regulated Code of Practice.
Notes
The US dollar to South African rand exchange rate used in this Announcement is ZAR17.33/US$ as at 16:00 South African time on 24 June 2020.
Contact:
Marian van der Walt
Tel: +27 (0) 82 888 1242
Harmony Gold Mining Company Limited (Harmony), a world-class gold mining and exploration company, has operations and assets in South Africa and Papua New Guinea (PNG). Harmony has more than 60 years' experience in the industry. Company assets include one open pit mine and several exploration tenements in PNG, as well as 9 underground mines and 1 open pit operation and several surface sources in South Africa. In addition, Harmony owns 50% of the significant Wafi-Golpu copper-gold project - a tier 1 asset in a joint venture in PNG.
The company's primary stock exchange listing is on the JSE with a secondary listing on the New York Stock Exchange. The bulk of our shareholders are in South Africa and the United States.
HARMONY GOLD MINING COMPANY LIMITED 
